Trudeau Immigration Plan in Doubt as Population Gains Ebb Slowly

(Bloomberg) -- Canada’s rapid population growth is beginning to slow as Prime Minister Justin Trudeau’s government reduces immigration levels. However, the country is still far from its goal of significantly cutting back on temporary residents, a group that has now reached its largest size ever.

Statistics Canada reported Wednesday in Ottawa that an estimated 250,000 people were added in the three months leading up to July 1, resulting in a quarterly growth rate of 0.6%. This marks the first instance since 2020 where quarterly growth was slower than in the same period the previous year.

Canada experienced record population increases after pandemic travel restrictions were lifted, adding over 2.35 million people since mid-2022—approximately the size of Houston's population. While the surge in immigration supported economic growth, it also strained housing costs and public services, leading to a notable decline in support for immigration and for Trudeau himself, prompting him to restrict access for some newcomers.

Trudeau’s immigration reduction plan targets temporary residents, which includes international students, foreign workers, and asylum seekers. The government’s initiatives seem to be gradually slowing the growth of this group, although progress is slow. In the second quarter, Canada added 118,000 temporary residents, marking the smallest net increase since the first quarter of 2023 and the third consecutive quarterly decline.

Despite the reduced growth rate of temporary immigrants due to a decline in study permit holders, the overall number of temporary residents in Canada has surpassed 3 million for the first time. This group now constitutes 7.3% of the population in the second quarter, reflecting a full percentage point increase since the government announced its plan to reduce this share to 5% over the next three years.

To meet this target immediately, the number of temporary residents would need to be cut by 30%, or nearly a million people.

In July, the Bank of Canada raised its short-term population growth projections, predicting that the government’s plan to restrict temporary resident inflows would take longer than previously anticipated to affect immigration levels. However, as population growth normalizes to historical averages in the long term, economic growth is expected to weaken in the coming years.

Canada’s annual population growth rate was 3% in the second quarter, a slight decrease from the 3.2% rate in the first quarter, yet it remains among the highest globally.

With an additional quarter million residents in the second quarter, Canada’s population now stands at 41.3 million. Although signs indicate a slowdown in population gains, they still exceed any second quarter increase recorded in the five decades prior to 2022. International migration accounted for 96% of these increases, while births surpassed deaths by fewer than 10,000, underscoring a rapidly aging population.

For the third consecutive year, the median age in Canada saw a slight decline, reaching 40.3 years on July 1, while the average age remained unchanged from a year earlier. This contrasts with the long-term trend of increasing median and average ages from 1967 to 2021, highlighting the significant impact of high levels of immigration in recent years.