Canada should reduce its annual immigration targets and focus on fixing a system that has continued to “move in the wrong direction,” says think tank

C.D. Howe Institute . The federal government currently aims to add about 395,000 permanent residents in 2025, 380,000 in 2026 and 365,000 in 2027, which is a big drop from Ottawa’s 2024 target of about 485,000.

But C.D. Howe’s Immigration Targets Council wants the cuts to go deeper, recommending targets of 365,000 newcomers in 2026, 360,000 in 2027 and 350,000 in 2028.

“This number is the median,” Parisa Mahboubi, a senior policy analyst at the C.D. Howe Institute and convener of the council, said. “Some members believe that the government’s current target is fine, while others think that we should move towards the more stable historical rate (which was lower)

”  She said the group of academics and analysts considered the economic situation, specifically the

labour market , and the government’s goal of reducing the number of temporary residents before making their recommendations.

Immigration plays a key role in Canada’s economy and Ottawa annually announces the number of newcomers the country aims to provide permanent residency status to. Many newcomers are often already in the country as temporary residents, such as students and foreign workers with permits.

The council said there’s a need to focus on the earnings potential of immigrants as opposed to just focusing on “meeting numeric” targets.

“Immigration policy should raise average human capital, rather than focusing narrowly on filling short-term labour market gaps, which prevents wage increases and capital investment to enhance productivity, or meeting non-economic objectives such as increasing Francophone immigration outside Quebec,” the report said.

The council also said the country’s immigration policy should be “transparent, predictable and oriented toward long-term prosperity” to ensure that economic immigrants have strong skills, earnings potential and integration prospects.

In that regard, it criticized the category-based selection system that Ottawa introduced in 2023, which gives special preference to

certain candidates in the Express Entry system due to specific attributes such as occupation or language.

Most temporary residents and foreigners living outside Canada try to enter as skilled workers and the Express Entry system provides them with points for their education level, work experience, English and French language proficiency, age and other factors.

For example, applicants under 30 receive the highest possible number of points in the age category. Applicants also receive points for Canadian educational degrees and work experience.

The higher the applicant’s score — out of a total of 1,200 — the higher their chances of becoming permanent residents, which eventually leads to citizenship. The system is designed to attract young, skilled people from around the world.

But the category-based system allowed Ottawa to bypass the points system and set lower cut-off scores for certain groups, such as tradespeople, engineers, health-care workers and French speakers, by conducting separate immigration draws for them.

“By creating category-based selection, we are losing some top talents,” Mahboubi said. “Some of the objectives of the system are not core around economic objectives.”

The C.D. Howe council also said it’s important to have fast-track pathways and policies in order to attract top-tier global talent.

”For high-profile research leaders, this should include pathways that allow them to bring their teams,” the report said.

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