Canada’s long-running shift toward big-city living appears to have hit a turning point. New population estimates from Statistics Canada (StatCan) show urbanization stalled in 2025 for the first time in decades, as both residents and newcomers increasingly bypass the country’s largest and most expensive metropolitan areas.
The data suggests the migration toward smaller cities, towns, and non-urban regions was not just a pandemic-era anomaly, but part of a broader structural shift.
Urban Population Growth Slows After Years of Front-Loaded Expansion
StatCan estimates show Canada’s census metropolitan area (CMA) population reached 31.17 million in 2025, an increase of 309,200 people, or 1.0% year-over-year. While still positive, this marked a sharp slowdown from 2024, when CMAs added more than 1.07 million people.
In volume terms, 2025’s increase was only slightly below the long-term pre-pandemic average of roughly 330,000 people per year between 2001 and 2019, but far weaker than the extraordinary surge seen in 2022 through 2024.
Two important factors help explain the shift. First, StatCan’s annual population estimates are taken on July 1, meaning much of the immigration slowdown that emerged later in 2025 will only fully appear in the 2026 data. Second, the figures focus exclusively on urban growth, masking what is happening outside Canada’s largest metros.
Canada’s Urbanization Rate Stops Rising
More notably, Canada’s overall urbanization rate failed to increase.
In 2025, 74.8% of Canadians lived in CMAs, unchanged from the previous year. Excluding the pandemic period, this marks the first time since the early 2000s that the urban share of the population did not rise.
This suggests that urbanization itself has stalled, not merely slowed.
Population Growth Shifts Outside Major Cities
The data shows that population growth outside CMAs is playing a larger role than at any point in decades.
Canada added 80,100 people outside of CMAs in 2025, accounting for 25.9% of the net population change recorded within CMAs. Excluding the pandemic years, this represents the largest share in at least 25 years.
Rather than simply absorbing fewer newcomers, major cities are increasingly being bypassed altogether in favour of smaller centres and non-urban regions.
Immigrants Are Also Avoiding Traditional Urban Hubs
The shift is not limited to domestic migration. Newcomers are also settling less frequently in Canada’s traditional gateway cities.
In Quebec, only 65.3% of immigrants settled in Greater Montreal in 2025, down from 83.1% five years earlier. In the Greater Toronto Area, the share fell to 60.5%, compared with 76.1% over the same period.
These declines suggest that affordability pressures, congestion, and housing costs are reshaping settlement patterns even among new arrivals.
A Familiar Pattern Late in Housing Cycles
While the data does not explain motivations directly, the trend aligns with patterns seen historically near the end of major housing cycles. As prices rise in large cities, households often seek affordability, space, and flexibility in smaller markets.
Canada’s population growth is slowing overall, but the composition and geography of that growth continue to shift. After several years of front-loaded demand, the country appears to be adjusting to the pressures created by rapid urban expansion.
What This Signals for Housing and Regional Growth
The stalling of urbanization has implications for housing demand, infrastructure planning, and regional real estate markets. Slower growth in major metros could ease pressure in some urban housing markets, while continued inflows into smaller centres may support demand and prices outside traditional hotspots.
If these trends persist, Canada’s population growth story in the coming years may be defined less by big-city expansion and more by geographic redistribution.
References (APA)
Statistics Canada. (2025). Annual population estimates, census metropolitan areas and census agglomerations, July 1, 2025. Government of Canada. https://www150.statcan.gc.ca
Statistics Canada. (2025). Annual demographic estimates: Canada, provinces and territories. Government of Canada. https://www150.statcan.gc.ca
Better Dwelling. (2026, January 14). Canadian urbanization stalls as more people snub big cities. https://betterdwelling.com
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