Canada Sets 5% Cap on Temporary Residents by 2027

(EDMONTON, ALBERTA) Canada will move to bring the share of its temporary residents down to under 5% of the total population by the end of 2027, a reduction from a recent high of 7.25%, Prime Minister Mark Carney told Liberal caucus members in Edmonton. The government says the plan will return immigration to “sustainable levels,” keeping welcome doors open while matching intake to housing, transit, and public service capacity.

While details are still being finalized, the direction is clear: international students, temporary foreign workers, and other non‑permanent categories will face tighter rules and lower quotas over the next three years.

Timeline and targets

Officials have previewed a phased approach that begins in 2025 and runs through 2027, aligning both permanent and temporary streams to new targets.

• The current Immigration Levels Plan sets annual permanent resident admissions at 395,000 in 2025, 380,000 in 2026, and 365,000 in 2027, down from earlier ambitions of 500,000 per year.
• For temporary residents, the government has modeled a steep decline in net new arrivals over the same period, paired with the assumption that a large share of current permit holders will depart as their status ends or converts to permanent residency.
• The federal timeline places the 5% temporary-resident population share target by end-2027, with core reductions in 2025 and 2026 and adjustments through 2027.
• Ottawa expects to table more details on quota allocation, program-by-program caps, and application windows before Parliament in late September or October 2025.

IRCC is also rolling out a new online account system in 2025–2026 to manage applications more efficiently and apply new rules more consistently.

This marks the first time Ottawa has set an explicit population-share goal for temporary residents, signaling a fundamental reset of how short-term migration fits into longer-term planning.

Focus: international students

International students sit at the center of the shift. Ottawa has already said student numbers will be reduced at least 10% in 2025, with sharper cuts for certificate and some post‑graduate programs.

Key data and trends:
– In Q2 2025 (April–June), about 80% of Indian student applicants were refused.
– Only 17,885 study permits were issued to Indian nationals in Q2 2025, compared with 55,660 in Q2 2024 — a drop of more than 66%.
– Over the first six months of 2025, Canada issued 47,695 study permits to Indians, down from 99,950 in the same period in 2024.
– For January–July 2025, the overall study permit approval rate fell to 38%, with 62% of applicants refused.
– Indians represented nearly a third of all study permits issued in Q2 2025, down from 45% a year earlier.

Consequences for students and institutions:
– Many colleges and universities that rely on international tuition have begun cutting programs and staff, especially in regions where student numbers supported local economies.
– Prospective students will need stronger documentation, clearer proof of funds, and realistic housing plans.
– Schools will likely face higher bars to show program quality and student support—factors officials say will protect learners and reduce misuse of the system.

Changes to temporary workers and provincial programs

Temporary workers will also see major changes aimed at aligning labor inflows with local capacity.

Planned or previewed measures:
– Stricter eligibility for the Temporary Foreign Worker Program (TFWP).
– Tighter Labor Market Impact Assessment (LMIA) policies, including a moratorium on low-wage LMIA approvals in cities where unemployment exceeds 6%.
– Provincial Nominee Programs (PNPs) must give more weight to candidates already inside Canada, making it harder for newcomers abroad to enter through work-first paths.
– Targeted streams may remain for critical sectors (for example, agriculture or fish processing), but the overall pressure is to reduce intakes and refocus on labor needs aligned with housing and services.

Policy changes overview (summary)

• Target: Under 5% temporary residents by end-2027 (from 7.25%).
• Permanent admissions: 395,000 (2025) → 380,000 (2026) → 365,000 (2027).
• Temporary residents: reduced via lower net new arrivals and natural exits/conversions.
• International student intakes tightened, with sharper cuts for certain program types.
• TFWP and LMIA rules narrowed; PNPs to favour in‑country candidates.

Impact on applicants, institutions and employers

Applicants should expect stricter screening and fewer seats.

For students:
– Prepare stronger files: credible study plans, proof of funds that match real costs, and confirmed housing.
– Expect higher scrutiny and lower approval odds compared with prior years.

For workers and employers:
– Employers will likely need to demonstrate greater effort to hire locally before seeking permits.
– Employers should monitor unemployment thresholds and regional program options.
– Provinces may favour current students and workers pursuing permanent residency over overseas applicants.

For institutions:
– Consider diversifying source countries and adjusting intakes to match housing availability.
– Some schools may scale down programs or shift toward courses with clearer labor outcomes.
– Colleges and universities will need to rethink recruitment, admissions cycles, and spending plans.

Economic and community effects

Officials argue the policy aims to tackle problems that built up during record population growth in 2023–2024—rapid increases that pushed rents up, lengthened wait times for services, and strained public transit.

Supporters say:
– The plan will help bring supply and demand closer together, giving time to add housing, speed up infrastructure projects, and improve student protections.

Critics warn:
– Cuts could trigger labor shortages, hit universities hard, and erode Canada’s reputation for openness to talent.

Local impacts to watch:
– Cities that saw rental spikes tied to student arrivals will monitor whether lower inflows ease pressure.
– Regions that relied on seasonal workers will assess effects on harvest schedules and processing plants.
– Universities will balance budgets while trying to safeguard the student experience.

What applicants and stakeholders should do now

IRCC urges applicants and stakeholders to follow official updates and review new eligibility and documentation rules as they come online. The first stop for updates and program guidance is the IRCC official website:

• https://www.canada.ca/en/immigration-refugees-citizenship.html

Practical steps:
1. Students: build a clear, honest file — study plan tied to prior education/work, proof of funds, and housing evidence.
2. Workers: confirm employer compliance, wage levels, and local labor data before applying.
3. Families: prepare for longer timelines and consider alternate options within regional and targeted programs.
4. Institutions and employers: review recruitment strategies, budgets, and contingency plans for lower international inflows.

Important: Expect a formal presentation before Parliament in the coming weeks and further announcements that will show how quotas are shared across streams and provinces. Those details will determine how quickly the temporary-resident share drops to 5% and how pressures are distributed among students, workers, and other categories.

While the short-term effect is contraction—fewer permits and more refusals—the longer-term goal is to stabilize growth and bring immigration back to sustainable levels. Ottawa says it wants to keep permanent pathways open, especially for people already contributing in critical sectors, which could support transitions from temporary to permanent status for those who meet labor market needs and are established in their communities.

The direction is set; the details will decide how smooth the landing is for students, workers, employers, and schools across the country.