Canada’s taking a break from population growth to work on itself for a bit. Statistics Canada’s (StatCan) latest population growth projections reveal the impact of immigration policies and Millennials reaching their demographic peak. BMO Capital Markets explained to investors that this confirms a “major population growth adjustment,” where growth grinds to virtually zero before gradually improving by the end of the decade.
Canada Is Expected To See Its Population Growth Crash This Year
Source: BMO Capital Markets.
Canadian population growth is projected to stall this year at roughly 41.66 million people in 2026, adding fewer than 4k people in StatCan’s medium growth projection (M1). Some steam returns in 2027, and it returns to the typical growth Canada saw pre-2017.
“Total population growth is now projected to fall to roughly zero this year, before gradually climbing back to a run-rate of around 0.7%-to-0.8% by 2029 (M1 medium-growth scenario). That is all consistent with the arithmetic incorporating new immigration targets,” explains Kavcic.
While the rate is in line with historical levels, it’s a dramatic change from the recent surge. Kavcic adds, “Note that this will run cooler than the 1.1% annualized growth seen in the decade through 2019; and, of course, the 3% explosion seen in 2024.”
Canada’s Population Slowdown Fueled By Policies, Millennial Peak
Canada’s recent immigration policy changes aren’t the only drag on growth. The bank notes that StatCan assumes the birth rate continues to fall, eroding natural growth. “In fact, by 2028, Canada is projected to flip over to negative net births, as the older cohort ages and the Millennial group moves out of their reproductive years,” he explains.
Despite the short-term slowdown, StatCan’s projections don’t seem to affect long-term growth much. The latest medium projections show the population hitting 57.4 million by 2074, just 3.9% lower than the projections made last year. That works out to a 0.081% decline in compound annual growth, a variance smaller than the margin of error used in the projection.
Kavcic has previously highlighted the Millennial cohort’s demographic peak. Just a few months ago, he explained that the peak is one of the reasons there’s no quick recovery for the real estate market. It won’t be until Gen Z reaches its family formation years that the flow returns—assuming they can afford housing.
On that note, there’s evidence that high home prices suppress the desire of households to have children. Applying further pressure is the fact that prime-aged Canadians are leaving the country in record volumes.
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