Canada Aims to Curb Immigration Amid Housing Shortage Crisis
In a significant policy shift, the Canadian government has announced plans to reduce immigration levels to alleviate pressure on housing and social services. Prime Minister Justin Trudeau acknowledged on Thursday that the country's response to the post-pandemic workforce shortage had gone too far, indicating a need to recalibrate immigration levels to better balance population growth and labor needs.
The new strategy involves a decrease in the target number of new permanent residents: from 485,000 in 2024 to 395,000 in 2025, 380,000 in 2026, and 365,000 in 2027. This marks the first reduction in immigration targets since Canada started publishing multi-year plans in 2018. The original targets were set at 500,000 for 2025 and 2027. A government source shared the revised figures on Wednesday, and both Trudeau and the immigration minister confirmed them today.
The government also plans to reduce the number of temporary residents by hundreds of thousands annually, hoping that over 1 million people with expiring visas will choose to leave voluntarily in the coming years.
Public sentiment in Canada has shifted, with more Canadians believing the country is accepting too many immigrants, impacting housing affordability. The governing Liberal party, trailing in polls ahead of an election required by October 2025, is moving to tighten immigration.
BMO bank analysts noted on Thursday that reducing immigration could relieve significant pressure on the economy and infrastructure. Government projections suggest these measures could lead to a 0.2% population decrease in 2025 and 2026, with a return to population growth in 2027.
The government estimates that by the end of 2027, the reduction in immigration could decrease the housing supply gap by approximately 670,000 units. However, some industry leaders have expressed concerns about potential impacts on the labor market. Diana Palmerin-Velasco, Senior Director of the Future Workforce at the Canadian Chamber of Commerce, highlighted the importance of immigration in avoiding a recession and warned that the reduction could send a negative message to potential foreign investors.