Mexican and Guatemalan workers pick strawberries at a farm in Pont-Rouge, Que., in August, 2021. Analysts are warning against more abrupt changes to immigration policies after rapid swings over the past couple of years.Jacques Boissinot/The Canadian Press
A tariff-induced economic slowdown has reignited a debate on immigration in Canada as some politicians accuse businesses of hiring cheap foreign workers over youth in their communities.
Both federal Conservative Leader Pierre Poilievre and B.C. Premier David Eby have recently called for scrapping or severely restricting the Temporary Foreign Worker Program, raising alarm bells over the number of work permits being issued as unemployment among young people steadily rises.
Many economists agree that the program needs to be significantly scaled back, particularly its low-wage stream.
But after rapid swings in immigration policies over the past couple of years, analysts are warning against more abrupt changes. Instead, they’ve been advocating for a broader reform of Canada’s immigration system that prioritizes long-term economic prosperity.
Opinion: Canada’s Temporary Foreign Worker Program needs deep reform
“We need to look at what the data tells us, what we learned in the past, and use that instead of just responding to debates quickly,” said Parisa Mahboubi, a senior policy analyst at the C.D. Howe Institute.
“There is no doubt that we need to reduce reliance on temporary foreign workers, and it should start with scaling back on low-skilled occupations under the Temporary Foreign Workers program, but in terms of shutting [it] down, we have to include some policies to prepare employers for that,” she added.
After facing sharp criticism over exceptionally strong population growth, then-prime minister Justin Trudeau’s government made several immigration policy changes to stem the flow of people coming into the country.
These changes included a temporary cap that reduced study permits for international students by more than 40 per cent and a five-per-cent target for the proportion of non-permanent residents relative to the population. The federal government also lowered its target for permanent-residency spots from 500,000 to just under 400,000.
The new restrictions have undoubtedly helped halt population growth, an outcome many have welcomed. (Canada’s population was stagnant in the first half of 2025 after reaching a whopping 3-per-cent annual growth rate in 2023.)
Prime Minister Mark Carney has committed to maintaining the immigration restrictions put in place by his predecessor, but it’s unclear whether the government is planning further changes to the system. The federal government will have an opportunity to demonstrate whether it plans to make adjustments in the coming immigration levels plan, which is set to be tabled by Nov. 1.
But Ms. Mahboubi said the discussion on immigration has focused too much on how many, rather than the type of people brought into the country.
The recent influx in immigration wasn’t only a numbers problem. Canada was letting in hundreds of thousands of international students a year, most of whom were headed to colleges that the federal government itself accused of using international students as “cash cows.”
Ottawa was also approving tens of thousands of work permits for low-wage workers in a bid to fill labour shortages, raising concerns that businesses were using the TFW program to avoid paying higher wages to domestic workers.
Mikal Skuterud, an economics professor at the University of Waterloo who specializes in immigration policy, said although it was necessary to reduce the number of non-permanent residents in the country, caps are not the solution.
Instead, he argues that reforming Canada’s permanent-residency system to make it more stringent, transparent and predictable would also help curb the number of temporary residents while also improving the selection process for immigrants. That’s because it would reduce the number of people trying to get to Canada by any means, including paying tens of thousands of dollars for an education from a dodgy postsecondary institution, just to get a chance at permanent residency, he said.
“I really do believe that the overwhelming growth that we’ve seen over the past 10 years has been a movement toward two-step immigration, where people believe, rightfully, that this is the pathway to PR status,” said Prof. Skuterud.
The way Canada selects permanent residents has changed over the past 10 years. The federal government increased the number of PR spots allocated to the provincial nominee program, which gives provinces the ability to select immigrants based on their own criteria. Provincial nominees accounted for 35 per cent of economic immigrants in 2019, up from just one per cent in 2000.
(The federal government then slashed the PNP allocation by half in 2024 as part of its new immigration levels plan.)
In 2023, the federal government also introduced category-based selection to the express-entry program, which gives applicants from specific career backgrounds priority. It also favours French speakers as the federal government seeks to increase the share of francophones living outside of Quebec.
Many economists have been critical of these changes, arguing that the emphasis on filling labour shortages comes at the expense of choosing the highest-skilled candidates.
“We need to update the way we select immigrants. It should really be about earnings in Canada,” said Christopher Worswick, an economics professor at Carleton University.
Prof. Worswick argues that there’s a fiscal consequence to category-based selection as well. If the federal government prioritizes filling labour shortages over selected workers based on the earnings potential, the federal government will rake in less tax revenue.
“That’s going to, on net, hurt the tax base quite a bit, which means you still have the same number of people who need health care and retirement pensions, but you’ll have a lot less tax revenue to pay for those services,” he said.
Prof. Skuterud said a key solution to Canada’s immigration woes is to consolidate the economic pathways to permanent residency so that the only way to be accepted is through the Comprehensive Ranking System, a points-based system used to assess and rank economic applicants for permanent residency.
“What you want is a system that’s based on rules … and that’s not a discretion-based system that gets politicized and gets influenced by lobbyists,” he said.