Canada’s 2025–2027 Immigration Levels Plan: Key Points

The federal government’s latest Immigration Levels Plan (2025–2027) introduces a more cautious and structured approach to Canada’s immigration system. For the first time, Immigration, Refugees and Citizenship Canada (IRCC) has outlined not only permanent resident targets, but also projected limits for temporary residents—most notably international students and temporary foreign workers.

Despite the tighter controls, there are concerns among policy and subject matter experts that Canada may still be moving too slowly to rein in the unsustainable growth of its temporary resident population while at the same time blocking immigration pathways for deserving applicants that Canada needs.

The 25% Labour Force Benchmark Still Too High

One of the federal government’s most notable claims in the 2025 plan is that temporary residents should not exceed 5% of Canada’s total population by the end of 2026. This, the government says, would bring temporary residents down to around 2 million people—roughly 25% of the labour force.

This benchmark has been presented as a responsible target. But from our perspective it may still be too high.

When temporary residents account for one in four members of the workforce, it raises critical questions: Are employers relying too heavily on international labour? Are post-secondary institutions too dependent on international student tuition? And most importantly, are Canadian infrastructure, housing, and public services prepared to support these levels of immigration?

Permanent Resident Targets

IRCC’s plan will hold permanent resident levels steady in 2025 and then begin a gradual decrease:

2025: 395,000
2026: 380,000
2027: 365,000

The overall goal is to align permanent immigration with Canada’s capacity to house and integrate newcomers. How that integration ability is calculated is not clearly understood. Economic immigration remains the top priority, especially through programs like the Canadian Experience Class (CEC) and Provincial Nominee Programs (PNPs). Yet, the CEC and PNP programs are not working well.

Key Implications

• Express Entry draws will continue to favour candidates with in-Canada experience, but so far the minimum required points are very high.
• Category-based selection will prioritize occupations facing persistent labour shortages, but the draws are random and unpredictable.
• Francophone immigration outside Quebec remains a government priority, with goals increasing to 10% of admissions by 2027. If you pass the French proficiency test, you can easily obtain a work permit and Canadian permanent residence.

The main issue is that applicants will not have any certainty at the point of application whether they will receive an Invitation to Apply, making Canada’s immigration regime less transparent. In the past, immigration streams to Canada were highly dependable. If you met the qualifying criteria and submitted an application, processing was certain. Now, it’s a roulette based on points and random NOC number selection that leaves applicants not knowing if they will ever receive an Invitation to Apply. This is why many people call Canada’s immigration regime a broken system.

Temporary Residents

IRCC’s 2025 targets for temporary residents are as follows:

• International Students: 305,900
• TFWP (LMIA-required): 82,000
• International Mobility Program (open/LMIA-exempt work permits): 285,750

While these numbers represent a decrease from 2023 and 2024 levels, they still reflect a large and complex temporary immigration system. The federal government continues to signal a reliance on international students and temporary workers to fill labour gaps and support economic growth. The latter is expected given the limited number of skilled Canadians available for certain jobs.

Analysis

The cap on international students is already in place, and many institutions are feeling the impact. We’re seeing more refusals. Still, we support IRCC in reducing the availability of study permits to Canada as that market was grossly overheated.

The International Mobility Program will see the most dramatic reductions—but even with cuts, nearly 130,000 open work permit holders are expected in 2026. Yet, open work permits for graduates and spouses of foreign workers makes for good immigration policy. We support these numbers to offset Canada’s low birthrate and shrinking tax base.

Employers using the TFW Program should expect heightened compliance audits and stricter LMIA requirements.

The government’s goal of bringing temporary residents to 5% of the population sounds ambitious—but in reality, this still leaves Canada with one of the highest proportions of temporary residents in the G7, with many holding limited rights and facing uncertain futures. The latter, while arguably necessary, must be balanced against the strain on younger Canadian workers looking for employment in an already difficult job market and potentially deteriorating economic outlook.

Family Reunification and Refugees

Despite broader reductions, the Levels Plan maintains Canada’s longstanding humanitarian and family reunification goals:

• Family Class: approximately 24% of total permanent residents
• Refugees and Protected Persons: 15%
• Humanitarian and Compassionate/Public Policy: ~6,000 to 8,000 annually

Despite the PR caps, backlogs will likely continue for spousal sponsorships, parent and grandparent programs, and refugee resettlement. Given the global geopolitical unrest, we believe the refugee program needs to be dramatically reduced to protect Canada’s borders and sovereignty.

Policy Tools and Operational Strategies

To manage the new targets, IRCC has announced:

• More digital processing and automation, with a goal of processing 80% of applications within published service standards. The latter is highly problematic given the poor quality of the AI tools used to date, which more often than not result in unreasonable refusals. This is why the Federal Court of Canada is flooded with Judicial Review applications. IRCC should dramatically improve their AI systems or stop using them altogether.
• Expanded training and technology to detect fraud, particularly in the student and temporary worker streams
• Greater emphasis on transitioning temporary residents already in Canada to permanent status (we will believe this when we see it)
• Increased coordination with provinces, employers, and municipalities to align immigration with labour market and housing needs

We are skeptical of the above initiatives given the fact that IRCC announced a gutting of their workforce by over 3000 positions.

Recommendations for Applicants and Employers

For International Students:
Choose designated institutions and programs that align with PGWP rules. Anticipate further limits on spousal work permits and be prepared for higher proof-of-funds requirements.

For Employers:
Start planning well in advance for LMIAs and maintain strict compliance. Consider long-term options like PNPs or employer-driven permanent residence pathways, although even certain PNP programs, like the OINP, are not functioning well. Plan to litigate unreasonable refusals and engage the support of Members of Parliament and the media. Only apply for LMIAs if you truly need the foreign worker. Processing times for LMIAs can take as long as 8 months.

For Workers in Canada:
Maintain valid status. Explore permanent residence options now—especially through Express Entry and provincial programs that prioritize in-Canada applicants. (Again, certain PNP programs are not doing the job they were supposed to do, leaving highly qualified applicants without an Invitation to Apply and no pathway to immigration)

For Family Sponsors:
Act early. Application volumes remain high, and timelines are unlikely to improve significantly in the short term.

We also urge IRCC to bring back the 200 Arranged Employment points for C-level, executives, and business owners. Otherwise, highly skilled foreign nationals who are in a position of creating jobs in Canada have no pathway to immigration.

So is the Levels Plan On the Right Track?

The reality is that the current Immigration Levels Plan appears misaligned with Canada’s actual needs. While the intake of foreign workers remains high, the system increasingly excludes highly qualified applicants who fall short of the rigid points thresholds. At the same time, persistent internal issues continue to undermine the system’s integrity: flawed AI tools incapable of accurately assessing applications, chronic staffing shortages, excessive processing delays, seemingly arbitrary NOC selections, and provincial nomination programs that no longer function consistently or effectively. Collectively, these problems reflect a broader dysfunction within IRCC’s operations. As you can see, Canada’s immigration regime is in excellent shape!