Prime Minister Justin Trudeau's administration is cutting back on the number of new immigrants for the first time in over ten years, marking a shift for a country that has traditionally welcomed high immigration levels.

Canada plans to lower its annual target for permanent residents to approximately 395,000 next year, a 21% reduction from the previous goal of 500,000 set last year, according to an anonymous government official discussing unpublished matters. The target is expected to drop further to about 380,000 in 2026 and 365,000 in 2027. The National Post first reported this news, and Immigration Minister Marc Miller will present the final figures to Parliament on Thursday morning.

Permanent residents play a crucial role in Canada’s immigration strategy, which aims to attract young, highly educated workers to address the aging workforce. The significant reduction to pre-pandemic levels indicates the government is scaling back its immigration ambitions.

Following the easing of travel restrictions in 2022, a large influx of immigrants resulted in unprecedented population growth. This surge—akin to adding San Diego’s entire population to a nation slightly larger than California in just one year—exacerbated housing shortages, drove up rental prices, strained public services, and increased unemployment rates.

These challenges have undermined the long-held belief that high immigration levels give Canada an advantage in the global competition for young workers needed to prevent economic decline. A recent survey revealed that Canadians haven't opposed immigration levels this strongly in 25 years.

However, permanent residents have not comprised the majority of recent immigrants. Instead, significant numbers have been driven by newcomers entering the country on temporary study and work visas, often with the intention of seeking permanent residency. This surge in temporary residents has led to increasing criticism of Trudeau's government for losing control over immigration.

Trudeau and Miller will also announce the country’s first annual target for temporary migrants on Thursday. The government has already committed to significantly reducing the temporary resident population over the next three years by limiting international student admissions and tightening restrictions on foreign labor.

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