Recent years have seen an unprecedented increase in Canada’s non-permanent resident population, far surpassing increases in annual admissions of new permanent residents. The unbalanced growth in Canada’s temporary and permanent migration inflows will inevitably result in a growing undocumented population and forced deportations. Both developments risk inflaming Canada’s immigration politics and undermining public confidence in the immigration system.
It is imperative that the government take immediate steps to stem the continuing growth in foreign student and temporary foreign worker entries.
Several factors have contributed to the non-permanent resident (NPR) population surge, including ad-hoc programs aimed at expanding eligibility for permanent resident (PR) status, increasing postsecondary reliance on international student tuition revenue and eased employer access to temporary foreign workers, most notably those in low-wage occupations.
Statistics Canada estimates that by the third quarter of 2023 Canada’s NPR population had reached 2.2 million, while entries of new permanent residents remained below 500,000 and which the government has announced will stabilize in 2025. The tightening bottleneck in temporary-to-permanent residency flows is, in fact, worse, because most PR slots continue to be filled by applicants residing abroad, not from Canada’s NPR population.
A key factor driving the growth in NPR inflows is the government’s repeated announcements of ad-hoc programs aimed at easing the pathway to PR status for lower-skilled migrants who would otherwise struggle to clear the hurdle of the Express Entry skills-based points system. Allocation of PR slots has increasingly become a lottery incentivizing large numbers of migrants to try their luck at obtaining Canadian PR status.
But given the limited number of PR admissions, large numbers of justifiably hopeful NPRs will be unable to realize their dreams. As their study and work permits expire, many will be unable or unwilling to return to their home countries. These migrants will become increasingly vulnerable to workplace exploitation, distorting wage outcomes in lower-skilled labour markets, and poverty, which government supports are unable to address because of their ineligibility.
Canada urgently requires a multipronged strategy to stem the continuing growth of the NPR population and restore the stability and integrity of the immigration system. In our view, policies should be aimed at augmenting migrants’ own incentives to seek NPR status in Canada.
On the international student front, we recommend reintroducing the cap on foreign students’ off-campus work hours at 20 a week; it was waived in October, 2022, and recently extended to April 30, 2024. The punting of this issue down the road is unhelpful in restoring predictability for prospective foreign students. Study permits have become de facto work permits incentivizing migrants whose primary objective is accessing Canadian jobs, not human capital investments.
We also recommend restricting study permits to institutions of a certain standard. Too many private colleges are essentially used as stepping stones to residency. Designated learning institutions whose students are currently ineligible for postgraduation work permits should also be ineligible for study permits. The government should also seek to undesignate institutions based on the measured immigration and labour market outcomes of their graduates. Moreover, these metrics should be regularly published by Immigration, Refugees and Citizenship Canada (IRCC) to help prospective migrants make informed decisions and to combat false dreams pushed by education recruiters.
On the temporary foreign worker front, the government must reconsider extended measures allowing, for example, 30 per cent of the work forces of employers in specific industries to be composed of low-wage temporary foreign workers. Stemming the growth in the low-wage stream of the Temporary Foreign Worker Program and restoring the pre-2020 hiring regulations would recognize recent evidence of the adverse effects of this program on wages and local unemployment rates.
Most important, the government needs to bring back predictability in its system for allocating PR admissions in the economic-class applicant pool. Though well-intentioned, ad-hoc programs aimed at easing the pathway to PR status are contributing to growth in TR inflow. IRCC needs to return to relying on the Comprehensive Ranking System (CRS) for allocating PR admissions, as it did before 2020. Given the transparency of the CRS “points system” and a stable CRS cutoff over time, unsuccessful applicants can see what human capital investments they need to be successful, thereby advancing the objectives of our skilled immigration program.
If these policy levers are collectively applied, they can stem growth in Canada’s NPR population, restore fairness and transparency in the PR system and secure the immigration system’s integrity and sustainability. In doing so, we can ensure that Canada continues to be a welcoming and prosperous country for all.
Parisa Mahboubi is a senior policy analyst at the C.D. Howe Institute. Mikal Skuterud is a professor of economics at the University of Waterloo, director of the Canadian Labour Economics Forum and a fellow-in-residence of the C.D. Howe Institute.
