Canada’s population contracted for the first time on record in 2025 and posted a third consecutive quarterly decline of roughly 55,000 people in the first quarter of 2026, according to Statistics Canada. The drop stems primarily from federal policy measures that sharply reduced temporary resident arrivals and accelerated net outflows of non-permanent residents, including international students and temporary workers. The 2026–2028 Immigration Levels Plan sets permanent resident targets at 380,000 annually and temporary resident arrivals at 385,000 for 2026—well below prior peaks—while aiming to bring the non-permanent resident share below 5 percent of total population by the end of 2027. Preliminary data also show elevated net emigration of citizens and permanent residents alongside periods of negative natural increase. These sustained policy-driven outflows and lower intake levels underpin trader expectations of a historically large annual decline in 2026.