Canada’s federal government has implemented the 2026-2028 Immigration Levels Plan, which sharply reduces targets for new temporary residents while stabilizing permanent resident admissions at 380,000 annually. This policy shift has produced net outflows of non-permanent residents, driving Statistics Canada’s preliminary estimates of a 0.2 percent population decline between October 2025 and January 2026—the first annual drop since the Second World War. Parliamentary Budget Office projections now anticipate flat or modestly negative growth for the full year as the temporary resident share falls toward the government’s 5 percent target. Traders appear to view these official caps and resulting demographic data as the primary factors favoring a year-end decline, though further policy adjustments or revisions to permit data could alter the trajectory.