Market Intelligence
For the first time in recorded history, Canada’s population fell over a full year. In the last quarter of 2025 alone it dropped by 103,504 people, leaving 41,472,081 residents on January 1, 2026.1 The number is real, and the headline writes itself. But a falling population and a shrinking rental market are not the same thing. Almost all of the decline came from one group — temporary residents — who rent in a corner of the market institutions rarely own, while the deeper shortage of apartments barely moved.
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The first-ever population decline
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Deliberate cuts to temporary residents
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Demand runs on households
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The shortage that didn’t move
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What this means
Part One
The short answer
Statistics Canada reported the population fell by 103,504 in Q4 2025 and by roughly 102,000 over the full year — the first annual decline on record. But the drop came almost entirely from non-permanent residents whose permits ended, while permanent immigration kept adding tens of thousands of new arrivals (Source: Statistics Canada, Q4 2025 population estimates).
Statistics Canada reported that Canada’s population fell by 103,504 people, or about 0.2%, between October 1, 2025 and January 1, 2026.1 Over the full 2025 calendar year the country lost roughly 102,000 residents — the first annual decline in recorded Canadian history. For a country whose growth story has always run on immigration, that is a genuine break from the past.
But the cause is narrow and specific. The decline came almost entirely from a fall in non-permanent residents (NPRs), whose numbers dropped by 171,296 in the quarter. The total count of NPRs living in Canada fell from about 3.15 million in October 2024 to roughly 2.68 million by January 2026.1 Most of that drop was people holding study permits, work permits, or both. Meanwhile, Canada still welcomed 83,168 new permanent residents in the same quarter — fewer than a year earlier, but still tens of thousands of new arrivals.1
In other words: the people leaving are largely students and temporary workers whose permits ended, while the continued flow of permanent immigrants — the group that has always anchored Canada’s population — kept arriving.
A permanent resident has been approved to live in Canada for good as a landed immigrant. A non-permanent resident is here on a temporary basis — an international student on a study permit, a worker on a temporary work permit, or someone who has claimed asylum. Temporary residents can become permanent ones, but their permits have end dates. That is why government policy can change their numbers quickly, while permanent immigration moves more slowly and predictably.
Figure 1 · What moved the number
Almost the entire Q4 2025 population drop was fewer temporary residents
Part Two
The short answer
The decline was a deliberate federal policy choice. Ottawa moved to bring temporary residents down toward 5% of the population — capping study permits and tightening work-permit rules — while keeping permanent-resident targets substantial. The Parliamentary Budget Officer estimated the changes lower the population outlook by about 1.4 million by end-2027: a planned slowdown, not a reversal (Sources: IRCC; PBO).
This decline did not happen by accident. It is the visible result of a federal policy choice. Under the 2025–2027 levels plan, Ottawa set out to bring the share of temporary residents down to roughly 5% of the population, after several years of rapid growth.2 To get there, the government capped study-permit applications, tightened eligibility for post-graduation and spousal work permits, and limited low-wage temporary foreign worker hiring. Those measures work through the system gradually as existing permits expire — which is exactly what the late-2025 numbers show.
Permanent immigration, by contrast, was trimmed but kept substantial. The same plan set permanent-resident targets of 395,000 for 2025, 380,000 for 2026, and 365,000 for 2027, with the economic category — skilled workers selected for the job market — making up close to 62% of admissions by 2027.23 Canada’s Parliamentary Budget Officer estimated the combined changes would lower the population outlook by about 3.2%, or roughly 1.4 million people, by the end of 2027.5 A meaningful adjustment — but a planned slowdown in the rate of growth, not a long-term reversal.
Each year, IRCC publishes a levels plan: the government’s targets for how many newcomers Canada will accept, split into categories like economic immigrants, family reunification, and refugees. Starting with the 2025–2027 plan, it also sets targets for temporary residents for the first time. Because new residents need somewhere to live, the levels plan is one of the most direct signals of where future housing demand is heading.
“Headlines count people. Housing markets count households — and the two moved in different directions.”
Part Three
The short answer
Housing demand is driven by households forming, not raw headcount. Non-permanent residents rent intensively but share and double up, so each departure removes fewer whole households than the headcount implies. Permanent residents form lasting renter households and move toward ownership over time — a renewable layer of apartment demand replenished by each year’s intake (Source: Statistics Canada / IRCC, 2021 Census housing-use study).
Here is the part the headline misses. Housing demand is not driven by the raw number of people in the country — it is driven by the number of households that form. Several people can share one home, and the same population can produce very different housing demand depending on how those people group together.
A joint Statistics Canada and IRCC study of 2021 Census data measured exactly how each group uses housing, in units occupied per 1,000 people.6 Non-permanent residents are almost entirely renters: about 316 rented units for every 41 owned. They also rent more intensively per person than anyone else — often sharing units and doubling up to manage costs — so each person who leaves when a permit expires removes fewer whole households than the headcount suggests. And because their stay is temporary, that demand can fall quickly when policy changes, as it did through 2025.
Permanent immigrants use housing differently. Recent purpose-built rental (PBR) demand starts with them too: recent permanent residents rent about 203 units per 1,000, including roughly 163 rented apartments — close to the kind of multi-family homes institutional owners hold.6 The difference is what happens next. They don’t leave when a permit ends. They form lasting households and move steadily toward ownership over their years in Canada — so each year’s intake of permanent residents adds a fresh layer of rental-apartment demand that the next year’s arrivals refill.
Seen over time, the contrast gets sharper. Permanent-resident intake has stayed a large, positive number every single year — a fresh cohort of renter households arriving on schedule — while net non-permanent flows surged to a record and then reversed. Even in 2025, as temporary numbers fell by roughly 344,000, permanent immigration still added hundreds of thousands of people who need homes.7
Figure 2 · A renewable layer vs. a volatile one
Permanent intake stays a steady, positive number every year; net non-permanent change surged to a record, then reversed
Imagine four students sharing a three-bedroom condo. That is four people but one household, renting one unit. If two of them leave when their permits expire, the population count drops by two — but the unit is still rented, and no purpose-built apartment opened up. Housing demand tracks households and units, not the headcount on a census form. It is why a population dip and a rental-supply shortage can co-exist.
Part Four
The short answer
CMHC estimates Canada needs roughly 3.5 million additional housing units beyond what is already being built to restore affordability by 2030, about two-thirds of it in Ontario and British Columbia. A one-year decline of about 100,000 people — concentrated in shared, temporary accommodation — does not close a shortfall measured in the millions (Source: CMHC housing-supply research).
Step back from the quarterly noise and the bigger picture is about supply, not demand. CMHC has estimated that Canada needs roughly 3.5 million additional housing units beyond what is already being built to restore affordability by 2030, with about two-thirds of that gap sitting in Ontario and British Columbia.4 Even in a slower-population scenario the gap stays in the millions of units; in a higher-growth scenario it approaches four million.4
Set against a shortfall of that size, a one-year decline of about 100,000 people — concentrated in shared, temporary accommodation — does not close the gap. The deficit between how many households want rental homes and how many purpose-built apartments exist has been building for decades, and it did not reverse in a single quarter. If anything, the slow pace of new construction means the underlying supply pressure is still the dominant force in the market.
A supply gap is the difference between the number of homes a country has and the number it would need for housing to be affordable. CMHC estimates this gap by comparing projected housing stock to what affordability would require. Closing it depends on how fast new homes get built — which is limited by land, approvals, labour, and financing — far more than by a single year’s change in population.
Part Five
The short answer
Canada’s first recorded annual population decline is real but narrow: almost entirely a planned reduction in temporary residents. The renewable, permanent-resident household formation that purpose-built apartments rely on kept going — and a supply shortfall measured in millions of units still dominates a demographic dip measured in the tens of thousands.
Canada’s first recorded annual population decline is a genuine event, but it traces almost entirely to a planned reduction in temporary residents — not to a fall in permanent immigration, which kept adding people through the quarter.1
Purpose-built apartments are served by durable, permanent-resident household formation. The renters leaving were temporary residents, who rent intensively but often share and double up and whose numbers move with policy — so the hit to the renewable, permanent-resident rental demand that institutional apartments rely on is far smaller than the headcount suggests.
A shortfall measured in millions of units does not close because of a one-year demographic dip measured in the tens of thousands. On the data published to date, the structural shortage of rental housing remains the dominant force in the market — subject, as always, to changing conditions.4
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Lankin’s focus on institutional-grade, purpose-built multi-family is, in part, a focus on the segment of the market tied to permanent-household formation rather than to temporary, shared-accommodation demand. We read the 2025 population data as a change in the pace of demand growth, not its direction, and we continue to weigh supply constraints and submarket detail in every acquisition. Outcomes depend on market conditions; past performance is not a reliable indicator of future performance.
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If you are evaluating any private real estate strategy in light of these headlines, the questions worth asking are: which population is actually changing, what kind of housing those people use, and how the strategy is exposed to structural supply versus short-term demand swings. Those are the questions Lankin asks of every purchase, and the same ones we’d encourage anyone evaluating a private real estate strategy to apply.
Common questions
Did Canada’s population really shrink in 2025?
Yes. Statistics Canada reported the population fell by 103,504 in Q4 2025 and by about 102,000 over the full year — the first annual decline on record. The fall came almost entirely from non-permanent residents (students and temporary workers) whose permits ended, not from permanent immigration (Source: Statistics Canada).
Does a falling population mean rental demand is falling?
Not necessarily. Rental demand tracks household formation, not raw headcount. The people leaving were mostly temporary residents who share housing, so each departure removes fewer whole households than the population drop suggests, while permanent immigration keeps adding renter households (Source: Statistics Canada / IRCC).
Why did Canada’s population decline?
It was a deliberate policy choice. The federal government capped study permits, tightened work-permit eligibility, and limited low-wage temporary foreign workers to bring temporary residents down toward 5% of the population, while keeping permanent-resident targets substantial (Source: IRCC).
How big is Canada’s housing shortage?
CMHC estimates Canada needs roughly 3.5 million additional housing units beyond current construction to restore affordability by 2030, with about two-thirds of the gap in Ontario and British Columbia (Source: CMHC).
Forward-looking information. Certain statements in this article constitute forward-looking information ("FLI") within the meaning of applicable Canadian securities laws. Forward-looking statements include words such as "expect," "anticipate," "may," "will," "could," "intend," "plan," "believe," and similar expressions, as well as statements about future market conditions, vacancy direction, supply pipelines, demand drivers, and investment outcomes. Forward-looking information is based on assumptions and is subject to risks and uncertainties — including macroeconomic, demographic, regulatory, and market-specific factors — that may cause actual results to differ materially from those expressed or implied. Lankin Investments undertakes no obligation to update forward-looking information except as required by applicable law.
Balancing context. While this article describes characteristics of the Canadian multi-family rental market that have historically supported relative stability — including supply and demand dynamics, occupancy levels, and rent profiles — investments of this kind are subject to a range of risks, including market, credit, interest rate, regulatory, operational, liquidity, and concentration risk. There can be no assurance that any historical pattern, market characteristic, or operating approach will continue or produce a particular outcome in the future. Past performance is not a reliable indicator of future performance.
This article is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any offering of securities by Lankin Investments will be made only to qualified investors pursuant to applicable exemptions from prospectus requirements and only by way of an offering memorandum or other authorized offering document, which should be reviewed in full prior to making any investment decision. Investors should consult their own legal, tax, and financial advisors before acting on any information in this article.
Information presented is sourced from third parties believed to be reliable; Lankin Investments has not independently verified, and does not assume responsibility for the accuracy or completeness of, third-party data. Market commentary reflects Lankin's view as of the publish date and may change without notice.
