Prince Edward Island’s population growth is slowing after several years of rapid expansion, a shift an expert says could ease pressure on housing and services, but also raise economic concerns.

As of Jan. 1, 2026, the province’s population stood at 182,001, according to the latest quarterly estimate from Statistics Canada.

While that marks an increase of 1,315 people, or 0.7 per cent, compared to a year earlier, growth has cooled down.

P.E.I.’s population increased significantly in recent years, particularly coming out of the COVID-19 pandemic, with year-over-year growth reaching an all-time high at about 4.3 per cent in the fall of 2023. Since then, growth rates have steadily declined each quarter.

Fred Bergman, a senior policy analyst with the Atlantic Economic Council, said the slowdown is largely tied to reduced international migration to the Island amid tightening federal and provincial immigration policies.

“This means less people, therefore less income, less spending and less economic activity. It also puts a strain in the workforce as well … and potentially even less tax revenues for government,” Bergman said.

“On the upside, it makes addressing issues like affordable housing or delivery of health care or having sufficient public infrastructure to match your population growth a lot easier.”

While P.E.I. still saw growth last year, Canada recorded an overall population decline — marking the first time the country has seen an annual net decline in residents since Confederation.

One major factor behind the slowdown is a decline in non-permanent residents coming to P.E.I.

Non-permanent residents, also known as temporary residents, include people holding work or study permits as well as asylum claimants and any family members living with them.

During the 2025 calendar year, nearly 2,200 non-permanent residents arrived on the Island, while roughly double that left — about 4,300.

Over the past several years, the number of temporary residents leaving the province has increased while arrivals have declined.

The number of non-permanent residents surged during the post-pandemic labour shortage, but the federal government under former prime minister Justin Trudeau later moved to scale back that influx.

Prime Minister Mark Carney’s government is continuing that approach, aiming to reduce the number of temporary residents to less than five per cent of the population by the end of 2027.

“P.E.I. is not too far from achieving the target,” Bergman said.

As of Jan. 1, 2026, there were a total of 10,368 non-permanent residents on P.E.I., accounting for about 5.7 per cent of the population. Bergman said if more continue to leave, the province could meet that target ahead of schedule.

Slower growth brings both relief and challenges

Bergman said reaching that target could give governments more time to catch up on housing, health care and infrastructure.

Non-permanent residents can boost the economy through work and spending, but many do not stay long-term.

“If they’re not staying in the long run, is that where you want the bulkier population to be? Is it non-permanent residents? Probably not for most countries,” he said.

In addition to fewer temporary residents, P.E.I. has also seen a drop in permanent immigration. More than 2,200 people arrived as permanent residents in 2025, a roughly 38 per cent decrease from the record year of 2023.

Fewer newcomers mean fewer workers, Bergman said, while an aging population continues to pose challenges on P.E.I. and across Atlantic Canada.

“The impact of the aging demographics is going to reduce the available domestic workforce to meet employers’ needs going forward,” he said. 

Meanwhile, the province continues to experience natural population decline, with more deaths than births.

Over the past five years, natural population growth in P.E.I. has generally been negative on a quarterly basis.

The latest data available from Statistics Canada shows that in the fourth quarter of 2025, there were 312 births and 462 deaths, resulting in a natural decline of 150 people. That marks the largest gap between deaths and births in a single quarter on record since 1946.

One bright spot in the data, Bergman noted, is interprovincial migration.

In 2025, more people moved to P.E.I. from other parts of Canada than left, resulting in a net gain of about 1,600 people. This helped offset the slowdown in international immigration, he said.

“So it wasn’t all bad news.”

However, he noted that high energy prices could draw workers to oil- and gas-producing provinces such as Alberta, Saskatchewan and Newfoundland and Labrador, potentially pulling people away from P.E.I.

Will the immigration slowdown last?

As Canada’s immigration landscape continues to shift, particularly with further reductions in temporary residents, Bergman said population growth on P.E.I. could slow even further in the short term before levelling off.

He said aging populations and labour shortages remain ongoing challenges in Atlantic Canada and across the country, and they’re not going away anytime soon — something that may force governments to revisit immigration policies.

“You are going to have to rely on immigration and non-permanent residents to fill some of those gaps, including temporary foreign workers — that’s inevitable,” Bergman said.

“I think it will happen within the next few years. You’ll see an uptick in bringing in people from abroad, because I think they’ll have no choice, because your only other option is to invest more in robotics, automation and artificial intelligence to offset less workers, and not every firm can afford to do that.”

Bergman noted that some policy shifts are already underway. Last month, Ottawa announced it will now allow rural businesses to employ more temporary foreign workers to help supplement the local workforce.

As Canada shifts immigration toward economic immigrants, Bergman said the P.E.I. government has already moved in that direction by prioritizing higher-skilled workers in high-demand sectors such as health care and skilled trades, while placing less focus on sectors like retail and service.

“It’s doing some of the right things now, and it’s got to decide … what’s the best path forward where we can balance meeting infrastructure needs and program needs versus having the right amount of population growth,” he said.

“That’s the balancing act they’ve got to figure out.”