Canada's Immigration Slowdown Threatens Economic Growth and Nation-Building Ambitions

Canada's immigration slowdown has become a hindrance to its economic growth and nation-building ambitions. The country's mood of defiant nation-building has made it necessary to rev up its immigration engines, but doing so without blowing everything up again is a challenge.

The slowdown was engineered in 2025 with the launch of the Carney government's Immigration Levels Plan, which restricted targets for 2025-27 and tightened rules. This was a response to the stalled economy during the early Trump crisis and the post-pandemic overshoot of provincial temporary-worker and student visas that created a spike in the non-permanent resident population.

An analysis by the C.D. Howe Institute found that raising the permanent-immigration levels from 0.9% to 1.1% of the population annually would increase annual GDP growth rates by around 33%. The Bank of Canada echoed this finding, concluding that current weak population-growth levels will shave an average of 0.2 percentage points per year off Canada's output growth.

The major drop in international-student visas has deprived Canada of its best source of advanced skills and investment. To avoid a repeat of the temporary-worker overpopulation crisis, the system needs to be adjusted to make permanent family immigration the norm.