'Certainly a world where we could reduce' immigration targets, says minister Miller

Newcomers account for more than 33% of the workforce in industries such as accommodation and food services

Immigration Minister Marc Miller says he is exploring the rare option of reducing the number of permanent residents allowed in each year as he gets set to announce the annual immigration targets in November.

The targets have generally been maintained or increased for more than a decade, but with declining job vacancies, rising unemployment — especially among newcomers and younger people — and the growing concerns about affordability, “there is certainly a world now in which we see reductions,” he said.

Miller said he is going to spend the next two weeks discussing various options with cabinet that make sense for Canada and the economy.

“The decision is not complete yet. It’s hard to speak about it, but there certainly is a world in which we would reduce,” he said. “These are all in an effort to make sure our plan makes sense for the economy and for the integrity of the immigration system, which is absolutely key.”

Immigration plays a key role in the country’s economy. Newcomers account for more than one-third of the workforce in industries such as accommodation and food services, transportation and warehousing, and the professional, scientific and technical sectors, according to Statistics Canada. The country’s aging population is another reason why there’s a high reliance on immigrants.

As such, the federal government announces its Immigration Levels Plan each year to map out the number of permanent residents it wants to bring in for the next three years.

For example, Canada in 2022 said it wanted to bring in 465,000 permanent residents in 2023, 485,000 in 2024 and 500,000 in 2025. Last year, the target plateaued at 500,000 for 2026.

“A number of things have changed since last year,” said Miller, who took over the role from Sean Fraser in August 2023.

He said his colleagues from different provinces had phoned him up last year saying, “Oh good lord, don’t change the 30 per cent exemption for temporary workers in sectors like hospitality,” and “give me more” workers.

The focus last year was on stabilizing the immigration system and keeping a closer eye on the number of temporary residents, which has drastically increased in recent years. As a result, the new plan will include a target for temporary residents for the first time instead of just focusing on permanent residents.

“It all pointed towards stabilization of the system (last year), not an increase,” Miller said. “But things have changed. You have seen more scarcity of jobs, more sectoral needs rather than the large labour needs. We see a number of elements with respect to interest rates and, frankly, my discussions with economists, among others, about the impact that the growth has had. That’s something I take to heart.”

Economists and businesses have differing predictions with respect to Miller’s looming decision.

The Canadian Chamber of Commerce, which represents more than 200,000 businesses, last week said it would not be surprised if the targets come down. Bank of Nova Scotia economist Rebekah Young shared a similar view.

But Benjamin Tal, deputy chief economist at CIBC World Markets Inc., doesn’t think there’s going to be a major difference. He expects the number of permanent residents to plateau at around 500,000, with more focus on limiting temporary residents, which include students, foreign workers and asylum seekers.

Bank of Montreal chief economist Douglas Porter last week said he found it “very interesting” that Ottawa was even “apparently considering rethinking” its permanent residency targets.

“That would be a very big step,” he said. “That would indicate that they have had some serious second thoughts on the wisdom of the very strong immigration flows that we have seen in recent years.”

If the targets for permanent residents are reduced, it will be in line with some of the rare cuts Miller has made with respect to temporary residents in the past year.

In March, he announced a cap on temporary residents for the first time, with the goal of cutting down the number of temporary residents to five per cent of the overall population by 2026, from about 6.5 per cent currently.

Ottawa earlier this month also reduced the number of international study permits it plans to provide in 2025, which is on top of a two-year cap imposed on international students in 2023.

Miller has also announced policies to restrict the eligibility for work permits for graduates and their spouses, and in August he limited the number of temporary foreign workers entering the country.

“It has been busy with some really significant changes that perhaps we as a government wouldn’t have thought about a few years ago,” he said as he reflected upon his first year as immigration minister.

He said these “adjustments were a long time coming” due to “overheating in the temporary residents’ space.”

Miller said both Prime Minister Justin Trudeau and former immigration minister Sean Fraser knew changes were required when he was given the role.

“Obviously, you have to trust your ministers and trust that they will do the work that’s needed or else they are quickly moved from that position,” he said. “We all have our own styles. This is my style. I prefer to act than not act. There’s some work to be done in terms of slowing down the ship and making sure that we continue to build back confidence in an immigration system that is under increasing challenge.”

He said handling the immigration portfolio hasn’t been easy, especially since it has become “supercharged” in the past year and a half.

“What I want to do is make sure that we are doing what’s right for Canada and the immigration system to the extent that the advice follows whatever it is,” he said. “You have to wait a couple of weeks (for the immigration targets), but I am not too worried about the reaction.”

• Email: nkarim@postmedia.com

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.