(OTTAWA) Ottawa is moving to slow population growth by cutting both permanent and temporary immigration targets for 2025–2027, a sharp turn from years of expansion. The federal plan, outlined by analysts at Desjardins and echoed by other sources, cites a weaker economy, Canada’s housing crunch, and pressure on public services as the main reasons for the shift. The government is setting lower permanent resident totals and, for the first time, caps for temporary residents, including international students and foreign workers, to bring their share down to 5% of Canada’s population by the end of 2026.
Under the new approach, permanent resident admissions will fall to 395,000 in 2025, 380,000 in 2026, and 365,000 in 2027. That is a large step down from earlier plans that aimed for 500,000 a year, including a reduction of 105,000 admissions from the previous projection for 2025 alone. Ottawa’s recalibration comes after warnings that rapid inflows have outpaced housing supply and strained clinics, schools, and transit systems across the country.
Desjardins links the policy change to a weaker economy and tighter fiscal conditions. The Parliamentary Budget Officer projects that by 2027, Canadians will work 1.3 billion fewer hours, real GDP will be 1.7% lower, and nominal GDP will fall by $37 billion over three years compared with earlier outlooks. Yet slower population growth is expected to lift real GDP per person by 1.4%, a sign that the smaller intake could ease short-term stress even as it risks fewer workers for the future.
Policy Changes Overview
The most direct change is the cut to permanent resident targets. The lower totals break with the previous goal of 500,000 annual admissions and point to a more cautious approach. Ottawa also moves into new territory by setting explicit caps for temporary residents. The aim is to shrink the number of people in Canada on study and work permits so that temporary residents account for just 5% of the population by late 2026. That’s a major policy shift; earlier plans did not include hard limits on temporary migration.
The government says it will focus on people already in Canada when choosing who gets permanent status next. Priority will go to skilled workers and students who have built ties here, which could help reduce churn and improve outcomes for those moving from temporary to permanent status. Provinces will still select many newcomers, but lower national totals mean smaller provincial allocations and tighter choices for programs. Ontario and British Columbia are expected to feel the biggest fiscal planning squeeze because they’ve relied more on fast population growth.
The Liberal government, led by Prime Minister Mark Carney, reaffirmed the lower immigration targets after the April 2025 federal election. According to analysis by VisaVerge.com, Ottawa is signaling a longer period of moderated inflows to give housing and public services time to catch up while keeping room for economic and humanitarian streams. Federal officials have framed the change as a balance: fewer arrivals now to reduce pressure, but continued pathways for talent already living and working in communities across 🇨🇦.
Impact and Reactions
For families and applicants, the immediate effect is increased competition for fewer permanent resident spots and stricter temporary caps. International students face tighter study permit numbers at the institution level, which may lead to more refusals or delayed starts. Employers will see a smaller pool of new international recruits and could face longer lead times to fill roles. Recruiters warn that sectors already short of staff—health care, construction, and advanced manufacturing—may struggle more if domestic training and retention do not improve quickly.
Businesses that depend on steady inflows of international talent may adjust by:
– Focusing on retention of current temporary workers who can transition to permanent status
– Expanding training for local hires to fill entry and mid-level roles
– Partnering with provinces to identify scarce skills and align job offers with permanent pathways
Economists note that the policy could ease rent and home price spikes if supply gains a breathing window. But Canada’s aging population means fewer newcomers can widen future labour gaps. The plan may help stabilize public services in the short run while raising the risk of deeper long-term shortages unless provinces, employers, and Ottawa expand training and productivity. Desjardins and other analysts point to the trade-off: slower headline growth and fewer total workers, but modest gains in income per person and less strain on infrastructure.
Ottawa’s move also reshapes provincial budgets. Lower population growth can mean slower revenue growth, which affects everything from hospital staffing to school construction. Ontario and British Columbia, where population growth was fastest, are assessing capital plans and workforce needs under tighter assumptions. Municipal leaders, facing housing and transit pressures, have welcomed the pause. Settlement groups caution that caps must still protect family reunification and refugee commitments, and that support services need steady funding to help newcomers already here succeed.
Applicants who are in Canada on temporary permits now sit at the center of the plan. Those with strong job histories, language skills, and Canadian credentials may have an edge as programs give priority to transitions. People considering future moves will need to plan earlier, confirm program quotas, and track shifting cutoffs. Official guidance and program updates remain available on the Government of Canada’s Immigration, Refugees and Citizenship Canada (IRCC) website, which posts the latest notices on levels and program changes.
The broader debate continues. Supporters of lower targets say the adjustment was overdue, arguing that adding people faster than homes and clinics can grow hurts both newcomers and long-time residents. Critics warn that dialing back too far will slow innovation and reduce the number of working-age Canadians paying taxes, caring for seniors, and building the next wave of firms. Ottawa says it will keep balancing economic, demographic, and humanitarian goals, and may adjust as new data arrives.
What comes next depends on how quickly housing supply rises and whether the labour market softens further. If construction scales up and productivity improves, pressure to hold down targets could ease. If cost-of-living strains persist, the cap on temporary residents and the lower permanent totals may hold longer. For now, the government is betting that a slower pace will reset the system, protect public services, and give those already living in communities across Canada a clearer path to stay.
This Article in a Nutshell
The federal government is cutting immigration targets for 2025–2027, lowering permanent resident admissions to 395,000 in 2025, 380,000 in 2026 and 365,000 in 2027, down from earlier plans of 500,000 annually. For the first time Ottawa will cap temporary residents so they constitute 5% of Canada’s population by late 2026, aiming to reduce pressure on housing, health care, schools and transit. The policy prioritizes transitions to permanent residency for skilled workers and students already in Canada. Analysts warn the cuts could reduce total labour supply and GDP growth, though GDP per person may rise slightly. Provinces like Ontario and B.C. face fiscal and planning adjustments, while employers and institutions must focus on retention, local training and clearer pathways to permanent status. The government says it will monitor data and may adjust targets as conditions evolve.
