New data indicates that the Canadian government's recent immigration cuts may be benefiting the economy. Despite promises to reduce immigration rates, the number of temporary migrants is already approaching the government's target for 2025. The Liberal government had aimed to limit immigration to 673,650 new temporary migrants by 2025 to prevent overwhelming community resources. However, a report from the Association for Canadian Studies reveals that in the first half of 2025, Canada welcomed 557,335 temporary migrants, which is 82 percent of the target.

Jack Jedwab, executive director of the Association for Canadian Studies, noted that the government is likely to meet its reduction goals primarily for international students. In contrast, it is expected to exceed targets for the temporary foreign worker program and the International Mobility Program.

A report from TD economists published recently suggests that the slowdown in immigration has already led to lower housing costs and increased job availability. The analysis estimates that without the immigration cuts, Canada's unemployment rate could have reached eight percent instead of the current 7.1 percent, according to the latest Statistics Canada figures. The report states, "The federal government’s revised immigration policy is beginning to pay dividends in returning balance to a stretched social infrastructure."

Analysts initially believed that reducing immigration would decrease consumer spending due to fewer people in the economy. However, they found the opposite to be true. The report attributes this to a shift in immigration patterns toward low-skilled young individuals who typically have less disposable income. It states, "The contribution to consumer spending from newcomers during the population surge was muted relative to past periods."

Canada has experienced some of the highest immigration rates in its history in the years following the COVID-19 pandemic. From 2022 to 2025, the country added approximately 3.1 million people, averaging 86,000 newcomers each month. This surge has been largely driven by increases in temporary immigration, including temporary foreign workers and student visa holders. Currently, the number of non-permanent residents in Canada stands at 3,024,216, significantly higher than the 1.3 million counted in 2021.

In 2023, Canada’s population growth reached three percent, six times the OECD average of 0.5 percent. The government, under former Prime Minister Justin Trudeau, justified high immigration levels as essential for boosting GDP and addressing potential labor shortages. In November 2023, Trudeau defended immigration policies in response to concerns about rising housing demand, stating, "We all know immigration creates jobs and prosperity."

Despite the recent cuts, immigration levels remain historically high. Canada is set to welcome 395,000 permanent residents this year, down from a pre-reduction target of 500,000 but still above the 300,000 average from 2015 to 2020, prior to the pandemic. The temporary foreign worker program has faced criticism for its role in high temporary immigration rates, particularly regarding unemployment and housing affordability. A recent poll indicated that 66 percent of respondents viewed the program negatively concerning housing, while 61 percent believed it adversely affected younger workers.

Jedwab pointed out that temporary foreign workers account for only about 15 percent of the overall temporary immigration stream, primarily serving sectors like agriculture, where labor shortages are often cited as justification for their presence. He remarked, "I do believe that there has been too much focus on the TFW program elements."