Canada is set to introduce some of the most sweeping immigration reforms in years, reshaping pathways for international students and temporary foreign workers (TFWs). With the release of the 2026–2028 Immigration Levels Plan and updates linked to Budget 2025, the government has signalled a major recalibration of its temporary resident programs to better match labour shortages, regional needs, and long-term population strategies.
This report breaks down the upcoming changes expected to unfold over the next year.
Also Read Canada to Reshape International Students and Workers Immigration Routes Before 2026
1. Shifting Pathways for Temporary Foreign Workers
Accelerated Transition from Temporary Status to Permanent Residency
Beginning in 2026, the federal government plans to fast-track permanent residency for up to 33,000 temporary workers across 2026 and 2027. While the full design of this transition has not yet been disclosed, Immigration, Refugees and Citizenship Canada (IRCC) confirmed that priority will be given to individuals who:
- Have established work histories in Canada
- Contribute to the tax system
- Possess skills relevant to critical labour market needs
- Demonstrate strong ties within Canadian communities
This focus aligns with the government’s recent trend: a growing share of permanent residency invitations now go to applicants with Canadian work experience. In fact, nearly two-thirds of Express Entry invitations in 2024 were issued to candidates with at least one year of eligible Canadian employment.
Possible Tightening of the Temporary Foreign Worker Program
Prime Minister Mark Carney has already hinted that the Temporary Foreign Worker Program (TFWP) will undergo a strategic overhaul in late 2025. The objective: to ensure the program is used only in areas facing genuine shortages and in industries central to economic growth.
Recent policy signals include:
- A pause on LMIA processing in any region experiencing 6%+ unemployment, implemented last year
- A proposed reduction in TFWP admissions from 82,000 to 60,000 beginning in 2026
These measures suggest that obtaining an LMIA, a mandatory document for most employer-specific work permits, may become increasingly difficult.
Sector-Focused Pathways and New Work Permit Streams
Canada is expected to launch or expand several occupation-specific pathways aimed at filling immediate labour gaps:
- Tech and Innovation Stream for U.S. H-1B Holders: A dedicated PR route targeting professionals in advanced research, healthcare innovation, and high-tech fields.
- Construction Worker Regularisation Program: Up to 6,000 undocumented workers in construction may gain access to permanent residency opportunities in 2025–2026.
- Agriculture and Seafood Processing Stream: IRCC plans to introduce a new work permit and PR pathway tailored to essential roles in farming and fish processing.
- Reopening of the Home Care Worker Pilot: Fresh intake expected in 2026, offering caregivers a stable route to PR.
Collectively, these initiatives highlight a shift toward a more targeted selection system—one that rewards hands-on Canadian work experience and sector-specific skill sets.
Related Topics
- Canadian Parliament Moves to Rein In More Immigration Powers in Border Security Bill
- Canada Rolls Out New Immigration Fee Structure Starting December 2025
- Nova Scotia Redesigns Immigration Intake With New Pool-Based Selection Model
- Canada Prepares for New PR Streams in 2026
- Ontario to Add New PR Pathways Under its PNP Program
- Canada Holds Another Major French-Focused Express Entry Draw
- IRCC Drops CRS to 531 in Surprise CEC Draw, the Lowest Since July
2. Changes Ahead for International Students
Study Permit Limits Expected to Tighten Further
For the past two years, Canada has applied a national cap on study permit applications. A new cap, covering 2026 intake volumes, which is set to be announced in January 2026.
Since the upcoming Immigration Levels Plan reduces projected new international student inflows from 305,900 to 155,000, experts expect a more restrictive cap as well.
However, Canada did not meet its 2025 student intake targets, which may soften the effect of a smaller cap on prospective students.
Graduate Students Exempt from the Cap
A major relief for higher-degree applicants: starting January 1, 2026, Master’s and PhD students will not be counted under the national study permit cap.
Additional benefits include:
- No requirement for a Provincial/Territorial Attestation Letter (PAL/TAL)
- Accelerated processing for doctoral applicants and their families—potentially within two weeks
Post-Graduation Work Permit (PGWP) Changes Coming in Early 2026
IRCC updated its PGWP rules in mid-2025, announcing that 178 academic programs would eventually lose eligibility for the PGWP. While initially scheduled for mid-2025, the government postponed implementation until early 2026.
Students planning to stay and work after graduation should therefore verify the PGWP status of their chosen program well before enrolling.
3. What These Shifts Mean for Future Applicants
For Temporary Workers:
- Those with Canadian work experience will have stronger PR prospects.
- TFWP entry may become more restrictive and sector-specific.
- Sector-based streams will increasingly shape who receives invitations for permanent residency.
For International Students:
- Competition for undergraduate and college-level study permits may increase.
- Graduate-level programs will become much more accessible.
- PGWP-eligible programs will remain a crucial factor in choosing a school.
4. A Transforming Immigration Landscape
Canada’s approach to managing temporary residents is moving toward a structured, needs-based model. By tightening intake volumes while expanding strategic pathways, the government aims to reduce system pressures, strengthen regional labour markets, and provide a more reliable transition system for those already contributing to the Canadian economy.
With many of these changes expected to take effect throughout 2025 and 2026, both students and workers planning to move to Canada or transition to permanent residency should closely follow IRCC updates to adjust their plans accordingly.
