Is Canada’s Immigration Slowdown Achieving Its Goals?

In this article, we’ll look at what the numbers show and offer a clearer sense of what this means for you – whether you’re waiting to immigrate, renting, or just keeping an eye on Canada’s future. 

Why Canada Reduced Immigration Levels 

There’s been growing acknowledgement that Canada’s recent population surge, driven by record-high immigration levels, has put pressure on social and economic systems. Housing affordability worsened quickly, and rental markets, especially purpose-built rentals and condos, became overheated. 

At the same time, businesses and public services were stretched thin as the labour force expanded faster than many sectors could handle. The Immigration slowdown is meant to steady that pace and give housing, transit, schools, and healthcare some room to catch up.  

It’s generally agreed that welcoming newcomers remains positive for Canada. The country needs them long-term, but only when there’s enough housing and infrastructure to support people as they arrive. The newer policies are simply an attempt to reflect that balance.

How the Immigration Slowdown Is Reshaping Canada’s Growth 

Canada’s move to slow immigration isn’t just a policy change on paper, it’s showing up in population numbers, the job market, and even the housing scene. Together, these shifts help explain why the slowdown feels significant and why its impacts are being closely watched by policymakers, employers, and newcomers alike. 

What Changed in Population Growth 

Statistics Canada shows a noticeable cooling in population growth. By January 1, 2025, the population had grown only 0.2% from the previous quarter. That makes it the slowest pace since 2020, marking a major shift from the rapid growth Canadians saw in 2022 and 2023. 

This slowdown reflects cuts to non-permanent resident (NPR) permits – including students and temporary workers – along with a reduction in permanent resident (PR) targets. 

Labour Market Pressure 

Before the immigration slowdown, Canada’s labour market had been running hot for several years, especially through 2021 to mid-2023, with many sectors relying heavily on temporary workers to fill ongoing gaps – particularly in transportation and manufacturing. But that momentum eventually faded as broader economic pressures set in.  

Unemployment peaked at 7.1% in August to the highest since 2016 outside the pandemic – driven by factors like tariffs, high interest rates, slower consumer spending, and overall economic uncertainty. October 2025 brought a slight improvement, but hiring remains uneven, and the job market still feels weak. With the next labour market update expected tomorrow, we may get a clearer picture of whether these conditions have changed further. 

Looking ahead, unemployment may ease further as the 2026-2028 immigration levels plan continues to reduce temporary worker and international student numbers. With fewer temporary residents in the mix, there’s simply less competition for jobs, particularly for young Canadians entering service, retail, and other entry-level roles where international students and temporary workers play a large role. 

But there’s another side to this. Canada is already facing a significant skills-shortage problem, with 700,000 skilled trades workers expected to retire between 2019 and 2028. Employers in manufacturing, construction, healthcare, and transport have long reported difficulty finding qualified workers. Cutting immigration and tightening the pool of skilled newcomers risks deepening these shortages just as demand for skilled labour remains strong. 

Housing Demand and Rental Market Trends Across Canada 

On the housing front, Statistics Canada’s 2025 data shows how strongly newcomers shape demand. Immigrants (permanent residents) occupy about 461 housing units per 1,000 people, compared to 397 among those Canadian-born. 

For non-permanent residents, the trend is similar: they rely heavily on rentals, using around 316 rental units per 1,000 people, with very few transitioning to ownership. 

The immigration slowdown is already showing up in rental markets. Rentals.ca reports national rents fell year-over-year for the 13th straight month, down 2.2% in October. Purpose-built rentals held mostly steady, while condo studios dropped sharply, and the steepest declines were in B.C. and Alberta. Vancouver and Toronto hit multi-year lows, and shared accommodation costs fell to a 28-month low. 

So, in simple terms, less immigration means less immediate pressure on rentals. 

What This Means for Newcomers  

If you’re already in Canada or hoping to come soon, it’s natural to feel that there’s a bit of mixed messaging.  

For renters, the slowdown might bring some relief. Less pressure on purpose-built rentals and condos could help moderate rent increases. For those aiming to buy, steadier population growth can help prevent sudden price spikes. 

For employers, fewer newcomers mean fewer available workers. That shift may ease downward wage pressure in some sectors, but it also means many employers should prepare for higher labour costs. With fewer temporary residents available, businesses that rely on them – especially in manufacturing, transportation, and service roles may need to raise wages to attract workers or invest in technology and infrastructure to keep operations running. 

And for Canada as a whole, the slowdown provides a bit of breathing room. It gives infrastructure – housing, schools, healthcare, transit – time to catch up. But there’s a delicate balance here. Newcomers add economic strength, fill demographic gaps, and enrich communities. Pull back too hard, and some of those long-term benefits weaken. 

So, Is the Immigration Slowdown Working? 

In many ways, yes. The slowdown cooled the housing market and eased rent growth. And while slower population growth doesn’t automatically fix infrastructure problems like healthcare shortages, it can slow the rate at which demand grows faster than the system can handle. 

But it hasn’t erased immigration’s long-term importance. So, while the short-term balancing act appears to be working, the long-term outcome depends on thoughtful policy – on housing supply, infrastructure, labour needs, and ongoing support for newcomers as they build stable lives here. 

If you want to stay ahead of these changes, follow Moving2Canada for updates and helpful tools to make the immigration process easier to understand