Canada’s sharp reduction in temporary resident admissions could have lasting economic and reputational consequences, immigration experts warn, even as the federal government argues the cuts are needed to ease pressure on housing and services. Prime Minister Mark Carney’s 2025 budget laid out a plan to stabilize annual permanent resident admissions at 380,000 while reducing temporary resident targets—from 673,650 in 2025 to 370,000 by 2027. The new limits include international students and temporary foreign workers, groups long considered pillars of Canada’s labour force and economic growth.
Immigration lawyer Elizabeth Long said the shift goes far beyond limiting student arrivals. Speaking to Parliament Today, she argued the move undermines the expectations of those who come to Canada, work in skilled jobs, and hope to transition to permanent residency. The government, she said, risks reshaping Canada’s image from a place that welcomes and integrates newcomers to one where workers “are seen as commodities” rather than future Canadians.
Carney defended the reductions during a speech in Toronto, saying the number of temporary residents has “exceeded our capacity” to house and support them, noting they accounted for 7.5 per cent of Canada’s population in 2024. Long countered that the figure would be much lower had the federal government kept up with processing permanent residency applications and addressed longstanding infrastructure issues. Blaming temporary residents, she said, ignores decades of policy failures and risks contradicting the values Canada claims to uphold.
Advocacy groups echoed the criticism. The Migrant Rights Network argued that cutting immigration will not make housing more affordable or improve services, but will instead shrink the economy, worsen labour shortages, and increase the vulnerability of migrant workers. The group accused the government of “scapegoating” newcomers for broader systemic problems.
A day after the budget, a more detailed immigration plan from Minister Lena Diab emphasized prioritizing temporary residents already living in Canada. The government also unveiled a one-time program intended to transition up to 33,000 work-permit holders to permanent residency in 2026 and 2027. Long predicted fierce competition, describing the program as “The Hunger Games” given the 1.5 million temporary workers already in Canada and the first-come, first-served structure used in past initiatives.
She cautioned that the new direction may push international students and skilled workers to choose other countries, which would undermine Canada’s economic prospects. Attracting high-skilled talent from the U.S., as the budget aspires to do, will be difficult if newcomers see no clear pathway to stay long-term. “It doesn’t make economic sense,” Long said.
In a statement, Immigration, Refugees and Citizenship Canada acknowledged the vital role immigration plays in economic growth but said higher numbers have strained housing and services. The department said the new plan is designed to return to “sustainable and predictable” levels while prioritizing permanent residency for those already established in the country.
The federal government is also increasing the number of provincial and territorial nominations under Canada’s Provincial Nominee Program to 91,500 next year, up from 55,000 in 2025. The move is expected to ease pressure in provinces like Ontario, where last year’s allocation cuts led to significant delays and uncertainty for applicants. Long noted, however, that backlogs will take time to resolve as many temporary residents were encouraged to apply only to face extended waits.
Ottawa has set a goal to reduce the temporary population to under five per cent by 2027, a target that will continue to shape immigration policy in the coming years as the country balances economic needs, public services, and its long-standing reputation as a welcoming destination.