What explains Kitchener–Cambridge–Waterloo's growth and why has it slowed, and how does a technology-and-manufacturing region differ from Toronto and its Ontario peers?
Waterloo Region added 90 people in 2025 on the Region's own count, a slowdown it attributes largely to falling international student enrolment, while unemployment in the metropolitan area stands at 7.1% and its manufacturers face U.S. tariffs
Graphic: The Kitchener–Cambridge–Waterloo economy: a technology and factory …
What happened
Kitchener–Cambridge–Waterloo's unemployment rate was 7.1% in October 2026, against 7.6% in Hamilton, 8.1% in London and 7.1% in Toronto, and employment was 390 thousand, 1.7% on a year earlier.
Unemployment rate: eight more metropolitan areas
Percent, three-month moving average, seasonally adjusted (same table as the six large cities).
Chart loads when it comes into view.
Latest values: Kitchener–Cambridge–Waterloo CMA 7.1 (2026-10); Winnipeg CMA 5 (2026-10); Halifax CMA 5.4 (2026-10); Québec CMA 4.5 (2026-10); and 4 more in the data table.
Related relationships: Winnipeg · Halifax · Hamilton · London
The Statistics Canada estimate of the metropolitan population on 1 July 2025 was 702 thousand, a change of 0.3% on the year before, against 11.7% over the three years to that date. The net change in non-permanent residents in the latest demographic year was -7,365. Over the past twelve months 3,715 homes were started, and the average two-bedroom rent in purpose-built rental apartments was C$1,816 in the October 2025 survey, with a vacancy rate of 4.0%, from 3.5% a year earlier.
Why it happened
The Region of Waterloo's June 2026 bulletin estimates the Region's year-end 2025 population at 678,270 people, including students temporarily living there, an increase of only 90 people or 0.01 per cent, and attributes the slowdown largely to decreases in international student enrolment after the federal government capped new study permits.
The bulletin says international students made up roughly 15 per cent of enrolment at the three local institutions in 2016, 37 per cent in 2023 and 17 per cent now, and that the region is particularly affected because some of its three post-secondary institutions relied heavily on international enrolment.
CBC reported in July 2025, citing an arbitration document, that 23 of Ontario's 24 public colleges recorded a 48 per cent fall in first-semester international enrolment the previous year, which the document blames on the federal study-permit cap, and that the local union counted at least 190 layoffs and 82 programme cancellations at Conestoga College. These are the union's figures for one college.
Evidence: CBC News: 'Morale has hit an all-time low': Conestoga College union speaks out on layoffs
The Financial Accountability Office of Ontario said of early 2026 that Ontario's population had fallen from a year earlier, the first decrease on record, because of a significant outflow of non-permanent residents and fewer new permanent residents. Statistics Canada has since revised its non-permanent resident estimates, and its current series shows no fall from a year earlier in those quarters; it shows Ontario up 0.3% over the four quarters to 1 July 2026. Those figures are for the province; the metropolitan net change in non-permanent residents above, for the year to June 2025 and published before the revision, is negative.
Evidence: Financial Accountability Office of Ontario: Ontario Economic Monitor: October 2025 to March 2026; Statistics Canada: The Daily: Canada's population estimates, second quarter 2026
The two population counts do not agree and neither source explains the gap: the Region's bulletin gives 678,270 at year end and describes its method (census base, an undercoverage allowance, local enrolment data), while Statistics Canada's July estimate for the metropolitan area is higher. The Region also notes that Statistics Canada reported an average error rate of about 45 per cent in 2021 non-permanent resident counts across Ontario, and says the 2026 Census is its opportunity to correct its baseline.
Why it matters
Waterloo EDC, citing CBRE's 2024 report, says the region's tech jobs grew 46 per cent from 2018 to 2023, the third-fastest of North American markets, and that 9.6 per cent of its workforce is in tech, against 10.1 per cent in Toronto. On that report the region's tech share of the workforce is therefore below Toronto's, even though Waterloo EDC credits its smaller size and high talent density as an advantage.
Evidence: Waterloo Economic Development Corporation: Waterloo’s Tech Trajectory: 46% Job Growth in 5 Years
The University of Waterloo reports a later CBRE survey ranking the region #7 in North America, with tech-role jobs up 58 per cent from 2021 to 2024, and notes that more people in the region work in sales, finance and marketing than in software development. The two CBRE figures cover different periods and the sources do not reconcile them.
Evidence: University of Waterloo: Waterloo Region ranks #7 in North America's top tech talent markets
The City of Waterloo says its head offices include Economical Insurance, Equitable Life of Canada, Manulife Financial and Sun Life Financial, and that insurers together employ about 8,500 people in its community. That is a city figure, not a metropolitan one.
In the Census, jobs located in the metropolitan area were 16.1% manufacturing, 10.8% professional, scientific and technical services and 6.9% finance and insurance in May 2021. Hamilton's manufacturing share was 11.5% and London's 11.2%, so manufacturing is a larger share of local jobs here than in either Ontario peer.
A region that is at once a software and insurance centre and a factory region differs from Toronto, where the one report quoted above shows a larger tech share, in that its employment base is split between the two; the sources do not say how much of its growth each accounts for.
The annual Labour Force Survey shows manufacturing employment of 69 thousand in 2025, 26.0% above 2021, and professional, scientific and technical services at 49 thousand, 51.7% above 2021. Both grew; the survey is a sample, so single-year moves in a sector of this size are imprecise.
History
Employment in the metropolitan area has changed 19.7% since December 2019, and the metropolitan population 17.8% over five years. The unemployment rate has ranged from 4.2% (September 2018) to 13.1% (June 2020) over ten years.
The Region's bulletin counts 73,800 full-time students on the three local campuses as of November 2025 and expects the cap to keep affecting the Region's population for the next few years as existing students graduate.
Across geographies
Job Bank reports that employment in the Kitchener-Waterloo-Barrie economic region, a wider area that includes Barrie, rose 0.5 per cent in 2025, against 1.0 per cent for Ontario. It is not the metropolitan area, and the metropolitan Labour Force Survey's annual employment rose 2.0% in the same year, a different reading from a different geography.
Evidence: Government of Canada (Job Bank): Economic Scan - Ontario: 2026
CMHC's July 2026 outlook says Ontario will likely continue to struggle with historically weak home sales because of affordability and slower population growth, and its table for this metropolitan area shows a rental vacancy rate rising from 4.5 per cent in 2026 to 4.7 per cent in 2027. The survey series for the same measure, 4.0% in 2025, is for three-unit-and-over row and apartment structures; CMHC's table is a forecast whose universe the page does not define.
What it influences
The University of Waterloo said in October 2024 that it faced an operating deficit of 75 million dollars for 2024-25, blaming fewer international students enrolling, a domestic tuition freeze, flat government grants and rising salary costs.
Evidence: University of Waterloo: University Budget Update: Your Input Matters
Wilfrid Laurier University's April 2026 budget began from a structural deficit of 7.1 million dollars and says its 2026-27 study-permit allocation, although lower than in previous years, should be enough to meet demand from new international undergraduates. The three institutions' positions therefore differ, and the sources do not compare them.
Evidence: Wilfrid Laurier University: 2026/27 Budget Report (Board of Governors, April 16, 2026)
CMHC's table forecasts housing starts of 3,900 for 2026 and 3,650 for 2027, after 4,306 in 2025. That is a forecast; the observed twelve-month total through September 2026 is 3,715, and 6,820 homes are under construction.
Risks
Waterloo EDC's 2025 annual report says the trade war's impact has been substantial, that the Canadian automotive industry has become an explicit target of U.S. policy and that the region's manufacturing industry faces its biggest challenges in a generation; it adds that 2025 was a challenging year and 2026 might be harder.
Evidence: Waterloo Economic Development Corporation: Waterloo EDC 2025 Annual Report
Toyota Motor Manufacturing Canada, whose three Ontario plants employ roughly 8,500 people (two of them in Cambridge, one in Woodstock outside the metropolitan area), told CBC in June 2025 that it had had no reductions or changes of plan through the period of uncertainty and that its workforce would remain relatively stable.
Evidence: CBC News: Toyota investing in southwestern Ontario production despite auto sector uncertainty
The Financial Accountability Office of Ontario says Ontario is expected to be disproportionately affected by uncertainty in Canada-U.S. trade relations because its manufacturing sector faces significant pressure from U.S. tariffs. No source held here gives a metropolitan estimate of jobs exposed.
Evidence: Financial Accountability Office of Ontario: Economic and Budget Outlook, Summer 2026
The Region's approval of light rail to Cambridge in November 2025 is not funding: the Region says staff must still pursue full project funding from the provincial and federal governments.
What to watch
The Region plans to re-baseline its population models after the 2026 Census, which will show whether the metropolitan and Regional counts converge. CMHC's forecast of a vacancy rate of 4.5 per cent in 2026 can be tested against the October 2026 Rental Market Survey, and Statistics Canada's quarterly and annual population estimates show whether the net outflow of non-permanent residents continues. Not held here: metropolitan wages, a consumer price index for the metropolitan area, tech-sector layoffs or funding totals for the region, and a metropolitan estimate of tariff-exposed jobs.
Prepared with AI assistance.
Follow the relationships
- Ontario 9 with evidence · 12 recorded Open in Studio
- Employment 0 with evidence · 0 recorded Open in Studio
- Housing demand 2 with evidence · 2 recorded Open in Studio
Sources for this section (9 datasets, 14 documents)
Data
- Labour force characteristics by census metropolitan area, three-month moving average, seasonally adjusted (14-10-0459-01; 5 series; latest October 2026; retrieved 2026-11-07)
- Population estimates, July 1, by census metropolitan area and census agglomeration, 2021 boundaries (17-10-0148-01; 1 series; latest 2025; retrieved 2026-10-24)
- Components of population change by census metropolitan area and census agglomeration, 2021 boundaries (17-10-0149-01; 1 series; latest 2024; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, housing starts, under construction and completions in selected census metropolitan areas, monthly (34-10-0154-01; 2 series; latest September 2026; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, average rents for areas with a population of 10,000 and over (34-10-0133-01; 1 series; latest 2025; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, vacancy rates, row and apartment structures of three units and over, privately initiated in census metropolitan areas, weighted average (34-10-0130-01; 1 series; latest 2025; retrieved 2026-10-25)
- Population estimates, quarterly (17-10-0009-01; 1 series; latest 1 July 2026; retrieved 2026-10-23)
- Place of work status by industry sector, work activity during the reference year, age and gender: Census metropolitan areas, tracted census agglomerations and census tracts of work (98-10-0492-01; 5 series; latest 1 January 2021; retrieved 2026-10-24)
- Employment characteristics by census metropolitan area, annual (14-10-0468-01; 3 series; latest 2025; retrieved 2026-11-07)
Documents cited
- Regional Municipality of Waterloo: 2025 Population and Households Estimates for Waterloo Region (Growth Analysis Bulletin, 2 June 2026) (retrieved 2026-10-25)
- CBC News: 'Morale has hit an all-time low': Conestoga College union speaks out on layoffs (retrieved 2026-10-25)
- Financial Accountability Office of Ontario: Ontario Economic Monitor: October 2025 to March 2026 (retrieved 2026-10-25)
- Statistics Canada: The Daily: Canada's population estimates, second quarter 2026 (retrieved 2026-11-07)
- Waterloo Economic Development Corporation: Waterloo’s Tech Trajectory: 46% Job Growth in 5 Years (retrieved 2026-10-25)
- University of Waterloo: Waterloo Region ranks #7 in North America's top tech talent markets (retrieved 2026-10-25)
- City of Waterloo: Key sectors and employers (retrieved 2026-10-25)
- Government of Canada (Job Bank): Economic Scan - Ontario: 2026 (retrieved 2026-10-25)
- CMHC: Summer Update: 2026 Housing Market Outlook (retrieved 2026-11-07)
- University of Waterloo: University Budget Update: Your Input Matters (retrieved 2026-10-25)
- Wilfrid Laurier University: 2026/27 Budget Report (Board of Governors, April 16, 2026) (retrieved 2026-10-25)
- Waterloo Economic Development Corporation: Waterloo EDC 2025 Annual Report (retrieved 2026-10-25)
- CBC News: Toyota investing in southwestern Ontario production despite auto sector uncertainty (retrieved 2026-10-25)
- Regional Municipality of Waterloo: Stage 2 ION (retrieved 2026-10-25)
Each dataset is used under its licence; attribution and series-level detail are in each chart’s “About this data” panel. Limitations: Every explanation here is a statement by the named organisation. Three geographies are mixed and are said where used: the Statistics Canada census metropolitan area (all series), the Regional Municipality of Waterloo and its three cities (the Region's population bulletin, Waterloo EDC, the Region's transit page), and Ontario or the Kitchener-Waterloo-Barrie economic region (Job Bank, the Province). The City of Waterloo's sector page describes that city only. No metropolitan consumer price index exists, and metropolitan wages, GDP by industry or after 2022, and a ranked list of employers are not held. Waterloo EDC and the universities describe themselves and their institutions. Forecasts are the publishers' and are not Northline forecasts.