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Earlier this year, in our Blog postNavigating Winds of Change: Realigning with Canada's Revised Immigration Framework for 2025 and Beyond, we examined the federal government's shift toward a more restrictive immigration policy. The 2025-2027 Immigration Levels Plan, introduced by then-Minister Marc Miller, marked a significant departure from previous years, with both permanent and temporary resident targets reduced in response to mounting pressures on housing, infrastructure, and social services. At the time, we noted that the targets for 2026 and 2027 were projections, subject to annual review and adjustment to reflect evolving labour market needs.
Now, just months later, the federal government has announced a notable policy adjustment. On October 16, 2025, Minister of Immigration, Refugees and Citizenship Lena Metlege Diab confirmed that several provinces, including Nova Scotia and Manitoba, will receive increased allocations under the Provincial Nominee Program (PNP). This move comes after a year of sharp reductions and sustained advocacy from provincial governments and business leaders concerned about the impact of lower immigration on local economies.
A Year of Restriction and Its Consequences
The 2025-2027 Immigration Levels Plan set out a clear intention to "cool off" Canada's rapid population growth. Permanent resident admissions were set at 395,000 for 2025, with further reductions to 380,000 in 2026 and 365,000 in 2027—a 21% decrease from the 2024 target of 500,000. For the first time, the Plan also included explicit targets for temporary residents, aiming to reduce their share to 5% of the total population by 2027. This meant capping study permits, tightening work permit eligibility, and reducing temporary resident arrivals from 673,650 in 2025 to 516,600 in 2026.
The rationale was to stabilize population growth and ease pressure on public services, while prioritizing the transition of temporary residents already in Canada to permanent status. Over 40% of new permanent residents in 2025 were expected to be former international students or temporary workers, with Express Entry and the Canadian Experience Class (CEC) focusing on those with Canadian work experience, French language skills, or expertise in key sectors such as healthcare, education, and skilled trades.
However, the immediate effect of these reductions was felt acutely by employers and provincial governments. Sectors already facing labour shortages—construction, healthcare, and skilled trades—struggled to fill critical roles. Employers encountered higher refusal rates and more demanding requirements for both the CEC and PNP streams, while provinces saw their PNP allocations slashed. For example, Nova Scotia's PNP allocation was halved from 3,570 to 1,785, and its total immigration allocation dropped from 6,300 in 2024 to 3,150 in 2025. Similar cuts were reported in Manitoba, New Brunswick, Newfoundland and Labrador, Saskatchewan, and Alberta.
Provincial Pushback and Federal Response
The backlash from provinces was swift and coordinated. Provincial ministers and business groups argued that the cuts were "short-sighted" and risked undermining economic recovery, especially in regions outside major urban centres. Employers warned of project delays and lost opportunities due to the inability to recruit needed talent.
In response, Minister Diab's October announcement signals a partial reversal. While the federal government remains committed to reducing overall immigration, it has agreed to restore and, in some cases, increase PNP allocations for several provinces. Nova Scotia, for instance, will receive a "significant" boost—its allocation reportedly increased by 559 spots, bringing the total to 3,709. Manitoba has secured an additional 1,500 nominations, and other provinces are finalizing similar agreements.
This adjustment is intended to give provinces more flexibility to address local labour shortages and support regional economic growth. The PNP allows provinces to nominate candidates with the skills and experience most needed in their communities, making it a vital tool for economic development outside Canada's largest cities.
Balancing National and Regional Priorities
Minister Diab's announcement reflects a recognition that a one-size-fits-all approach cannot meet the diverse needs of Canada's regions. While the federal government continues to emphasize the importance of managing population growth and protecting public services, it is also responding to urgent calls from provinces for more autonomy in selecting newcomers.
The restored PNP slots are expected to provide immediate relief for sectors like healthcare, construction, and trades, where shortages have been most acute. For employers, this means renewed opportunities to recruit and retain talent essential to local economies, particularly in smaller provinces and rural regions that rely heavily on immigration to sustain growth and address demographic challenges.
Ongoing Uncertainty and the Road Ahead
Despite this late-year boost, uncertainty remains for both employers and prospective immigrants. The overall reduction in permanent and temporary resident admissions has led to increased competition for available spots, higher qualifying thresholds, and longer processing times in some streams. For example, Express Entry candidates have faced rising Comprehensive Ranking System (CRS) score requirements, and the removal of points for arranged employment has made it more difficult for employers to support candidates directly. While the government has signaled that some of these changes may be temporary, no clear timeline has been provided for their potential reversal.
Provincial programs, such as the Ontario Immigrant Nominee Program (OINP), have also experienced operational challenges due to reduced quotas and unpredictable draw schedules. Employers and applicants alike must remain vigilant, as any changes in employment status or eligibility can impact ongoing applications. Regional programs, including the Atlantic Immigration Program and Rural Community Immigration Pilot, continue to offer alternative pathways, but are similarly constrained by limited quotas and evolving criteria.
Looking Forward: Flexibility and Adaptation
The federal government is expected to release its 2026–2028 Immigration Levels Plan in the coming weeks, which will set new targets for all immigration categories, including the PNP and Express Entry. This next plan will be closely watched by provinces, employers, and prospective immigrants, as it will indicate whether the recent flexibility shown by Ottawa will become a more permanent feature of Canada's immigration system.
What is clear is that Canada's approach to immigration is now characterized by a delicate balancing act: managing national priorities such as housing and social services, while responding to the urgent and diverse needs of provinces and territories. The recent increase in PNP allocations demonstrates a willingness to adapt policy in response to economic realities and regional advocacy.
As we noted in our March analysis, the evolving landscape requires employers and applicants to be proactive and informed. Navigating the new environment will demand careful planning, timely action, and a readiness to adjust strategies as policies continue to shift.
For organizations and individuals seeking to understand how these changes may affect their immigration strategies, staying up to date with the latest policy developments—and seeking tailored guidance—will be essential.
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