🇨🇦 Canada’s 2026 Budget Slashes International Study Permits by 65%
Prime Minister Mark Carney’s government has unveiled a drastic cut to international study permits in its first federal budget, reducing allocations by nearly two-thirds for 2026.
According to the newly released Budget 2025, the federal government plans to issue only 155,000 international study permits in 2026, down from the 437,000 target set for 2025. The number will remain capped at 150,000 for both 2027 and 2028, marking one of the most significant reductions in Canada’s recent immigration history.
📉 Major Shift from Previous Targets
This move represents a sharp departure from earlier projections, which anticipated 385,000 permits in 2026 and 370,000 in both 2027 and 2028. The steep cuts are expected to deliver a heavy financial blow to Canadian universities, many of which are already struggling to stay afloat due to reduced provincial funding and frozen domestic tuition fees.
For years, international students have been a critical source of revenue for post-secondary institutions, as they pay significantly higher tuition fees compared to domestic students. The new targets could intensify financial instability across the higher education sector.
🧾 Background: Previous Reductions and Current Trends
Last year, Ottawa had already moved to scale back study permits — first by 35% in 2024 and another 10% in 2025. However, even the reduced targets are not being met.
Data shows that only 149,860 international study permits were issued in the first half of 2025. If the trend continues, total permits will fall around 31% below the 437,000 target, highlighting a tightening immigration landscape well before the new cap takes effect.
🎯 The Broader Immigration Strategy
The new measures form part of Canada’s Immigration Levels Plan, embedded within the 2025 federal budget. The government aims to reduce the total number of temporary residents — including foreign workers and students — from 673,650 in 2025 to 385,000 in 2026, and further down to 370,000 in 2027 and 2028.
Finance and National Revenue Minister François-Philippe Champagne defended the decision, calling it necessary to make immigration “more sustainable.”
“Canadians understand that we’ve reached, or even exceeded, our capacity to welcome people to the country,” Champagne stated. “We want to attract the best and brightest minds to build technologies of the future.”
🏠 Focus on Sustainability and Capacity
The federal budget argues that the surge in temporary residents has placed unmanageable pressure on housing, healthcare, and education systems. The government described recent growth as “unsustainable” and pledged to restore balance while maintaining compassion and economic competitiveness.
In line with that approach, Ottawa also plans to stabilize permanent resident admissions at 380,000 per year over the next three years — slightly down from 395,000 in 2025. The share of newcomers selected based on economic and labour market needs will rise from 59% to 64%.
👩🔬 Investing in Global Research Talent
Despite the reduced student intake, the government is increasing investment to attract top-tier international researchers. Budget 2025 includes $1.7 billion over 13 years, with $879 million allocated over the next five years, to recruit over 1,000 global research leaders.
A key component is a $1 billion research Chairs initiative, starting in 2025–26, under the federal Tri-Agency — which includes the Canadian Institutes of Health Research, NSERC, and SSHRC — to bring outstanding international academics to Canadian universities.
In addition, $400 million over seven years will be directed to the Canada Foundation for Innovation to upgrade research infrastructure and equipment. Another $133.6 million over three years, beginning in 2026–27, will help international PhD students and postdoctoral fellows relocate to Canada, with provisions for hiring international assistant professors as needed.
🧠 Addressing Foreign Credential Challenges
To strengthen Canada’s labour market, the budget proposes $97 million over five years (from 2026–27) to establish a Foreign Credential Recognition Action Fund through Employment and Social Development Canada.
The government acknowledges that over half of immigrants with a university degree are overqualified for their jobs, costing billions in lost productivity. The new fund aims to streamline credential recognition, particularly in the healthcare sector, where shortages remain severe.
🔍 What’s Next?
Further details of the Immigration Levels Plan will be presented when Immigration Minister Lena Diab tables the 2025 Annual Report to Parliament on Immigration later this year.
With these sweeping changes, the Carney government is signalling a shift toward a more selective and economically driven immigration system — prioritizing sustainability, innovation, and long-term competitiveness over rapid population growth.
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