Something happened in 2025 that has not happened in the lifetime of anyone working in Canadian real estate, mortgages, or insurance: the country got smaller. Statistics Canada confirmed a population decline of 103,500 in Q4 2025, making 2025 the first year of annual population decline on record. For professionals whose businesses are built on demand, this shift is worth understanding deeply.
The Numbers
Canada's population dropped to 41,472,081 as of January 1, 2026, down roughly 102,000 from the previous year. The decline was driven by the departure of 171,296 non-permanent residents as Ottawa moved to reduce temporary residents to 5% of total population, down from a peak of 7.6% (over 3 million people) in October 2024. Permanent resident admissions fell nearly 20% year-over-year, and immigration overall declined 18%. Ontario and BC accounted for nearly 70% of all emigration. As the Wall Street Journal put it: "For the first time since World War II, Canada experienced a decline in its population last year, marking a significant change from the growth observed in previous years following the federal government's stricter immigration regulations."
What It Means for Mortgage Brokers
Fewer people means fewer buyers, and that shows up first in purchase pipeline volume. TD economist Marc Ercolao notes that "this year and into next year, we're witnessing a phase of significant stagnation in the housing market, partly due to population trends." With outstanding mortgage credit at $2.4 trillion and the BoC overnight rate sitting at 2.25%, the renewal wave remains the defining opportunity. Brokers in Ontario and BC will feel the purchase slowdown most acutely, while those in Alberta and the Prairies still benefit from interprovincial migration.
Scott Larter, CEO of BrokerBot, frames it clearly: "For ten years, population growth papered over a lot of cracks in the housing market. That era is over. Ontario and BC lost more people than they gained last year. If you are a mortgage broker in Toronto or Vancouver, your purchase pipeline just got thinner. The opportunity shifts to renewals, refinances, and staying close to the clients you already have."
What It Means for Real Estate Agents
This spring is shaping up to be one of the softest in recent memory for listing agents in the country's two largest markets. Toronto saw an 80% drop in apartment construction starts in 2025, while Vancouver experienced a 7% decrease. Record condo project cancellations, with a fivefold increase in canceled units in Toronto and a tenfold increase in Vancouver, signal that developers are pulling back hard. But there is a silver lining in the data. Marc Ercolao observes that "the detached housing market isn't experiencing as pronounced an effect, as a very small portion of newcomers are engaged in that segment." Scott Larter adds: "Real estate agents in Toronto and Vancouver are looking at the softest spring in years. Detached homes are somewhat insulated, but condos that depend on investor demand and immigration-driven rental income are exposed. The agents who pivot to serving existing homeowners with market intelligence and equity updates will stay relevant through the downturn."
What It Means for Insurance Professionals
The insurance angle is underreported but real. The national vacancy rate has climbed to 3.1%, and average asking rents have fallen for 17 consecutive months, down 7.8% from their May 2024 peak. For landlord clients, vacant units sit unoccupied longer, which changes their risk exposure. Shifting property values in softening markets may also leave some owners over-insured or, more dangerously, under-insured if they have not recently reviewed their coverage.
Larter highlights the opportunity: "For insurance professionals, falling property values and rising vacancies in certain markets change the risk picture. Fewer tenants mean more vacant units. More vacant units mean more coverage gaps. The brokers and agents who are having those conversations proactively with landlord clients are adding real value."
The Silver Lining
Not all of this is bad news. Affordability is genuinely improving. The average Canadian tenant is now saving $172 per month compared to peak rents, and rent as a share of income has fallen from 34% two years ago to 29% today. Toronto rents are down by more than 8%, and Vancouver rents are down by more than 10%. Ottawa estimates that the immigration reduction will narrow the housing supply gap by roughly 670,000 units by the end of 2027.
Alberta and the Prairies continue to see strong interprovincial migration and economic momentum. BMO senior economist Robert Kavcic describes the trajectory: "We're now fully in an era of normalization, with population growth of around zero expected through 2027, before settling back to a baseline of just under one per cent." For all three professional groups, the message is the same: the market is changing, and the ones who engage clients proactively will emerge stronger.
FAQs
Q: How does the population decline affect mortgage purchase volumes?
Fewer newcomers means fewer first-time buyers, particularly in Ontario and BC where 70% of emigration is concentrated. Mortgage brokers should expect thinner purchase pipelines in these provinces. BrokerBot's pipeline tracking tools help brokers identify which segments are slowing and redirect effort toward renewals and refinances.
Q: Is the condo market in trouble?
Condo markets in Toronto and Vancouver are under significant pressure. Toronto saw an 80% drop in apartment starts, and record project cancellations are mounting. However, the detached market is somewhat insulated. BrokerBot's market intelligence updates help real estate agents and brokers advise condo-investor clients on changing conditions.
Q: What does this mean for rental property insurance?
Rising vacancies and falling rents change the risk profile for rental property owners. Insurance brokers should proactively review coverage for landlord clients, especially in markets where vacancies are climbing and property values are softening. BrokerBot's client management tools make it easy to flag accounts for timely coverage reviews.
Q: Are there any regions where the market is still strong?
Alberta and the Prairies continue to benefit from strong interprovincial migration. CMHC noted that Calgary and Montreal may see stronger housing market activity compared to Toronto and Vancouver. BrokerBot helps professionals track regional trends so they can focus their energy where the activity is.
Q: How long will the population decline last?
BMO economist Robert Kavcic expects population growth of around zero through 2027, before returning to a baseline of just under one per cent. This is a multi-year adjustment, not a one-quarter blip. BrokerBot's trend dashboards help professionals plan their business around these longer-term shifts.
Q: How should I adjust my client outreach strategy?
In softening markets, the value proposition shifts from finding new clients to deepening relationships with existing ones. Whether you are a mortgage broker focused on renewals, a real estate agent providing equity updates, or an insurance broker reviewing coverage gaps, proactive outreach builds trust that pays off when the market turns. BrokerBot's automated outreach tools help you stay in front of clients without spending hours on manual follow-up.
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