The vanished

Imagine Waterloo, Saanich or St. John’s disappearing. Just poof.

They all have populations close to 120,000, which is the number of employed people that vanished from the face of our Dominion last month. The labour force dropped by this astonishing number, so even though Canada lost 24,000 paycheques in January the unemployment rate took a big tumble, to 6.5%. That’s the best stat in a year and a half. But it’s also troubling.

Why did so many leave the workforce? Stop looking for a job? Or just drop off the radar?

“It’s not normal to see unemployment pull back aggressively even as job growth goes into reverse,” says head BMO economist Doug Porter, “but there is a ready explanation—the labour force fell by 119,000 in the month (one of the largest non-pandemic drops ever), driven by slowing population and a steep drop in the participation rate.”

This is all weird to the touch since we’ve been in a trade war with the orange king to the south for the past year. Auto workers have been punted. Shifts and whole factories shuttered. Tariff angst and destruction in lumber, steel and now aviation. In this world you’d expect our jobless rate to be surging and the central bank getting ready to slash rates as a counter-measure.

But not this time. It’s complicated. Is this a harbinger of the future?

The consensus is that today’s report sucks. The job losses are real, reflecting the ‘rupture’ in global trade and alliances our prime minister yakked about in Davos. This helps explain the hot mess real estate is in, as wary buyers retreat from the market even as prices tumble, sellers freak and valuations roll back to 2021 levels (when everybody had FOMO and serious house lust).

But there’s more than trade woes to blame.

Porter also points to the “the abrupt slowdown in population growth, which is taking the steam out of unemployment rates.” In the final few months of 2025 Canada had the largest quarterly drop in population in history (at least to when we started writing stuff down in 1946). The number of people living here declined by close to 80,000, and came on the heels of months of zero pop growth.

Why?

Because that’s what you asked for. Canadians got their boxers in a knot over perceived too-high immigration levels of the Trudeau era, especially post-Covid, and compliant politicians responded. The immigration plan now for this year and next has a 20% cut in approvals and a slashing of entries by international students and temporary workers (the people who do things Canadians faint at thinking about). In the last quarter of ’25 this change alone sucked off close to 180,000 people.

There’s more. We’re getting old.

The number of people hitting 65 and exiting the work force is huge.

Every week 7,000 more fogies hit the traditional retirement age in Canada. There are now more than eight million wrinklies, making up 20% of the population. Over the next four years, this gush becomes a Boomer tsunami. There are already more people over 65 than kiddos under 18. With life expectancy pushing higher the social costs of supporting the old wheezers is immense. And growing. OAS is a timebomb.

And this: just when the immigration gates go up and wrinklies abound, we have a baby shortage.

The fertility rate is a paltry 1.2 per woman now, putting us in the ‘ultra-low’ category with countries like Singapore. Back when the Boomers were being hatched the rate peaked in the 1950s at almost 4, and has faded steadily ever since. In order to replace the population, no growth, this number needs to be 2.1 – or almost twice the current level.

Add it up. Trade hassles. Immigration squeeze. Irritating old people shuffling around aimlessly all over the place. A baby famine. It’s a recipe for continuing economic torpor, population erosion and a falling unemployment rate as the workforce shrinks.

But it also sucks for real estate. Fewer newcomers buying houses. Reduced numbers of families being formed. Less nesting. Falling demand. And maybe a surplus of properties on the market if governments keep insisting they must build, baby, build. Millions of new dwellings, despite rising inventories of unsold places, is a formula for falling asset values.

But then, maybe it’s all temporary.

Fewer people working could mean more people… you know… procreating.

In the cause of Canada.

About the picture: “Here is my dog Mouse, on a walk along Deer Lake Park here in Burnaby.” writes Grace. “He’s an 11-year-old beloved walking trouble. Small in size, big on personality, and stubborn as hell. Yet always knows how to make me laugh. I’m a daily reader of your blog. Always looking forward to it on my lunch break.

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/06/the-vanished/