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Over 1 billion USD are devoted annually to rehabilitating freshwater habitats to improve survival for the recovery of endangered salmon populations. Mitigation often requires the creation of new habitat (e.g. habitat offsetting) to compensate population losses from human activities, however offsetting schemes are rarely evaluated. Anadromous Pacific salmon are ecologically, culturally, and economically important in the US and Canada, and face numerous threats from degradation of freshwater habitats. Here we used a matrix population model of coho salmon (Oncorhynchus kisutch) to determine the amount of habitat offsetting needed to compensate mortality (2–20% per year) caused by a range of development activities. We simulated chronic mortality to three different life stages (egg, parr, smolt/adult), individually and simultaneously, to mimic impacts from development, and evaluated if the number of smolts produced from constructed side-channels demographically offset losses. We show that under ideal conditions, the typical size of a constructed side-channel in the Pacific Northwest (PNW) (3405 m2) is sufficient to compensate for only relatively low levels of chronic mortality to either the parr or smolt/adult stages (2–7% per year), but populations do not recover if mortality is >10% per year. When we assumed lower productivity (e.g.; 25th percentile), we found that constructed channels would need to be 2.5–4.5 fold larger as compared to the typical size built in the PNW, respectively, to maintain population sizes. Moreover, when we imposed mortality to parr and smolt/adult stages simultaneously, we found that constructed side-channels would need to be between 1.8- and 2.3- fold larger that if the extra chronic mortality was imposed to one life stage only. We conclude that habitat offsetting has the potential to mitigate chronic mortality to early life stages, but that realistic assumptions about productivity of constructed side-channels and cumulative effects of anthropogenic disturbances on multiple life stages need to be considered. [ABSTRACT FROM AUTHOR]