The plan signals a strategic reset:

• Permanent residence (PR) numbers will be held steady, while
• New temporary resident admissions (including students and workers) will be cut significantly, with the federal government aiming to reduce Canada’s overall temporary resident population to under 5% of the total population by the end of 2027.

For employers, HR teams and foreign nationals, this means a more selective and tightly managed Canadian immigration system.

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Key Immigration Targets for 2026–2028

Permanent Residents

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Under the 2026–2028 immigration plan, Canada expects to welcome:

• 380,000 new permanent residents in 2026
• 380,000 in 2027
• 380,000 in 2028

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The government is therefore holding the cap at 380,000 per year, rather than scaling back the 2027 target as had previously been floated. Within these totals, Canada continues to prioritise economic immigration (for example through Express Entry and provincial nominee programs). By 2027–2028, around 64% of all permanent resident landings are expected to come through economic streams, favouring applicants with in-demand skills, Canadian work experience and education.

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Temporary Residents: Students and Workers

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The most striking change in the plan is on the temporary resident side. IRCC has set the following intake targets for new temporary residents (a category that includes international students and temporary foreign workers):

• 2026: 385,000 new temporary residents
• 2027: 370,000 new temporary residents
• 2028: 370,000 new temporary residents

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This is a sharp reduction compared with 2025, when planned admissions for temporary residents stood at 673,650.

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These caps will apply to individuals entering Canada under:

• The International Mobility Program (IMP)
• The Temporary Foreign Worker Program (TFWP)
• Study permit pathways for international students

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The message is clear: temporary entry will be considerably more selective, even as Canada keeps permanent immigration levels stable.

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Canada’s “Two-Stage” Immigration Model

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The 2026–2028 plan continues to reinforce Canada’s two-step immigration approach:

1. Stage One – Temporary Status
   
   • Individuals first arrive as temporary residents, most commonly as international students or temporary foreign workers.
2. Stage Two – Permanent Residence
   
   • Eligible candidates then transition to permanent residence through economic or other immigration programs, often leveraging Canadian work or study experience.

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At the same time, the federal government is:

• Tightening the intake of new temporary residents, and
• Keeping permanent residence numbers steady,

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in an effort to maintain immigration at levels considered “sustainable” given pressures on housing, healthcare, infrastructure and other public services.

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There are also indications that up to 33,000 work permit holders could move from temporary to permanent statusbetween 2026 and 2027 through targeted transition measures, with more operational detail expected in future IRCC announcements.

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International Students: Still Important, But Under Tighter Controls

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International students remain a central part of Canada’s immigration and labour strategy, but their share of temporary resident admissions will be slightly reduced under the new plan.

• From 2026 to 2028, students are expected to represent around 40% of new temporary resident arrivals, down from approximately 45% in 2025.

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This policy shift comes on top of earlier measures affecting:

• Study permit approvals,
• Post-Graduation Work Permit (PGWP) eligibility, and
• The linkage between programs of study and Canadian labour market priorities.

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The practical impact is that entry for new international students will be more selective, particularly:

• At the undergraduate level, and
• In programs that do not clearly align with sectors where Canada faces skills shortages.

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For education providers and employers that rely on graduates from Canadian institutions, it will be increasingly important to:

• Track program eligibility and PGWP rules, and
• Align recruitment with labour-market-driven programs and institutions.

What the 2026–2028 Plan Means for Employers

For organisations hiring or relocating personnel to Canada, the new Immigration Levels Plan has several important implications.

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1. More Predictable Permanent Residence Opportunities

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With permanent resident admissions fixed at 380,000 per year from 2026 to 2028, employers gain:

• Greater predictability around PR intake volumes; and
• Continued emphasis on economic streams that reward Canadian experience and in-demand skills.

Businesses should continue to treat permanent residence pathways as a core retention tool for high-value employees, especially those working in high-demand occupations and priority sectors.

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2. Increased Pressure on Temporary Worker Routes

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The combined ceiling on temporary residents means:

• More competition for spots under both the International Mobility Program (IMP) and the Temporary Foreign Worker Program (TFWP)
• A likely rise in processing times,
• Potentially stricter enforcement of program conditions and compliance obligations.

Employers should anticipate closer scrutiny of:

• Job offers and wage levels,
• Labour Market Impact Assessments (LMIAs) where required, and
• Record-keeping and audit readiness.

Early workforce planning and robust supporting documentation will be critical.

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3. Evolving Student and Graduate Talent Pipelines

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As student intake is calibrated more closely to labour market needs, the flow of international graduates into the Canadian workforce will look different:

• The overall pool may grow more slowly than in past years,
• But those who do arrive are more likely to be trained in priority fields such as STEM, healthcare, skilled trades and green economy roles.

Employers should:

• Strengthen partnerships with targeted academic programs and institutions, and
• Monitor which fields of study continue to provide strong PGWP routes and pathways to economic permanent residence.

Considerations for Foreign Nationals

For individuals exploring work, study or permanent residence in Canada, the 2026–2028 Immigration Levels Plan suggests:

• Permanent residence remains attainable, but selection will increasingly favour candidates who:
  
  • Have Canadian work or study experience, and
  • Possess skills that match priority occupations.
• Temporary entry will be more competitive, especially for:
  
  • Lower-skilled roles, and
  • Study programs not closely linked to identified labour needs.
• Those already in Canada on a temporary basis may benefit from targeted transition measures to permanent residence, particularly work permit holders in sectors facing long-term skills shortages.

Action Points for Businesses

To prepare for the new immigration environment in 2026–2028, employers may wish to:

1. Audit Canadian Talent Dependencies
   
   • Identify roles that rely on temporary foreign workers or international graduates, and
   • Assess exposure to reduced temporary caps and tighter admission criteria.
2. Develop PR-Focused Talent Strategies
   
   • Where appropriate, support key employees in pursuing economic permanent residence, thereby:
     
     • Reducing reliance on repeated work permit renewals, and
     • Providing a more secure status for long-term workforce planning.
3. Collaborate Closely With Immigration and Tax Advisors
   
   • Given the pace and complexity of regulatory change, proactive engagement with immigration counsel and tax professionals can help structure:
     
     • Assignments,
     • Hiring, and
     • Compliance processes
       in line with the new Levels Plan.
4. Track Program-Level Policy Changes
   
   • Beyond headline targets, monitor ongoing updates to:
     
     • LMIA requirements,
     • PGWP policies, and

Provincial nominee program criteria, as these will significantly influence how the plan is implemented in practice

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Contact and Disclaimer

Should you have any questions regarding the above information, or require assistance with your immigration or global mobility matters, please don’t hesitate to contact our legal team at Hudson McKenzie. You can reach us by email at londoninfo@hudsonmckenzie.com or by telephone at +44 (0) 20 3318 5794.

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For office locations, please visit our Our Offices page.

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The information provided in this blog is for general guidance only and does not constitute legal advice.