RBC's comprehensive report identifies critical flaws in Canada's immigration approach and proposes four key reforms for sustainable growth
The Royal Bank of Canada released a report titled "A Smarter Immigration Strategy," authored by Jackie Pichette (Policy Lead for Skills & Higher Education), economist Farhad Panahov, and design lead Caprice Biasoni, drawing on consultations with more than 60 economists, demographers and policy makers over six months.
Key Problems Identified
Canada's immigration strategy has lost its edge, and rebuilding trust in the system is needed as Ottawa looks to reduce its reliance on the United States and pursue new economic goals.
Factors such as population shocks — from the huge increase in immigration between 2022 and 2024 to a rare decline in population numbers in 2025 — frequent rule changes, a weakened points system and a diminished focus on skills and experience have created an unstable environment.
Canada admitted roughly three million migrants between 2022 and 2024 — about a decade's worth of immigration in three years — driven mainly by lower-skilled temporary residents. Per capita GDP fell for two consecutive years, and Canada's population later declined for the first time in modern history.
More than 25 separate rule changes affected international students between 2024 and 2026, contributing to an estimated 20,000 job losses in the post-secondary sector.
Canada's Official 2026 Immigration Levels Plan
Based on the most recent official information from IRCC, Canada has set its permanent resident admission target at 380,000 for 2026, which will remain stable at 380,000 annually through 2028. This represents a significant reduction from previous years—the 2024 target was 465,000.
Permanent Resident Targets
Economic Immigration:
The plan increases the share of economic migrants from 59% to 64% by 2027, making this the dominant category. Economic immigration remains the core focus, accounting for 64% of admissions by 2027–2028, primarily through the Federal High Skilled and Provincial Nominee Programs (PNP).
Provincial Nominee Program (PNP):
The PNP allocation is set to increase significantly in 2026, reaching 91,500 nominations compared to 55,000 in 2025, representing a 66% rebound.
Family Reunification & Refugees:
Refugees/Protected Persons/Humanitarian & Other categories account for 56,200 admissions (14.8% of target), lowering to 54,300 for 2027 and 2028.
Temporary Resident Targets
Targets for new temporary resident arrivals are set at 385,000 in 2026, down from 673,650 in 2025—representing a 43% reduction in new international students and temporary workers entering Canada.
Work Permits:
Total work permits are set at 230,000 in 2026, down from 367,750 in 2025 (a 37% reduction).
International Students:
Total student permits are set at 155,000 in 2026, down from 305,900 in 2025 (a 49% decrease).
Policy Objectives
This year's Levels Plan focuses on a return to sustainable immigration levels through continued decreases to temporary resident arrivals and stabilized permanent resident admissions.
This will keep PR arrivals at less than 1% of the population beyond 2027 and reduce the total number of temporary residents to less than 5% of Canada's population by the end of 2027.
Francophone Immigration:
The plan aims to achieve French-speaking PR admissions target of 9% in 2026, on the path to establishing a 12% target by 2029.
Core Recommendations
1. Stabilize Population Growth
RBC recommends a stable population growth target near 1%, restoring Express Entry's points-based focus, consolidating provincial categories, and advancing faster data reporting through the ePayroll project.
2. Reform Express Entry
RBC argues that targeted sub-categories within Express Entry are undermining the merit-based points system by allowing lower-scoring applicants to bypass higher earners.
RBC wants Ottawa to prioritize applicants who score the highest points instead of picking and choosing them through categories and let provincial immigration systems handle the latter since they are more likely to understand their specific occupational needs.
3. Provincial Control
"Concentrating most categories at the provincial and territorial level to address regional skills shortages" would allow the federal government to focus on selecting candidates with the highest projected earnings.
4. Two-Step Talent Pipeline
The bank recommends rebuilding a two-step talent pipeline focused on high-skilled temporary admissions.
Economic Context
Jackie Pichette stated the report "adds to the urgency of getting our strategy in order and making sure that we are able to attract the talent that we need to pursue the economic plans that Canada has for itself right now and keep our economy strong," noting that the federal government is trying to speed up and fund key projects linked to sectors such as energy, mining and transportation as it looks to make the economy more independent amidst a trade war with the U.S.
Important Note
This is one financial institution's analysis and recommendation. IRCC has not adopted these specific proposals, and other experts hold differing views on how category-based selection should be handled.
