It will soon be necessary for Canada to rev up its immigration engines. The challenge is to do it without blowing everything up again.
The return to economic growth and higher employment we’ve been experiencing this year, along with Canada’s mood of defiant nation-building, have made Ottawa’s immigration slowdown a hindrance to our ambitions.
That slowdown, engineered in 2025 with the launch of the Carney government’s Immigration Levels Plan, was sensible and generally well-designed. Its restricted 2025-27 targets and its tighter rules were a response both to the stalled economy of the early Trump crisis, and to the postpandemic overshoot of provincial temporary-worker and student visas that created a spike in the non-permanent resident population of about three million people.
Politically, it was important for the federal government to reassure everyone that they were able to control and restrict immigration when necessary.
But that restraint has now outlived its usefulness, and is putting a brake on Canada’s macroeconomic growth, its housing-supply growth and its nation-building ambitions. The Trump crisis has been a sobering reminder that our low population density and market size stand in the way of the independent industries and institutions we desire.
An analysis this year by the C.D. Howe Institute concluded that the major constraint to economic growth is not cyclical demand deficiencies, but slower demographic growth – a labour market where the number of retiring workers exceeds the number of new entrants. Raising the constrained permanent-immigration levels of 0.9 per cent of population annually to a still-modest 1.1 per cent, their analysis shows, would increase annual GDP growth rates by around 33 per cent. The Bank of Canada echoed this finding, concluding that current weak population-growth levels alone will shave an average of 0.2 percentage points per year off Canada’s output growth.
That has specifically hurt our ability to expand the housing supply and complete major infrastructure projects. An analysis this year by Deloitte found that by 2030, Canada’s construction industry will be needing between 410,000 and 520,000 more workers than can be provided by the domestic population. A small share of that can be addressed through trades-education incentives and higher pay, but that still leaves a huge immigration shortfall in semi-skilled fields that are crucial to our ambitions. And the major drop in international-student visas, while necessary for curtailing abuse of the system, has deprived Canada of its best source of advanced skills, investment and permanent immigration.
The risk in ramping up immigration again is that Canada’s system has the same structural flaw that led to the temporary-worker overpopulation crisis – one that first arose in 2008, the first year the number of temporary immigrants exceeded permanent ones (which remains the case). The Harper government re-engineered the temporary programs to become the main source of labour immigration, because they’re faster and cheaper; the Trudeau and Carney governments improved and safeguarded the system while maintaining its primacy, and its main flaw remains.
The flaw is that the main "points system" immigration entry portal for families seeking permanent residence, Express Entry, is built exclusively to handle immigration schemes for highly skilled and educated people. Its advanced-education requirement excludes the very people the economy most needs – effectively forcing the first generation of permanent immigrants to sacrifice their expensive educations and work in the less-skilled end of the economy, and leaving tradespeople in a limbo of non-permanence.
Permanent immigration also takes a long time: Waiting times in 2026 range from seven months at best to peaks of up to 38 months.
Permanent immigration of intact families, with a quick pathway to citizenship, should constitute the majority of immigration. It provides the most successful integration, the highest economic return, and a newcomer population that invests in housing rather than just consuming it.
That can be achieved with a few small changes. As experts have recommended, the Express Entry system needs a category for people in secondary-school-only skilled trades, to account for 10 to 20 per cent of permanent immigrants. The points system needs to weigh more heavily toward foreign trade experience and non-degree credentials. Provinces should have authority over these less-skilled PR categories, to meet their specific economic needs. And permanent residence should be granted soon after arrival, not after years of ambiguous residence.
Removing the incentive to rely on temporary immigrants means raising the processing speed to a few months at most. This isn’t helped by the current reduction of 1,440 jobs in Immigration, Refugees and Citizenship Canada. Shifting the temporary-permanent balance will require more staff, although AI and other technologies can help.
It was long-term temporary status, not immigration itself, that put the system in crisis – a majority of our newcomers for two decades weren’t becoming Canadians. To avoid a repeat, we must adjust the system to make permanent family immigration the norm.
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