Canada’s 2025–2027 Immigration Plan: Initial impacts
On October 21, 2025, the Government of Canada released a report[1] evaluating the effectiveness of its 2025-2027 Immigration Levels Plan (the “2025 Plan”).[2] The 2025 Plan was designed to reduce the number of international students and temporary workers entering Canada, aiming to ease pressure on housing, infrastructure, and public services. A key target of the 2025 Plan was to bring the temporary resident population below 5%, and early data suggests progress toward that goal.
To address the rapid growth in international student numbers, the Government implemented a two-year cap on study permit approvals. The 2024 cap reduced approved permits by 35%, with an additional 10% reduction introduced in 2025. The Government also introduced stricter eligibility measures such as imposing province-specific limits, mandatory attestation letters, stricter financial requirements, and changes to work permit eligibility. These efforts resulted in 132,505 fewer international student arrivals between January and August 2025 compared to the same period in 2024.
The Temporary Foreign Worker Program was also tightened, as Canada put a 10% limit on low-wage hiring and stopped processing low-wage applications in urban areas with high levels of unemployment. Restrictions to the Post-Graduation Work Permit Program and Open Spousal Work Permit eligibility were also introduced to better align with labour market needs. As a result of these changes, the Government has announced that 146,000 fewer temporary worker permits were issued between January and August 2025 compared to the same period in 2024.
It must be noted that access to permanent residency has also been affected by these recent immigration policy changes, which include a significant reduction in the number of nomination certificates available. While temporary workers continue to become permanent residents, with nearly half of new permanent residents between January and August 2025 being once temporary residents, these individuals often have Canadian education and work experience, strong language skills, and most transition through economic pathways such as Express Entry and the Provincial Nominee Program. This shows that the impact of these policy shifts extends beyond international students and temporary workers. By focusing on reducing the number of temporary residents, the plan is ultimately narrowing the pathways to permanent residency.
What does this mean for employers?
Since the introduction of stricter immigration measures, navigating Canada’s immigration system has become increasingly difficult, with impacts on academic institutions and employers alike. The 2025 Plan, as well as the resulting immigration policy changes and reputational concerns about Canada’s openness to foreign nationals, have led to a sharp decline in international students and work permit issuances. This has disrupted recruitment, enrollment, and workforce planning and will continue to impact the labour market in Canada.
As the number of international students in Canada decreases and rules on Spousal Work Permits continue to be strict, there will be fewer individuals holding Post Graduate Work Permits and Open Spousal Work Permits to pick up entry-level and higher skilled positions. Restrictions to the temporary foreign worker program may mean it is impossible to hire low wage workers from outside Canada based on a labour market impact assessment. Finally, changes to permanent residency programs have made it more difficult to retain foreign nationals working in Canada; for instance, many have already faced the difficult decision to leave the country due to the limited avenues to available to remain in Canada.
As a result, reviewing recruitment methods and reliance on foreign workers is critical for employers at this time. An approach to filling labour gaps that worked in the past may no longer be available or may be significantly restricted. As immigration compliance becomes more rigorous, an immigration lawyer can help employers understand the impacts of these changes, as well as employers’ obligations. It is important to engage legal advice early to consider alternative immigration programs, ensure foreign nationals already employed keep their valid status, and avoid application refusals, which, in the current environment, can be particularly detrimental to a foreign national and their ability to continue working in Canada.
The Government’s Annual Report to Parliament on Immigration is expected to be released in November, but we do not anticipate a reversal in the overall strategy of reducing immigration volumes announced last year. While this does not mean there are no options available, employers who plan ahead and engage in legal representation will be far better equipped to deal with the implications of Canada’s evolving immigration landscape.
Our legal team is available to provide comprehensive support to employers as they navigate the impacts of these developments and adapt to recent immigration changes.
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 author, or a member of our Immigration Group.
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[1] Understanding student and temporary worker numbers in Canada, Government of Canada, online: Government of Canada <www.canada.ca/en/immigration-refugees-citizenship/corporate/reports-statistics/statistics-open-data/immigration-stats/students-workers.html?utm_source=IRCCSM&utm_medium=linkedin>.
[2] Canada’s Immigration Levels, Government of Canada, online: Government of Canada <www.canada.ca/en/immigration-refugees-citizenship/corporate/mandate/corporate-initiatives/levels.html>; see also, 2025–2027 Immigration Levels Plan, Immigration, Refugees and Citizenship Canada, online: Government of Canada <www.canada.ca/en/immigration-refugees-citizenship/news/2024/10/20252027-immigration-levels-plan.html>.