A June Edge Realty Analytics report has indicated that Canada’s population growth may be peaking.
In the second quarter of 2024, Canada’s population saw an increase of 0.6%, or 243,000 people. However, this quarter showed the start of a plateau to Canada’s headlining population growth. The rapid growth stabilized with an annual rate of 3.2%, adding 1.27 million new residents. This quarter was pivotal, as it was the first time since early 2021 that annual growth did not accelerate, suggesting that Canada may be reaching a peak in its population boom.
The driving force behind this surge continues to be the influx of non-permanent residents, including international students, temporary foreign workers, and other temporary visa holders. In the second quarter, the non-permanent resident population grew by 132,000, bringing their total to 2.8 million, or a record 6.8% of the Canadian population. Over the past year, NPRs have accounted for a significant 830,000 of the 1.27 million annual growth, making up 66% of the total increase.
Source: Edge Realty Analytics
Source: Edge Realty Analytics
This surge in NPRs presents significant challenges for policymakers. The federal government has indicated a goal of reducing the proportion of NPRs to 5% of the population within three years. To meet this target, given the increase in the second quarter of 2024, Canada would need to cut 59,000 NPRs each quarter for the next 12 quarters. If successful, this would bring the growth rate down to just 0.5% by the end of 2025.
Source: Edge Realty Analytics
Achieving this reduction is a significant task that would involve a time component.
Measures such as capping the number of international students are expected to take time to impact the population. Changes would show in the next academic year in the fall. However, Statistics Canada reports that while Canada added 131,810 NPRs in the first quarter of 2024, this was one of the lowest quarterly increases since mid-2022, significantly lower than the peaks seen in 2023, which recorded record highs in the second (+233,361) and third (+312,758) quarters.
In the first quarter of 2024, the estimated number of individuals with work permits increased significantly by 94,299. On the other hand, those with only study permits saw a notable decline of 24,594. Although it is typical to see fewer study permit holders in the first quarter, the decrease in 2024 was more pronounced compared to the 16,003 drop observed in the same period of 2023.
Additionally, in April, study visa applications, which are a good forward indicator of international student admissions, were down 32% year-over-year, with applications from India, a major source of international students, dropping by 61%. Overall, international student admissions are down 18% year-to-date, with a 46% decline for Indian students.
Source: Edge Realty Analytics
According to ApplyBoard, March 2024 saw a steep year-over-year decline in new study permits processed: only 33,000 permits compared to 70,000 in March 2023. This downturn is influenced by several factors, including tightening student loan conditions in India, strained Indian-Canadian relations, and recent media controversies. Moreover, the preference of Indian students for now-capped programs, like college diplomas and undergraduate degrees, plays a role. Finally, the increased requirement to show $21,000 in funds for living expenses (up from $10,000 last year) is adding another significant barrier.
Despite Indian students making up a third of all processed study permits and 55% of approvals, March 2024 saw a historic low of just over 4,000 permits for Indian students. This suggests Canada may miss its already reduced international student targets by 10-15%. With caps set 35% below the 2023 levels and distributed per capita across provinces, Ontario and BC face drastic reductions of up to 60%.
Source: Edge Realty Analytics
Given these dynamics, it appears likely that Canada’s population growth may be at or near its peak, with two record-setting quarters from late 2023 about to drop out of the annual calculations, and NPR growth expected to slow sharply. How quickly this slowdown materializes will largely depend on the government’s commitment to its NPR reduction targets and its broader immigration policies. Staying on top of any changes as they occur will be important for monitoring real estate trends.
