The federal government has announced several upcoming policy shifts that will significantly affect international students and temporary foreign workers (TFWs). With the release of the 2026–2028 Immigration Levels Plan and Budget 2025, we now have a clearer picture of what to expect in the coming months.
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Changes Affecting Temporary Foreign Workers
Faster Pathway from Temporary Status to Permanent Residency
The government plans to expedite the transition of up to 33,000 temporary workers to permanent residence (PR) in 2026–2027.
While details are still forthcoming, IRCC has indicated that the new pathway will focus on workers who:
- Hold valid work permits
- Have strong community ties
- Pay taxes
- Work in high-demand sectors that support economic growth
This follows the success of the 2021 TR-to-PR pathway, which reached its cap on launch day. IRCC data shows a growing emphasis on Canadian work experience—64% of Express Entry candidates invited in 2024 had at least one year of eligible Canadian work experience.
Stricter Eligibility for the Temporary Foreign Worker Program (TFWP)
Prime Minister Mark Carney signaled upcoming reforms to the TFWP in September 2025, emphasizing a more targeted approach focused on specific sectors and regions.
Although the exact implementation remains unclear, recent trends suggest increasing restrictions:
- A pause on LMIA processing for regions with 6%+ unemployment was introduced last year.
- The latest Immigration Levels Plan reduces TFWP entries from 82,000 to 60,000 in 2026.
These changes suggest that obtaining an LMIA—and subsequently a TFWP work permit—may become more difficult.
New Sector-Specific PR Pathways and Work Permit Streams
Canada continues to prioritize immigration programs tailored to specific labour market needs. Several new pathways are expected to launch soon, including:
- PR Pathway for H-1B Visa Holders
An accelerated program for tech and advanced-industry talent, highlighted in Budget 2025. - PR Pathway for Undocumented Construction Workers
Up to 6,000 spots were announced in March 2025. - Agriculture & Fish Processing Stream
A new sector-specific work permit and PR option outlined in the 2025–2026 Departmental Plan.
Additionally, some existing PR programs—such as the Home Care Worker Pilots—will reopen for new applicants in 2026.
TFWs with Canadian work experience remain strong candidates for most sector-specific pathways.
Changes Affecting International Students
Study Permit Cap Expected to Decrease
For the past two years, the government has limited the number of study permit applications it processes annually. An updated cap for 2026 will be announced in January 2026.
The new Immigration Levels Plan reduces the target for new international student arrivals from 305,900 to 155,000 in 2026—about a 50% cut—making it likely that the study permit cap will also drop.
However, because Canada fell short of its international student intake targets in 2025, the overall impact on new applicants may be smaller than expected.
Graduate Students Exempt from the Cap
Starting January 1, 2026, Master’s and PhD students will no longer be included in the study permit cap.
Key changes include:
- No PAL/TAL required for graduate-level programs
- Faster processing for doctoral students and their families (as little as two weeks)
Program Removal from PGWP Eligibility Coming in Early 2026
In June 2025, IRCC announced the removal of 178 programs from PGWP eligibility, originally scheduled for 2025. The change was postponed and will now take effect early 2026.
International students planning to work in Canada after graduation should ensure their chosen program remains PGWP-eligible.
