Federal immigration policy changes under the 2026-2028 Immigration Levels Plan are the primary driver behind the 61% implied probability that Canada's population will decline this year. Permanent resident targets have stabilized at 380,000 annually, while new temporary resident arrivals, including students and workers, are capped at 385,000 for 2026, down sharply from prior years. Parliamentary Budget Officer projections indicate these reductions will produce net outflows of non-permanent residents that fully offset gains from permanent immigration and natural increase, resulting in flat or negative overall growth for a second consecutive year. Recent Statistics Canada data confirm population declines in late 2025 and early 2026, with ongoing outflows concentrated in major provinces. This policy-driven normalization of inflows, aimed at easing housing and service pressures, underpins trader assessments of downside risk through year-end.