Canada announces temporary reduction in immigration to help economy catch up

Canada announced on Thursday a significant reduction in the number of immigrants coming to Canada over the next two years, as part of a broader effort to stabilize the country’s economy and address pressing infrastructure and housing challenges. Prime Minister Justin Trudeau emphasized the decision as a temporary measure, which will allow the government to focus on strengthening systems and services to better serve all Canadians.
Trudeau wrote on X, “We’re going to significantly reduce the number of immigrants coming to Canada for the next two years. This is temporary — to pause our population growth and let our economy catch up. We have to get the system working right for all Canadians.”
Marc Miller, Minister of Immigration, Refugees and Citizenship, has announced Canada’s 2025–2027 Immigration Levels Plan, which aims to pause population growth in the short term to ensure long-term, well-managed, and sustainable growth. For the first time, the plan sets controlled targets not only for permanent residents but also for temporary residents, such as international students and foreign workers.
Immigration has played a critical role in Canada’s economic recovery post-pandemic, providing businesses with much-needed workers and helping to stave off a recession. However, with ongoing pressures on housing, infrastructure, and social services, the government is adjusting its immigration strategy to meet the evolving needs of the country.
In a significant shift from previous plans, the 2025–2027 strategy lowers Canada’s permanent resident intake targets. Compared to last year’s plan, the new targets are as follows:
– 395,000 permanent residents in 2025 (down from 500,000)
– 380,000 permanent residents in 2026 (down from 500,000)
– 365,000 permanent residents in 2027
Miller emphasized that these reductions are designed to alleviate pressures on Canada’s housing market and social services while still promoting long-term prosperity through immigration.
In addition to lowering permanent resident targets, the government aims to reduce the temporary resident population to 5% of Canada’s total population by the end of 2026. Temporary residents, such as international students and foreign workers, will face new restrictions, including caps on student intake and stricter eligibility requirements for foreign workers.
The Immigration Levels Plan is anticipated to result in a slight population decline of 0.2% in both 2025 and 2026, with a return to population growth of 0.8% by 2027. The government views this approach as essential for ensuring sustainable growth and helping Canada’s provinces, territories, and institutions better accommodate newcomers while balancing the country’s economic and social needs.
Miller said that these changes align with the expectations of Canadians for a well-managed immigration system that continues to bolster the nation’s workforce, economic success.