Economists suggest that recent federal cuts to immigration targets could provide relief for Alberta's persistently high unemployment rate. As Canada plans to significantly reduce the number of temporary residents and international students, the resulting smaller pool of job seekers may improve employment prospects for Albertans currently looking for work.
Significant Reduction in Immigration Targets
The latest federal immigration strategy will slash the total number of temporary resident permits and international student admissions by approximately 40 to 50 percent over the next three years. This substantial reduction comes as the government extends its deadline to decrease temporary residents to five percent of Canada's total population, moving the target from 2026 to 2027.
Charles St-Arnaud, chief economist at Alberta Central, explained that these changes could benefit the provincial labour market. "It will allow the labour market to absorb those who are unemployed," St-Arnaud stated. "But again, we still need job growth for that. We still need a positive economic environment for employers to be willing to hire."
International Students Bear the Brunt
According to a recent RBC Economics report, international students will be most affected by the new immigration targets. National admissions have been cut in half from 2025 levels and will remain at approximately 150,000 annually for the next three years—representing the smallest study permit allocation in at least a decade.
Economist Rachel Battaglia, author of the RBC report, noted that these reductions could have significant effects on rental markets in cities with high student populations. "Reduced inflows also have significant effects on Canada's rental markets—particularly in areas with a high concentration of students," Battaglia wrote. "Further target reductions could make rental market cooling more pronounced as international students represent a diminishing share of rental housing demand."
Alberta Already Feeling the Effects
St-Arnaud indicated that Alberta has already been experiencing the impact of shifting immigration patterns since the previous update to immigration goals a year ago. "You're seeing population growth in Alberta and in Canada slowing quite rapidly across the board," he observed.
The economist highlighted the dramatic slowdown in population growth, noting that while Canada's population was growing at an annualized pace of about 3.5 percent in early 2024, the most recent data from the second quarter of 2025 shows growth has slowed to just 0.5 percent.
While the current immigration cuts are less severe than those implemented last year, economists suggest they still represent a significant policy shift that could help balance Alberta's labour market by reducing competition for available jobs.
