Canada has a demographics problem. Is immigration still the answer?

If this past year’s generational shift in the popular Canadian attitude to immigration can be pinpointed in hindsight on the calendar, it was somewhere around the beginning of November, when Canada’s population peaked and began to decline.

To be sure, the big inflection points on immigration had already passed, including the massive spike in the pandemic, driven by a wild gamble to increase temporary residents to juice the economy, followed eventually by the realization that this was putting impossible strain on housing and services, leading to large cuts in 2024 in the dying days of the Justin Trudeau prime ministership.

But November 2025’s federal budget formalized this, and doubled down on the flip flop, slashing the cap on temporary residents from 675,000 to 385,000.

Coupled with the news that Canada’s population of about 41.5 million people actually declined by 76,000 in three months, the largest quarterly drop since the 1940s, this showed that the moment of flux was over. The kaleidoscope pieces have settled, and the generational shift has become the new normal. The cuts to immigration would not only continue, but accelerate in the coming years. And more people than ever seem to approve, to view immigration broadly as a problem rather than a solution.

It is a dramatic change.

The percentage of temporary residents in Canada, which spiked from 3.3 per cent in 2018 to 7.5 per cent in 2024 is to be cut back to a goal of five per cent, or one person in twenty. New permanent residents are to be kept under one per cent by 2027.

“We are getting immigration under control,” Prime Minister Mark Carney said in promoting his budget, which carried the unspoken admission that it has not been, and is not yet.

“If we look at 2025, we start seeing the impact of changes,” said Rupa Banerjee, professor of human resources management and organization behaviour at Toronto Metropolitan University and Canada Research Chair in Economic inclusion, Employment and Entrepreneurship of Canada’s Immigrants.

Public attitudes that had been overall positive on immigration since the 1990s now have settled firmly into the negative. Polling by Environics has shown a clear majority of Canadians believe “there is too much immigration to Canada.” In late 2024, 58 per cent of Canadians said this, marking a fully 14 point increase from the year before. If ever there was an issue on the move in 2025, it was immigration.

After the pandemic, immigration numbers “ratcheted up a lot,” Banerjee said, particularly for temporary residents such as foreign students and people with work permits.

“This became a flashpoint of what all of our problems were in the country. It was an oversimplification, but it is what the public felt,” Banerjee said. “For the first time in 25 years we started seeing the public move against immigration.”

So today, at the start of 2026, the popular middle ground is no longer an emotionally driven appeal to Canada’s welcoming virtues. Now, it is a more restrained, calculating, even ruthless view of immigration focused on limited capacity and coldly economic cost/benefit analysis.

That holds true even among immigrants themselves, Banerjee said, for whom the biggest competitors tend to be other immigrants.

That both flip and flop happened under Liberal governments, but different prime ministers, has helped Carney manage this pivot. Rather than wear Trudeau’s judgment failure as his party’s own, he is able to present himself as a problem solver and thereby to wrongfoot the Conservatives for whom immigration had been a winning point of popular distinction. Tories moaned, not for the first time, about Grits stealing their best campaign ideas.

Much of the drop in temporary residents is coming from reduced numbers of foreign students.

Jack Jedwab, president of the Montreal-based Association for Canadian Studies, sees this as a necessary correction to a system in which universities and colleges had engaged in “commodification of the students,” relying heavily on the higher tuition fees paid by foreign students without reckoning with the broader implications to civic life, local economies, and the resilience of their own operating budgets.

“A lot of the cuts that the government enacted or set targets for were largely attributable to adjustments to source countries,” said Jedwab, who is tracking numbers from Immigration, Refugees and Citizenship Canada.

These cuts heavily applied to India. Jedwab said he found Canada rejected nearly three quarters of Indian applications for permits to study at Canadian post-secondary institutions in August 2025, the most recent month available, compared to about 32 per cent in August 2023.

There was a 54 per cent drop in numbers of study permit holders from India from 2024 to 2025, compared to an 18 per cent drop for other countries, Jedwab found.

The very fact there is a limit at all is novel, Banerjee said. Prior to last year there had been no caps, not even any real tracking.

“It was left to the market,” Banerjee said. “I think (the change) was needed, especially on the temporary resident side, where market forces were dictating numbers so there was no limitation.”

It may be popular in principle, but there is also skepticism about Carney’s strategic response to immigration. For example, the new federal budget includes pledges to recruit 1,000 leading international researchers and attract skilled foreign workers already in the U.S. with an accelerated pathway to Canada. In December, however, came news that Canada’s main work permit program for immigrant entrepreneurs will stop taking new applications.

These are the just the latest details, not major shifts on their own, but they reflect a broader subversion of Canada’s “world-renowned skilled immigration system,” according to five academic economists writing jointly for the C.D. Howe Institute.

They describe a well-intentioned but fateful decision taken by the Trudeau Liberals in 2023. By carving out new categories of immigrants to satisfy provincial priorities even though they would fail to meet points-based thresholds for residency, the economists’ memo says, Canada replaced a rules-based system with ministerial discretion.

“The result is an opaque system that is exposed to political lobbying, looks like a lottery to prospective migrants, and squeezes out highly skilled candidates,” they write.

With fewer skilled immigrants, Canada’s productivity and tax revenue suffers. This, in turn, “affects Canada’s ability to attract the world’s best and brightest students to our post-secondary institutions, which are collectively reeling from plummeting international enrolment.”

Jedwab sees some blame for industry in this. Canada does need immigration to remain demographically robust, he said. An aging population will change the tax burden. To weather that change, he said industry needs to be more vocal about offering a sustainable vision, rather than saying simply that they need more workers.

In 2025, the demographic impact of Canada’s new normal on immigration made itself clear. But more change is coming.

“I don’t think we’re seeing the economic outcomes yet, but we are seeing the demographic effects,” Jedwab said.

Canada is accepting far fewer immigrants. It pledges to accept even fewer. And more people than ever in recent memory believe this is the right thing to do. The national population has crested and Canada has entered population decline.

“I think one year we can withstand, but if this continues, that has negative consequences for growth,” Banerjee said.

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