Canada’s Reduction of Temporary Residents: Reasons, Measures, Impacts

Canada is renowned worldwide for its multiculturalism and welcoming immigration policies. The country has admitted record numbers of immigrants in recent years, greatly enriching Canada’s economic, social, and cultural landscape. Immigration plays a crucial role in Canada's economic growth, accounting for most of the country's population and labour force expansion. It allows Canada to attract skilled workers, support growing industries, reunite families, and maintain humanitarian obligations. Currently, there are approximately 2.5 million temporary residents in Canada, making up about 6.2% of the overall population. However, in recent months, Immigration, Refugees and Citizenship Canada (IRCC) has announced measures to restrict the number of arrivals of temporary residents. This article will delve into the reasons behind these policy changes, the steps taken, and the potential positive and negative impacts of these measures.

The Current Situation

During the COVID-19 pandemic, the government brought in many foreign workers to fill labour gaps in critical industries such as construction, early childhood education, and healthcare. However, after the pandemic, the need for temporary foreign workers decreased. Amidst global inflation, lack of affordable housing, and access to services like healthcare, the general population's support for immigration has plummeted. Production and construction are struggling to keep up with fast population growth, and some blame the country's record-high immigration numbers. Canada’s permanent residency target remains at a record high but has levelled out at 500,000 individuals for 2025 and 2026. One major concern is that an equivalent target does not exist for temporary resident permits and visas. Canada’s temporary resident population consists of the following categories:

• 42% – international students
• 9% – temporary foreign workers under the Temporary Foreign Workers Program
• 44% – temporary workers under the International Mobility Program, e.g. Post Graduation Work Permits, spousal work permits, youth mobility programs, intercompany transfers, or refugees.
• 5% – asylum seekers waiting for their claim to be heard at the Immigration and Refugee Board

One category that has grown significantly in recent years is the number of international students. Unfortunately, some unscrupulous individuals and institutions have taken advantage of international students by offering a low standard of education at high costs. As a result, many students struggle to find employment in their field after graduation or face financial difficulties due to unrealistic expectations regarding Canadian living expenses. Additionally, some have become victims of immigration fraud.

Measures

Canada's Immigration Minister, Marc Miller, has announced plans to create a more sustainable, predictable, and manageable immigration system. The goal is to align immigration planning with community capacity, integrity, and labour market needs. Canada aims to continue benefiting from the contributions of newcomers while setting them up for success. This will involve finding a balance between safeguarding international students, creating more accessible permanent residency pathways, and providing fair opportunities for Canadian citizens, permanent and temporary residents. Therefore, Minister Miller aims to reduce Canada’s temporary resident population from 6.2% to 5% over the next three years. To achieve this, he plans to collaborate with other levels of government, provinces and territories, cabinet colleagues, business leaders, and settlement providers. IRCC’s latest changes and announcements include the following:

• The financial requirements for new international students have been doubled, setting more realistic expectations regarding Canadian living expenses. The current minimum requirement for the first year of study lies at $20,635.
• Due to previous immigration fraud cases, a new verification process ensures the authenticity of Acceptance Letters (LOA) for new international students.
• There will be a two-year cap for new international students, with an expected number of 292,000 approved study permits for 2024.
• The Immigration Levels Plan will be expanded to include both temporary resident and permanent resident arrivals. A target for temporary residents will be announced by the end of 2024.
• Changes to the Post-Graduation Work Permit criteria.
• Partial visa requirements for Mexican travellers.
• The maximum proportion of temporary foreign workers allowed in a business’s workforce has decreased from 30% to 20% for most sectors, excluding healthcare and construction.
• Employers must exhaust local hiring options before applying for a Labour Market Impact Assessment (LMIA).
• The validity period for LMIA approvals has been reduced from 12 to six months, urging employers to fill approved positions promptly.
• Selection processes prioritizing candidates already living in Canada, often referred to as “domestic draws,” are selection rounds conducted within Canada to choose candidates for permanent residency. Holding more domestic draws (federal and provincial) will help temporary residents wishing to settle in Canada transition to permanent residency.

Positive Impacts

According to economists, these new measures can help sectors affected by rapid population growth to catch up in production. This may lead to better affordability, economic stability, and social cohesion. Experts predict that the impact on Canada’s unemployment rate, broader inflation pressures, and interest rate expectations should be mild. Additionally, the changes can benefit Canadian citizens and permanent residents since a reduction in temporary residents opens up jobs. These measures also safeguard international students and ensure they receive a quality education, are safe from fraud, and are prepared to thrive in the Canadian job market. Current temporary residents may benefit from the new policies since they may create better and faster permanent residency routes. Overall, IRCC seems to avoid disrupting the experiences and goals of current temporary residents, many of which have contributed to Canada’s economy for years.

Negative Impacts

Critics argue that while reduced population growth might slow housing prices, it isn’t likely to solve Canada’s affordability issues. Housing shortages predate the recent influx of temporary residents and have been predicted for decades. Even though a reduction in immigrants can help reduce the demand for housing and other infrastructures, it also reduces labour supply. Therefore, it causes construction to take longer and may worsen labour and housing shortages. This may be especially obvious in sectors and businesses that rely heavily on temporary workers. By portraying immigrants as responsible for the housing crisis, some may face hostility for a problem created by a shortcoming in Canadian politics.

Moreover, temporary residents may experience difficulty planning for their future and face uncertainty. In the most severe cases, reduced access to temporary permits may push them into losing their jobs or becoming undocumented. Additionally, a reduction in temporary residents will likely slow GDP growth in 2025 and beyond. The measures will likely result in an older Canadian population and slower growth in the government revenue base. It may also lower tax revenues to support government social programs and lower labour force participation. Finally, immigration practitioners will likely see a decrease in clients, and educational institutions may see a lower educational standard, as a cap on international tuition fees reduces funding.

Conclusion

There are several valid reasons for Canada’s planned reduction of temporary residents, such as the overwhelming demand and cost of housing and the above-outlined integrity issues in Canada’s international student program. While experts have pointed out a number of potential positive as well as negative effects of the announced measures, the exact outcomes remain to be seen as more updates will follow. It is clear that immigration is not the only factor responsible for the problems mentioned earlier, and Canada will continue to rely on immigration to prosper in the foreseeable future. This is a complex issue with many factors to be considered. If you want to find out more in-depth information, consider taking one of our courses, such as the following:

• Certificate in International Student Immigration (CISI)
• Certificate in Temporary Residents Immigration Law (CTRL)
• Certificate in Permanent Resident Programs: Economic Classes (CIEC)
• Certificate in the Labour Market Impact Assessment Process (CLMIA)

Visit our website to learn more.