Canada to Slash Temporary Immigration; NPR Share Expected Below 5%

Canada 🇨🇦 will sharply scale back temporary immigration over the next three years, aiming to reduce the share of non-permanent residents in the population from above 7% today to below 5% by 2028, according to the federal government’s latest plan. The shift will cut the flow of temporary resident visas, including permits for foreign workers and international students, while holding permanent resident admissions near historic highs.

Officials say the change is meant to bring migration to a level the country’s housing, healthcare, and education systems can handle, setting up a slower but more stable pace of growth.

Key numbers and targets

• Temporary resident admissions
  • 673,650 in 2025 (current plan)
  • 385,000 in 2026
  • 370,000 in 2027
  • 370,000 in 2028
• International student visas
  • Previously signaled: 305,000 over two years
  • New expectations: ~155,000 in 2026, ~150,000 in 2027–2028
• Permanent residents
  • 395,000 in 2025
  • 380,000 per year from 2026 through 2028 (slightly raised from earlier intentions but below 2025)

The package is presented in the 2025–2027 Immigration Levels Plan, which prioritizes applicants already in Canada and focuses on labor shortages in healthcare and the skilled trades. The government’s official overview is available on the Immigration, Refugees and Citizenship Canada website’s Immigration Levels Plan.

Expected effects on population and services

Bank of Montreal expects the pullback to produce net outflows of non-permanent residents over the next two years, which would help push the overall share of temporary residents down to the government’s stated target.

In practical terms:
– Fewer permits for temporary foreign workers and students means slower short-term population growth.
– This should reduce pressure on tight rental markets and public services (healthcare, education).
– VisaVerge.com analysis suggests the approach reflects Ottawa’s attempt to ease immediate strains while keeping long-run pathways to permanence open for those who can fill chronic job gaps.

The government frames the cut as a reset after a rapid run-up in temporary immigration during and after the pandemic.

Many sectors came to rely on short-term labor as hiring rebounded unevenly. Colleges also recruited more international students to cover budget shortfalls. As housing demand outpaced supply, political pressure mounted to slow inflows seen as contributing to overcrowded rentals and long wait times for family doctors.

The government says the new levels aim to respect communities that absorbed record numbers of newcomers while still supporting employers and universities, though officials acknowledge a difficult transition period is likely.

Impact on students and educational institutions

The plan singles out the study stream for sharper controls at least through 2028.

• Caps on international students will remain tight compared with recent years, with the steepest drop occurring in 2026.
• Institutions will be expected to demonstrate they can support admitted students with housing and career services.
• Approvals will favor programs with clear job outcomes.

Implications:
– Students already in Canada may still have pathways to work, but fewer upstream approvals mean campus cohorts will likely shrink.
– Private or lower-ranked programs that depend heavily on foreign tuition will feel the greatest impact.

Impact on employers and the labour market

The fall in permits for foreign workers will limit a channel many businesses used to fill roles quickly.

• Sectors likely affected: hospitality, food processing, some construction trades.
• The plan emphasizes economic immigration from within Canada, suggesting existing temporary residents may be steered toward permanent pathways if they meet required skills and language thresholds.
• Fresh arrivals on short-term permits will be harder to obtain, forcing firms to:
  • Adjust recruitment plans
  • Consider wage increases
  • Invest more in training

Provincial and local effects

Provinces face a mixed picture:

• Potential benefits:
  • Slower temporary inflows could ease pressure on schools and hospitals, especially in large cities with high rents.
• Potential drawbacks:
  • Colleges and universities that rely on international tuition will feel the pinch and may lobby for targeted allocations.
  • Smaller communities that used temporary immigration to offset aging populations could press for more provincial nominations.

The federal plan’s focus on critical sectors provides openings for tailored provincial programs, but the aggregate cap will constrain overall numbers.

Permanent residency focus and transition risks

The government argues that keeping permanent resident targets near 380,000 will maintain long-term labour force growth while giving services room to catch up.

• Emphasis on applicants already in Canada (many former temporary residents) aims to improve integration outcomes because these candidates often have Canadian work or study ties.
• However, trimming temporary admissions from 673,650 to 385,000 in a single year is steep. Policy analysts note outcomes will depend on:
  • How quickly exits occur as permits expire
  • How many temporary residents transition into permanent programs

Exception: attracting top researchers

One notable exception to the slowdown is a new push to attract elite talent.

• Ottawa will invest $1 billion over 13 years in an “International Talent Attraction Strategy.”
• Goal: draw high-caliber researchers, scientists, and innovators to boost research output, health innovation, and advanced manufacturing.
• Effect: tighter general criteria for study and work permits paired with special efforts to court elite candidates.

Economic and market implications

Financial markets and banks will monitor demographic effects closely.

• BMO projects net outflows among non-permanent residents, implying moderated overall population growth even as permanent admissions continue.
• Rental markets may cool faster if large student cohorts leave and fewer temporary workers arrive.
• If labour shortages worsen in key industries, provinces might press for adjustments and schools may restructure to reduce reliance on international tuition.

The balance between easing housing pressure and meeting labour demand will likely define policy debates going forward.

Practical takeaways for individuals and organizations

• For families and individuals planning to come to Canada: temporary immigration pathways will be much tighter through 2028.
  • Prospective international students should expect fewer approvals and stricter program scrutiny.
  • Employers seeking foreign workers will need to plan further ahead and consider permanent immigration options.
  • Permanent residence remains accessible at high levels, but competition will be stronger; those already in Canada with Canadian work or study experience may have an advantage.

How success will be judged

The plan’s success hinges on whether the share of non-permanent residents falls below 5% by 2028 without derailing economic growth.

• If services stabilize and housing construction accelerates during the period, the government may claim the slower pace delivered better outcomes for newcomers and communities.
• If labour shortages deepen, pressure will grow for mid-course corrections.

For now, the numbers set a firm direction: fewer short-term arrivals, steady permanent targets, and a bid to match population growth with the country’s capacity to welcome people well.