Canada to "stabilize" immigration levels at 500,000 annually in 2026

New immigration levels for Canada will not go down beyond 2025, but the peak intake levels will be maintained.

In a release today, the federal government announced its newly established target for permanent residents in 2026 is 500,000. This maintains the already planned target of 500,000 for the previous year of 2025 instead of continuing the years-long trend of escalating the figure to a new high year-over-year.

This is up from the targets of 465,000 in 2023 and 485,000 in 2024 and the realized all-time consecutive record levels of 432,000 in 2022 and 405,750 in 2021. Prior to the pandemic, immigration level targets were already heightened as a measure to help address Canada’s structural labour shortage, and the targets were further increased since 2021 to catch up from the pandemic’s earlier impacts on migration patterns and the exacerbated labour shortage.

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With a very low birth rate, immigration is key to Canada’s economic health and the maintenance of its social services over the long run. For instance, the measure of improving housing affordability by building more housing supply is hampered by the labour shortage, with immigration being one major avenue to help resolve this particular issue.

For the 2025 target, the aim is to have 60% of the permanent resident admissions be dedicated to the economic class, which focuses on the economic growth and labour supply strategy.

But the heightened immigration levels are increasingly being blamed for also exacerbating Canada’s housing affordability and supply issues, particularly in the crisis regions of Metro Vancouver and Greater Toronto — areas with not only Canada’s greatest housing issues but also where a substantial portion of immigrants decide to live.

There is growing criticism that the federal government’s immigration policy is not offset by proportionally increased housing strategies.

A representative national survey conducted in October 2023 by Research Co. found that 38% of Canadians now believe immigration is having a mostly negative effect on the country, representing a 12% increase from a similar survey in February 2022. Moreover, 39% now believe the number of legal immigrants should decrease, representing a 14% increase from the previous survey last year. There were also drops in the proportion who believe current immigration levels should be maintained, falling by 2% to 37%, and the proportion who believe in increasing immigration levels, falling by 8% to 17%.

When it comes to provincial differences in attitudes towards immigration, 50% of respondents in Alberta believe there should be fewer legal immigrants entering Canada, followed by 45% in Atlantic Canada, 42% in Ontario, 41% in British Columbia, 36% in Saskatchewan and Manitoba, and 28% in Quebec.

Other separate surveys conducted this past summer also found Canadians are now more likely to blame the federal government for the housing crisis instead of their provincial and municipal governments.

The federal government stated today that its decision to maintain, not increase, the peak annual immigration target at 500,000 represents a measure to address the current concerns, including the impacts on housing.

“Today’s Immigration Levels Plan for 2024-2026 sets out our targets for immigration over the next three years. By stabilizing the number of newcomers, we recognize that housing, infrastructure planning, and sustainable population growth need to be properly taken into account,” said Marc Miller, the federal Minister of Immigration, Refugees, and Citizenship.

“Through this plan, we are striking the appropriate balance to grow Canada’s economy while maintaining our humanitarian tradition, supporting Francophone immigration, and developing a more collaborative approach to levels planning with our partners. Canada will continue to welcome newcomers and ensure that they are supported in their new lives.”

It was also noted today that the federal government will work on “recalibrating” the number of temporary resident admissions to “ensure this aspect of our immigration system also remains sustainable.” One of the largest groups of temporary resident admissions are post-secondary students, which have greatly increased in number in recent years.

Canada’s number of international students reached 800,000 in 2022 — far higher than the federal government’s original target of 450,000 by 2022, which was achieved by 2017/2018. It has been suggested that such volumes have contributed to the overheated rental housing market in the cities with Canada’s largest post-secondary institutions. Over several occasions this past summer, Fraser hinted the federal government was considering capping the number of international student visas to tackle the housing crisis.

In August 2023, CIBC Capital Markets released a bombshell report suggesting Statistics Canada may have undercounted the presence of non-permanent residents by nearly one million people due to the earlier pandemic-time travel restrictions and the false assumption that permit-holders left the country before the expiration of their visa.

With macroeconomic headwinds, including the skyrocketing cost of construction materials and labour, coupled with the high cost of borrowing for construction financing, new housing construction is expected to slow down in Canada for the foreseeable future.