By Nojoud Al Mallees and Laura Osman
The government aimed to welcome 500,000 new permanent residents in 2025 and 2026.
The target for next year will instead be 395,000 new permanent residents, and this figure will drop to 380,000 in 2026 and 365,000 in 2027.
“In the tumultuous period we experienced after the pandemic, between meeting labor needs and maintaining population growth, we did not find the right balance,” Trudeau said Thursday morning.
“Through the plan we are announcing today, along with previously announced measures, we are making our immigration system work better.
The move follows significant criticism of the Liberal government’s increase in immigration and the impact of high population growth on housing availability and affordability.
The federal government estimates that Canada’s population will decrease slightly by 0.2% in 2025 and 2026, before returning to growth of 0.8% in 2027.
Statistics Canada recently reported that the population on July 1 was 3 percent higher than a year earlier. Between 1998 and 2018, annual population growth was less than 1.5%.
The Canadian Press reported in January that internal documents obtained through a freedom of information request showed federal officials warned the government two years ago that a surge in immigration could affect the housing affordability and services.
But Trudeau said Thursday that businesses and provinces are also partly to blame for the immigration system losing control.
“Far too many businesses have chosen to abuse our temporary measures, exploiting foreign workers while refusing to hire Canadians for fair pay,” Trudeau said.
“Meanwhile, under provincial oversight, some colleges and universities are welcoming more international students than communities can accommodate, treating them as a disposable way to line their own pockets. This is unacceptable and must change.
Ottawa also aims to reduce the proportion of temporary residents – which includes temporary foreign workers and international students – to 5 per cent of the population over the next three years, from 7.2 per cent in July.
The federal government says this means the non-permanent resident population will decrease by 445,901 in 2025, by 445,662 in 2026 and increase slightly by 17,439 in 2027.
Business groups reacted negatively to the news, arguing it would hurt employers’ ability to fill labor shortages.
The Canadian Chamber of Commerce said the plan is “disappointing for businesses across the country who, in recent months, have had to deal with abrupt and constant changes to their immigration policies.”
“A significant reduction in our labor pool will impact thousands of employers across Canada who are struggling to find the workforce they need to operate and grow,” he said. the chamber said in a statement.
The Canadian Federation of Independent Business said the “drastic reduction” in targets would hurt businesses which, despite rising unemployment, face hundreds of thousands of vacant positions.
The Bank of Canada’s recent Business Outlook Survey reveals that labor shortages are now below the historical average.
The Liberal shift on immigration follows a rapid increase in the number of new permanent residents in Canada and a growing number of people coming to the country on a temporary basis. Federal ministers acknowledged this had put pressure on housing, health care and affordability.
NDP Leader Jagmeet Singh and Conservative Leader Pierre Poilievre both responded by accusing Trudeau of ruining the immigration system in the first place.
“We cannot believe Trudeau’s last minute pre-election change of heart. He can’t fix the immigration system he broke,” Poilievre said.
Singh said Trudeau’s announcement is a “minor 20 per cent adjustment” and does not address the “serious challenges” Canadians face in housing and health care.
Immigration Minister Marc Miller said the lower numbers would help reduce the housing shortage, estimating that by 2027 Canada will need to build 670,000 fewer homes to close the gap.
The federal government plans to prioritize temporary residents for permanent residency, expecting them to fill more than 40% of permanent residency spots.
“These people constitute a pool of young workers. They’re competent, they’re there,” Miller said.
“They have started their integration process and it doesn’t impose the additional housing, health care and social service requirements that we see with someone coming directly from another country. That makes sense.
The federal government is also increasing its admission target for French speakers outside Quebec to 10% in 2027, compared to 6% this year.
In a new report released by BMO, senior economist Robert Kavcic writes that the plan “will provide relief to the economy and infrastructure that have become almost debilitating in recent years.”
In addition to easing pressure on property prices and rents, Kavcic says slowing population growth will also help reduce underemployment in the labor market.
As high interest rates cooled the economy, Canada’s unemployment rate climbed to 6.5% in September, up one percentage point from a year earlier.
Young people and newcomers have felt the brunt of the labor market slowdown, facing significantly higher unemployment rates than other workers.
This report by The Canadian Press was first published October 24, 2024.
— With files from Rosa Saba and David Baxter
This is a corrected story. A previous version said Statistics Canada reported the population as of July 1 was 3.2 per cent higher than a year earlier.
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Last modification: October 24, 2024