2025 immigration challenges

By Brittany C. Trafford, Brendan Sheridan and Kaitlyn Clarke

Recently, the Government of Canada made a number of changes to the immigration landscape in an effort to rein in the population growth, address the housing supply gap and lower the unemployment rate. The extent of these efforts has become clear with the Government’s release of the 2025-2027 Immigration Levels Plan (“2025 Plan”).

Each year, the Government publishes an Immigration Levels Plan projecting its immigration targets for the next three years. The Plan provides permanent resident admission targets for 2025 and notional commitments for 2026 and 2027. The 2025 Plan also introduces, for the first time, targets for temporary residents – students and workers under the International Mobility Program and the Temporary Foreign Worker Program.

Permanent resident targets

The 2025 Plan reduces immigration targets across the board for 2025 and projects further decreases in 2026 and 2027. This includes reductions in almost every permanent resident admissions category.

Overall, the 2025 Plan projects 105,000 fewer permanent resident admissions for 2025 than what was initially forecast in the 2024 Immigration Levels Plan (“2024 Plan”). The other main takeaways from the 2025 Plan for permanent residents include:

• An intent to prioritize in-Canada applicants and projection that more than 40% of the new permanent resident admissions will be from foreign nationals who are in Canada already and who have Canadian experience.
• A suggestion that further adjustments will be made to facilitate more in-Canada applicant admissions by emphasizing federal economic priorities to attract workers in labour fields with the highest need, including health care and trades occupations.
• A continued focus on economic immigration with such admissions comprising 58%, 60%, and 62% of overall permanent resident admissions in 2025, 2026, and 2027, respectively. This includes applicants through programs such as the Atlantic Immigration Program, Provincial Nominee Program and Express Entry, among others.
• Reinforcement of efforts to strengthen Francophone communities outside of Quebec with Francophone immigration targets representing 8.5%, 9.5%, and 10% of overall permanent resident admissions in 2025, 2026, and 2027, respectively.

Despite the fact that economic immigration continues to receive the highest share of allocations for permanent resident admissions, economic immigration targets in the 2025 Plan will see reductions across the board for 2025 from what was projected in the 2024 Plan; most notably:

• a 41% decrease in admissions for 2025 Atlantic Immigration Program (3,500 fewer total admissions);
• a 54% decrease in admissions for 2025 Provincial Nominee Program (65,000 fewer total admissions across Canada);
• a 67% decrease in admissions in the 2025 Federal Business category (4,000 fewer total admissions);
• a 26% decrease in admissions through 2025 Federal Economic Pilots (10,920 total admissions); and

While the established economic programs are almost universally decreasing, the Government has assigned 41,700 permanent resident admissions to the new Federal Economic Priorities category. It is expected that these admissions will be used to the Government’s efforts to attract individuals working in the labour fields with the highest needs.

Temporary resident targets

The 2025 Plan’s introduction of targets for temporary residents is in line with the Government’s stated efforts to reduce the number of temporary residents in Canada to 5% of the population over the next three years. Temporary residents include both temporary foreign workers and international students.

The 2025 Plan aligns with changes announced throughout 2024 to the International Student Program and Temporary Foreign Worker Program, including:

• The introduction of an annual cap on international study permits issued per year;
• Tightening of eligibility requirements for post-graduation work permit eligibility requirements;
• Changes to the Temporary Foreign Worker program, including the re-introduction of the 10% cap on hiring workers in the low-wage Labour Market Impact Assessment (“LMIA”) application stream and raising the starting wage for high-wage LMIA application streams by 20%; and
• Tightening of the open-work permit eligibility requirements for spouses of international students and foreign workers.

The Government’s stated targets represent a continued decrease in admissions of foreign nationals with the most significant decrease taking place between 2025 and 2026 during which time the target for foreign workers will decrease from 367,750 to 210,700.

The 2025 Plan clearly signals that there will be fewer temporary foreign nationals in Canada, including those on open work permits.  The effect of the 2025 Plan may not be felt immediately given that many temporary workers already in Canada may benefit from the focus on transitioning existing workers to Permanent Residency but the targets will have an impact in the very near future. This impact is most likely to be felt by employers in Canada as well as educational institutions who have already seen a drop in international students.

Takeaway

The decrease in immigration admissions will make the immigration system more competitive and challenging to navigate.  It is important for those leveraging immigration to support their workforce and for foreign nationals wanting to come or stay in Canada to understand the impact of the 2025 Plan. Despite these changes, immigration still remains a viable option for employers looking to fill labour gaps or individuals seeking permanent resident status. Employers and individuals seeking to use the immigration system must be more deliberate and forward-thinking about their immigration needs and plan accordingly.

Our team of lawyers can help employers and individuals navigate the uncertain landscape and seek out existing opportunities within Canadian immigration programs.

This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact the authors, or a member of our Immigration Group.

Click here to subscribe to Stewart McKelvey Thought Leadership.