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Immigration Rules in Canada Set for Major Shift for International Students and Temporary Workers
Canada is preparing to introduce a series of major immigration reforms that will directly affect both international students and temporary foreign workers. These changes stem from the 2026–2028 Immigration Levels Plan and Budget 2025, both of which offer a clearer picture of how Canada plans to reshape its immigration system over the next few years. CIN breaks down the key developments expected in the coming months.
Updates Impacting Temporary Foreign Workers
Faster transition from temporary resident to permanent resident
The federal government has announced plans to transition up to 33,000 temporary workers to permanent residency in 2026 and 2027. While full implementation details are still pending, Immigration, Refugees and Citizenship Canada (IRCC) has indicated that this transition will prioritize workers who:
- Have integrated into Canadian communities
- Contribute to the economy through taxes
- Are employed in essential in-demand sectors
This follows a growing trend in the immigration system. According to the latest Express Entry Year End report, 64% of all candidates invited to apply for PR in 2024 had at least one year of Canadian work experience, highlighting the growing value placed on domestic work history.
Tighter controls coming to the Temporary Foreign Worker Program (TFWP)
Prime Minister Mark Carney has suggested that the TFWP will soon be repositioned to focus on specific sectors and regions experiencing high labour demand. The exact adjustments remain unconfirmed, but several earlier steps point toward stricter controls:
- Last year, Canada paused LMIA processing in regions with unemployment rates of 6% or higher
- The latest Immigration Levels Plan reduces TFWP entries from 82,000 to 60,000 for 2026
These signals suggest that LMIA approvals and TFWP eligibility criteria may become more restrictive.
New sector-focused PR and work permit streams
Canada is continuing to align immigration with labour market needs by introducing new pathways that cater directly to key industries. New and upcoming streams include:
- PR pathway for H1-B visa holders, with a focus on tech, healthcare, research and advanced industries
- PR option for construction workers, offering up to 6,000 spots for undocumented workers in the sector
- Agriculture and fish processing work permit stream, paired with a corresponding permanent residency pathway
Several established programs will also reopen in 2026, including the Home Care Worker Immigration pilots. Because Canadian work experience is a major advantage across these programs, temporary foreign workers already living and working in Canada are expected to be strong beneficiaries.
Updates Impacting International Students
Study permit cap expected to be reduced again
Since last year, Canada has been limiting the number of study permit applications processed annually. The next update to the cap is scheduled for January 2026.
The new Immigration Levels Plan reduces projected new international student arrivals from 305,900 to 155,000 in 2026. Based on these targets, the upcoming cap is expected to be lower, potentially increasing competition for study permits. However, because Canada did not meet its 2025 student intake target, the impact on applicants may vary.
Graduate students to be exempt from the cap
From January 1, 2026, the study permit cap will no longer apply to Master’s and PhD candidates. They will also not require a Provincial or Territorial Attestation Letter (PAL/TAL). IRCC will additionally fast-track applications for doctoral students and their family members, with processing times as short as two weeks.
Removal of some PGWP-eligible programs coming in early 2026
IRCC previously announced updates to the list of academic programs eligible for the Post-Graduation Work Permit (PGWP). Although the removal of certain programs was paused in July 2025, IRCC confirmed that the changes will officially take effect early in 2026.
Until that announcement, 178 programs that were slated to lose PGWP eligibility remain eligible. Students who intend to remain in Canada and work after completing their studies are strongly advised to verify that their selected program qualifies for PGWP.