Temporary Residents Cap 2025–27: Advice for Students & Workers

Canada’s recent policy shift limiting the number of temporary residents between 2025 and 2027 has stirred deep concern among international students, foreign workers, and employers alike. As the federal government seeks to reduce its reliance on temporary immigration streams, people are left wondering how this cap will affect their future, status, and opportunities.

Whether you’re already in Canada or planning to come soon, understanding your position—and your options—matters more than ever. In this blog, we break down what the cap means, who it affects, and how you can move forward with clarity and confidence.

What Is the Temporary Residents Cap?

In early 2025, the federal government announced its intention to gradually reduce the number of temporary residents in Canada to 5% of the total population by 2027. As of 2023, that percentage stands at 6.2%, translating to about 2.5 million people.

The plan will reduce that number by approximately 20% over the next three years. The cap includes:

• International students
• Temporary foreign workers
• Asylum seekers awaiting decisions

The rationale behind this shift includes easing pressure on housing, healthcare, and labor markets, all of which have felt the effect of the rising population.

But while the government’s objective is broad, the immediate impact is sharply personal—for the student unsure about renewing their study permit or the worker counting on a pathway to permanent residency.

Students: What You Need to Know Now

If you're studying in Canada or plan to apply for a study permit soon, the new cap may affect both your chances of approval and your long-term future in the country. Here’s what you should watch for:

Fewer Study Permits Approved

Immigration, Refugees and Citizenship Canada (IRCC) has already tightened criteria for post-secondary students, particularly for non-degree programs or private colleges. In 2024, the federal government introduced a new requirement: a provincial attestation letter (PAL) for new international student applicants. This remains in force and will likely become more selective as the cap takes hold.

As provinces face individual quotas for international students, the approval rate for study permits is expected to decline.

Choose Your School Carefully

The institution you choose matters more than ever. Publicly funded colleges and universities with established reputations and funds for international students are more likely to retain strong approval rates.

For example, students applying to programs that lead to skilled employment in high-demand sectors—like healthcare, engineering, and IT—may still have good prospects under the new cap.

Private institutions offering short-term or non-labor-market-focused programs may see greater scrutiny.

Post-Graduation Work Permit (PGWP) Changes

The Post-Graduation Work Permit program has also been affected. In 2024, students from private-public partnership colleges are no longer eligible for PGWPs, and new limits could be added in the coming years to manage inflow. If your plan includes working in Canada after graduation, research your program’s PGWP eligibility before applying.

Workers: Adapting to a Tighter Labor Market

The cap has major implications for those holding or seeking temporary work permits. Employers relying on foreign talent—and the workers they hire—should prepare for a more selective system.

Labour Market Impact Assessments (LMIAs)

Expect LMIAs to become harder to obtain. While high-demand occupations may still see approvals, service-sector jobs or low-wage positions will face greater resistance.

If you're currently on a closed work permit through the Temporary Foreign Worker Program (TFWP), it’s important to keep track of your permit expiry date and talk to your employer about long-term plans. Extension approvals may be limited.

International Mobility Program (IMP)

The IMP—which includes open work permits for spouses of skilled workers and postgraduate students—may also be tightened. IRCC has signaled it will begin applying greater scrutiny even to open work permit streams, especially where they are not tied to a clear labor market benefit.

Prioritize Permanent Residency Pathways

If you're a temporary worker eyeing permanent residency, now is the time to act. Programs like Express Entry, Provincial Nominee Programs (PNPs), and the Atlantic Immigration Program remain open, but competition is expected to intensify.

Focus on improving your Comprehensive Ranking System (CRS) score through:

• Higher language test scores (IELTS/CELPIP)
• Canadian work experience in a TEER 0, 1, 2, or 3 occupation
• Provincial nomination opportunities
• Educational credentials

Consulting an experienced immigration firm like Kingwell Immigration Law can help you chart a realistic path forward and avoid costly missteps.

Impact on Employers and Communities

While the cap targets temporary residents, the ripple effects extend to Canadian businesses, universities, and regional economies.

Employers in the agriculture, construction, food service, and healthcare sectors—many of which rely on temporary foreign labor—may face labor shortages and productivity losses. Schools could see reduced tuition revenue and less diversity in their student bodies.

Rural communities that have benefited from immigration-driven growth may experience setbacks if temporary-to-permanent transitions slow down.

Some provinces are pushing back, urging the federal government to grant them more autonomy in selecting temporary workers to meet regional needs. For example, Alberta and Ontario have proposed pilot programs to better align federal caps with local labor demands.

Final Thoughts

The temporary residents cap from 2025 to 2027 marks a turning point in Canada’s immigration story. While the policy aims to balance population growth with housing and infrastructure limits, it introduces real challenges for international students, foreign workers, and their families.

For personalized guidance on how the new cap affects you or your family, reach out to Kingwell Immigration Law. With the right support, your Canadian dream can still be within reach—even in a time of change.