New Canadian citizens and their families and friends at the Citizenship Ceremony in the Cirque Du Soleil performance tent in Toronto in July, 2024.Sarah Palmer/The Globe and Mail
Parisa Mahboubi is a senior policy analyst at the C.D. Howe Institute.
Canada’s immigration policy has lost its way. Once a model for attracting skilled newcomers who drove growth and innovation, the system is now consumed with chasing numeric targets and competing objectives. The result is a complex web of programs that undermine wage growth, discourage productivity investment and erode public confidence in immigration itself. A course correction is urgently needed.
According to the C.D. Howe Institute’s Immigration Targets Council, Canada’s approach needs immediate reform. Their recommendations offer a roadmap for restoring the system’s effectiveness while maintaining the levels of immigration necessary for our demographic and economic future.
The principle is straightforward: Who we select matters more than how many we admit. Immigration should raise average human capital – the skills, education and experience people bring to the labour market – not simply fill short-term labour gaps or advance non-economic goals such as regional or linguistic targets. When policy makers prioritize meeting quotas over selecting qualified candidates, they undermine the wage increases and capital investments that drive productivity growth. This approach has led us to lower standards repeatedly, flooding our system with applications from inadequately skilled candidates and compromising the overall quality of our immigrant pool.
The solution begins with streamlining economic programs and consolidating them under Express Entry as a single, transparent system for economic immigration. Within Express Entry, the Comprehensive Ranking System should remain the foundation, with all applicants meeting a clear minimum threshold. That means phasing out boutique pathways such as category-based draws or provincial programs targeting lower-skilled workers, which dilute the focus on skills and long-term success.
Express Entry itself must evolve. Education, work experience and language ability remain essential, but additional criteria would sharpen selection. Verified Canadian earnings for those with prior experience here provide a powerful signal of future success, reflecting skills, education quality and integration ability. Field of study is another important factor, ensuring credentials align with economic needs and lead to higher earnings. These improvements would encourage prospective immigrants to secure employment matching their qualifications before applying, raising the overall quality of the intake.
At the same time, the rapid growth of Canada’s non-permanent resident population must be brought under control. Ottawa should maintain its current ceiling of 5 per cent of the population in 2026, with a review in early 2027. Managing this balance requires clear, merit-based pathways for high-skilled temporary residents to transition to permanent status, while avoiding the creation of ad-hoc programs.
Temporary immigration programs also need reform. The international student system has become a backdoor to low-wage labour rather than a magnet for top global talent. Raising standards is essential: tougher admissions, stronger language and academic requirements, limits on off-campus work and stricter oversight of institutions.
Most Canadians favour scaling back immigration and temporary resident numbers, poll shows
The Temporary Foreign Worker Program demands equal scrutiny. While maintaining essential streams like the Global Talent Stream for genuine high-tech recruitment – and even creating fast-track pathways for exceptional talent in science, medicine and artificial intelligence – Canada must reduce reliance on temporary low-wage labour. Over-reliance on such workers reduces employers’ incentives to improve pay and working conditions and can trap entire industries in low-productivity cycles. Strategic reforms could include restructuring the $1,000 Labour Market Impact Assessment fee – unchanged since 2014 – by charging more for low-skill positions and escalating costs for repeat users. This would nudge employers toward training and technology investment rather than dependence on cheap foreign labour.
Canada’s asylum system also requires attention. Improving efficiency is critical to protect genuine claimants while discouraging the use of asylum as an alternative pathway to permanent residency.
Altogether, these reforms align with the council’s recommended permanent-resident admissions of 365,000 in 2026, declining modestly to 350,000 by 2028. This approach balances demographic needs with system capacity while ensuring quality selection. Crucially, policy should be guided by evidence – earnings data and other outcomes – not political whim. That would replace the ad-hoc, short-term decisions of recent years with a transparent, principled framework.
The stakes are high. Done right, immigration fuels innovation, fills genuine skill shortages and underpins long-term prosperity. Done poorly, it suppresses wages, deters investment and erodes public trust in a system that has long been a Canadian success story.
By refocusing on human capital, setting guardrails on the temporary population and simplifying economic programs, Canada can restore an immigration policy that serves both newcomers and Canadian residents.