As Canada enters 2025, significant changes in immigration policy are reshaping the nation’s economic outlook. The federal government’s reduced immigration targets are expected to slow population growth, potentially decreasing economic growth by nearly one percentage point over the next three years. This shift could impact the federal budget by approximately $50 billion over five years starting in 2025. While lower interest rates might partially offset these challenges, the country faces mounting pressure to address productivity growth, unemployment rates, and persistent affordability issues. The situation demands careful fiscal management as Canada navigates these structural economic changes.
