According to Budget 2025, Canada is preparing to launch a new initiative that will enable up to 33,000 foreign workers to transition from temporary work permits to permanent resident (PR) status between 2026 and 2027, as part of the forthcoming Immigration Levels Plan.

The plan will also feature several key adjustments:

  • Temporary resident admissions will be reduced to 385,000 in 2026 — a 43% drop from 2025’s target of 673,650.
  • International student admissions are projected at 155,000 for 2026, down 49% from 305,900 in 2025.
  • Temporary foreign worker admissions will be capped at 230,000, marking a 37% decrease from 2025’s target of 367,750, but an 8% rise compared to last year’s 2026 target (210,700).
  • Protected Persons in Canada will be granted PR status over the next two years.

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The permanent residence target for 2026 will stay fixed at 380,000, consistent with last year’s plan. Of this, 64% of PR admissions will be dedicated to economic immigration, an increase from the previous 59%.

For 2027, the provisional target for permanent residents will be 380,000, up 4% from the 2027 notional target of 365,000 outlined in the prior plan. The framework will also take into account “industries and regions affected by tariffs, along with the distinct needs of rural and remote communities.”

The Liberal minority government, led by Prime Minister Mark Carney, presented Budget 2025 in Parliament on November 4, 2025. More details on Canada’s immigration framework are expected when the Minister tables the 2025 Annual Report to Parliament on Immigration.

Decline in Temporary Residence Targets

The lower temporary resident targets for 2026 indicate a strategic policy shift, though not necessarily an immediate change in outcomes. Despite higher 2025 targets, actual admissions have been significantly below expectations.

From January to August 2025, Canada admitted just 154,515 temporary foreign workers (42% of the annual target) and 89,430 international students (29% of the target).

Changes to the Temporary Foreign Worker Program (TFWP)

Prime Minister Carney has signaled upcoming reforms to the Temporary Foreign Worker Program, emphasizing a “more targeted approach focused on specific sectors and regional labor needs,” as stated in a September 10, 2025 address to the Liberal caucus in Edmonton.

Budget 2025 does not specify how admissions will be divided between the TFWP and the International Mobility Program (IMP). Historically, the IMP has accounted for the majority of work permits. For instance, in 2025, targets included 285,750 under the IMP and 82,000 under the TFWP.

The new plan is expected to raise combined targets for 2026, with total worker admissions projected at 230,000, up from the 210,700 outlined in last year’s plan.

Permanent Residence Admissions Targets

The upcoming plan proposes minimal revisions to PR admissions for 2026. The overall target will remain at 380,000, with the following distribution:

  • Economic class: 239,800 (up from 229,750)
  • Family reunification: 84,000 (down from 88,000)
  • Refugee and humanitarian: 56,200 (down from 62,250)

Understanding the Immigration Levels Plan

The Immigration Levels Plan outlines three-year admission goals for both temporary and permanent residents. While the first-year targets are confirmed, those for the subsequent two years are provisional and may change.

Last year’s plan was the first to introduce temporary resident admission targets and to reduce permanent resident targets by 20%, from the earlier 500,000 per year.

Under the upcoming plan, the projected top-level PR targets will be:

  • 2027: 380,000 (up from 365,000)
  • 2028: 380,000

For temporary residents, the indicative targets for both 2027 and 2028 will be 370,000 annually, including 220,000 foreign workers and 150,000 international students.

This represents a significant reduction from the prior plan’s figures (516,600 for 2026 and 237,700 for 2027), primarily due to lower international student intake targets, which had previously been set at 305,900 per year.

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