Canada Significantly Reduces Temporary Resident Targets: What It Means for Immigrants and Employers

Major Transformations in Canada’s Immigration Policy

In a major shift to immigration policy, the federal government has announced a substantial reduction in the number of temporary residents it will admit to Canada over the next several years. According to figures released in Tuesday’s federal budget, Canada plans to admit only 385,000 temporary residents next year, a decrease of about 43 percent compared to the 2025 target. The number is expected to drop slightly further to 370,000 in each of the two following years.

This marks a significant change from the government’s previous immigration plan, which had projected more than 516,000 temporary residents in 2026. The new approach signals a continued effort by the government to scale back immigration levels after a period of rapid expansion during the post-pandemic recovery.

Precedence for Reduction In Immigration Numbers

Under the previous government led by former Prime Minister Justin Trudeau, Canada saw one of the largest increases in immigration in its history. The surge was largely a response to post-pandemic labour shortages and economic recovery efforts. However, as housing pressures, inflation, and strain on social services have intensified, public and political attitudes toward immigration have shifted. This new policy reflects that changing sentiment.

The most recent budget indicates that temporary worker numbers have already been cut in half this year compared to 2024. Meanwhile, international student arrivals are down by about 60 percent, and asylum claims have fallen by roughly one-third. These figures demonstrate the government’s intent to bring immigration levels in line with what it views as Canada’s current economic and housing capacities.

Silver Lining Amongst These Dramatic Changes

At the same time, the budget emphasizes a more targeted approach to immigration—one that prioritizes economic needs and pathways to permanence. Among the key measures is a one-time program to fast-track permanent residency for 33,000 work permit holders over the next two years. This could benefit many temporary foreign workers who have already integrated into the Canadian labour market and are contributing to the economy.

Additionally, the government plans to introduce a new accelerated pathway for U.S. H-1B visa holders—highly skilled professionals, particularly in technology and specialized occupations. This initiative aims to attract and retain global talent that can drive innovation and fill critical skills gaps in Canada’s economy.

Further Changes

The budget also includes a one-time measure to speed up permanent residency approvals for protected persons—individuals who have already been recognized as refugees by the Immigration and Refugee Board but are awaiting final confirmation of their permanent status.

For employers, students, and temporary foreign workers, these changes could have significant implications.

Employers relying on temporary labour may face new challenges in workforce planning, while individuals currently in Canada on temporary permits should closely monitor eligibility for new permanent residency pathways.

How Ayodele Law Can Help

At Ayodele Law, our experienced lawyers stay up to date with every change in immigration law and policy. Whether you’re seeking to apply for permanent residency, renew a temporary work permit, or explore economic immigration options, our team can guide you through the process with confidence.

📞 Contact us today for a consultation and take the next step toward making Canada your permanent home.