On this page you will find:
- How Canada’s immigration slowdown is affecting labour force participation
- The latest Statistics Canada employment figures for September 2026
- Why immigration previously helped offset population ageing
- What an older population means for Canada’s labour supply
- How healthcare and education employment is changing
- The implications for Canada’s next Immigration Levels Plan
Canada’s decision to reduce immigration is exposing a long-term demographic challenge, with new Statistics Canada figures showing that slower population growth is allowing the effects of an ageing workforce to become more pronounced.
The country’s labour force participation rate fell to 64.8 per cent in September 2026 – its lowest level since December 1997, excluding the COVID-19 pandemic year of 2020.
The decline came as Canada lost 68,000 jobs in September, following a further 42,000 employment losses in August.
However, the most significant finding in Statistics Canada’s September Labour Force Survey concerns the relationship between immigration and Canada’s ageing population.
The agency found that strong immigration temporarily offset population ageing during 2023 and 2024. That effect has since reversed as permanent and temporary immigration slowed in 2025 and 2026.
The findings raise important questions about Canada’s ability to maintain its workforce as Ottawa prepares its 2027–2029 Immigration Levels Plan.
Canada Loses 110,000 Jobs In Two Months
Statistics Canada’s October 9 report showed further deterioration in employment during September.
Employment fell by 68,000, or 0.3 per cent, while the unemployment rate increased to 6.5 per cent.
The decline followed August’s loss of 42,000 jobs, bringing the combined reduction over two months to approximately 110,000.
| Labour market indicator | September 2026 |
|---|---|
| Employment change | -68,000 |
| Unemployment rate | 6.5% |
| Employment rate | 60.6% |
| Labour force participation rate | 64.8% |
| Youth employment change | -48,000 |
Young Canadians experienced particularly difficult conditions. Employment among people aged 15 to 24 fell by 48,000, accounting for most of September’s overall decline.
Meanwhile, the proportion of Canadians aged 15 and older who were either working or actively looking for employment fell by 0.2 percentage points.
Although monthly employment figures can fluctuate, the participation rate points to a more persistent demographic problem.
Immigration Previously Offset Canada’s Ageing Population
Statistics Canada’s findings demonstrate how immigration has influenced the composition of Canada’s labour force.
In September 2026, people aged 65 and older represented 23.2 per cent of the population aged 15 and over.
That compares with 20.5 per cent in September 2019 and just 14.8 per cent at the beginning of the century.
The demographic shift matters because older Canadians are less likely to participate in the labour market, particularly after reaching traditional retirement age.
Statistics Canada identified an important interruption to this trend.
During 2023 and 2024, large increases in permanent and temporary immigration brought additional residents into Canada, temporarily offsetting the growing proportion of older people.
As immigration slowed in 2025 and 2026, population ageing resumed its upward trend.
This suggests immigration was doing more than increasing Canada’s population. It was also helping maintain the relative size of the population available to work.
Population Ageing Explains Much Of The Participation Decline
Statistics Canada also examined what labour force participation would look like if Canada’s population had maintained its September 2019 age composition.
The results were revealing.
After adjusting for population ageing, the September 2026 participation rate would have been just 0.1 percentage points below its level a year earlier.
It would also have been 0.2 percentage points higher than in September 2019.
In other words, the falling participation rate largely reflects changes in Canada’s age structure rather than a substantial decline in Canadians’ willingness to work.
This distinction is important for immigration policy.
An ageing population can reduce the available labour supply even when employment opportunities remain relatively strong for particular occupations.
However, the findings do not establish that immigration restrictions caused September’s job losses.
Employment levels depend on numerous factors, including economic growth, business investment, consumer demand and hiring decisions.
The demographic findings instead point to a longer-term risk: slower immigration may reduce one of the mechanisms that previously helped Canada offset population ageing.
Canada’s Immigration Targets Have Already Been Reduced
The federal government has introduced substantial reductions in immigration targets as part of its efforts to ease pressure on housing, infrastructure and public services.
Under the current 2026–2028 Immigration Levels Plan, Canada aims to admit 380,000 permanent residents annually.
Targets for new temporary resident arrivals have also been reduced, with 385,000 planned for 2026 and 370,000 annually for 2027 and 2028.
| Immigration target | 2026 | 2027 | 2028 |
|---|---|---|---|
| Permanent residents | 380,000 | 380,000 | 380,000 |
| New temporary resident arrivals | 385,000 | 370,000 | 370,000 |
| Temporary workers | 230,000 | 220,000 | 220,000 |
| International students | 155,000 | 150,000 | 150,000 |
The government also wants temporary residents to account for less than five per cent of Canada’s population by the end of 2027.
These measures reflect concerns that rapid population growth has outpaced the country’s capacity to provide housing and essential services.
Nevertheless, the latest demographic findings highlight a competing challenge.
Reducing immigration may ease some immediate pressures associated with population growth, while potentially making it harder to offset the effects of an ageing workforce.
The extent of that impact will depend on the number, ages and skills of newcomers, alongside Canada’s broader economic conditions.
Healthcare Employment Falls Despite Longer-Term Growth
The September report also revealed contrasting developments in sectors central to Canada’s immigration priorities.
Employment in healthcare and social assistance fell by 23,000 in September, marking the sector’s first monthly decline since December 2022.
Despite that reduction, employment remained 93,000 higher than in September 2025, making healthcare and social assistance the largest contributor to annual employment growth.
Educational services experienced a sharper deterioration, losing 35,000 jobs during September and 67,000 over the preceding 12 months.
These figures demonstrate why monthly employment losses do not necessarily eliminate longer-term recruitment needs.
Canada’s ageing population is likely to continue influencing demand for healthcare and support services, even when employment in those industries temporarily declines.
For immigration policymakers, this strengthens the case for distinguishing between short-term labour market conditions and longer-term occupational requirements.
Targeted immigration programs can help address specific workforce needs without necessarily requiring a return to the exceptionally high population growth recorded in earlier years.
What Does This Mean For Canada’s Next Immigration Levels Plan?
The federal government is preparing its 2027–2029 Immigration Levels Plan, which is expected to set out immigration targets for the coming three years.
The September Labour Force Survey provides another consideration for officials deciding how quickly immigration should grow and which applicants Canada should prioritize.
The government must balance several competing objectives: managing housing and infrastructure pressures, supporting employment opportunities for existing residents, and ensuring employers can access the workers they need.
The ageing-workforce findings suggest that the composition of immigration could be as important as overall admission numbers.
Prioritizing working-age applicants with skills in sectors facing sustained shortages may help maintain labour force participation while keeping immigration within the government’s planned limits.
Other responses, including higher participation among older workers, improved productivity and greater workforce participation across different age groups, could also reduce demographic pressures.
However, none of these approaches offers an immediate solution to the underlying change in Canada’s age structure.
The central challenge is that immigration reductions and population ageing are occurring simultaneously.
Canada’s latest employment figures underline the weakness of the current labour market, but the longer-term demographic evidence points to a different concern.
Even as the country seeks to limit population growth, it must still ensure enough people are available to support economic activity, public services and an increasingly older population.
That tension is likely to remain an important consideration in Canadian immigration policy beyond 2026.
Frequently Asked Questions
How is Canada’s immigration slowdown affecting its workforce?
Statistics Canada found that increased immigration temporarily offset population ageing during 2023 and 2024. As immigration slowed in 2025 and 2026, the proportion of older residents began increasing again. This demographic shift is contributing to lower labour force participation and could create longer-term challenges for Canada’s labour supply.
Why is Canada’s labour force participation rate falling?
Canada’s labour force participation rate fell to 64.8 per cent in September 2026. Statistics Canada attributes much of the decline to population ageing. Although many older Canadians remain economically active, participation generally decreases after retirement age. The growing proportion of older residents therefore puts downward pressure on the national rate.
Did Canada’s immigration cuts cause the September 2026 job losses?
Statistics Canada’s report does not establish a direct connection between immigration restrictions and September’s loss of 68,000 jobs. Employment changes reflect factors such as economic conditions, hiring decisions and demand for workers. The report instead identifies a longer-term relationship between slowing immigration, population ageing and labour force participation.
Will Canada need more immigrants because of its ageing population?
Immigration can help offset population ageing by adding working-age residents to the labour force. However, future immigration requirements will also depend on economic conditions, productivity, workforce participation and labour shortages. Canada must balance these demographic needs against housing availability, infrastructure capacity and the government’s broader immigration objectives.
What could the ageing workforce mean for Canada’s next Immigration Levels Plan?
The ageing workforce may strengthen the importance of economic immigration and programs targeting occupations facing long-term shortages. Canada’s next Immigration Levels Plan will need to balance labour supply requirements with the government’s commitment to sustainable population growth. The September statistics provide additional evidence for considering demographic pressures when setting immigration targets.