By Mata Press Service

A fresh analysis by Desjardins indicates that although the Canadian government's initiative to curb population growth is beginning to take effect, it is unlikely to meet its objective this year.

The report highlights that since adjustments were made to immigration targets, there have been indications that the influx of non-permanent residents has slowed.

Population growth has also declined in key areas, with the newest arrivals experiencing the sharpest drop.

Drawing on Statistics Canada’s Labour Force Survey data, Desjardins’ economic analyst LJ Valencia and deputy chief economist Randall Bartlett observed that while year-over-year population increases remain substantial, the month-over-month growth rate has “considerably” declined from its peak in 2024.

However, the report points out that the current level of non-permanent resident arrivals is insufficient for Ottawa to meet its goal of reducing temporary resident numbers to below five percent of the overall population.

“Our population projection is mostly unchanged,” the report’s authors state.
“The government still needs to stem the tide of inbound newcomers and see more [non-permanent residents] leave the country to achieve its population targets.”

In October 2024, the federal government announced measures to lower the number of new permanent residents as part of revised immigration objectives to stabilize population growth.

These changes also included new limits for temporary residents. Plans call for admitting 445,901 individuals in this category by 2025, followed by a slight reduction to 445,662 in 2026.

According to Desjardins, the issuance of new non-permanent resident permits dropped by 25 percent year-over-year in the final quarter of 2024.

However, the overall number of non-permanent residents increased by nearly 40,000, surpassing prior forecasts from Desjardins and the federal government by approximately 100,000.

“Our updated population and net [non-permanent resident] forecast suggests that [non-permanent residents] accounted for approximately 7.5 percent of the population by the end of 2024,” the report states.

Desjardins’ projections for non-permanent residents and Ottawa’s targets for permanent resident admissions indicate that population growth in Canada is expected to decelerate significantly.

Despite this, the firm remains “skeptical” that Canada will achieve its immigration targets and notes that a decrease in permanent resident admissions has yet to be observed.

A key uncertainty is how external factors may influence the government’s targets. Desjardins points out that corporate leaders in Canada have raised concerns about labor shortages, which could pressure Ottawa to adjust its policies. High vacancy rates in certain sectors may also contribute to calls for a more measured approach.

“In addition, the federal government has struggled to meet some policy objectives in the past, and the prospect of meeting its new immigration targets is especially daunting given the administrative challenges associated with executing such a significant policy shift,” the report’s authors write.

Additionally, tariffs imposed by former U.S. President Donald Trump could further affect Canada’s ability to meet its goals.

The financial institution warns that if such tariffs are introduced, the country could enter a recession, which in turn could significantly reduce the demand for temporary workers.

Although described as an “unintended consequence of an undesirable outcome” for the economy, the report notes that a downturn could help Ottawa reach its population targets more quickly.

The past year has seen notable changes in Canada's immigration policy, reflecting the government's response to pressing domestic challenges, including housing affordability and public service capacity. Here are the key developments:

Immigration Cap: Canada has announced a significant reduction in immigration targets for 2025, capping new permanent resident admissions at 395,000, down from 485,000 in 2024. This trend is expected to continue with targets of 380,000 for 2026 and 365,000 for 2027.

Permit Issuance: The Canadian government plans to reduce the issuance of work permits by 35% in 2024 and aims to grant 485,000 new study permits. For 2025 and 2026, this target will decrease by 10%, with plans to issue 437,000 study permits in 2025.

Economic Mobility Pathways: Canada continues to emphasize programs that address labour shortages while also providing pathways for skilled refugees. The Economic Mobility Pathways Pilot aims to welcome skilled refugees into high-demand sectors like healthcare.

Category-Based Selection: The introduction of category-based selection in the Express Entry system allows for targeted invitations to candidates who meet specific economic priorities. This approach is designed to align immigration with labour market needs.

There has been a noticeable shift in public sentiment regarding immigration, with rising concerns about the impact of high immigration levels on housing and public services. This has influenced the government's decision-making process regarding immigration targets, said immigration analysts.

While policymakers are tasked with balancing immediate infrastructural challenges against the long-term economic benefits of immigration, critics warn that reduced targets could lead to labour shortages in essential sectors, potentially hindering economic growth.

The federal government’s recent immigration policy changes are likely to have significant implications for skilled workers and businesses, said immigration lawyer Jatin Shory.
“As the U.S. moves toward protectionist policies, Canada must differentiate itself as a pro-business, pro-immigration destination. A strategic, well-structured immigration system can attract top global talent that might otherwise be deterred by restrictive U.S. policies,” he said.
“In light of these adjustments, the need for skilled workers will be even more urgent and businesses must act quickly to secure the talent necessary to adapt to the changing landscape.”