On September 19, 2024, Immigration, Refugees and Citizenship Canada (IRCC) announced additional restrictions affecting several temporary residency programs, including those for international students and temporary foreign workers.1 These changes include a further reduction in the intake cap for international students in 2025, updates to the eligibility criteria for a Post-Graduation Work Permit (PGWP), and new restrictions on open work permits for spouses of select international students and foreign workers.
WHY THIS MATTERS
This latest announcement is part of Canada’s broader strategy to manage the growing number of temporary residents, while making sure that foreign nationals and Canadian employers do not abuse the immigration system.
Earlier this year, the Canadian government introduced a “soft cap” on the number of temporary residents it would accept, aiming to reduce the temporary resident population from 6.2 percent to 5 percent by 2027.2 This policy has been driven by concerns over housing affordability and pressure on infrastructure. Furthermore, Canada has been implementing new policies, which tighten the rules for international students and enforce greater compliance obligations among employers, including applying more strigent rules on low-wage Labour Market Impact Assessment applications (LMIAs) to protect Canadian workers.
Upcoming Changes to Canadian Temporary Residence Programs
Changes to Intake Cap for New Study Permit Applications in 2025
In January 2024, IRCC announced that it will set an intake cap on international student applications for a period of two years.
For 2025, the number of approved study permits for international students will be capped at 437,000, representing a 10 percent decrease from the 2024 limit of 485,000.3 This cap is expected to remain in place for 2026 as well.
Unlike in 2024, the cap for 2025-2026 will now include master’s and doctoral students, with IRCC reserving approximately 12 percent of cap allocations for these students. Additionally, master’s and doctoral students will now need to submit a Provincial Attestation Letter (PAL) as part of their study permit applications.
Restrictions on Work Permits for Spouses of Master’s Degree Students
In April 2024, IRCC stopped issuing open work permits to spouses of international students, except for those in master’s, doctoral, and select professional degree programs.
However, later this year, Canada will limit open spousal work permit eligibility to spouses of master’s students whose programs are at least 16 months in duration. IRCC has not yet confirmed if current open spousal work permit holders will be able to apply for extensions under the new rules.
New PGWP Eligibility Requirements
Effective November 1, 2024, international students applying for a Post-Graduation Work Permits (PGWP) will be required to demonstrate a minimum language proficiency in English or French. Specifically, university graduates will need to demonstrate a Canadian Language Benchmark (CLB) level 7, while college graduates will need to meet CLB 5. This change may pose challenges for foreign students who are not fluent in English or French.
New Work Permit Restrictions for Spouses of Foreign Workers
Currently, the work permit eligibility for spouses of temporary foreign workers does not include restrictions based on the foreign worker’s role, except for TEER 4 and 5 occupations.4
Later this year, open spousal work permits will only be granted to spouses of foreign nationals hired under the Temporary Foreign Worker Program (TFWP) and International Mobility Program (IMP) in managerial or professional occupations or in sectors with labour shortages.
KPMG INSIGHTS
Considerations for Employers & Foreign Nationals, including Students and Workers
- The new cap on international study permits could limit opportunities for students wishing to study in Canada and reduce the pool of candidates available to designated learning institutions.
- Spouses of select international students, as well as spouses of foreign workers, particularly those outside of managerial or professional roles or sectors without labour shortages, may need to consider alternative pathways to secure work permits in Canada.
- The new measures may make Canada a less attractive destination for foreign nationals seeking temporary employment, with employers needed to rely more heavily on Canadian workers or those already eligible to work in the country.
- As Canada’s labour market conditions evolve, the government will continue to review and adjust immigration policies. The 2025–2027 Immigration Levels Plan, set to be released by November 1, 2024, is expected to reflect these temporary resident reductions, potentially leading to further policy changes and restrictions.
Immigration legislation and practices continue to change frequently. Individuals who have questions or concerns about the new measures are encouraged to contact their usual immigration counsel or KPMG Law LLP (see the Contacts section) for further guidance.
Contacts
Additional Resources
Footnotes
1 IRCC, News Release, "Strengthening temporary residence programs for sustainable volumes" (September 18, 2024).
2 See the following issues of GMS Flash Alert: 2024-091 (April 16, 2024) and 2024-036 (February 6, 2024).
3 IRCC, "CIMM – International Student Cap Allocations – February 28, 2024."
4 IRCC, "Open work permits for family members of foreign workers: Who can apply."
Disclaimer
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