Bank of Canada Warns Immigration Cuts Threaten Economic Growth

The Bank of Canada warned that sharp immigration cuts combined with an aging population threaten to weaken economic growth, shrink the workforce, and intensify labor shortages. The central bank noted that population growth slowed to 0.5 percent in 2025, marking the weakest pace in over a century. While these restrictions were intended to ease a housing and affordability crisis, the bank cautioned that fewer immigrants would result in fewer workers and weaker demand for goods and services.

Prime Minister Mark Carney and Immigration Minister Lena Metlege Diab are currently preparing the 2027-2029 Immigration Levels Plan, due by November 1. The government has signaled a shift toward attracting skilled newcomers in emerging technologies, health care, and skilled trades to mitigate labor shortages.

However, a tension remains between housing goals and economic requirements. Carney previously pledged to reduce temporary residents to less than five percent of the population by the end of 2027. He has since questioned when the government should resume a controlled increase in population to maintain the nature of the country.