A fresh TD Economics report released this morning concludes that Ottawa’s decision to stabilize permanent resident admissions at 395,000 and cap temporary residents is easing pressure on Canada’s overheated housing and labour markets faster than expected.
Chief Economist Beata Caranci finds that population growth slowed to 0.9 % in 2025 from 3.2 % a year earlier, cutting rental demand growth in half and trimming projected purpose-built rental inflation to 3–3.5 % for 2026. Unemployment, meanwhile, has held below 6 %, contradicting concerns that fewer newcomers would drive labour shortages.
The study credits the decline in international student arrivals (down 60 % year-to-date) and tighter work-permit criteria for family members as key drivers of the slowdown. It also warns that sustained low immigration could dent consumer spending in 2027 unless productivity gains rise.
For employers, the findings suggest wage pressure may abate in sectors such as construction and retail, but specialized skills gaps will persist, making programs like the Global Talent Stream even more critical. Policymakers are likely to seize on the report as empirical backing for the imminent 2026-2028 Immigration Levels Plan, expected to keep permanent resident targets flat while shrinking temporary admissions again.
Real-estate analysts say the data could temper calls for rent caps, giving municipalities breathing space to accelerate housing supply initiatives.
Chief Economist Beata Caranci finds that population growth slowed to 0.9 % in 2025 from 3.2 % a year earlier, cutting rental demand growth in half and trimming projected purpose-built rental inflation to 3–3.5 % for 2026. Unemployment, meanwhile, has held below 6 %, contradicting concerns that fewer newcomers would drive labour shortages.
The study credits the decline in international student arrivals (down 60 % year-to-date) and tighter work-permit criteria for family members as key drivers of the slowdown. It also warns that sustained low immigration could dent consumer spending in 2027 unless productivity gains rise.
For employers, the findings suggest wage pressure may abate in sectors such as construction and retail, but specialized skills gaps will persist, making programs like the Global Talent Stream even more critical. Policymakers are likely to seize on the report as empirical backing for the imminent 2026-2028 Immigration Levels Plan, expected to keep permanent resident targets flat while shrinking temporary admissions again.
Real-estate analysts say the data could temper calls for rent caps, giving municipalities breathing space to accelerate housing supply initiatives.
