Canada could miss some targets in reducing immigration: Desjardins

Canada’s Population Growth Slowdown: Progress and Challenges

The Canadian government’s efforts to slow population growth are beginning to show signs of progress, but the country is unlikely to meet its ambitious targets this year. A recent report from Desjardins, a Canadian financial services firm, highlights that while the influx of non-permanent residents has slowed and population gains have decreased in key segments, the current trajectory suggests that Ottawa’s goals remain out of reach. The report, authored by Desjardins’ economic analyst LJ Valencia and deputy chief economist Randall Bartlett, provides a detailed analysis of the challenges and uncertainties surrounding Canada’s population growth and immigration targets.

Immigration Targets and Population Growth: A Mixed Picture

Since the federal government revised its immigration targets in October 2024, there have been noticeable changes in the dynamics of population growth. The report reveals that the number of new non-permanent residents entering the country has slowed, with a 25% year-over-year drop in new permit holders in the final quarter of 2024. However, the total number of non-permanent residents still increased by nearly 40,000 during this period, resulting in a figure that is approximately 100,000 higher than previously forecast. This has left non-permanent residents accounting for about 7.5% of Canada’s population by the end of 2024, exceeding the government’s target of reducing this proportion to less than 5%.

The report also notes that while year-over-year population gains remain high, month-over-month growth has slowed “considerably” from its 2024 peak. Despite these signs of progress, the authors of the report are skeptical that Canada will achieve its admission targets for newcomers. They point out that permanent resident admissions have yet to decline, and the government’s ability to stem the tide of inbound non-permanent residents remains a significant challenge.

The Role of Non-Permanent Residents in Population Growth

Non-permanent residents, including international students, temporary workers, and asylum claimants, have played a crucial role in Canada’s population growth in recent years. The Desjardins report highlights that these individuals are a key driver of demographic changes, and their numbers have grown significantly over time. However, the federal government’s plan to reduce the influx of temporary residents has faced challenges, with the number of new non-permanent residents exceeding expectations.

The report suggests that achieving the government’s target of reducing temporary resident volumes to less than 5% of the general population will require more aggressive measures to stem the flow of newcomers and encourage more non-permanent residents to leave the country. While the government has set specific targets for temporary resident admissions—445,901 in 2025 and 445,662 in 2026—the current pace of growth suggests that these goals may not be met without significant policy adjustments.

External Pressures and Economic Challenges

The Desjardins report also raises concerns about external pressures that could influence the government’s ability to meet its population and immigration targets. Corporate Canada has expressed growing concerns about labour shortages, particularly in industries with high job vacancies. These organizations may pressure the government to moderate its policies and allow for more temporary workers to address these shortages. The report warns that such pressures could undermine the government’s efforts to slow population growth.

Another factor that could impact Canada’s population trajectory is the potential imposition of tariffs by U.S. President Donald Trump. The report cautions that such tariffs could push Canada into a recession, while also slowing the demand for temporary labour. While this would have negative economic consequences, it could paradoxically help the government achieve its population growth targets more quickly by reducing the number of non-permanent residents entering the country.

The Road Ahead: Uncertainty and Challenges

Looking ahead, the Desjardins report paints a picture of uncertainty and challenges for Canada’s population growth and immigration policies. The federal government’s struggle to meet its policy objectives in the past, combined with the administrative challenges of implementing significant policy shifts, raises doubts about its ability to achieve its new immigration targets. The report’s authors note that the government has yet to demonstrate the capacity to execute the necessary changes to stem the tide of non-permanent residents and reduce population growth to the desired levels.

At the same time, the report acknowledges that external pressures, such as corporate Canada’s concerns about labour shortages and the potential impact of U.S. tariffs, could further complicate the government’s efforts. These factors suggest that Canada’s population growth trajectory remains highly uncertain, with the government facing an uphill battle to meet its targets in the coming years.

Conclusion: A Balancing Act for Canada’s Population Policy

In conclusion, the Desjardins report highlights the complex challenges facing Canada’s efforts to slow population growth. While the government’s revised immigration targets have shown some signs of progress, the persistent inflow of non-permanent residents and the external pressures on policy suggest that achieving the desired population growth targets will be a difficult balancing act. As Canada navigates the intricate interplay of economic, demographic, and political factors, the country’s ability to manage population growth while addressing the needs of its economy and society remains a critical issue for the future.