Economic Prosperity through Controlled Growth
April 29, 2026
The Spring Economic Update 2026, released on April 28, 2026, remains largely aligned with federal policies previously introduced in the 2025 Budget and 2026-28 Immigration Levels Plan. The Update centres on four strategies to make Canada more “affordable, prosperous, and safe” (Spring Economic Update p. 5). These include investment in the skilled trades, strengthening security and community building, measures to increase affordability, and investment in national economic projects. Immigration levels will remain lower than in recent years while also strategically focused on economic immigration. These policies raise some concerns related to slower growth in the Atlantic region, as well as increased security in immigration holding centres. To mitigate some of these risks, it will be crucial for the settlement and integration sector to provide responsive services that support – and help to retain – newcomers in the Atlantic region.
2025 budget context
In its 2025 Budget, the federal government positioned immigration as a key driver of economic growth (see ARAISA’s analysis). The Liberal government, led by Prime Minister Mark Carney, demonstrated its commitment to both immigration and the economy by positioning the 2026-28 Levels Plan as part of the federal budget. In contrast to the former Liberal government, which resulted in a record 483,655 permanent resident admissions in 2024 (Open Government), Carney has favoured lower but also more stable immigration levels. As such, Carney’s government stabilized immigration at 380,000 admissions for the next three years while also reducing temporary resident admissions by 25% for 2026. The 2025 Budget further prioritized immigrants who align with the federal government’s economic policy. Priorities included supporting foreign credential recognition, recruiting international talent in research and innovation, and transitioning work permit holders to permanent residency. A core part of the government’s economic policy is the Comprehensive Expenditure Review, which reduces funding across most federal departments, including a 15% reduction to Immigration, Refugees and Citizenship Canada.
What the update says
The 2026 Spring Economic Update focuses on “sustainable” immigration in a way that remains aligned with the preceding budget and levels plan. The Update highlights a 64% decrease in asylum claims, 71% decrease in temporary foreign worker arrivals, and 75% decrease in international student arrivals compared to 2024 (p. 72). At the same time, it reaffirms efforts to attract and retain skilled immigrants to shape the national economy. This includes initiatives previously mentioned in the 2025 Budget to “fast-track permanent residence for a total of 33,000 skilled temporary workers who are already working in Canada” as well as to “provide stability for Protected Persons in Canada by processing applications from up to 115,000 individuals who have been recognised as needing protection” (p. 73).
The Update frames slower population growth, driven by reduced immigration, as a key factor in making Canada more prosperous and affordable. The government explains that high immigration levels “pushed labour supply growth beyond what the economy could readily absorb,” which resulted in pressure on the labour market (p. 36).
By reducing immigration, the government plans to bring population growth to “more sustainable levels, supporting a more balanced labour market – responding to local needs and the ability for communities to absorb new immigrants” (p. 36).
Moreover, as population growth slows, the government projects that housing affordability will return “to more sustainable levels, easing supply-demand pressures that have driven up housing costs in recent years” (p. 38).
While this strategy may apply at the national level, it is cause for concern in the Atlantic provinces. Natural increase (births minus deaths) has been steadily in decline for decades in every Atlantic province. Moreover, natural increase has been net negative (i.e. more deaths than births) every year in Newfoundland and Labrador, Nova Scotia, and New Brunswick for a decade; on Prince Edward Island it has been net negative each year since 2018 (Statistics Canada). As such, the region depends heavily on immigration for population growth and to build its labour force. Without high immigration, the region risks losing much of the growth momentum it has had in recent years (Public Policy Forum).
Another concerning policy is security initiatives to strengthen “the integrity of our immigration system” (p. 87). These initiatives include $238 million over two years (less $153 million in existing resources) to the Canadian Border Services Agency (CBSA) “to contract guards with higher security training at Immigration Holding Centres” and $52 million over five years to CBSA and Correctional Service Canada “to pilot and deploy technologies to prevent unauthorised communications and contraband delivery in correctional facilities and immigration holding centres.” (p. 87) Such measures may create added barriers for newcomers while potentially damaging Canada’s reputation as a welcoming place for immigrants and refugees.
What’s next for the settlement and integration sector?
Although the Update includes some concerning policies, challenges can be mitigated through attention to the country’s diverse regional needs. Settlement service providers should collectively prepare to engage with the federal government during any upcoming consultations to ensure that sector and regional needs are addressed. Some organizations may be able to continue delivering the Community Volunteer Income Tax Program (p. 107) – renewed for three years – which supports lower-income individuals, including some newcomers, with income tax preparation.
Overall, with reduced immigration levels, the settlement and integration sector needs to focus on supporting every newcomer who accesses services. By providing targeted, coordinated, and evidence-based service, the sector can help to integrate newcomers into our local communities and inform their decisions to stay in the Atlantic region.