Canada to cut immigration by 20% in 2025: Low-skilled workers not welcomed

Canada is stepping back from its previously welcoming immigration stance, a shift that could significantly impact low-skilled Indian workers currently in the country. Prime Minister Justin Trudeau’s administration now intends to scale back the number of new arrivals as public sentiment on immigration wanes.

 

20 per cent drop in immigration 

In the latest immigration strategy outlined by Immigration Minister Marc Miller on Thursday, Canada will admit approximately 395,000 permanent residents in 2025, marking a drop of nearly 20 per cent from the 485,000 expected this year. The plan also sets a target for temporary immigrants, including international students and foreign workers. Their numbers are expected to drop to about 446,000 in 2025 and 2026, down from roughly 800,000 this year. By 2027, Canada will accept just 17,400 new non-permanent residents.

 

 

These adjustments will lead to a projected population decline of 0.2 per cent in the next two years, shifting from the robust growth of 3 per cent observed in the second quarter of this year. If the government meets its goals, it would mark the first population shrinkage in Canada since the 1950s. 

At a news conference, Trudeau referred to the plan as a ‘pause’ on population growth, intended to give various levels of government time to improve healthcare, housing, and social services to accommodate future populations.

 

Impact on Indian immigration trends 

Canada-based immigration analyst Darshan Maharaja believes these changes would greatly affect Indians, who represent a large portion of Canada’s immigrant demographic. “Temporary workers already in Canada continue to be eligible to transition to permanent residency,” Maharaja said. “However, the government has increased the emphasis on highly skilled workers, leaving low-skilled workers in a precarious position,” he said.

 

“The government has already imposed a cap on student permits, and diplomatic issues between India and Canada have affected visa processing times.” He warned that the effects of today’s changes to Canada’s immigration policy are far-reaching. “The biggest impact will be on workers in low-skilled jobs, as they will find it very difficult to transition to permanent residency and may face the prospect of returning to India,” Maharaja said.

 

Over the past decade, Indian immigration to Canada has surged by 326 per cent, with student enrolments skyrocketing by 5,800 per cent. In 2023, the number of Indian immigrants reached 139,715, according to the National Foundation for American Policy (NFAP). Indian students now make up a large share of the international student body in Canada, with enrolments rising from 2,181 in 2000 to 128,928 in 2021.

 

Maharaja said that these trends reflect a growing dependence on Indian immigrants, particularly in sectors requiring skilled labour. “While temporary workers can still apply for permanent residency, the emphasis on highly skilled applicants means that those in lower-skilled jobs may struggle. Many Indians have come to Canada seeking better opportunities, but this new policy could jeopardise their dreams.”

 

The high demand for skilled labour in Canada has attracted many Indians, with quite a few pursuing higher education in Canadian institutions. However, the increasing cap on student permits could hinder future enrolments, limiting opportunities for Indian students who contribute to Canada’s economy and cultural diversity.

 

What led to this decision? 

An influx of newcomers aided Canada’s post-pandemic recovery. But it also exacerbated housing shortages and increased unemployment rates in the country. According to reports, the rapid immigration growth has strained public services and raised concerns about housing affordability. Trudeau acknowledged the challenges, saying, “We didn’t get the balance quite right. Our immigration system has always been responsible, but we are acting today because of the tumultuous times as we emerged from the pandemic.”

 

Immigration Minister Marc has expressed confidence that this reduction would not adversely impact the economy – at least not in the short term. “Whatever you see in the next three years with neutral population growth is counteracted by the quite large growth that we’ve seen in the last three years,” he said. Economists have pointed out potential benefits from the changes, suggesting they might relieve pressure on housing and the labour market.

 

“Rapid growth in population in recent years has resulted in negative growth in per capita income while pushing up the cost of living,” said Robert Kavcic, a senior economist at the Bank of Montreal. He believes that reducing immigration intake could help mitigate these issues. “Slower population growth may ease the strain on housing and improve living standards for Canadians.”

 

Concerns of small businesses in Canada

 

The tightening of immigration has left many small business owners feeling anxious. Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), said the rush to make significant changes to Canada’s permanent immigration levels and the Temporary Foreign Worker (TFW) Program has many small business owners’ heads spinning. “While it is entirely appropriate to adjust immigration levels based on labour market needs, any shifts carry considerable implications for employers and workers,” Kelly said.

 

The CFIB is already receiving panic calls from small business owners, while many are expressing regret over losing valued foreign workers whose visas are nearing expiration. Some others are voicing concern over the prevailing wage requirements for skilled temporary workers that do not reflect the reality of small businesses. It would mean the small firms will struggle to survive. Earlier, decisions to reduce access to low-skilled TFWs will also have a major impact on the ability of small firms to build the teams they need to put their products or services to market.

 

“A restaurant owner who can’t find a cook will struggle to keep their business afloat,” Kelly warned. “Many small businesses rely on foreign workers to fill crucial roles, and the sudden reduction in immigration levels will create gaps that are hard to fill.”

 

However, Maharaja is of the view that reduction in immigrants might correct imbalances that have made the job market less accessible to Canadians. “There will definitely be challenges for small businesses, such as restaurants, due to reduced immigration,” he said. “However, many have become reliant on desperate workers to keep wages low, which has resulted in shutting Canadian workers, including the young and retired, out of the job market.”

 

Public sentiment on immigration 

A recent survey by the Environics Institute found that 60 per cent of Canadians believe there is ‘too much immigration’ in the country. This marks the highest opposition level in 25 years. Concerns centre on housing shortages and economic pressures, prompting Trudeau’s government to implement new targets for immigration.

 

The survey results indicate a growing dissatisfaction with the government’s handling of immigration, especially in light of the rising cost of living. Dapo Bankole, an advocate for immigrant life education said, “The major challenge is not just about numbers but how well the country can integrate new arrivals into the economy without creating disruptions.” 

 

Bankole stressed that Canada may no longer need as many immigrant professionals, especially as many highly skilled immigrants find themselves in roles far below their qualifications. “There is a build-up of white-collar professionals who have ended up in blue-collar jobs,” he said. This mismatch creates a challenging environment for immigrants and Canadian workers who are increasingly competing for the same positions.