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In a new immigration strategy announced by Immigration Minister Marc Miller on Oct.24, Canada aims to lower immigration intake to resolve domestic infrastructure and housing challenges. It will  admit approximately 395,000 permanent residents by 2025—a nearly 20 percent reduction from the 485,000 expected this year. 

Temporary immigrants, including international students and foreign workers, will also see a cut, with numbers dropping to around 446,000 in 2025 and 2026, down from roughly 800,000 this year. By 2027, Canada will allow just 17,400 new non-permanent residents.

These reductions could result in a projected population decline of 0.2 percent in the next two years, a stark shift from the robust 3 percent growth recorded in the second quarter of this year. If achieved, this would be the first instance of population shrinkage in Canada since the 1950s.

Prime Minister Justin Trudeau described the plan as a "pause" on population growth, designed to allow governments time to bolster healthcare, housing, and social services. “We didn’t get the balance quite right. Our immigration system has always been responsible, but we are acting today because of the tumultuous times as we emerged from the pandemic,” he said at a press conference.

Impact on Indian workers

Canada-based immigration analyst Darshan Maharaja warns that these changes will disproportionately affect Indians, who make up a large part of Canada’s immigrant population. "Temporary workers already in Canada continue to be eligible to transition to permanent residency," said Maharaja, "however, the government has increased the emphasis on highly skilled workers, leaving low-skilled workers in a precarious position." Maharaja added that the recent cap on student permits and the strained diplomatic relations between India and Canada have already slowed visa processing.

“The biggest impact will be on workers in low-skilled jobs,” Maharaja explained. “They will find it very difficult to transition to permanent residency and may face the prospect of returning to India.”

Over the past decade, Indian immigration to Canada has soared by 326 percent, with student enrolments increasing by 5,800 percent. In 2023 alone, 139,715 Indian immigrants were welcomed, according to the National Foundation for American Policy. Yet with caps tightening, the future of Indian students—who form a significant portion of Canada’s international student body—seems uncertain.

"Many Indians have come to Canada seeking better opportunities," Maharaja said. "But this new policy could jeopardize their dreams."

Policy changes triggered by economic concerns

A surge of newcomers played a role in Canada’s post-pandemic recovery, but it also contributed to housing shortages and rising unemployment. According to reports, the rapid growth has strained public services and heightened concerns over housing affordability. Marc Miller expressed confidence that the immigration cuts would not impact the economy negatively in the short term. “Whatever you see in the next three years with neutral population growth is counteracted by the quite large growth that we’ve seen in the last three years,” Miller said.

Robert Kavcic, a senior economist at the Bank of Montreal, believes slower population growth may ease housing pressures. “Rapid growth in population in recent years has resulted in negative growth in per capita income while pushing up the cost of living,” Kavcic stated, adding that reduced immigration intake could help improve living standards for Canadians.

Small Businesses Raise Concerns

The new policy has caused anxiety among small business owners. Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), remarked that adjusting immigration levels to align with labor market needs has left employers scrambling. “The rush to make significant changes to Canada’s permanent immigration levels and the Temporary Foreign Worker (TFW) Program has many small business owners’ heads spinning,” Kelly said.

Some small businesses, reliant on foreign workers to fill essential roles, are already voicing concerns over wage requirements and losing valuable staff. “A restaurant owner who can’t find a cook will struggle to keep their business afloat,” Kelly added. "The reduction in immigration levels will create gaps that are hard to fill."

Maharaja, however, believes a drop in immigration may open more opportunities for Canadian workers. “There will definitely be challenges for small businesses due to reduced immigration,” he noted, “but many have become reliant on desperate workers to keep wages low, shutting Canadian workers, including the young and retired, out of the job market.”