Canada’s non-partisan numbers watchdog expects policymakers to hit their immigration goal… sort of. A new report from the Parliamentary Budget Officer (PBO) shows Ottawa will hit its temporary resident reduction target. The analysis also reveals it’s being met by delaying implementation and reclassifying 148,000 temporary residents. The latest update presents a plan that prioritizes the optics of action over the urgency they initially conveyed.
Canada Eases Off Immigration Throttle, Delays Implementation
Following Canada’s record (and destabilizing) population growth, policymakers pledged to roll back immigration. Their 2025-2027 Immigration Levels Plan sought to limit non-permanent residents (NPRs) to 5% of the total population. It’s a significant reduction from the 7.6% peak in Q4 2024, but higher than the 3% historical norm, according to the PBO. The plan also targeted 365,000 permanent resident spots in 2027, a sharp drop from the record 484,000 in 2024.
Source: PBO.
The 2026-2028 Immigration Levels Plan tells a different story, moving the goalposts and prioritizing optics. The NPR share reduction has been delayed until “the end of 2027,” a year later than originally pitched. Permanent resident slots have also jumped 4% to 380,000 by the end of 2027. Delays aren’t surprising—over-promising and under-delivering is the gold standard in Canada … or is that the condo standard now?
In either case, the more interesting part is the accounting schemes needed to hit the new goal.
Canada Turns To Accounting Scheme To Hit Its Immigration Target
The PBO notes the “success” of the plan relies on a significant reclassification of NPRs. Canada will grant 148,000 NPRs permanent residency from 2026 to 2027. Initially, this was presented in a way to suggest it was included in the 380,000 permanent resident cap. Supplementary information obtained by the PBO reveals these spots are in addition to the stated targets. If averaged out over both years, that works out to 454,000 permanent resident admissions, a volume only surpassed in 2023 and 2024.
“We estimate that without the 148,000 additional PR admissions planned under the one-time initiatives—which reduce the NPR population without affecting the number of people present in Canada—NPRs would account for 5.3 per cent of the population at the end of 2027, exceeding the Government’s target,” writes the PBO.
It’s worth understanding the mechanics here, especially for those interested in the demand impact (e.g., housing). The reserved reclassification applies to NPRs already in Canada and their dependents. It doesn’t add to the population, as their consumption is already happening. This is mostly an issue of moving the goalposts, not one where demand stimulus is added.
2020s Population Growth Still The Largest Since The 80s, Destined To Slow
The PBO warned that the plan will lead to a drag on the country’s total population growth. It estimates population growth will be flat in 2026 and pick up “modestly” to 0.3% in 2027. It further notes that over the medium term, Canada’s population growth will stabilize “… below its historical average of 1.1 per cent per year.”
That’s equivalent to the population projection from Statistics Canada (StatCan). It’s also in line with BMO’s estimate, which argues housing demand was set to slow either way. The bank warns Millennials are at their demographic peak, an expected long-cycle issue. With the oldest now 45 years old, they’re past their family formation years, and often buy their first home in their 30s, if they’ve bought one at all. In plain English, it’s too late for them to start having kids, and their housing needs won’t evolve as fast as previous generations. When you get on the housing ladder at 40, your knees hurt too much to keep climbing.
The short-term slowdown gets a lot of attention, but its long-run impact is smaller than most think. The 2020s will still be the fastest-growing decade since the ’80s, with the long-term gap smaller than a rounding error within 50 years. There’s a reason most countries don’t try to cram in a decade of growth over three years. It didn’t curb the demographic problem, but amplified it for short-term gains for a handful of people. Those winners aren’t the temporary residents, either.
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