Canada has released its Immigration Levels Plan for 2026 - 2028 (the “Immigration Plan”) in accordance with Budget 2025. The Immigration Plan, along with some announcements in the Budget, affect temporary (work permit) and permanent programs.

Employers that utilize foreign nationals to address skills shortages need to be aware of the changes.

Details of the plan

The Immigration Plan is presented as a targeted shift towards long-term sustainability, workforce stability, and innovation-based immigration. The government frames this direction as a response to a period of rapid population growth driven by temporary residents, whose share of the population rose from 3.3% in 2018 to 7.5% in 2024. The recalibration of target numbers is intended to bring immigration to a sustainable pace, balancing growth with capacity.

The following are some key components of the Immigration Plan:

  • Permanent residents (“PR”):
    • Canada will stabilize PR admissions at 380,000 per year from 2026 to 2028. This is slightly below the 395,000 level projected for 2025.
    • The share of economic immigrants will increase from 59% to 64%, reinforcing Canada’s focus on attracting highly skilled professionals and innovators who can drive national productivity and regional development.
    • There are targeted measures recognizing eligible Protected Persons as PRs over the next two years.
    • There is also a plan to transition up to 33,000 work permit holders to PR between 2026 and 2027. There is no indication on how this transition will be rolled out, but further updates are expected in the new year.
  • Temporary residents:
    • New temporary resident admissions will be reduced from 673,650 in 2025 to 385,000 in 2026, and 370,000 in both 2027 and 2028. Most of the decrease relates to international students, not foreign workers.
    • By the end of 2027, temporary residents are expected to account for less than 5% of Canada’s population.
    • The government’s stated intention is to support workforce needs in communities across the country, with attention given to industries and sectors affected by tariffs and to the unique needs of rural regions.
  • Talent attraction strategy:
    • A $1.7 billion International Talent Attraction Strategy has been announced, intended to position Canada as a global destination for the world’s top innovators, entrepreneurs, and researchers.
    • The Talent Attraction Strategy aims to attract high-impact talent to settle in Canada as a place to innovate, invent, and expand industries. The stated objective of this strategy, in conjunction with the plan itself, is to signal that while Canada is reducing short-term volume, it remains deeply committed to welcoming the best and brightest from around the world.
    • The budget included a statement that “in the coming months the government will also launch an accelerated pathway” for H-1B visa holders to come to Canada. The H-1B visa is a U.S. work permit for specialized positions, often in the tech industry.
  • Savings and investment:
    • Budget 2025 anticipates Immigration, Refugees, and Citizenship Canada (IRCC) meeting a 15% savings target by 2028. The government expects to achieve this through technology‑enabled productivity gains, reduced use of external consultants, and a reassessment of human‑resources requirements.
    • Investment in the Canada Border Services Agency (CBSA) will occur through the hiring of 1,000 new CBSA officers.

Key impacts for businesses and HR leaders

This Immigration Plan emphasizes the importance of strategic workforce planning and long-term retention. With fewer temporary resident spaces available, employers should anticipate greater scrutiny and longer lead times for immigration pathways and benefits. Sustainable recruitment and proactive planning will be necessary to ensure key employees are able to engage in cross-border employment and be retained in critical roles, encouraging companies expanding into and growing in Canada.

Companies will also need to be strategic and thoughtful when leveraging employer-driven temporary and permanent residency options such as Provincial Nominee Programs, the Global Talent Stream, and other economic-class streams that align with business needs. With the federal focus shifting toward stability and innovation, organizations that align their hiring with these objectives will be better positioned to attract and retain top global talent in Canada.

Industries most affected by this shift will include construction, energy, healthcare, technology, and advanced manufacturing, particularly in regions where specialized skill shortages remain high. The government has signaled that sectors impacted by tariffs and regional labour challenges will receive special consideration, making it important for businesses to stay connected to evolving program criteria and policy updates.

Conclusion: What employers should do now and the new era

The Immigration Plan reflects what the Canadian government believes is a balanced approach to population and economic growth. It shifts Canada toward quality over quantity, prioritizing long-term settlement and economic contribution over short-term intake.

The focus of Budget 2025 as it relates to immigration is clear: attract talent that builds sustainable industries, drives innovation, and contributes meaningfully to Canada’s future providing economic prosperity.

How Gowling WLG can help

Immigration remains a vital component of workforce planning across many industries. At Gowling WLG, our Immigration Group can help employers navigate the Immigration Plan and Budget 2025, manage compliance, and design cross-border workforce strategies that align with long-term talent needs.

To find out more about our group, reach out to a member of our team and subscribe to our newsletter for the latest updates.