06:42 AM EDT, 10/29/2024 (MT Newswires) -- Canada's federal government is taking direct aim at a net outflow of temporary migrants and fewer new permanent

residents for a couple of years, which, if all goes as planned, will result in a small 0.2% decline in the population each year, noted Bank of Montreal (BMO).

An annual decline hasn't occurred before, at least not since quarterly records were kept after WWII, said the bank.

Most areas of demand -- consumer spending, home sales, college enrollment -- will be impacted, as well as a few areas of supply -- workforce, housing starts, stated BMO.

The eventual impact will depend on execution, but suffice it to say this 180-degree policy shift implies a mild downside risk to

growth unless productivity ramps higher, pointed out the bank.

Government policies that incentivize business investment may never be needed more, added BMO.