Beyond the Numbers: Canada’s Shifting Immigration Priorities

The year 2025 has marked a significant turning point for Canada, beginning with Prime Minister Justin Trudeau announcing his resignation in January after more than a year of rapid policy change and rising public discontent. New challenges, such as strained Canada-US relations and economic uncertainty, have raised the question of what role immigration and the recognition of immigrants’ labour market contributions may play in a re-aligned labour market context. As in 2024, immigration is expected to remain one of the top issues in Canadian public discourse this year, as the government navigates shifting priorities and the upcoming federal election.  

The 2025-2027 Immigration Levels Plan, which the Canadian government released in late October 2024, signaled one such shift. Unlike previous Plans—which steadily raised immigration targets—this latest Plan significantly reduces the target number of permanent resident (PR) admissions. This Immigration Levels Plan also set targets for temporary resident (TR) admissions for the first time, as the federal government works to reduce the current temporary resident population. 

Understanding the context of these changes is critical to shaping the conversation about the future of Canada’s immigration policy—one that goes beyond the numbers.  

Economic and Political Pressures 

Immigration to Canada surged post-pandemic as the government responded to labour market needs and demographic pressures, such as an aging population, high retirement rates, and record-low birth rates. New immigrants were seen as a potential solution to these demographic and economic challenges. 

However, this post-COVID-19 influx has coincided with other economic and demographic pressures, including the housing crisis and higher numbers of newcomers, which have contributed to increased public concern over immigration levels. Public opinion polls from late 2024 show that 65 percent of Canadians believe that previous immigration targets were too high, and 78 percent think these targets contributed to the housing shortage.  

Meanwhile, systemic barriers prevent many immigrants from accessing careers where they can fully utilize their skills, training, and experience. These barriers have made it difficult to achieve the goal of higher immigration targets—bolstering the workforce—exposing a disconnect between immigration policy and economic integration. 

The current moment in Canada, with much political and economic uncertainty, has further amplified this ongoing challenge and it is more critical than ever that immigrants are able to fully utilize their skills and training.  

The 2025-2027 Immigration Levels Plan: Key Changes 

The latest Immigration Levels Plan outlines specific priorities and adjustments to Canada’s immigration strategy, reflecting shifts in both permanent and temporary resident admissions. These include: 

• Reduced admissions of both permanent and temporary residents: A 19 percent decrease in permanent resident admissions from 2024 to 2025, as well as a reduction in temporary resident admissions, including international students 

• Preference for applicants already in Canada: At least 40 percent of permanent resident admissions in 2025 will come from individuals already living in Canada as temporary residents 

• Prioritization of in-demand occupations: Emphasis on pathways for workers in key sectors such as health care and skilled trades 

• Increased admission of French-speaking applicants: A continuation of efforts to boost Francophone immigration outside Quebec, with targets rising from 6 percent in 2024 to 10 percent by 2027 

CAPTION: Compared to earlier immigration targets, the new levels plan significantly reduces expected targets for new permanent residents. 

*2023-2025 Immigration Levels Plan 

**2024-2026 Immigration Levels Plan 

***2025-2027 Immigration Levels Plan 

Despite reductions across all four immigration categories, each category’s proportional representation within the total will remain largely consistent from 2024 to 2025. The economic class will continue to make up the largest share, at 59 percent of permanent residents in 2025.  

The new levels plan also decreases new temporary resident targets yearly. 

*2025-2027 Immigration Levels Plan 

These targets align with policy changes introduced in 2024, including caps on international student permit applications and more restrictive parameters for the Temporary Foreign Worker Program. By 2027, temporary residents are projected to represent no more than 5 percent of the total population, down from 6.2 percent in 2023.  

A Better Conversation: Leveraging Immigrant Talent in Canada 
As Canada approaches a federal election, which may occur as early as May 2025, the issue of immigration levels promises to remain prominent and could be contentious. However, focusing solely on the number of new immigrants risks overlooking more important issues at hand. While Canadians across the country are facing economic challenges, newcomers are often affected more severely. Compared with unemployment rates among all Canadians (6.6 percent), current rates are particularly high among immigrants (11.1 percent). Immigrant youth fare even worse, with a rate of 22.8 percent.   

In addition, many immigrants also experience underemployment: Fewer than half (47.2 percent) of recent immigrants work in the same sector as they did pre-migration. The costs of this underemployment (also called overqualification) are steep—and not just for immigrants themselves. Indeed, as noted in a December 2024 publication of the C.D. Howe Institute, broader costs include “reduced consumer spending, lower potential tax revenues, a greater burden on social programs, and an additional strain on public finances.”  

The article’s authors, Parisa Mahboubi and Tingting Zhang, cite Reitz et al. (2014), who “estimated the economic cost of immigrant overqualification at about $4.8 billion in 1996, rising to $11.4 billion in 2006 (in 2011 dollars). With a higher immigration level today, this loss is likely much greater.” They go on to say that  “improving the overqualification of immigrants is crucial for fostering economic growth and enhancing the living standards of Canadians.” 

These consequences—felt by both immigrants and Canadian society more broadly—mean that policymakers and others must expand discourse beyond the number of admitted immigrants to address economic inclusion. Immigration levels alone do not guarantee economic prosperity, nor do they ensure labour market needs are met. Especially in today’s context, Canada cannot afford to let immigrants’ skills go to waste and policymakers must do more to ensure that immigrants who are already here can make full use of their training and experience.  

When immigrants are able to work in their fields, Canada can better address ongoing challenges, including skills shortages, record-low productivity, stagnant economic growth, and the economic uncertainty tied to tumultuous Canada-US relations. Unlocking the full potential of immigrant talent is not just an opportunity—it is a necessity for Canada’s prosperity.