By Mata Press Service

Canada’s latest federal budget has prompted a sharp warning from the Canadian Immigration Lawyers Association (CILA), which says the immigration system is now in crisis as government targets and processing delays diverge from the economic and social needs of the country.

CILA says the newly released Immigration Levels Plan for 2026 to 2028 continues a pattern of reductions to both permanent and temporary resident programs while avoiding the structural reforms needed to fix long wait times, reduce backlogs and protect family reunification rights.

The group says the government is proposing to give itself the authority to cancel applications under Bills C-2 and C-12, even when delays are caused by federal processing failures.

“IRCC’s clients should not be penalized for the federal government’s inability to effectively manage the immigration system,” the association said. “Cancelling applications would further erode the predictability and competitiveness of the immigration system.”

CILA notes that wait times for some applicants exceed 10 years and that cuts to intake levels are being introduced without clear service standards. These delays disrupt job continuity for skilled workers already in Canada and undermine workforce planning for employers across technology, healthcare, construction and essential services.

Immigration accounts for more than 80 percent of Canada’s labour force growth. As aging accelerates and retirements rise, the lawyers warn that reducing permanent resident admissions now will weaken the labour pool needed to sustain the health system, build housing and support large-scale infrastructure projects.

They also argue that restricting temporary residents without offering wider transitions to permanent status risks pushing people into informal work and long-term legal uncertainty.

Cuts to international student admissions are already creating deep budget shortfalls in post-secondary institutions. Universities across the country have reported program reductions and deficits, including a projected $75 million shortfall at the University of Waterloo.

CILA says the shift threatens Canada's standing in artificial intelligence research and other high-value innovation sectors that have relied on global talent and academic networks.

The association also raised concern over spousal sponsorship delays and the shrinking Parent and Grandparent Program, where targets have been reduced by a percentage significantly higher than the overall permanent residence cuts.

Current processing for dependents of protected persons averages more than four years, a separation that CILA calls both harmful and unnecessary. The group is urging the government to allow sponsored spouses to enter Canada on temporary visas while their permanent applications are finalized.

The lawyers recommend stabilizing permanent resident levels, aligning temporary worker caps with verified labour shortages, replacing the parent and grandparent lottery with a merit-based system, and removing the provisions that allow the government to cancel applications without due process.

“Immigration remains one of Canada’s most powerful strategic advantages,” the statement concludes. “Ensuring its alignment with national development goals will be essential to building a resilient and competitive Canada.”

Other key sectors echoed concerns that the budget does not match workforce realities.

Restaurants Canada, representing more than 90,000 foodservice businesses, said cuts to immigration will worsen chronic hiring challenges, particularly in remote and tourism-dependent regions.

“We are facing intense pressure from rising input costs and reduced consumer spending,” said Kelly Higginson, the group’s president. “The lack of support for workforce shortages, combined with further immigration reductions, puts many operators at risk.”

The Fraser Institute said the budget continues a pattern of heavy spending and intervention that has weakened growth and productivity. The think tank warned that higher taxes and regulatory burdens will discourage investment at a time when Canadians are already seeing declining living standards.

“Canadian workers are falling behind their U.S. counterparts in every province,” the group said in its reaction. “This budget does not change that trajectory.”

The BC Business Council said: “This budget comes seven months into the 2025/26 fiscal year, indicating a woeful lack of fiscal transparency. Looking ahead, the proposed shift to a fall budget cycle is welcome. It should improve alignment with the Main Estimates and overall fiscal transparency – but only if the government sticks to its new timetable consistently.”

The Canadian Construction Association (CCA) commended the government’s significant $115-billion investment in infrastructure, including $51 billion for local infrastructure such as housing and transportation, which will support communities across Canada and enable the ambitious homebuilding agenda.

While the budget marks an important step toward recognizing construction’s role in Canada’s economy, CCA continues to call for a coordinated national workforce strategy, one that connects immigration, apprenticeships, upskilling, and the destigmatization of careers in the skilled trades.

“The construction sector employs 1.6 million Canadians and contributes $165 billion to Canada’s GDP, yet we continue to face significant labour shortages,” said Rodrigue Gilbert, President of CCA. “Without a long-term, coordinated workforce strategy, any ambitious construction agenda will stall.”

The government’s investment in foreign credential recognition is also important, however CCA cautions that it is too narrowly focused on unionized programs.

“Union training programs play an important role in building Canada’s workforce, but we must ensure equitable access to training and credential recognition for all workers, including the 70 per cent of Canada’s construction workforce that is non-unionized,” said Gilbert. “If we want to build more homes and infrastructure faster, we need investments that don’t leave the majority of workers behind.”