Canada could soon reach a point where every bit of its population growth comes from immigration, with births no longer adding to the total, an expert has warned.With population growth now almost flat, the parliamentary budget officer projects that 2026 will mark Canada’s second straight year of zero growth, based on the federal government’s latest Immigration Levels Plan. A 2024 government report also says newcomers are expected to account for all population growth by 2032.Dan Hiebert, a geography professor at the University of British Columbia who studies migration, said the country is heading into new territory.“Natural increase in Canada is going to hit zero really soon. Maybe 2029, maybe 2030, give or take, right? And at that point, all population growth is going to be immigration-related, like 100 per cent,” he said, according to CTV news.He added: “It means that wherever the government of Canada, and in particular (Immigration, Refugees and Citizenship Canada), wherever it sets that immigration number at, that’s the amount the population is going to grow. So that’s historically unprecedented.”Canada’s population surged after the Covid-19 pandemic, peaking at 3.1 per cent growth in 2023, far above the historic average of 1.1 per cent since 1972. That increase was driven almost entirely by immigration.Statistics Canada data show that in 2024 the population grew by 816,000 temporary and permanent immigrants, while natural growth, defined as births minus deaths, was about 34,000 people. Immigration has been the leading driver of growth since the start of the millennium. In 2000, around 148,000 immigrants arrived, compared with the natural growth of about 110,000. The gap has only increased over the past 25 years.The latest immigration plan aims to reduce overall arrivals, particularly temporary residents such as students, to ease pressure on housing and public services.
How is population growth affecting the housing market?
Rachel Battaglia, an economist at the Royal Bank of Canada, said slower population growth is already affecting the housing market. The bank expects rents to keep falling this year after rising sharply in the years following the pandemic. Rentals.ca says the average rent across Canada dropped in February for the 16th month in a row, but the speed of the decline is now slowing down.Battaglia said that when fewer newcomers arrive, demand for housing falls in areas where many migrants usually settle. However, she said lower demand can also reduce the motivation to build new homes. She added that housing is still much less affordable than before the pandemic, and this is made worse by low consumer confidence and a weak job market.
What is the old-age dependency ratio?
Dan Hiebert also warned that Canada’s ageing population will increase the old-age dependency ratio. It is currently about 29.5 people aged 65 and over for every 100 working-age people. Using Statistics Canada models, he estimates that if population growth averages 0.8 per cent a year, the ratio could rise to about 50 retirees for every 100 workers within 50 years.“The higher that ratio, the tougher it’s going to be to have the economy function properly. And also, especially, to have government function properly,” Hiebert said.He added: “Once people retire, they still draw on social services. And in fact, the draw on social services actually becomes higher over time simply because of the added health care costs … and at the same time they’re putting in less tax revenue, because they aren’t working.”He said Ottawa should think beyond its current three-year immigration planning window.
