Understanding Canada’s Immigration Levels Plan 2025-2027

Canada’s Immigration Levels Plan 2025-2027 marks a big shift in immigration policy direction. Here’s what employers need to know. 

23 April 2025 | By Alex Schulte

Blame the clean mountain air, the buzzing cities or the famously high quality of life. Whatever the pull factor, Canada’s appeal to the world’s most talented workers is almost unbeaten. The country has ranked in the top three destinations of choice for skilled workers in every edition of BCG’s ‘Decoding Global Talent’ tracker since 2014.

Like many countries, the ‘Great White North’ has seen record-breaking levels of net immigration in recent years. But unlike some of its peers, this has been almost entirely by design. Canada’s immigration policy specifies and forecasts exactly how many newcomers it plans to admit each year.

An annual document, the Immigration Levels Plans, maps out the country’s medium-term strategic approach to inward migration. Businesses need to acquaint themselves with this meticulous framework.

What is the Immigration Levels Plan?

The Immigration Levels Plan is published every year by Immigration, Refugees and Citizenship Canada (IRCC) – the Government of Canada’s department for all migration-related matters.

The Plan is released annually and updated every two years with annual targets for permanent and, more recently, temporary migration numbers over the succeeding three years.

Each Plan is informed by:

• The country’s priorities and objectives for immigration
• The needs of the economy, both nationally and regionally
• Canada’s international obligations and commitments
• The capacity of housing, healthcare and other public services to absorb population growth
• Administrative capacity to process immigration applications
• Canada’s cultural capacity to settle, integrate and retain migrants

The Plans are the result of consultations with stakeholders from across civil society, political and economic life, including provincial and territorial governments, businesses, educational institutions and immigrants themselves.

This broad range of inputs results in well-reasoned, consensus-driven policy plans that respond to competing interests among the general public.

What does the Immigration Levels Plan cover?

The annual Plan defines the following near-term strategic priorities:

• Permanent resident admissions targets

Targets for the number of new permanent residents, broken down by immigration category (economic, family, refugee and humanitarian). The upcoming year’s target is set in stone, while those for the following two years are more notional and subject to annual review.

• Temporary resident targets

The current 2025-2027 Plan is the first to set targets for temporary residents, such as international students and seasonal workers.

• Immigration categories

The annual Plan sets the official categories by which migrants to Canada are classified. The four main categories – Economic, Family, Refugees and Protected Persons, and Humanitarian & Compassionate and Other – have remained constant. But now, they have been joined by a new classification for temporary residents, along with subcategories for economic migrants with specific skills.

• Francophone immigration

The Plan sets specific targets for French-speaking immigrants to maintain the strength of Francophone minority communities outside Quebec.

• In-Canada Focus

Canada reserves a significant proportion of permanent resident admissions for individuals already in Canada as temporary residents, such as students and workers, to facilitate their transition to permanent status.

This joined-up, pluralistic approach to border policy acknowledges immigration as a phenomenon that touches all areas of national life. The Canadian state approaches migration as a strategic economic lever that must be handled carefully, in case it causes unintended consequences in other areas.

So what does the most recent update spell out for Canadian migration policy over the next few years?

Canada’s Immigration Levels Plan 2025-2027: A Course Correction

The latest Immigration Levels Plan, published on 24 October 2024 and covering 2025 to 2027, marks a major departure from the previous years’ editions.

For Permanent Resident Admissions, it targets 395,000 in 2025 and 380,000 in 2026 – both revised down from a target of 500,000 specified in the 2024-2026 Plan.

At 21% for 2025 alone, this is a significant drop, and not an arbitrary one. The Immigration Levels Plan 2025-2027 represents the Canadian government’s response to public opinion.

In 2023, immigration increased Canada’s population by 1.27 million. At 3.7%, this was the highest annual population growth seen in 66 years. In that year, the country welcomed 475,1550 permanent residents, well above its target for that year of 465,000. But temporary immigration made up the lion’s share.

Previous Immigration Levels Plans had already pencilled in big rises to net migration. The 2021-2023 and 2023-2025 blueprints explicitly aimed to increase net migration as a means of boosting economic growth and filling critical labour market shortages.

But the sheer scale of inward migration was credited with pushing up housing costs and placing pressure on public infrastructure. Previously hospitable public attitudes to immigration quickly soured, with the number of Canadians agreeing that there is “too much immigration to Canada” climbing 17% in one year.

To maintain the public consent that marks out Canada’s immigration strategies from many other countries’ more top-down arrangements, the 2025-2027 Plan needed to mark a change in course.

This entailed a big challenge – and a test case for international observers. How could policymakers ditch a key strategic assumption – that immigration would keep on its upward trend – without creating destabilising ripple effects for the rest of the economy?

Before we get to that, let’s take a look at exactly what the document itself spells out.

Canada’s Immigration Levels Plan 2025-2027 in Numbers

1. Permanent Resident Admission Targets

This marks a notable reduction from previous targets, with an overall decrease on previous projections for 2025 of 105,000 admissions.

These headline figures are the central point of a range of higher and lower projections.

40% of these numbers are anticipated to be made up of students or workers already in Canada. It also specifies that 8.5% of the total should go to French speakers for placement outside Quebec.

Within these total figures, the Plan also sets targets for different classes of permanent resident admissions. Let’s dig into the numbers.

Economic class

Immigration pathways included in this category admit skilled workers who can contribute to the Canadian economy.

Under the plan 2027, economic class admissions are projected to constitute nearly 62% of all permanent resident admissions. Within this category, there is a focused allocation under “Federal Economic Priorities” targeting skilled workers in sectors facing acute shortages, notably healthcare, technology and skilled trades.

Family class

These are the projections for family members sponsored by Canadian citizens and permanent residents to settle in Canada.

Refugees and Protected Persons Class

These projections refer to individuals who have been recognised by the Immigration and Refugee Board as needing protection, or those who meet the definition of refugee under the 1951 Refugee Convention.

Humanitarian & Compassionate and Other Class

These figures refer to individuals who might not qualify for other immigration programs but whose exceptional circumstances merit residency on humanitarian grounds.

2. Temporary Resident Admission Targets

For the first time, the 2025-2027 Immigration Levels Plan contained targets for temporary residents. These visas are typically granted to students, seasonal workers and international staff at corporates in Canada for secondments and intra-company transfers.

It is the swelling number of temporary residents that, above all, caused the Trudeau government to change course and target lower rates of migration.

So what does the revised strategy spell?

These targets were billed by the then-Minister for Immigration, Refugees and Citizenship, Marc Miller, as a mechanism to ‘pause population growth’. They seek to keep the proportion of temporary residents below 5% of Canada’s population by the end of 2026.

To support this aim, the current plan dictates:

• A 10% reduction to the annual cap for international student admissions for 2025
• Tighter eligibility requirements to the Post-Graduation Work Permit Program

What the New Immigration Policy Means for Canada

Canada’s 2025–2027 Immigration Levels Plan is a major national policy shift, with some significant potential social and economic effects.

Population and demographics

The new plan reduces both permanent and temporary resident targets, translating to a projected population of 41.4 million by the end of 2027—1.4 million fewer people than under the previous, higher-immigration scenario.

This is a 3.2% downward revision to Canada’s previous demographic outlook, markedly slowing the pace of population growth.

Immigration policy in a country with Canada’s demographic profile will always be a trade off between alleviating short-term pressures on housing, healthcare, and infrastructure and mitigating the longer-term problems caused by an ageing population. In shifting gear so dramatically, the Canadian government has clearly picked the former route.

Economic impact

Fewer migrants mean fewer workers – and lower economic output. In its official impact assessment of Canada’s new immigration policy, the Parliamentary Budget Officer estimates that by 2027, 1.3 billion fewer hours will be worked than in the previous Plan. 93% of this reduction is due to the slower rate of population growth.

This is set to drag down real GDP by 1.7% by 2027 compared to the status quo. The effect on government tax take of this nominal $37 billion drop will surely be making some in the Treasury Board of Canada rather anxious.

However, there are some on-paper upsides buried in the data. Real GDP per capita – often seen as a better proxy for actual living standards – is forecast to rise by 1.4% by 2027 thanks to the drop in population against the counterfactual.

It is worth stating, however, that all these figures were calculated months before the current round of economic uncertainty precipitated by the Trump administration’s tariffs on Canadian exports. Any prior GDP forecasts should be handled with caution.

Labour market

The narrower path to permanent residency for temporary foreign workers will create tighter, more competitive conditions in the job market.

The government intends that 40% of new permanent residents will come from the pool of temporary residents already in Canada. However, the overall reduction means that many temporary residents may face greater uncertainty and fewer opportunities to transition to permanent status.

This could lead to a loss of talent available to Canadian employers if skilled workers choose other countries with more liberal immigration policies.

Social policy considerations

Lower rates of immigration may well reduce the strains on housing and public services that have shifted public sentiment so markedly in recent years.

There is a risk that this easing-off of immediate pressures may store up trouble down the line. By 2030, over-65s could represent up to 23.4% of the total population. This will increase demand for skilled healthcare professionals at the same time that fewer workers are entering Canada.

The provisions in the economic class targets to prioritise workers from shortage areas, which includes healthcare, may mitigate these risks.

What Canada’s New Immigration Policy Means for Businesses

The 2025-2027 Immigration Levels Plan will have direct effects on how employers in Canada recruit, retain and plan for international talent.

Here’s what companies should expect.

1. A smaller talent pool and increased competition

The significant reduction in both permanent and temporary resident targets means there will be fewer new arrivals available to fill roles, especially in sectors already facing shortages.

Businesses should anticipate heightened competition for skilled foreign workers, as more applicants vie for fewer permanent residency spots and temporary permits.

2. More selective economic immigration

The government heavily prioritises economic immigration over all other forms, with about 62% of new permanent residents coming through economic streams.

However, the policy focus is shifting to converting those already in Canada (temporary foreign workers, international students) to permanent residency pathways. This will make it harder for companies to recruit talent directly from abroad, unless they have a compelling business case or the candidate fills a critical shortage.

3. Stricter business immigration pathways

Federal business immigration streams like the Start-Up Visa are now capped at 2,000 admissions in 20225, decreasing to 1,000 in subsequent years. Others, like the Self-employed Persons Program, have been paused altogether.

Any applications business owners and entrepreneurs make must be robust, well-documented, and clearly demonstrate how the business case will benefit Canada’s economy.

4. Temporary worker program changes

The introduction of targets for temporary residents, including international students and foreign workers, will cause new administrative pressures for businesses.

Employers may need to support more work permit extensions for current foreign employees, as the journey to permanent residency will be more competitive and take longer.

Companies should budget and plan for increased administrative support and potential delays in securing or extending work permits.

5. Labour market and productivity impacts

The 1.3 billion fewer hours worked will put pressure on businesses to ramp up their productivity and maximise the output from each existing staff member.

Be prepared to offer more competitive salaries – wage pressures are likely to increase as employers compete for a smaller pool of available workers.

6. Need for strategic workforce planning

With competitive pressures mounting, HR and Global Mobility teams should focus their attention on the groups with the clearest pathways to permanent residency. This meanas retaining and upskilling existing temporary foreign workers and building recruitment pipelines for international students.

Canada’s immigration policy is clearly shifting towards a tougher dispensation for lower-skilled foreign nationals. Recruitment strategies should move toward attracting the highest-impact talent.

Top Strategic Tip: Use the Express Entry System

To preserve their access to talent in this tightening regulatory context, employers in Canada must familiarise themselves with the Express Entry system. This pivotal component of the Canadian immigration framework streamlines the process of attracting and retaining skilled workers. Based on criteria such as skills, experience, and educational background, it prioritises candidates most likely to succeed in Canada’s economy.

For businesses, this means access to a pool of pre-assessed, highly skilled professionals who can fill critical roles within your operations.

Navigating the Express Entry Application Process for 2025-2027

Canada’s Express Entry system remains a key pathway for employers to recruit skilled foreign workers for permanent residency. However, recent updates have refined job offer requirements and Labour Market Impact Assessment (LMIA) rules. Here’s a step-by-step guide for businesses:

Step 1: Determine the need for a foreign worker

• Assess the domestic labour market: Before pursuing a foreign hire, ensure you cannot fill the position with a Canadian citizen or permanent resident. This is a core requirement for most Express Entry-linked hires.

Step 2: Advertise the position

• Mandatory job posting: Most employers must advertise the job on the Canada Job Bank for at least 30 days and, in some cases, on additional platforms. This demonstrates genuine efforts to hire locally before seeking international candidates.

Step 3: Obtain a Labour Market Impact Assessment (LMIA) (if required)

• Apply for an LMIA: For most Express Entry job offers, a positive LMIA is required. This document proves that hiring a foreign worker will not negatively impact the Canadian labour market.
• LMIA exemptions: Some positions or programs (such as certain intra-company transfers or trade agreements) may be LMIA-exempt. Check IRCC guidelines for details.

Step 4: Extend a formal job offer

• Job offer requirements:
  • Must be in writing, recent, and from a legitimate Canadian employer (not a diplomatic mission).
  • Must specify job title, duties, pay, deductions, hours, and conditions.
  • Must be for a full-time, non-seasonal role in a TEER 0, 1, 2, or 3 occupation under the National Occupational Classification (NOC).
  • Must be valid for at least one year after the candidate receives permanent residency3.
  • For Federal Skilled Worker Program (FSWP) and Canadian Experience Class (CEC): the offer must be from a single employer. For Federal Skilled Trades Program (FSTP): offers can be from up to two employers.
• Include LMIA number: If applicable, include the LMIA number in the job offer for the candidate’s Express Entry profile1.

Step 5: Candidate updates Express Entry profile

• The candidate enters or updates their Express Entry profile with the job offer details and LMIA number (if applicable).
• The job offer helps the candidate qualify for specific draws or programs, but as of 2025, job offers no longer provide CRS points in general draws. They remain important for eligibility and some program-specific or category-based draws.

Step 6: Support the candidate through the process

• Interview and select: Employers can use the Job Bank or their own recruitment channels to identify and interview candidates in the Express Entry pool.
• Assist with documentation: Provide any additional documentation or support the candidate may need for their application.

Step 7: After Invitation to Apply (ITA)

• Once the candidate receives an ITA, they must submit a complete application for permanent residence, including the job offer letter and other supporting documents.
• IRCC aims to process most Express Entry permanent residence applications within six months.

Provincial Nominee Program (PNP) option

• Employers can also nominate candidates through a Provincial Nominee Program aligned with Express Entry, which may have additional or alternative requirements

Note:

• Job offers are still critical for program eligibility, even though they no longer add CRS points in most cases as of 2025
• Always consult the latest IRCC guidelines to ensure compliance with current requirements.

Looking Ahead: Canada’s Evolving Immigration Policy Stance

After an abrupt about-turn, the landscape for Canadian immigration policy could well change again in 2025. While the April 28 federal election is likely to result in a win for the incumbent Liberal Party, the onslaught of US tariffs spells almost unprecedented volatility for the Canadian economy.

The next update to the Immigration Levels Plan is expected in October 2025. Until that point, businesses should maximise their use of the routes currently available to them to hire skilled talent. But employers must note the direction of travel away from low-skill migration and update their recruitment strategies to prioritise foreign nationals with high-value specialisms.

At Centuro Global, we stay abreast of all the latest regulatory developments to provide timely and accurate advice.

Sign up to our newsletter to hear about all Canadian immigration policy changes as soon as they are announced.

For expert guidance on future-proofing your workforce strategy, contact our experienced immigration team.

FAQ: Canada’s 2025–2027 Immigration Levels Plan

What is Canada’s 2025–2027 Immigration Levels Plan?

Canada’s 2025–2027 Immigration Levels Plan is the government’s updated framework outlining how many new permanent and temporary residents will be admitted annually. The plan sets lower targets for both permanent residents (PRs) and temporary residents (TRs) compared to previous years, with a focus on economic immigrants and those already living in Canada.

How many immigrants will Canada admit each year under the new plan?

Canada aims to welcome 395,000 new permanent residents in 2025, 380,000 in 2026, and 365,000 in 2027. These targets are lower than the previously planned 500,000 per year and reflect a shift toward more sustainable population growth.

Why did Canada lower its immigration targets?

The government reduced targets to address pressures on housing, healthcare, and infrastructure, and to ensure the successful integration of newcomers. The plan is designed to stabilise growth while supporting economic needs and maintaining Canada’s humanitarian commitments.

What does the plan mean for businesses and employers in Canada?

Businesses should expect a smaller pool of new international talent and increased competition for skilled workers. The plan prioritises transitions to permanent residency for temporary residents already in Canada, so employers may need to focus on retaining and upskilling current foreign workers and students. There will also be stricter caps and requirements for business immigration programs.

How will the changes affect temporary foreign workers and international students?

With new caps on temporary residents and more competitive pathways to permanent residency, temporary foreign workers and international students may face longer wait times and more competition for PR spots. Employers should plan for possible delays and provide additional support for current foreign staff.

Are there changes to business immigration programs?

Yes. Programs like the Start-Up Visa and Self-Employed Persons stream now have annual caps and higher standards for economic impact and innovation. Applications must clearly demonstrate benefits to Canada’s economy to be successful.

Will the plan impact Canada’s labour market and economy?

Yes. The reduction in immigration is expected to slow overall labour force growth and may exacerbate skills shortages in some sectors. However, it is also projected to improve GDP per capita and ease pressure on housing and social services.

How can businesses adapt to these changes?

Businesses should prioritise retention and upskilling of current foreign workers, review recruitment strategies to attract high-impact talent, and ensure business immigration applications are robust and aligned with Canada’s economic priorities. Staying informed about evolving immigration policies is crucial for workforce planning.

Where can I find official updates on Canada’s immigration plan?

For the latest information and detailed breakdowns, visit the official Government of Canada Immigration Levels Plan page, or sign up to the Centuro Global newsletter.