For the second straight quarter, the country’s population was little changed, compared with a quarterly growth rate of nearly 1% last year, according to Statistics Canada data released Wednesday.

Tighter immigration rules aimed at reducing the number of temporary immigrants drove almost more people out than new arrivals and natural births, with an increase of 47,098 people or 0.1% in the second quarter, the data showed. That’s a similar gain to the first three months of this year — and, except for 2020, the lowest growth rate in a second quarter since comparable records began in 1946.

The government’s plan to reduce the temporary migrant population appears to be working. The number of non-permanent residents dropped for the third time in a row, reaching 7.3% of the total population in the quarter, versus 7.6% at its peak. The decrease was driven by foreign students and workers leaving the country.  

With half a year of essentially no population growth, Prime Minister Mark Carney’s government must decide whether to keep its tight lid on inflows or bring in more workers. The country’s new immigration targets are due Nov. 1. 

It will be the first target set under Carney, who promised to bring immigration rates to “sustainable levels.” At the same time, his government wants to build homes and infrastructure to boost activity in a tariff-hit economy. That plan will require more skilled workers in trades and construction — sectors that still face labor shortages. 

US policies on immigration may also influence movements across the northern border, with some refugees as well as H-1B visa holders potentially heading to Canada.

In order to increase the number of intakes, Carney — who inherited eroded public support for mass immigration — will have to restore public confidence in the system and rebuild consensus around welcoming newcomers. 

Like many of its advanced economy peers, Canada needs immigration to grow its population and tax base in order to replace workers and support its aging population. International migration accounted for more than 70% of population growth in Canada between April and June. In the second quarter, the number of births exceeded deaths by 13,404, with immigration adding 33,694 people.

Tepid population growth already clouded the economic outlook. Bank of Canada Governor Tiff Macklem said last week, when he resumed cutting interest rates, that low population growth as well as a weak labor market will weigh on household spending — a rare bright spot in the economy that contracted sharply last quarter.

British Columbia was the only province or territory to see a population decrease in the quarter, while Prince Edward Island was the fastest-growing province.