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Immigration Cuts Are Hollowing Out Small Communities across Canada

Business groups urge Carney government to retain foreign workers already here

Voters in five provinces and one territory will head to municipal polls in the remainder of 2026, but one of the issues shaping local economies will not be decided inside city halls.

Immigration remains a federal file, yet mayors, chambers of commerce, and local business groups say Ottawa’s cuts to permanent and temporary immigration targets are being felt at the local level, impacting municipal labour markets, housing systems, property tax collection, transit, local economic development, and a range of services.

Nationally, Ottawa lowered its target for new temporary worker arrivals from 367,750 in 2025 to 230,000 in 2026, a 37 percent reduction. Within that total, the target for arrivals through the Temporary Foreign Worker Program has dropped from 82,000 to 60,000.

At the provincial level, another pathway used to retain foreign workers was also sharply reduced. British Columbia, for instance, was permitted to nominate 8,000 workers and entrepreneurs for permanent residence in 2024, but its Provincial Nominee Program allocation was cut to 4,000 in 2025, despite BC asking Ottawa for 11,000 spots. The province said the reduction significantly affected its ability to meet workforce needs in areas such as health care, child care, construction, and housing.

In the town of Sechelt, on BC’s Sunshine Coast, Mayor John Henderson says the problem now is finding enough workers to keep the community running. In 2021, 3,975 people in Sechelt were aged sixty-five and over, up from 3,455 in 2016. Over the same period, the working-age population, aged fifteen to sixty-four, was essentially flat, moving from 5,600 to 5,580. That means more than a third of Sechelt’s residents were seniors in 2021.

With an aging population, near-zero unemployment, and employers struggling to replace retiring staff, Henderson says federal immigration cuts are landing differently in smaller communities like his, where the local economy depends on a workforce Ottawa controls. The consequences range from restaurants shortening hours, care homes struggling to staff shifts, and construction firms delaying projects to small businesses being unable to replace workers who retire or move away. In larger municipalities with high numbers of temporary residents, the impact can be more complex, with implications for rental housing, household finances, and property tax collection.

Brampton, Ontario—where voters will choose a mayor, city councillors, regional councillors, and school board trustees in October—is navigating a range of similar local issues.

Mortgage specialist Rakhi Madan........

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