Fast vs. Slow: How Different Immigration Rates Can Impact Canada’s Economic Challenges and Regional Disparities

• This report examines how different permanent immigration rates – and policies aimed at influencing where newcomers settle – affect Canada’s population growth, regional balance, and long-term economic challenges. It models six scenarios from 2021 to 2046 to project the impacts of varying immigration levels.
• The analysis finds that while immigration supports national population growth, it tends to reinforce the divide between fast-growth and slow-growth regions. Large urban centres expand rapidly, while many smaller communities experience demographic stagnation, decline, and accelerated ageing – even under high immigration scenarios.
• The takeaway: immigration policy alone can’t solve regional disparities. To support slower-growth areas, it must be paired with broader investments in infrastructure, services, and economic development – especially in mid-sized cities that can absorb growth and ease pressure on major urban centres.

Press Release

Introduction

The distribution of Canada’s population since Confederation has been characterized by two long-term trends: movement westward and urbanization. Shortly after the boundaries of the four western provinces were finalized, Western Canada constituted 24 percent of the total Canadian population – and that proportion has risen to 33 percent today.¹These figures are calculated based on the 1911 Census and the Statistics Canada quarterly population estimate for 2023, Q4 (Statistics Canada 2024a). Over this period, Canada’s rural and small-town population has grown slowly, while its urban population has expanded rapidly (Statistics Canada 2022). Throughout most of its history, Canada’s population growth has been dominated by natural increase, but immigration nevertheless has played a powerful role in these transformations. In recent decades, immigration has become the primary driver of population growth, shaping both the overall size and distribution of Canada’s population. This trend is expected to continue, as net international migration will account for all future population growth in Canada in the coming decades.

Low fertility is a defining characteristic of contemporary Canada. For the most part, this is true of all regions of the country, although Statistics Canada data show considerable variation in fertility across provinces and territories. As of 2023, fertility rates in Canada are below the replacement level of 2.1 children per woman in every region except Nunavut. Rates are lowest in British Columbia, the Yukon, the four Atlantic provinces, and Ontario (ranging from 1.00 to 1.22), somewhat higher in Québec, the prairie provinces, and the Northwest Territories (1.38 to 1.63), and highest in Nunavut at 2.48 (Statistics Canada 2024b). This widespread trend contributes to a continued decline in natural population growth.

Given the reliance on immigration for population growth, Canada can be divided into fast-growth and slow-growth regions based on immigrant settlement patterns. Immigrants tend to settle in larger cities, which experience relatively rapid growth, while many rural and remote areas continue to face demographic stagnation or decline due to negative natural increase (except in the prairie provinces) and minimal net international migration. This pattern is further influenced by internal migration, as residents move within Canada in response to economic and social factors.

What drives immigrant settlement choices? Research on voluntary migration highlights three factors (e.g., Massey et al. 1993): people are drawn toward opportunities for better lives, they settle in places they know or at least have heard about, and they move to places where they benefit from the support of family, friends, or community. The landscape of immigrant settlement in Canada reflects these forces (McDonald 2004; Dion 2010; Hiebert 2015). Places with dynamic economies and advanced education and training opportunities exert a powerful, attractive force (Hyndman et al. 2006; Frenette 2018). Major urban centres such as Toronto, Vancouver, and Montréal are well-known internationally and benefit from large immigrant communities, making them more attractive to new arrivals.

In a recent pre-arrival survey by the Impact and Innovation Unit at the Privy Council Office, respondents cited their top reasons for choosing a settlement province as: “It is a place I can see myself living long-term,” “I will be able to find good work there,” “It is a place I have heard a lot about,” and “There are good educational opportunities for me or for my family” (Leduc and Scott 2024).

Canada may, therefore, have a land mass of close to 10 million square kilometres, but the majority of immigrants, as well as temporary residents, live in a handful of urban areas. This settlement landscape can be summarized as a combination of concentration in major metropolitan centres and a high degree of dispersion outside them, an outcome that plays a fundamental role in differentiating between “fast-growth” and “slow-growth” regions.

The impact of population growth on housing in fast-growth regions is particularly notable – an issue now at the centre of national politics and discourse. Research suggests that a 1 percent increase in population is associated with a real home price increase of more than 3 percent per year (Porter and Kavcic 2023). Consequently, it is surely no accident that the highest housing prices in Canada are found in fast-growth regions, particularly in Toronto and Vancouver, which have the highest concentrations of immigrants and non-permanent residents (Ley 2023). This outcome does not necessarily mean that immigrants drive housing prices upward but rather that newcomers tend to settle in economically dynamic areas where demand for housing is already high. Understanding these interactions is essential for shaping effective housing and population policies.

This study assesses the effectiveness of regionalized immigration policies – such as the Provincial Nominee Program and the Atlantic Immigration Program – in promoting a more balanced population distribution. Despite these efforts, the gap between fast- and slow-growing regions has remained largely unchanged. Using Statistics Canada’s custom population projections from 2021 to 2046, this study explores six immigration scenarios and their potential impacts on both fast- and slow-growing regions. The findings reveal that immigration alone cannot resolve regional disparities. While larger cities struggle to accommodate rapid population growth, slower-growing regions continue to face demographic decline and ageing. These insights highlight the need for a more comprehensive policy approach – one that integrates immigration with broader regional economic and infrastructure development strategies.

Before turning to the study itself, two fundamental questions deserve brief attention. First, is it ethical for governments to attempt to shape where immigrants settle, especially when Canadians enjoy full mobility rights and are not subject to such constraints? Should newcomers be expected to support communities that Canadians themselves are avoiding or leaving?

Second, is it practical to encourage immigrants to settle in areas where they will struggle to find meaningful work, given that locals are leaving these regions in search of better opportunities? In essence, regionalization programs risk distorting labour market signals and impeding the efficient allocation of labour across the country. This raises important questions about whether such policies are rational, particularly at a time when Canada is grappling with a productivity crisis.

While these ethical and economic concerns merit serious consideration, this study examines the long-term trade-offs that arise in current efforts to align immigration with regional development. It asks: What are the regional impacts of immigration, and how do they vary at different scales of immigration? Can immigration policy address the very different needs of the faster- and slower-growing parts of Canada? Have regionalization programs produced their intended effects? If regionalization efforts continue, what can be done to improve their effectiveness?

Efforts to Reshape the Geography of Immigrant Settlement

Canada’s 1976 Immigration Act introduced a number of innovations, including requiring the minister of what is now called Immigration, Refugees, and Citizenship Canada (IRCC) to present a plan for the level of immigration to Parliament each year. A key objective was fostering a strong economy and regional prosperity – a principle echoed in the 2001 Immigration and Refugee Protection Act.²The Immigration and Refugee Protection Act of 2001, section 3(1)(c), states that: immigration should “…support the development of a strong and prosperous Canadian economy, in which the benefits of immigration are shared across all regions of Canada.”

Policies to encourage immigrants to settle more broadly began to take shape in the 1990s, especially with the 1991 Canada-Québec Accord, which permits Québec to select economic immigrants, manage settlement services, and maintain its demographic share and French culture.

Other provinces, particularly in Atlantic Canada and the Prairies, which were largely bypassed as immigrant destinations, were eager to negotiate similar agreements (Seidle 2023). Between 1990 and 2009, all provincial and territorial governments (except Nunavut) signed bilateral agreements with the government of Canada. None of these agreements is as far-reaching as the Canada-Québec Accord, but they enable provinces and territories to nominate economic immigrants according to an allocation formula defined and managed by IRCC (Paquet and Xhardez 2020). In practice, these allocations serve as a policy tool to influence the geographic distribution of newcomers (Xhardez and Tanguay 2024).

Provincial Nominee Programs (PNPs) serve two main objectives: encouraging a greater regional dispersion of immigrants and enabling provincial and territorial governments – which are presumably closer to local labour markets – to better match labour market needs with the skills of prospective immigrants (IRCC 2017). The balance between these objectives varies between fast-growth and slow-growth regions. In the former, provincial or territorial governments seek to expand their annual nominee allocation in order to enhance the efficiency of the immigration program to satisfy their perceived economic needs. Conversely, in slower-growth regions, PNPs serve as a means to attract immigrants who might not otherwise settle there. For example, in 2023, of the 21,300 economic-class immigrants settling in Manitoba, 19,800 were admitted through the PNP (93 percent); in contrast, the corresponding figures for Ontario that year were 21,400 out of 102,500 (21 percent) (IRCC 2023).

The significance of these nominee programs has grown enormously over time (Picot et al. 2024; Xhardez and Tanguay 2024). In 2001, when Federal-Provincial-Territorial (FPT) agreements were in their infancy, provincial nominees accounted for only 1,274 immigrants admitted that year – less than 1 percent of the total economic-class admissions (CIC 2001). In recent years, IRCC has also introduced additional programs to promote settlement in slow-growth regions, notably the Atlantic Immigration Program (formerly a pilot) and the Rural and Northern Immigration Pilot.³On the most recent changes to the latter, see IRCC (2024a).

IRCC has also prioritized Francophone minority settlement outside Québec with a set of policies that intersect with regional initiatives. Following a long-term decline in the ratio of Francophone Canadians outside Québec, a new goal was established in 2003 to use immigration to help restore the demographic weight of this population. A specific target of 4.4 percent of primarily French-speaking immigrants settling outside Québec was set in 2019 (IRCC 2019) and achieved in 2022 (IRCC 2024b). This target is set to increase to 10 percent by 2027 (IRCC 2024c). Essentially, these policies are akin to PNPs in encouraging a more even distribution of newcomers across Canada but do not mandate specific destinations, unlike community-specific programs such as the Rural and Northern Immigration Program.

Collectively, the array of programs that are either operated by IRCC to advance the goal of regionalized immigrant settlement or have been devolved to Québec and the other provinces through nominee programs have come to account for over half of the economic-class selection system. In 2022, around 54 percent of economic-class immigrants were selected through one of these mechanisms: Québec (17.7 percent), PNPs (34.5 percent), the Atlantic Immigration Program (1.9 percent), and the Rural and Northern Immigration Pilot (less than 1 percent). Factoring in the 4.4 percent Francophone target, nearly 60 percent of economic-class immigrants were selected through policies designed to influence settlement geography (IRCC 2023).

However, settling newcomers in less popular destinations is only the first step – ensuring they remain there is equally important. As permanent residents, immigrants have the right to mobility within Canada, making retention a key challenge for regional immigration policies. Immigrants are a uniquely mobile group: globally, only 3 percent of people live outside their country of birth, and those who have not yet fully planted roots in a new locality are likely to move again, particularly if they have significant human capital (King and Newbold 2007).⁴It is worth noting that, given Charter rights, Canadian law does not prohibit permanent residents from applying to immigrate to one part of the country – such as through a PNP – but settling elsewhere.

Policies aimed at promoting regional and non-metropolitan settlement must account for secondary migration – the movement of immigrants away from their initial destination. It is important to remember that these policies have been established in the first place to compensate for “natural” forces that lead to the depopulation of places with few or even diminishing economic opportunities, especially in peripheral locations. In these cases, out-migration may become akin to a downward spiral, accentuating the forces that prompted people to leave in the first place. Policymakers hope that immigrants will fill demographic gaps and, through consumption and their addition to labour supply and entrepreneurial capacity, stimulate economic growth – and ultimately reverse the out-migration trend. This potentially propulsive force is diluted with secondary migration. In effect, the extent of secondary migration helps determine the efficiency of regionalization policies.

Patterns of Secondary Migration

The five-year retention rate of immigrants in Table 1 provides insight into the scale and impact of secondary migration.⁵More recent data are available in Statistics Canada (2023c), but this earlier table is used as it covers the relatively stable pre-pandemic period. Nationally, around 15 percent of all permanent residents admitted in 2014 were no longer in Canada in 2019, presumably having returned to their country of origin or moved elsewhere.⁶Return or onward migration varies by admission category, with economic immigrants, particularly those qualifying in the business class, exhibiting the highest tendency to leave Canada (Bérard-Chagnon et al. 2024). Table 1 also highlights significant variations in retention rates across provinces, with pronounced outflows from the slow-growing parts of Canada in contrast to the “stickiness” of the more populous and economically dynamic parts of the country.⁷There are likely interaction effects between population size and the capacity of places to retain newcomers (e.g., see Hyndman et al. 2006), but the simple fact remains: the “fast” parts of Canada retain a much higher fraction of newcomers than is the case for “slow” Canada.

Although a detailed analysis is beyond the scope of this Commentary, Table 1 suggests that retention rates are generally higher among individuals who held a work permit before obtaining permanent residence status. This implies that designing multiple stages in the immigration process (such as the case of the Atlantic Immigration Program) may be an effective strategy to enhance the ability of slow-growing regions to retain immigrants by allowing newcomers to build social and economic ties before settling permanently.

For those immigrants exercising secondary mobility in Canada, where have they gone? Analysis of the Longitudinal Immigration Database, with a focus on the period just prior to the pandemic, informs us about the initial destination of immigrant tax filers who landed in Canada between 2015 and 2019 and their province of residence in 2020.⁸The author thanks the Migration Analysis team at IRCC for compiling and sharing these data. A clear trend is revealed: while the patterns of interprovincial secondary migration are complex, Alberta, British Columbia, and especially Ontario were the main recipients of secondary migration, collectively receiving over 96 percent of those who relocated to another province. In contrast, every other province and territory experienced net outflows. Economic opportunity remains the most significant factor in attracting secondary migration.

We gain additional insight into secondary migration when we disaggregate the data according to language proficiency. Around 10 percent of immigrants who speak English move to another province within five years of landing in Canada. This figure rises to 20 percent for bilingual individuals and 21 percent for Francophones.⁹Custom calculations and figures are provided by the IRCC Migration Analysis Unit, 2024. Whereas Anglophone immigrants are mainly drawn to Ontario, British Columbia, and Alberta, Francophone and bilingual immigrants tend to gravitate toward Québec.

The Impact of Regionalization Initiatives

How significant have Canada’s regionalized immigrant settlement efforts been, particularly in relation to secondary immigration? A comparison of the 2001 and 2021 Census data on the geography of newcomer settlement is instructive in this respect. Regionalization programs were in their infancy in 2001 but were a major factor in Canada’s immigration system by 2021.

Figure 1 illustrates the changing landscape of newcomer (i.e., recent immigrant) settlement across the regions of Canada. It compares the distribution of immigrants admitted into Canada between 1996-2001 and 2016-2021, providing insight into how regional settlement patterns have evolved over two decades.¹⁰ Some of these newcomers would only have arrived in Canada shortly before the enumeration date, while others would have been settled for as long as five years and may have engaged in secondary migration. The difference between the two cohorts offers a measure of how effective regionalization policies – many of which expanded significantly from the late 1990s to the late 2010s – have been in redistributing immigration flows beyond the traditional gateway cities.

Ontario consistently has attracted more immigrants than its population share, both at the start of regionalization programs and more recently.

The same is true for British Columbia, although in both cases their share of recent immigrants has declined. Since the 1990s, Québec has been responsible for its own immigration targets and has opted for a modest immigration level relative to Canada as a whole, resulting in a gradual decline in its share of the population. Regionalization – especially through PNPs – has shifted the settlement of newcomers from Ontario and British Columbia to the prairie and Atlantic provinces. Immigration to the territories has also increased but the fraction of newcomers settling there remains small. This may have occurred without a nominee program for Alberta, given its buoyant economy, but not for Manitoba, Saskatchewan, or the Atlantic region.

Figure 2 presents a different perspective on the same data, focusing on the changing distribution of newcomers across city-size categories. Notably, in 2021, for the first time in Canadian history, the Toronto Census Metropolitan Area (CMA) had more residents than all of rural and small-town Canada combined (i.e., places with fewer than 10,000 persons). This highlights the highly differential impact of immigration on fast-growth and slow-growth regions.

Regionalization efforts have primarily diverted newcomers from Toronto and Vancouver. That is, the provincial nominee system, along with several much smaller national admission channels, has encouraged newcomers to settle in other regions of the country.

Most have chosen mid-sized cities, which have become more important gateways to Canadian society.¹¹On the growth of mid-sized gateway cities, see Bonikowska et al. (2015). Cities with populations between 250,000 and 2 million have benefited most. In 2001, mid-sized cities received fewer newcomers than their share of the Canadian population, but by 2021, this was no longer true for places between 500,000 and 2 million people. The proportion of newcomers to places with 250,000 to 500,000 people nearly matched their population share, as well.¹²Note that with population growth between 2001 and 2021, a small number of places changed categories. For example, London, Ontario was in the 250,000-500,000 category in the former year and the 500,000 to 1 million category in the latter year. The fact remains, however, that a larger proportion of newcomers settled in mid-sized cities in 2016-2021 than was the case 20 years earlier. Regionalization policies have also assisted smaller places in Canada, but not to the same extent. All categories below 100,000 people received far fewer recent immigrants than their share of the Canadian population.

It is also important to acknowledge the fact that while regionalization has diminished the relative appeal of the most popular immigrant destinations, Ontario and British Columbia – especially Toronto and Vancouver – continue to attract large newcomer populations.¹³We can anticipate that ongoing secondary migration will not appreciably change these patterns. The geographical distribution of the 2011-2015 and 2006-2010 cohorts in 2021 (not reported in this Commentary) revealed very similar patterns to those for the 2016-2021 cohort. In all cases, places with fewer than 250,000 people accounted for less than 15 percent of the immigrant population, compared with nearly 45 percent of the Canadian-born population. This reflects the broader forces shaping migration patterns in Canada. Since a deliberate effort to alter migration trajectories occurs within a context of free mobility for all permanent residents, its impact will always be constrained. Furthermore, given that the same forces operate within regions as they do at the national and international scales, encouraging immigrants to settle in less popular regions generates a microcosm effect, creating faster and slower-growing localities within slower-growth parts of Canada.

Immigration and Canada’s Future Regional Structure

This section explores a special population projection using Statistics Canada’s microsimulation model (Demosim) to assess the impact of varying immigration rates on regional population dynamics. The projections conform with recent Statistics Canada assumptions for longevity and other basic demographic parameters: net temporary migration was assumed to be zero, and the total fertility rate for 2023 (1.33) was used throughout. Six scenarios were created based on annual permanent immigration rates ranging from 0.3 percent to 1.8 percent. These correspond to immigration levels in 2025 between approximately 125,000 and 750,000 people, based on the Q4 population estimate of 41.5 million. From 2000 to 2015, the immigration rate averaged 0.6 percent per year (Scenario 2), rising to nearly 1.2 percent per year by 2024 (Scenario 4). The 2025-2027 immigration plan aligns with Scenario 3 at a rate of around 0.9 percent. In essence, the scenarios reflect both current and recent immigration rates, allowing for expansion or contraction, as shown in Table 2.

The projections were conducted for provincial and territorial jurisdictions as well as CMAs and non-CMA areas in each province and territory. This means that projections were created for geographical areas with as few as 100,000 persons. Using the 2021 base population, projections were provided for a 25-year period (2021-2046), given the high uncertainty associated with long-term projections for such areas.

A projection exercise of this nature may be seen as revealing or, to put it bluntly, futile. While the study shows plausible demographic futures based on realistic immigration scenarios, its utility depends on assumptions that may not hold over time. All six scenarios assume constant immigration levels – a static outlook that is unlikely given the evolving political and economic context. The recent shift from a 1.2 to a 0.9 percent immigration rate in 2024 underscores this uncertainty.

Nevertheless, the projections offer important insights. With immigration now driving all of Canada’s population and labour force growth, even modest policy changes can have major repercussions over time due to the compounded and cumulative nature of population growth. There is no way to predict how these decisions will evolve over time, and the past year has taught us that they can change quickly. While accepting this uncertainty, the study nevertheless provides a highly salient set of results. It illustrates the kinds of capital and infrastructural investments that ought to be made, and where, under different immigration policy scenarios. This is vital information if the overall goal of government is to prepare Canadian society for a future in which population growth is properly accommodated and can form the basis for economic prosperity.

Currently, Canada’s contemporary demography is dominated by two factors: low fertility and the ageing of the particularly large baby boom generation.

Unless dramatic changes occur, these factors will continue to shape Canada’s landscape through 2046, though with one important difference. Today, we see the combination of low fertility and the retirement phase of babyboomers; by 2046, surviving babyboomers will be between 80 and 100 years old. While they will still have a substantial demographic impact at that point, they will be nearing the end of their major influence on population trends.

Table 3 shows that Canada’s projected population in 2046 ranges from 40.1 million under Scenario 1 (0.3 percent immigration rate) to 61.9 million under Scenario 6 (1.8 percent), with significant regional variations. Given that natural increase between 2021 and 2046 is anticipated to hover near zero, some regions are projected to experience population declines without sufficient immigration. However, even a relatively small amount of immigration yields a stable or slightly growing population in most regions. For example, under the lowest immigration scenario (an immigration rate of 0.3 percent of population per year, roughly equivalent to an immigration target of 125,000 in 2025), Ontario, Western Canada, and the North would all see population growth. Québec, however, would see a slight decline in population, while this effect would be dramatic in Atlantic Canada, which would see a drop in population of around 15 percent.

In Scenario 2 (with an immigration rate of 0.6 percent, comparable to the rate observed from the late 1980s to 2015), every region except Atlantic Canada would experience population growth, with Ontario gaining over 2.7 million people. Scenario 4 (approximately equivalent to the 2024 immigration rate) would lead to significant growth across all regions except Atlantic Canada. Under this scenario, population increases would be particularly concentrated in Alberta (63 percent growth between 2021 and 2046), Ontario (+44 percent), and British Columbia (+40 percent), highlighting the need for substantial infrastructure and social investment. This is also true, but to a lesser extent, under Scenario 3, which aligns with the permanent immigration targets for 2025-2027.

The population of Atlantic Canada is not sustained until Scenario 6, where it would grow only marginally.¹⁴Incredibly, when projection data are disaggregated to the provincial scale, Newfoundland and Labrador would be expected to decline in population by 13 percent even at this extraordinary rate of immigration, though each of the other three Atlantic provinces would experience a population gain. However, for this to take place, Canada’s annual immigration target would need to increase to 750,000 and continue to trend incrementally upward for the next 25 years. At such levels, the rapid growth in Alberta (+96 percent), Ontario (+74 percent), and British Columbia (+79 percent) would pose significant challenges for housing, social, and economic infrastructure. It is worth noting that despite the efforts at regionalization, higher rates of immigration do not narrow regional population disparities but actually exacerbate the gap between fast-growth and slow-growth regions.

Table 4 adds an urban dimension to the population projection for 2046. As immigration is predominantly an urban phenomenon, metropolitan areas with at least 250,000 people would see population growth even under the lowest immigration scenario. Scenario 2 would be sufficient to maintain or increase the population of metropolitan areas with at least 100,000 people. However, rural areas, towns, and small cities (fewer than 100,000 residents) would experience population decline unless immigration levels rise above the current rate (at least Scenario 5).¹⁵Unfortunately, the Demosim projection for this paper was not calibrated to produce results for more granular population size categories, so we cannot see what level of immigration would be required to maintain the population of rural areas (a subset of the < 100,000 category), but it would be very high.

If immigration were to reach Scenario 6 (1.8 percent), population pressures on Canada’s largest cities would be immense. Toronto’s population would more than double (14.4 million); at present, there are only three larger urban agglomerations in North America – Mexico City, greater New York, and the Los Angeles extended urban region. Stated another way, the population of Toronto in 2046 would be larger than that of Ontario as a whole today. At that point, more than half of the Ontario population would reside in metropolitan Toronto. Similarly, metropolitan Montréal would account for nearly 63 percent of the population of Québec, and Vancouver’s population would exceed the entire population of British Columbia today. That is, immigration cannot be the singular “policy fix” for slow-growth regions without adding tremendous pressure on fast-growth regions, likely well beyond their ability to cope with population growth.

Moreover, as seen in Figure 3, higher immigration rates accelerate growth in fast-growth regions and increase the gap between the share of Canadians living in large metropolitan areas and those in smaller places. Simply put, immigration has always driven population concentration in Canada and more immigration exaggerates this tendency. Under Scenario 4, for example, the population of areas with fewer than 100,000 residents would be maintained, but their demographic significance would decline from about 29 percent of the Canadian population in 2021 to just over 20 percent in 2046. In contrast, metropolitan Toronto alone would account for 22 percent of the Canadian population.¹⁶Such a development would present important challenges for Canada’s electoral system. If parliamentary seats were rigorously allocated according to the distribution of people, the political weight of rural and small-town Canada would erode considerably.

Regional Dynamics of Ageing

None of the immigration scenarios in this projection exercise would result in a stable old-age dependency ratio (OADR) – the number of seniors (65 and over) relative to the working-age population (18-64). This section explores the geographic dimensions of this issue. The consequences of population ageing would be less severe in fast-growth regions but greatly exacerbated in the slower-growing parts of the country (Table 5).

Under the third scenario, the territories – the only part of Canada with robust fertility – would experience population ageing but would still retain an OADR below today’s national average (27.8 senior citizens for every 100 in the working-age population). Elsewhere, the OADR would rise, but the effects would be most severe in Québec and Atlantic Canada. By 2046, the Atlantic provinces would have 59.3 seniors for every 100 working-age residents, with Newfoundland and Labrador reaching a staggering 73.5 seniors per 100 potential workers.

The urban-rural divide in the OADR trends is even more striking. In 2021, large cities already had significantly lower OADRs than mid-sized cities, small cities, and especially non-metropolitan areas (Table 6). By 2046, this gap is projected to widen under all immigration scenarios. Under the third scenario, OADRs in large cities are projected to rise above today’s national average, with modest increases in Toronto and the three cities in the 1-2 million population range while exceeding a ratio of 35 in Montreal and Vancouver. The challenge will be greater for mid-sized cities below 1 million in population and even more pronounced for small cities, where the OADR for those between 100,000 and 250,000 residents is projected to surpass Japan’s OADR of 48. Non-metropolitan areas would face the steepest increases in OADR. Scaling immigration back up to the level seen in 2024 would ease fiscal strain across all regions, though it would also require accommodating more population growth.

Figure 4 contrasts the age distribution of non-metropolitan parts of Newfoundland and Labrador (i.e., excluding St. John’s), a slow-growth region, and metropolitan Toronto in 2021 and under the Scenario 3 projection for 2046. Toronto’s population pyramid in 2021 already showed a strong concentration in the prime working-age years, with the most common age group being 25 to 29. However, without continued immigration, population renewal would be limited due to relatively small cohorts of children and teenagers. Even with high immigration, Toronto’s projected 2046 pyramid reveals a more “top-heavy” structure, with a higher proportion of the population in the 75+ age cohort. This highlights that once immigration is adopted as the primary policy tool to address ageing, ageing itself cannot be reduced.

While Toronto’s demographic changes are significant, non-metropolitan Newfoundland and Labrador faces a more severe challenge. In 2021, its population pyramid already showed signs of ageing, with the most common age group being 60-69 years old. By 2046, even with continued immigration, the region’s population would largely consist of seniors, leading to an extraordinary OADR of 97.9 seniors for every 100 working-age residents. This would place an unprecedented burden on healthcare and social services.

Table 7 illustrates the impact of realistic immigration scenarios on Toronto’s population. As immigration increases, the population grows significantly, particularly among younger age groups, while the elderly population continues to rise regardless of immigration levels. This pattern will likely be observed in other fast-growth regions as well. Focusing on Scenario 3, which aligns with the current immigration rate, Toronto’s population would grow from 6.5 million to 9.9 million by 2046. This growth would require substantial investments in transportation, urban services, and housing to accommodate 3.4 million new residents.

Despite an older population, there would be 108,000 more children under five years old than in 2021, increasing demand for early childhood education. The school-age population (5-17 years old) would grow by nearly 300,000, necessitating an expanded K-12 infrastructure. Meanwhile, the senior population in Toronto would more than double, from 1.02 million in 2021 to 2.08 million in 2046, with the 85+ age group tripling to 414,000.

Canadians will have to adjust to the simultaneous forces of population growth and ageing. Slow-growth regions, such as non-metropolitan Newfoundland and Labrador, will primarily face the challenges of an ageing population, while fast-growth regions like Toronto will need to expand their capacity to serve the needs of both growing young and older populations, but particularly the latter group. Unless retirement patterns change, there will be a lower ratio of the working-age population to support these needs.

Policy Discussion: Bringing a Geographical Sensibility to Canada’s Demographic Challenge

Canada is undergoing large-scale demographic transformations driven by urbanization and migration, with net international migration becoming the primary determinant of population growth. These forces are expected to intensify, particularly in Toronto and other urban centres in Alberta and British Columbia, which continue to expand. While this growth fuels economic dynamism, it also presents significant challenges, particularly in housing affordability, strained infrastructure, and increased pressure on public services.

Efforts to disperse immigrant settlement have been modestly effective and have somewhat muted the exceptional pace of growth of Toronto and Vancouver and mainly redistributed it to mid-sized cities. However, the regional distribution of growth remains uneven. Larger cities (with populations between 500,000 and 2 million) such as Calgary, Edmonton, and Ottawa-Gatineau have become prominent gateway cities for newcomer settlement. At the same time, regionalization policies have had a limited impact on smaller cities and, especially, rural regions. Given that these places tend not to be on the minds of prospective immigrants in the first place, plus the fact that permanent residents have Charter rights to move anywhere within Canada, smaller and rural regions continue to struggle with population retention and demographic decline.

The consequences of demographic ageing will also be distributed unevenly across Canada. Urban centres will experience these effects but to a lesser degree than the rural and small-town regions, where population stagnation or decline is more pronounced. The financial and infrastructural burden of this demographic shift will challenge provincial budgets and necessitate a rethinking of inter-regional transfer payments.

This uneven distribution of demographic change raises two critical policy questions:

• Is Canada’s immigration program achieving its goal of supporting a strong and prosperous economy across all regions?¹⁷According to the Immigration and Refugee Protection Act, one of the objectives of Canadian immigration policy is to “support the development of a strong and prosperous Canadian economy, in which the benefits of immigration are shared across all regions of Canada” (also see footnote 2). While immigration has contributed to population growth in all parts of the country, the benefits are not equally shared. Immigrants tend to concentrate in larger, economically dynamic cities, leaving slower-growing regions with limited population renewal.¹⁸While some suggest that discrimination may deter immigrants from settling in rural or slower-growing areas, research has found that experiences of discomfort or discrimination may actually be more prevalent in larger cities (Ray and Preston 2013). This paper focuses on economic and demographic factors influencing settlement patterns rather than the broader social geography of immigrant experiences. If shared growth means equal benefit across regions, the current immigration system falls short of achieving this objective. It is also worth noting an emerging policy tension between, on the one hand, encouraging newcomers to locate in regions facing population decline and, on the other, efforts to improve labour mobility in Canada and enhance national productivity.
• Can a national immigration policy adequately serve the demographic needs of all regions? While provincial and territorial governments can select immigrants and target specific regions, they cannot enforce settlement in particular areas, largely due to the mobility rights guaranteed by the Charter. These rights are foundational to a well-functioning labour market and benefit both immigrants and Canadian-born workers. As a result, regional immigration initiatives are most successful when paired with broader efforts to strengthen local economic opportunities, access to services, and overall community attractiveness.

Addressing these regional demographic and economic challenges requires a broader policy toolkit, with immigration being just one component. There are longstanding policy options available to support this goal.¹⁹Ideally, these policies would seek to attract economic opportunities to these regions as well as investment in their social infrastructure. There is a large literature on stimulating the development of non-core regions. For a recent summary, see Kinossian (2018). Some of these options are generic and not focused on immigration, including strategic infrastructural investment (e.g., transportation, broadband coverage, and educational opportunities) that would simultaneously encourage both the attraction and retention of people. A recent C.D. Howe Institute report argues that focusing solely on increasing housing supply in Toronto and Vancouver will not resolve affordability challenges (Kronick and Beaudry 2025). The authors recommend that policymakers identify mid-sized cities with strong growth potential and support their development into larger economic hubs. By investing in infrastructure, local business growth, and better transit connections, these cities can absorb more population growth, easing pressure on major centres while creating new opportunities for both immigrants and domestic migrants. This approach aligns with the need for more balanced population growth and could help address the challenges faced by slow-growth regions (i.e., by supporting the development of mid-sized urban areas within them).

Other options are more immigration-specific. First and foremost, a strong alignment between regional immigration programs and provincial economic development strategies is essential – a process that is already advanced in a number of provincial jurisdictions. Certain regulatory measures could also be improved, such as fast-tracking the credentialization of skilled newcomers in slower-growing parts of Canada, enabling them to find meaningful work as quickly as possible. Finally, efforts to support newcomers and foster rapid integration and inclusion in community life have proven to be important (see Esses et al. 2023).

Ultimately, immigration is best conceptualized as a tool for regional policy development in Canada, but not as the solution to the issue of regional disparities in opportunity and population growth. Immigration “helps,” but it does not “solve.” In fact, under current trends, immigration exacerbates the gap between fast- and slow-growth regions. Truly addressing the issue of population sustainability for slow-growth regions would require an ensemble of social and economic policies, with immigration playing a supporting – not primary – role.

Conclusion

Canada’s immigration policy plays a crucial role in shaping the country’s demographic landscape, but its benefits are unevenly distributed. While major urban centres absorb most new immigrants, slow-growth regions continue to face population stagnation. At the same time, rapid urban expansion in high-growth cities brings serious challenges, particularly in housing affordability, infrastructure capacity, and public service delivery. Policy solutions must acknowledge these geographic imbalances and view immigration as a key component of a broader regional development strategy.

To ensure sustainable growth and economic resilience across Canada, policy efforts must go beyond managing immigration and actively support regional development. These should include both more generic initiatives as well as those that coordinate immigration – both attraction and retention – and regional development policy. Investing in mid-sized cities with growth potential may be particularly helpful since they provide an alternative to overburdened urban centres while helping slow-growth regions remain viable. Strengthening secondary cities through infrastructure investment, business development, and improved transit links offers a promising path forward. Significantly, investments that would improve the capacity of these places to attract immigrants would also serve as magnets for internal migration within Canada. This strategy can help reduce housing pressures in major urban centres, promote economic development outside traditional high-growth regions, and ensure a more balanced and sustainable demographic future for the entire country.

At the same time, mechanisms must be developed to address the pressures of growth in Canada’s largest metropolitan areas, particularly Toronto and Vancouver, and looming population decline in most non-metropolitan areas of the country. These forces are likely to be relentless under any plausible immigration policy system.