Rural and small town areas, that is, those areas outside urban centres with core populations of 10,000 or more, recorded a 0.4% decline in population between 1996 and 2001. The population of these areas declined in every province except Ontario, Manitoba and Alberta. In 2001, 20.3% of Canadians lived in rural and small town areas, down from 21.5% in 1996.

The growth of these rural areas and communities depended on the proportion of their residents who commuted to urban centres. The population of rural areas in which more than 30% of the residents commuted to urban centres increased 3.7%. The growth in these areas was mainly the result of people who moved just beyond urban boundaries to live in a more rural setting.

Except for the most remote areas, rural and small town areas in which the proportion of commuters was less than 30% declined in population. Between 1996 and 2001, they lost population through migration. In addition, because their population was aging, their rate of natural increase was low, and in some cases, negative.

The population of the most remote rural areas grew 1%. Their rate of natural increase was still high enough to offset any out-migration. The high rate of natural increase may be attributed to the higher birth rate among Aboriginal people.