- Canada’s 380,000 permanent resident admissions remain fixed for 2026 under the new immigration plan.
- Temporary resident targets fall to 385,000 in 2026, then 370,000 in 2027 and 2028.
- Rents softened, but CMHC data show housing starts are still weakening rather than rebounding.
Canada’s 2026–2028 Immigration Levels Plan sets 380,000 permanent resident admissions in 2026 and reduces new temporary resident arrivals to 385,000 in 2026, followed by 370,000 in 2027 and 2028.
The federal plan also targets a temporary resident population below 5% of Canada’s population by the end of 2027. The measures have fueled claims that lower immigration is easing rents and allowing builders to catch up, but the housing data present a narrower picture.
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Rents have softened in some major markets. Construction has not broadly rebounded.
The plan keeps permanent resident admissions at 380,000 in each of the three years. Its temporary resident targets are lower, with the government citing pressure on housing, infrastructure and services.
Immigration, Refugees and Citizenship Canada also said the international student population has dropped one-third since 2024. That decline affects a major source of rental demand, particularly in markets with large student populations.
Asking rents have eased, but the drop is uneven
Statistics Canada data cited in September 2026 coverage put the average asking rent for a two-bedroom apartment in Canada at $2,150 in the first quarter of 2026. That was down 0.9% from a year earlier.
Vancouver recorded a larger decline. The average asking rent there was $3,100, down 2.2% year over year.
The pattern has varied by city. An August 2026 industry comment said rents in Toronto and Vancouver softened in 2025, while smaller and more affordable cities posted stronger growth.
Nadia Effendi, a senior economist at TD Economics, linked the immigration reductions to weaker demand in both housing markets.
“eased the pressure on social and economic infrastructure, lowering condo demand for both home ownership and the secondary rental market”
Effendi also said, “lower immigration rates have also caused a reduction in asking rents across major cities in Canada.”
Those comments describe a demand-side effect. They do not establish that the immigration reductions alone produced every rent decline, since rents also vary with local supply, population movement and financing conditions.
Construction is slowing instead of returning to a broad rebound
Canada Mortgage and Housing Corp. figures show housing starts weakening in July. The national seasonally adjusted annual rate reached 229,074, down 5% from 240,773 in June.
The six-month trend also fell. It stood at 247,377, down 0.5% from June.
| Housing measure | Result |
|---|---|
| National starts, July 2026 | 229,074 |
| National starts, June 2026 | 240,773 |
| July change | Down 5% |
| Six-month trend | 247,377 |
| Six-month trend change | Down 0.5% |
| Forecast starts, 2025 | 259,028 |
| Forecast starts, 2026 | 241,400 |
A CMHC-linked housing outlook forecasts 241,400 starts in 2026, down from 259,028 in 2025. The figures point to a softer construction year, not a return to stronger building activity.
The distinction matters for the rental market. Reduced demand can lower asking rents in some locations, while fewer new projects can limit the supply available to tenants later.
Greg Lovitt, co-founder and CEO of Skyline Group of Companies, described the current period as one “where rent increases have slowed and asking rents have dropped from their peak in some areas.”
He also said it is a time to “catch up on building the housing supply that’s needed.”
Lovitt’s view combines the two trends: weaker rental growth may give developers room to add supply, but the current construction numbers have not yet shown that acceleration nationally.
Mortgage costs remain part of the housing calculation
Financing conditions add another constraint. The housing outlook projects average posted five-year fixed mortgage rates at 5.2% in 2026, 5.4% in 2027 and 5.5% in 2028.
Those projections accompany a subdued housing forecast. Rents are expected to soften in some major cities, while housing starts are projected to decline in 2026.
That combination can affect both builders and renters. Developers face borrowing costs while households face mortgage payments that can influence whether they buy or remain in the rental market.
The federal government’s targets are designed to reduce pressure on housing, infrastructure and services. The available figures show some easing in rental demand, especially in Toronto and Vancouver, but they do not show a full construction recovery.
The temporary resident target is scheduled to remain at 370,000 in 2028. The government’s population target is to bring temporary residents below 5% by the end of 2027, while the housing market continues to absorb lower demand and weaker building activity.
