(CANADA) Canada 🇨🇦 is reshaping how people settle in the country, doubling down on a two-step immigration model while moving to shrink the overall number of temporary residents. In 2025, over 40% of permanent resident admissions are expected to come from people already in the country as temporary residents—mainly international students and temporary foreign workers.
At the same time, the federal plan targets a sharp decline in the temporary resident population through 2026, aiming to bring temporary residents down to 5% of the total population by the end of 2026. These moves come alongside a gradual drop in overall permanent resident admissions under the 2025–2027 plan, even as Ottawa promises to keep transition routes open for workers in sectors with severe shortages.
What “two-step” immigration means and why it matters
Two-step immigration means arriving first on a study or work permit, then applying for permanent status. This route has grown from niche to central:
- In 2000, only around 5% of new permanent residents had been temporary residents.
- By 2023, the share had climbed to nearly 50%.
- In 2025, the trend continues, with over 40% of permanent admissions expected to be from current temporary residents.
Benefits:
– Employers get quicker access to talent.
– Applicants build Canadian experience before applying for permanent residency.
Trade-offs:
– As the government cools growth in the temporary population, entry becomes more restricted and competitive.
Recent policy changes and immediate impacts
Ottawa has already started adjusting policies:
- International student admissions fell 43% in early 2024 compared to 2023.
- Several temporary post‑pandemic policies have ended or are being phased out.
- In 2025, new limits on open work permits for spouses of temporary foreign workers and international students took effect, largely restricting eligibility to spouses of high‑skilled workers and graduate‑level students.
Daily impacts:
– Couples are reconsidering study plans and family timing.
– Employers are adjusting hiring plans due to fewer spousal open work permits in lower‑skilled roles.
The 2025–2027 Immigration Levels Plan: key figures
- Total admissions:
- 395,000 in 2025
- 365,000 in 2027
- Composition by 2027:
- Economic immigrants: nearly 62%
- Family programs: about 22%
- Humanitarian streams: around 15%
This reflects a balancing act between growth, service capacity, housing, and labor market needs.
Growth of the temporary workforce and pressures on selection
Canada’s temporary foreign worker population has expanded markedly:
- From roughly 67,000 in 2000
- To almost 1.5 million in 2024
Employers in hospitals, long‑term care, food processing, and home building have relied on temporary programs to fill gaps. Many temporary workers now seek permanent status, which pressures selection systems—especially when Ottawa lowers total permanent resident admissions.
Effects on international students
The long‑term promise of two-step immigration remains, but near‑term controls change the picture:
- Caps on study permits, reduced spousal work access, and the wind‑down of temporary allowances mean fewer new entrants and fewer families arriving together.
- Stronger links between field of study, sector demand, and selection prospects.
Who benefits:
– Graduates in health care and trades stand to benefit from targeted measures.
– Those in fields with weaker demand may face tougher odds.
Implications for employers
Employers should expect a new reality:
- Firms that relied on steady inflows of students and spousal workers for entry or mid‑level positions must plan earlier and invest more in retention.
- For critical fields (nursing, personal support, construction trades), government signals point to continued selection priority for experienced candidates already in Canada.
- Employers expecting fast, flexible access to temporary labor across many roles will face more scrutiny and tighter numbers through 2026.
Practical employer actions:
– Sponsor full‑time roles that meet selection criteria.
– Support licensing and credential recognition.
– Offer training and language support to help employees qualify for permanent streams.
Family and spousal work permit consequences
The 2025 changes to spousal open work permits have mixed effects:
- Where spouses still qualify (mainly high‑skilled roles and graduate programs), family income and stability can remain strong—improving the case for permanent residency.
- Where spouses no longer qualify, families may have to choose between living apart or surviving on a single income in Canada, with social and financial consequences.
This influences:
– Where families settle
– Job choices
– Timelines for permanent resident applications
Who will be favored in selection
The government intends to keep transition pathways open for people already building a life in Canada, particularly those with:
- The right mix of skills
- Strong language proficiency
- 1–3 years of full‑time, skilled Canadian experience in shortage sectors (care, construction, trades)
According to analysis by VisaVerge.com, applicants who match work experience and credentials to priority areas may continue to see better outcomes than peers in non‑shortage fields.
What applicants should do now
Steps to strengthen applications in a tighter system:
- Focus work and study plans on sectors with strong demand (health care, skilled trades).
- Build clear, continuous Canadian work experience and keep detailed records of hours and duties.
- Improve and maintain strong language scores.
- Seek stable, full‑time roles that match recognized job classifications.
- Plan family timelines carefully in light of narrower spousal open work permit eligibility in 2025.
How the decline in permanent admissions affects competition
With admissions falling from 395,000 (2025) to 365,000 (2027):
- Cutoffs in points‑based selection often rise.
- Timelines can lengthen.
- Applicants are encouraged to strengthen profiles rather than apply early with weaker files.
Practical suggestions:
– Continue working to reach higher experience tiers.
– Improve language scores.
– Secure strong job offers and document results clearly.
– Students should select programs with co‑op/clinical placements and move quickly into full‑time skilled roles after graduation.
Return to traditional rules and expectations
The end of post‑pandemic measures means more traditional rules will apply across study, work, and permanent programs:
- Stricter proof of funds for study
- Narrower spousal work pathways
- Greater emphasis on matching job roles to recognized skill levels
Applicants should expect more predictable but tougher competition for permanent seats.
Sectoral focus: where the door remains more open
Even as inflows fall, transition pathways remain important for:
- Health care: hospitals, long‑term care, home care
- Trades: housing and infrastructure demands
The front door narrows, but the door for those already inside who meet urgent workforce needs is kept open.
Community and economic ripple effects
Direct impacts:
– Students may arrive without a working spouse and face higher living costs.
– Workers may wait longer for invitations as permanent admissions fall.
– Families may choose provinces based on job offers and cost of living.
– Employers may shift recruitment to shortage‑focused positions.
Community ripple effects:
– Fewer new international students in schools
– Landlords and local services adapt to changing temporary populations
Official plan and further reading
Applicants and employers can review the government’s outline and targets in the 2025–2027 Immigration Levels Plan. The plan lays out total admissions, the emphasis on economic selection, and continued roles for family and humanitarian streams.
Key takeaway (blockquote)
Canada is tightening the front door on new temporary residents while keeping the second step—pathways to permanent residency for those already here—central to how future permanent residents are chosen. Expect fewer entry points, more selectivity, and continued priority for sectors with real labor shortages.
The two‑step model rewards people who build lives in Canada—study, work, and settle—then apply to stay. The coming reduction in temporary inflows will not end that path. Instead, it will likely make the path more selective, more focused on real labor needs, and more dependent on strong job matches and clear documentation. For many, this means longer preparation and careful planning; for others in health care and trades, it may mean a clearer route even as overall numbers fall.
In the months ahead, attention will focus on how policy changes play out on campuses and in workplaces, how selection responds to the new candidate mix, and how applicants and employers adapt to a tighter but more targeted system.
Frequently Asked Questions
This Article in a Nutshell
Canada is consolidating a two-step immigration approach—where many newcomers arrive first as temporary residents and later transition to permanent status—while actively reducing the overall temporary resident population. In 2025, over 40% of permanent admissions are expected to be from individuals already in Canada. The government targets lowering temporary residents to 5% of the population by the end of 2026 and plans modestly reduced permanent admissions across 2025–2027 (395,000 to 365,000). Policy changes include cuts to international student inflows, narrower spousal open work permit eligibility, and ending post‑pandemic measures. Priority will go to applicants with 1–3 years of Canadian skilled experience in shortage sectors such as health care and trades. Employers and applicants should pivot toward targeted fields, document Canadian experience, and prepare for more competitive selection criteria.
