(Bloomberg) -- Canada’s rapid population growth is edging down as Prime Minister Justin Trudeau’s government cuts back on immigration. Yet the country is still a long way from its goal of drastically reducing temporary residents — a group that’s now larger than ever.
An estimated 250,000 people were added in the three months to July 1, representing a quarterly growth rate of 0.6%, Statistics Canada reported Wednesday in Ottawa. It marks the first time since 2020 that quarterly growth was slower than the same period a year earlier.
Canada had seen record population gains after pandemic travel restrictions eased. The country has added more than 2.35 million people since mid-2022 — that’s roughly the equivalent of Houston’s population. While surging immigration helped buoy the economy, pressures on housing costs and public services led to sharp declines in support for immigration and Trudeau, forcing him to pull the welcome mat away from some newcomers.
Trudeau’s plan to reduce immigration has focused on temporary residents, a group that includes international students, foreign workers and asylum claimants. The government’s efforts appear to be slowing the growth of this cohort, even if at a glacial pace. Canada added 118,000 temporary residents in the second quarter, the smallest net increase since the first quarter of 2023 and the third straight quarterly decline. That was driven by a decrease in study permit holders.
3 Million Strong
Still, while the growth rate of temporary immigrants has eased, the overall number of these residents in the country topped 3 million for the first time. The share of this cohort reached 7.3% in the second quarter, a full percentage point jump since March, when the government announced its plan to pare down the proportion to 5% over the next three years.
To reach the target immediately, the number of temporary residents in the country would need to drop by 30%, or nearly a million people.
“Although measures to curb temporary resident volumes have already been introduced, their impacts aren’t immediate,” Aïssa Diop, spokesperson for Immigration Minister Marc Miller, said in an email. The population share of this group is expected to continue increasing throughout 2024 because it will take time before the measures take effect, she said — even though the number of new students has started falling.
The Bank of Canada in July lifted its near-term population growth projections, anticipating the government’s plan to limit inflows of temporary residents would take longer time than previously expected to slow immigration. But as population increases normalize closer to levels near historical averages in the long run, economic growth is expected to be weaker in the coming years.
Permanent Residency
Temporary residents either have to leave the country or gain permanent residency in order to lose their non-permanent status, but both are equally difficult, said Mikal Skuterud, an economics professor at the University of Waterloo.
“They’re financially constrained. They’ve come here under the hope of making a transition to permanent residency. But those PR numbers are capped,” he said. “So you’re between a rock and a hard place.”
The government currently sets a target of admitting about half a million permanent residents annually. But the immigration minister may adjust those levels when he announces new figures by Nov. 1 — when Miller will also set temporary resident caps for the first time.
Canada’s annual population growth rate was 3% in the second quarter, a slight decline from the 3.2% pace in the first quarter, but still among the fastest in the world.
With a quarter-million residents added in the second quarter, 41.3 million people now live in Canada. But while population gains showed signs of slowing, they remain higher than in any other second quarter in the five decades before 2022. International migration accounted for 96% of the increases, while births only outnumbered deaths by fewer than 10,000 — highlighting a rapidly aging populace common among advanced economies.
But strong immigration in recent years helped reverse the trend, at least in the near term. For the third year in a row, the median age in Canada decreased slightly, reaching 40.3 years on July 1, while the average age saw no change from a year earlier. This contrasts with the general trend of an increasing median and average age from 1967 to 2021.
--With assistance from Jay Zhao-Murray and Monique Mulima.
(Updates with government and academic comments from the seventh paragraph.)
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