Canada’s Immigration Policy Still Needs Course Correction for Long-Term Prosperity: Report

Passengers are seen at Pearson International Airport, in Toronto, on June 29, 2024. The Canadian Press/Christopher Katsarov

Canada’s immigration policy is still moving in the “wrong” direction and needs a course correction to achieve long-term prosperity instead of short-term labour market solutions, says a new report by C.D. Howe Institute.

“Canada must move from chasing numbers and pursuing short-term or non-economic objectives to focusing on skills,” C.D. Howe Institute senior policy analyst Parisa Mahboubi said in a Sept. 16 release on the report.

Labour market skills and the earnings potential of permanent and temporary immigrants should be prioritized over achieving numeric targets in immigration policy, the Sept. 16 C.D. Howe report said. The report is based on the recommendations made by members of C.D. Howe’s Immigration Targets Council, including academics and policy experts.

“A principled, transparent, and sustainable immigration policy will raise human capital, strengthen prosperity, help maintain balance in the non-permanent resident population, and sustain public confidence,” Mahboubi added.

Meanwhile, focusing on filling short-term labour market gaps can prevent wage increases and capital investment, the report said.

Council members criticized the strategy of choosing permanent residents based on the “express entry pool,” which takes specific attributes like occupation or language into consideration, as well as provincial nominee programs that prioritize lower-skilled workers, but allow provinces to meet regional labour market needs.

Instead, members recommended using a comprehensive ranking system that evaluates immigrants based on their education, work experience, language ability, likelihood of long-term success, and field of study. Verified earnings in Canada for those who have prior experience in the country was another recommended consideration.

Council members also recommended using fast-track pathways and policies to attract top-tier global talent, and called for stronger federal-provincial coordination to recruit individuals with achievements in fields such as science, medicine, and artificial intelligence.

The council recommended the number of annual permanent residents allowed into the country should be 365,000 in 2026, 360,000 in 2027, and 350,000 in 2028. The federal government’s current target for 2026 is 380,000, and 365,000 for 2027.

Non-Permanent Residents

Concerns about the rapid growth of the non-permanent resident population and issues in the asylum system were also raised by council members, who recommended the federal government maintain its 5 percent ceiling on non-permanent residents in 2026, and review the target in early 2027.

Achieving the “optimal” share of non-permanent residents involves transitioning those in high-skill occupations to permanent residency, the members said.

Improving efficiency within Canada’s asylum system is “critical” to protecting genuine claimants and reducing pressure on the immigration system more broadly, because many immigrants currently see asylum as a “pathway to permanent residency,” the report added.

Meanwhile, the international student system has become a pathway for low-wage labour instead of attracting “top global talent,” the report said. Council members recommended the immigration department uses higher admission standards, stronger language and academic requirements, limits on off-campus work, and stronger federal oversight to only allow high-quality institutions and programs to be offered as part of the international student program.

“Similarly, the Temporary Foreign Worker Program should be scaled back and not be used as a substitute for raising wages or improving working conditions, since relying on temporary workers can reduce employers’ incentives to offer better pay or workplace standards,” the report said, adding that reducing reliance on low-skilled temporary workers will encourage productivity growth and higher wages for Canadian workers.

Reforming the temporary and permanent immigration programs, as well as improving the asylum system, would reduce the size of the non-permanent resident population, council members said.

2025 Targets

The latest data released by Immigration, Refugees and Citizenship Canada (IRCC) indicated the federal government will surpass some of its immigration targets set out for the year.

The department’s target for permanent residents in 2025 is 395,000. The federal government admitted 207,650 permanent residents in the first two quarters of the year. If this pace continues, the total number of permanent residents would reach 415,300 by the end of the year.

The IRCC’s target for new temporary foreign workers in 2025 is 82,000, however the federal government already surpassed its target by issuing 105,195 permits in the first half of the year.

Similarly, Canada’s cap on its International Mobility Program is 285,750 for the year, however, the government has admitted 302,280 people in the first two quarters.

The IRCC report comes several months after Prime Minister Mark Carney said Canada needs to cap immigration levels to allow for more capacity to be built before more people are let into the country. In his mandate letter to cabinet ministers in May, Carney said they should work to attract “the best talent in the world to help build our economy, while returning our overall immigration rates to sustainable levels.”

Conservative Leader Pierre Poilievre called the latest data released by the IRCC “disastrous,” adding that Canada should “only invite the right people in the right numbers so our jobs, health care and housing can catch up.”