StatCan data confirm a third straight quarterly decline, with more losses forecast through 2027
Canada's population contracted for the third consecutive quarter in early 2026, Statistics Canada reported Wednesday. That extends a historic demographic reversal that is reshaping the housing demand outlook and prompting fresh questions about where mortgage volumes are headed.
The agency placed Canada's population at 41,417,056 on April 1, down 55,025 people from January 1. The 0.1% quarterly decline marks the third straight contraction, a sequence without precedent in modern Canadian history.
Demand drivers erode
The Q1 2026 contraction was driven overwhelmingly by the continued departure of non-permanent residents, whose numbers fell by 117,879 in the first three months of the year. That's more than double the 55,194 decline recorded in the same period a year ago.
Permanent immigration also slowed, with 83,149 new arrivals in Q1 2026 compared with 104,210 in the first quarter of 2025, roughly 20% fewer.
Net emigration totalled 20,140 for the quarter, marginally above the 19,961 recorded a year earlier.
The country also recorded negative natural increase for the first time in recent memory, with 155 more deaths than births, a reversal from the gain of 983 posted in the first quarter of 2025.
Read more: Canada's housing market in 'new ground' after population starts to fall
CPA Canada chief economist David-Alexandre Brassard described the trajectory as a "slow burn" with long-running implications for the sector.
"Housing demand in Canada has long been supported by strong population growth," Brassard said.
"With population now declining, we're in the midst of a slowdown phase that could last several more quarters and naturally ease pressure on the housing market."
Rate cuts may follow
Brassard projected that population losses would extend well into next year. "At the current pace, population levels could continue to fall through 2027, weighing on economic growth, labour markets, consumption – and housing demand," he said.
The cumulative effect on affordability may carry a silver lining for buyers.Analysis of whether Canadians leaving the country are weakening the housing market has pointed to condo rents falling to 33-month lows in early 2026 as a direct consequence of population loss, evidence that softer demand is beginning to feed through to pricing. Brassard said the adjustment, while uncomfortable, was overdue.
Read more: Are Canadians fleeing the country weakening the housing market?
"The housing market needed to adjust after a period of significant overvaluation," he said. "A cooler demand environment, especially one driven by population trends, should support a gradual improvement in affordability, even if the timing and extent remain uncertain."
He also flagged monetary policy implications. With inflation pressures easing alongside lower oil prices, the Bank of Canada may have more room to cut its policy rate.
"The policy rate is not immune to lower economic fundamentals, and it could be lowered to prop up the economy and the housing market," Brassard said.
The Bank of Canada held its overnight rate at 2.25% at its April 29 meeting, cautioning that ongoing trade and geopolitical uncertainty continued to cloud the economic picture.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
