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As population declines, Canada seeks world’s top talent
Businesses in small towns and cities are increasingly struggling to stay open because of labor shortages.
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Prabhjot Paul Singh - Fri, 19, Dec 2025
- 00:02 EST
- 8
Canada Flag. / Unsplash
As appeals by cities and provinces to review recent immigration policy changes go unanswered, Canada is experiencing its sharpest population decline in nearly eight decades.
Businesses in small towns and cities are increasingly struggling to stay open because of labor shortages. Canada’s public broadcaster, CBC, recently highlighted the case of an Indian immigrant who has run a restaurant in Saskatchewan since arriving as an international student in 2010. She said her last two chefs, whose work permits were not renewed, are set to return to India early next year, putting her business at risk.
Her experience is not an isolated one. Employers across the country are facing acute shortages of both skilled and unskilled workers, leaving many businesses in precarious positions.
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According to Statistics Canada, the country recorded an unprecedented population decline in the third quarter of this year. Canada’s population, which crossed the 40 million mark just a few years ago, fell by about 76,000 people.
When Prime Minister Mark Carney’s minority Liberal government presented its first budget, it outlined plans to sharply reduce international student permits in the coming years. Emphasizing a focus on high-skilled immigration rather than labor volume, the budget announced an initiative to recruit more than 1,000 top international researchers, backed by up to 17 billion Canadian dollars (about $12 billion U.S.) in funding.
Finance Minister François-Philippe Champagne said the government aims to attract “the best and the brightest” to Canada.
Carney has said his government wants to restore immigration levels to what it considers “sustainable” while continuing to attract global talent to support economic growth.
While the full economic impact of the new immigration policy may take time to emerge, the government has proposed keeping new permanent residents at under 1 percent of the population beyond 2027. It also plans to reduce the share of temporary residents to below 5 percent by the end of that year.
Recent data from Statistics Canada suggest the demographic effects of the policy shift are already becoming visible.
Canada’s birth rate has also declined steadily over the past six decades, leaving immigration as the primary driver of population growth. Economists have warned that stagnant or negative population growth could strain certain sectors of the economy, even if it leads to higher per capita productivity.
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