OTTAWA — The Liberal government’s new immigration plan shifts the focus toward economic immigrants and cuts by more than half the number of new international students that can come to study in Canada.
With recent opinion polls showing most Canadians still believe immigration levels are too high, Prime Minister Mark Carney’s government will further reduce temporary resident admissions and make good on his election campaign promise to cap those numbers to five per cent of the overall population.
In delivering the federal budget Tuesday, Finance Minister François-Philippe Champagne said the government’s goal was to return the immigration system to a sustainable path.
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“We are taking back control of our immigration system and putting Canada on a trajectory to bring immigration back to sustainable levels,” Champagne said.
Despite restrictive measures the past two years to rein in the number of study and work permit holders, slightly more than three million non-permanent residents were in Canada at the end of the third quarter of 2025, accounting for 7.2 per cent of Canada’s population.
“It’s through immigration that you bring in skilled people who are going to build, who are going to contribute to the economy, who are going to create jobs. That’s how you build the nation,” said Kyle Hyndman, former chair of the Canadian Bar Association’s immigration law section.
“This immigration plan is a giant hole in what appears to be a nation-building budget. It’s going totally the opposite direction. I think it’s more about responding to opinion polls,” Hyndman said.
Starting next year, Ottawa will limit the number of new international student permits to 150,000 from a previous target of 305,900. This latest reduction comes after previous cuts to admissions, which swelled to more than 700,000 early in the decade.
The government imposed a cap on the number of international students in 2024 and initially proposed it as a two-year measure, but the reductions, which have caused financial headaches at colleges and universities, are now projected to continue.
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“The new study permit caps further erode Canada’s reputation,” said Larissa Bezo, president and CEO of the Canadian Bureau for International Education. “Unfortunately, today’s announcement sends another signal to prospective international students that Canada is closing its doors.”
There are also some winners in the plan. The government has put aside $1.7 billion for new research chairs, lab equipment and other grants to help foreign academics move to Canada. It’s also increased the permanent resident spots for French-speaking candidates who settle outside of Quebec to 30,267, 31,825 and 35,175 in the next three years.
Ottawa also proposes a one-time measure to grant permanent residency in 2026 and 2027 to 33,000 work permit holders who have “strong roots in their communities, are paying taxes, and are helping to build the strong economy Canada needs.” There will also be a special initiative to expedite permanent residence pathways for eligible “protected persons,” who have been granted asylum in Canada.
While the immigration plan announced in the budget shrinks the number of international students, it keeps permanent immigration levels largely the same as previously planned. Under the proposal, Canada will welcome 380,000 new permanent residents annually for the next three years up slightly from a previous projection of 365,000 newcomers in 2027.
The 2026-28 plan will allocate 239,800 permanent residence spots for economic immigration, and 84,000 for family reunification programs, including the sponsorships of spouses and parents/grandparents. The share of skilled immigrants will go up from 59 per cent to 64 per cent, while spaces for protected persons and resettled refugees from abroad will drop from 68,350 this year to 56,200 in 2026 and 54,300 in 2027 and 2028.
“There’s only one way to really course correct, and that is to stabilize the numbers. That’s really your only option,” said Rick Lamanna, a spokesperson for the Canadian Immigration Lawyers Association.
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“You choke off the biggest driver of the increase on temporary (resident) side, which is the students. Then you keep the permanent resident numbers overall the same. Now at least there’s a pathway for a lot of these people who are in here right now to become (permanent residents) in the next few years.”
The Migrant Rights Network said the budget plan is a “shocking attack” on refugees and migrants, and part of a wider strategy of “scapegoating” migrants for unaffordable housing, strained health care and low wages that are the result of government policies.
Last year, Ottawa’s immigration plan reduced the target for new permanent residents by 21 per cent — the first reduction after years of steady increases since the 1990s — in response to public backlash in 2023 and 2024 amid the housing crisis, the rising cost of living and strained health-care resources after the pandemic.
Two recent polls by Environics Institute and Abacus Data both found that more than half of Canadians still believe the country accepts too many immigrants, though the percentages of people expressing that view has dropped slightly from 2024.
