The following op-ed, by ICBA Chief Economist Jock Finlayson and the BC Economic Brief’s Ken Peacock, was first published by Business in Vancouver on July 14, 2026.
Recently released data show that B.C.’s population declined by 0.7 per cent year-over-year in the first quarter of 2026. That may not sound dramatic, but it is part of a stunning demographic reversal. The province has not recorded an annual population decline in modern history. Normally, our population grows by about 1.5 per cent per annum, although during the exceptional 2022–2024 period this figure jumped to 2.5 per cent. The shift from record population growth to outright decline in little more than a year carries significant economic and business implications.
The abrupt demographic drought reflects changes in all three components of migration, but the dominant factor is the sharp reversal in the number of non-permanent residents.
Net interprovincial migration has weakened considerably. Rather than B.C. attracting 5,000 to 6,000 people each quarter, net inflows from other provinces have dwindled to a trickle. Net international migration, in contrast, remains positive at roughly 7,000 people per quarter. However, that is only half the pace recorded over 2022–2024 and roughly matches the levels which prevailed before the Justin Trudeau government dramatically expanded immigration and effectively lost control of the wider immigration system.
For B.C., the biggest change is among temporary residents. During the 2022–2024 period, B.C. regularly saw quarterly net inflows of 20,000 to 30,000 non-permanent residents. That has now reversed, with net outflows of temporary residents exceeding 20,000 in each of the past two quarters. There are also fewer new permanent immigrants landing in B.C.
Taken together, weaker inflows of permanent migrants and the large net outflow of temporary residents have caused B.C.'s population to decline in each of the past four quarters, for a cumulative loss of roughly 50,000 people over the past year. Never before has our province experienced such a swing from record population growth to sustained population decline. A demographic shift of this magnitude will inevitably ripple through the economy.
One of the sectors that’s most exposed is post-secondary education. For more than a decade, many B.C. colleges and universities (including some private ones) relied on growing international student enrolment to support expansion. International students pay far higher tuition fees than their domestic colleagues, making them a vital source of institutional revenue. With foreign student numbers plummeting, many educational institutions—particularly in the Lower Mainland—are confronting declining enrolment and mounting financial pressures.
The broader B.C. economy is also being impacted by the demographic slump. New residents need shelter, food, transportation, household goods, and a mix of consumer services. Quarterly population gains of 15,000 to 20,000 people (and more in recent years) have long provided a meaningful tailwind for economic growth and boosted the fortunes of consumer-facing businesses. The onset of sizable population losses spells trouble for many businesses that rely on consumer spending.
The housing market is also adjusting. Prices and rents are falling in many parts of the province. Much of the recent expansion in condominium construction occurred during a period of exceptionally strong population growth and robust investor demand. That world is no more. Foreign investor activity in the housing sector has essentially evaporated following policy and tax changes, while domestic investors face less favourable economics owing to sluggish rental demand, higher financing costs, taxes on vacant properties, and restrictions on short-term rentals.
Labour supply is another area where the effects of a falling population are becoming evident. A decline in temporary foreign workers directly reduces the number of young adults available to work. Fewer international students also mean fewer workers, as many were employed while actually or claiming to be studying. B.C.'s labour force has been shrinking. In May, the labour force was 0.6 per cent smaller than a year earlier. Although the unemployment rate has risen, it would have climbed even higher were if not for the decline in the number of people participating in the labour market.
Population growth has been a defining driver of B.C.'s economy for most of the last 10-15 years. We have now entered a very different environment, characterized by slower permanent in-migration, fewer non-permanent residents, and outright population declines. We expect very feeble – if any -- population growth over 2026-2028 and perhaps beyond. There will be no repeat of the policy-driven population boom of 2021-2024. While that demographic surge yielded some benefits, it also contributed to distortions across the economy, including higher housing costs and – arguably – an “over-abundant” supply of entry-level labour. Today’s demographic reversal is creating its own set of challenges. Governments, businesses, post-secondary institutions, and other organizations will need to adapt to an economy in which net population growth no longer provides a meaningful growth tailwind.