Canada’s 2025 Election and Population Trends: Navigating Sustainable Growth Amid Political Crosscurrents

The Canadian federal election scheduled for October 20, 2025, will serve as a critical juncture for policymakers grappling with a population growth trajectory that, while moderating, continues to test immigration and economic frameworks. As Scotiabank’s latest analysis underscores, Canada’s population growth is slowing from post-pandemic peaks but remains elevated historically, with key challenges emerging in managing temporary residents and aligning with federal targets. With geopolitical tensions and housing affordability dominating the political discourse, investors must parse how these dynamics will shape economic stability and investment opportunities in the coming year.

The Election Context: A Critical Vote on Immigration and Growth

The election’s timing is set against a backdrop of legislative debates over electoral dates, with a proposed shift to October 27, 2025, to avoid conflicting with the Hindu festival of Diwali. While the proposed delay faced opposition from all major parties except the governing Liberals, the October 20 date remains the most likely outcome unless bipartisan support emerges—a scenario deemed unlikely given current tensions. The election will likely see candidates like Liberal leader Mark Carney and Conservative leader Pierre Poilievre clash over immigration policies, with Carney advocating caps on permanent residents until growth aligns with pre-pandemic levels and Poilievre pushing stricter controls on temporary workers and asylum seekers.

Population Growth: Slowing, but Not Stalling

Scotiabank’s data reveals a nuanced picture of Canada’s demographic landscape. Year-over-year population growth (for those aged 15+) dipped to 2.9% by March 2025, the first time below 3.0% since late 2023. The annualized growth rate for the year-to-date (YTD) averaged 1.8%, signaling moderation but not stagnation. Key drivers include:
- Temporary Resident Reductions: The temporary resident population (students, workers, and asylum seekers) saw its first net decline in three years, driven by a 18% drop in study permit issuances in 2024. However, asylum claimants surged by +25,000, complicating efforts to meet the government’s goal of reducing temporary residents to 5% of Canada’s population by 2027.
- Permanent Immigration Trends: Canada is on track to admit ~483,000 permanent residents in 2024, narrowly missing the 485,000 target. The 2025 target of 395,000 reflects a deliberate slowdown, though analysts question whether this will suffice to curb growth pressures.

Economic Implications: Growth vs. Sustainability

The moderation in population growth presents both opportunities and risks. On one hand, slower growth may ease pressures on housing markets and public infrastructure, which have been strained by rapid expansion. On the other, it risks labor shortages in sectors reliant on immigration, such as healthcare and technology.

• Housing Market: With population growth cooling, housing demand may stabilize, potentially easing price volatility. However, geopolitical risks—such as U.S. tariffs on Canadian goods—threaten to complicate this picture. Scotiabank projects 1.7% GDP growth in 2025, constrained by trade-related uncertainty.
• Geopolitical Risks: U.S. trade policies, including tariffs on Canadian exports, could amplify economic headwinds. Canada’s retaliatory tariffs on $155 billion of U.S. goods, coupled with delayed supply chains, add to the uncertainty.

Policy Challenges: Can Targets Be Met?

Scotiabank’s analysis is skeptical about meeting the 5% temporary resident target by 2027, noting structural and political barriers:
1. Administrative Delays: Processing exits for temporary residents takes time, and visa holders often arrive months after issuance.
2. Asylum Dynamics: U.S. migration policies and rising asylum claims in Canada complicate population management.
3. Election Uncertainty: The outcome of the October election could shift immigration priorities. For instance, a Conservative victory might accelerate caps on temporary workers, while a Liberal win would likely prioritize economic nominee programs.

Investment Implications

Investors should focus on sectors that align with Canada’s evolving demographic and policy landscape:
- Real Estate: Slower population growth may reduce speculative demand, favoring stable, income-producing properties over speculative markets like Vancouver or Toronto.
- Technology and Healthcare: Sectors requiring skilled labor may face staffing challenges unless immigration targets remain flexible.
- Financials: Banks like Scotiabank (RY) could benefit from stable consumer demand, though trade-related risks could weigh on exports-heavy portfolios.

Conclusion: A Cautionary Optimism

Canada’s population growth trajectory in 2025 is moving toward more sustainable levels, but achieving the federal government’s goals will require navigating electoral volatility, geopolitical tensions, and administrative bottlenecks. With growth projected at 1.8% annually (YTD) and temporary resident numbers declining—albeit unevenly—investors can cautiously position for stability in sectors like financials and real estate. However, the October election’s outcome and U.S. trade policies remain wildcards.

Scotiabank’s data makes clear that while the “stall” in population growth remains elusive, Canada’s demographic path is shifting toward moderation. Investors who balance exposure to resilient sectors with hedging against trade risks will be best positioned to capitalize on this evolving landscape.

Data sources: Scotiabank Economics reports, Canada Elections Act provisions, and parliamentary legislative timelines.