(OTTAWA, ONTARIO, CANADA) Ottawa immigration cuts are showing clear effects in Canada’s housing market and job market, with a new analysis from TD Economics finding cooler rent growth and a steadier path for employment as of October 30, 2025. The report says the policy shift to slow population gains has reduced strain where it was most visible—purpose-built rentals and urban condo segments—while also keeping the national unemployment rate lower than it would have been under faster inflows. The findings arrive as policymakers weigh long-term targets against the short-term reality of tight housing supply and rising living costs in ??.

Key findings at a glance

• Rent growth is estimated to be about 2 percentage points lower than it would have been if population growth had continued at past highs.
• Canada’s population growth decelerated from 3.2% in Q2‑2024 to 0.9%, a shift the report links to the federal decision to dial back intake.
• The national jobless rate would likely be at least 1 percentage point higher today if Ottawa had not slowed intake.
• Despite slower population growth, household spending has remained resilient, with no broad drop in purchases of goods and services.

Housing market impacts

TD Economics finds the cooling in rents is strongest where new arrivals have the biggest influence—particularly urban condo segments and purpose-built rentals.

• Condo asking rents are falling fastest in markets most shaped by newcomers.
• Purpose-built rental demand has moderated, easing immediate pressure in those segments.

Still, the report stresses that slowing intake is not a substitute for building more homes:

• Vacancy rates remain tight in many cities.
• The stock of purpose-built rentals is not rising fast enough to close the gap created by years of underbuilding.
• A slower housing market does not automatically make homes affordable for renters or first-time buyers.

Important: Immigration changes can relieve pressure in the short run, but large-scale supply additions (zoning reform, faster approvals, building-cost relief) are essential for sustained affordability.

Labour market effects

The analysis highlights trade-offs on the labour side. Fewer newcomers helped spread available work across a labour force that stopped expanding as rapidly, which has supported a lower headline unemployment rate.

• With population growth stalled, employment conditions are expected to improve mildly over time, as hiring and job openings rebalance.
• Sectors that rely on steady inflows—food services, construction, care work, hospitals, long‑term care, and tech—could face tighter recruiting conditions if intake remains slower for long.
• The present pause supports a gentler landing for the job market, but rising retirements and persistent hiring needs could shift the balance.

Consumption and economic activity

Despite fewer newcomers, the report notes no broad drop in household spending. Possible reasons include:

• Strong wage gains for some workers
• Savings cushions for certain households
• Shifts in spending patterns

However, the authors warn that if consumer spending later softens, the benefits of lower rent growth and a lower jobless rate could be offset by weaker revenue for businesses—affecting provincial budgets that rely on sales tax.

Authors and report framing

The document, “Is the Dial-Back of Immigration Having the Intended Impact in Canada?”, was written by Beata Caranci, Senior Vice President and Chief Economist, and Marc Ercolao, Economist. They frame the results as evidence that slower intake can:

• Cool rent pressure and
• Ease labour market strain

—without immediately denting consumer demand.

Policy context and links

Policy decisions on intake are set through the government’s annual Immigration Levels Plan. For official targets and category information, consult the Government of Canada’s page on planned admissions and policy goals through Immigration, Refugees and Citizenship Canada at the Immigration Levels Plan.

Practical implications

For different groups, the short-term effects look like this:

• Renters: May see fewer bidding wars and slightly softer asking rents, but not necessarily easier access to larger or better-located units.
• Recent graduates: A steadier job market can aid entry-level hiring, but slower labour force growth doesn’t guarantee better job matches in all fields.
• Developers: Softer rents might influence project starts, but underbuilding to date still points to ongoing demand for new supply.
• Employers in tight sectors: Could face recruiting challenges if slower intake persists.

Main takeaway

Ottawa’s immigration cuts have visibly reduced immediate strain in the housing market and steadied job conditions, according to TD Economics—with measurable shifts: rent growth roughly 2 percentage points lower than the high‑growth path, a jobless rate at least 1 point lower than without the policy, and population growth down from 3.2% to 0.9%. The authors emphasize these early gains are limited without substantial supply-side reforms and continued attention to labour bottlenecks. Policymakers, landlords, and job seekers will be watching upcoming data to see whether these early shifts persist or new pressures emerge.