Canada’s Slowing Immigration Helps Job Market, and Mortgage Deliquencies Rise

Canada’s job market is showing signs of recovery after policymakers returned to historical immigration targets. Earlier warnings suggested that slowing population growth might harm the economy, but the real challenge turned out not to be job losses. Instead, the economy simply couldn’t create enough new positions fast enough to keep up with a growing population. By aligning immigration with long-standing norms, Canada appears to be easing pressure on the job market, allowing job creation to better keep pace with added residents.

The improvement in job-creation balance is encouraging, though the job deficit isn’t gone. Canada still needs to create more jobs to meet current demand, and the one-for-one pace hasn’t returned yet. But for now, the market is moving in the right direction. If policymakers hold steady, Canada may slowly rebuild a healthier labor market.

While the job market is finding firmer footing, there’s growing trouble in housing. Mortgage delinquencies—missed or late payments—have surged across the country. In the first quarter of 2025, the national delinquency rate rose to 0.22 percent, the highest level in four years. Though still lower than pre-2019 levels, the increase is sharp and worrying.

Toronto stands out as the main hotspot in this trend. Its mortgage delinquency rate has more than tripled in recent years, reaching levels not seen in over a decade. This suggests that while the national average hasn’t returned to past highs, Toronto’s housing market is under much greater strain—and that problem could spread if not addressed.

The shift toward more manageable immigration numbers may help on one front, but housing pressures are mounting. Rising mortgage delinquencies threaten financial stability for many homeowners, especially in high-cost markets like Toronto. As the job market slowly improves, policymakers face a tricky balance—maintaining steady population growth while easing the strain on homeowners.

Canada’s economy appears to be steering in a better direction, but there’s no room for complacency. Job creation needs to continue improving to fully close the gap with population growth—and, at the same time, authorities must address the housing pains that are growing deeper in certain regions. With both labor and housing pressures at play, the road ahead demands steady, careful policymaking.