Canada set to make drastic reductions in annual immigration targets

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Canada will take the rare step of reducing its annual immigration targets on Thursday, according to a government source.

The federal government is expected to decrease the number of permanent residents to around 395,000 in 2025, 380,000 in 2026 and 365,000 in 2027, from 485,000 this year.

Prime Minister Justin Trudeau is expected to make the announcement on Thursday morning.

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In late September, Immigration Minister Marc Miller said he was exploring the rare option of reducing the number of permanent residents allowed in each year while preparing the Immigration Levels Plan, which is usually announced by Nov. 1.

The targets have generally been maintained or increased for more than a decade, but with declining job vacancies, rising unemployment — especially among newcomers and younger people — and growing concerns about affordability, “there is certainly a world now in which we see reductions,” Miller said.

Immigration plays a key role in the country’s economy, with newcomers accounting for more than one-third of the workforce in industries such as accommodation and food services, transportation and warehousing, and the professional, scientific and technical sectors, according to Statistics Canada. The country’s aging population is another reason why there’s a high reliance on immigrants.

As such, the federal government’s Immigration Levels Plan annually maps out the number of permanent residents it wants to bring in for the next three years.

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Economists and business associations had differing predictions with respect to Miller’s decision.

The Canadian Chamber of Commerce, which represents more than 200,000 businesses, in September said it would not be surprised if the targets came down. Bank of Nova Scotia economist Rebekah Young shared a similar view. But Benjamin Tal, deputy chief economist at CIBC World Markets Inc., said he isn’t expecting a major change.

Bank of Montreal chief economist Douglas Porter in September said he found it “very interesting” that Ottawa was even “apparently considering rethinking” its permanent residency targets.

“That would be a very big step,” he said. “That would indicate that they have had some serious second thoughts on the wisdom of the very strong immigration flows that we have seen in recent years.”

The reported decrease in permanent residents is in line with some of the recent cuts Miller has made to the number of temporary residents allowed into the country.

In March, he announced a cap on temporary residents for the first time, with the goal of cutting down the number of temporary residents to five per cent of the overall population by 2026, from about 6.5 per cent currently.

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Ottawa earlier this month reduced the number of international study permits it plans to provide in 2025, which is on top of a two-year cap imposed on international students in 2023.

Miller has also announced policies to restrict work permit eligibility for graduates and their spouses, and in August, he limited the number of temporary foreign workers entering the country.

The federal government is expected to provide a target for temporary residents on Thursday morning.

• Email: nkarim@postmedia.com

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