Municipal voters in four provinces and one territory will head to the polls in 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-per-cent reduction. Within that total, the target for arrivals through the Temporary Foreign Worker Program has dropped from 82,000 to 60,000.
B.C. does not receive a separate federal temporary-worker target, but another pathway used to retain foreign workers was also sharply reduced. The province 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 B.C. 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 Sechelt, B.C., Mayor John Henderson says the problem is not finding jobs for newcomers — it is finding enough workers to keep the community running. 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.
Statistics Canada census data shows why that matters locally. In 2021, 3,975 people in Sechelt were aged 65 and over, up from 3,455 in 2016. Over the same period, the working-age population, aged 15 to 64, was essentially flat, moving from 5,600 to 5,580.
That means more than one-third of Sechelt’s residents were seniors in 2021. For Henderson, the challenge is not attracting jobs, but finding enough workers to keep local services and businesses operating as the community ages.
His concern is part of a broader question facing municipalities across Canada: what happens when federal immigration decisions begin to affect the systems city halls rely on to function?
In smaller communities, that can show up when restaurants shorten hours, care homes struggle to staff shifts, construction firms delay projects or small businesses cannot replace workers who retire or move away. In larger municipalities with high numbers of temporary residents, the impact can be more complex, touching rental housing, household finances and property-tax collection.
Similarly, on October 2026, Brampton voters will choose a mayor, city councillors, regional councillors and school board trustees in Ontario’s 2026 municipal election. Candidates are navigating a range of local issues tied to decision making in Ottawa.
Brampton mortgage specialist Rakhi Madan told The Pointer the dramatic drop in the city’s large international student and foreign worker populations due to recent federal policy has reduced rental incomes for homeowners who relied on students and workers primarily from India to help carry their home financing costs.
The reduction has been particularly steep in Ontario, which has historically been the destination for more than half of Canada’s international study-permit holders. The province’s target for study permits fell from 141,000 in 2024 to 116,740 in 2025, and to 70,074 in 2026. The 2026 figure is roughly half the 2024 target.
Nationally, Ottawa’s latest immigration plan sets a target of 155,000 new international student arrivals in 2026, 49 per cent below the previous year’s target.
These numbers reflect a dramatic decline from the peak year, when IRCC issued 684,000 international student study permits in 2023, a number that was unsustainable (post secondary institutions, primarily in Ontario, drove the numbers up to attract lucrative international student tuition revenue).
Brampton offers an example of how federal policy impacting local economic stress can become a municipal finance issue. The Pointer reported that the number of Brampton property-tax accounts assigned to a bailiff for collection rose from 234 in 2023 to 1,170 in 2024, a roughly 400 per cent increase. A later Pointer story, citing Equifax Canada data highlighted by The Globe and Mail, reported that Brampton’s mortgage delinquency rate reached 0.6 per cent in the fourth quarter of 2025, the worst of all major cities in Canada. CMHC’s Equifax-sourced mortgage delinquency table reported the national rate at 0.24 per cent for the same period.
A property-tax account being assigned to a bailiff means the city has escalated an unpaid tax bill to formal collection. Brampton’s tax-arrears process allows the city to recover unpaid property taxes from properties in arrears. For municipalities, a rise in those accounts matters because property taxes are the main source of revenue used to fund the entire municipal budget.
No public data directly links Brampton’s rise in tax arrears to federal immigration changes, but the timing is hard to ignore: the spike came as Ottawa began tightening international student, post-graduate work permit and temporary foreign worker rules.
In a city where international students, mostly from India, have long relied on rented rooms, basement apartments and shared accommodations, federal changes to reduce temporary-resident levels can create challenges not only for landlords and renters, but also for the property-tax base that funds roads, transit, policing, garbage collection, stormwater systems and community facilities.
This is the municipal tension now emerging around immigration policy. Federal decisions about who can study, work or settle in Canada do not only affect national population targets. In communities that have built parts of their labour market, housing market or local economy around newcomers and temporary residents, those decisions can reshape municipal planning and revenue pressures.
In a statement to New Canadian Media, IRCC said municipalities play an important role in identifying local labour-market needs, supporting newcomer integration and informing immigration policy. The department said the 2026–2028 Immigration Levels Plan was developed after consultations with provinces and territories about their regional and labour-market needs.
IRCC also said the plan increases planned admissions through the Federal High Skilled and Provincial Nominee Program categories. It did not directly address whether reductions in temporary residents could contribute to the municipal financial pressures emerging in places such as Brampton.
Henderson has concerns about the drastic federal immigration policy changes over the last three years. In a June 3 letter obtained by New Canadian Media, a coalition of chambers of commerce, restaurant, tourism, hotel, construction, food, seafood and local business groups urged Prime Minister Mark Carney to create a permanent immigration pathway for lower-skilled workers and labourers.
The letter argues that Canada’s economy depends not only on highly educated workers, but also on people doing TEER 4 and 5 jobs — lower-wage or entry-level roles that may require a high school diploma, on-the-job training or short work demonstrations, but are still essential to restaurants, hotels, care homes, food processing, construction support and other local services.
The coalition warned that businesses, particularly in rural and remote communities, risk losing foreign workers they have already recruited and trained. Among its recommendations were allowing employers to keep foreign workers already in Canada, letting spouses and dependent children remain, extending low-wage work permits to up to two years, removing caps for small rural employers, expediting processing, enhancing settlement supports, and working with local governments, employers and unions on a long-term rural immigration plan.
Employer groups are making a similar argument nationally. In a policy paper called Reimagining Immigration: The Canadian International Workforce Program, a coalition of business, tourism, restaurant, hotel, construction and chamber organizations argues Canada needs a permanent pathway for lower-skilled workers in jobs employers say remain consistently vacant.
The paper proposes a new immigration program with separate streams for seasonal and year-round lower-skilled work, and calls for regional pilots to be expanded so TEER 4 and 5 workers can qualify where local labour-market needs justify it.
IRCC said pathways for TEER 4 and 5 workers already exist through regional economic immigration programs where labour shortages can be demonstrated. It pointed to the Atlantic Immigration Program, the Rural Community Immigration Pilot program, the Provincial Nominee Program and the Francophone Community Immigration Pilot.
The pressure is not limited to restaurants and tourism. In Saskatchewan, the farm sector has raised similar concerns about labour shortages in rural communities. The Saskatchewan Association of Rural Municipalities has warned that agricultural employers are struggling to find enough skilled and reliable workers, citing a shortage that left 28,200 agricultural jobs unfilled during the 2022 peak season. A Canadian Agricultural Human Resource Council forecast also found that Saskatchewan had 35,100 domestic agriculture workers during peak season in 2022, with grain and oilseed accounting for more than 40 per cent of the province’s agricultural workforce.
Those pressures could also become part of a local election conversation. Saskatchewan’s municipal calendar is different from many provinces: urban municipalities are not holding general elections in 2026, but rural municipalities elect council members on a rotating schedule. Councillors for even-numbered divisions are up for election on Nov. 9, 2026, while reeves (head of council in a rural municipality) and odd-numbered division councillors are scheduled for 2028. That puts farm labour, rural retention and immigration policy in front of agricultural communities that do not control immigration policies but often live with their consequences. For rural municipalities, shortages do not stop at the farm gate: they affect local businesses, population retention, roads, services and the economic base that small communities depend on.
Canada already has some regional immigration tools meant to respond to those local pressures. The Rural Community Immigration Pilot (RCIP) offers permanent residence to skilled workers who want to work and settle in rural and more remote communities. IRCC on its website says participating communities can designate certain employers to make job offers for positions they cannot fill locally.
The pilot includes 14 communities: Pictou County, North Bay, Sudbury, Timmins, Sault Ste. Marie, Thunder Bay, Steinbach, Altona/Rhineland, Brandon, Moose Jaw, Claresholm, West Kootenay, North Okanagan Shuswap and Peace Liard.
IRCC said regional immigration programs accounted for approximately half of economic immigration admissions in 2025. IRCC’s data shows Canada admitted approximately 228,330 economic-class permanent residents in 2025, including principal applicants and their accompanying family members. The department said it recognizes strong demand for economic immigration pathways in rural areas but is currently assessing the implementation and results of the existing pilots before determining future regional policies or programs.
For communities that were not selected for the RCIP, including Sechelt, IRCC pointed to other routes such as the Provincial Nominee Program and streams managed through Express Entry. The department did not indicate whether the RCIP would be expanded, saying it could not speculate on future policy decisions.
In British Columbia, the selected RCIP communities are West Kootenay, North Okanagan Shuswap and Peace Liard. Of the 14 communities selected for the RCIP, only one is in Saskatchewan: Moose Jaw.
Asked whether Sechelt would want access to a program like the RCIP, Henderson said his municipality is open to new immigration initiatives, including the RCIP and other proposals contained in the Reimagining Immigration policy document backed by employer groups.
But he said the more urgent issue is keeping workers who are already in the community.
“The urgent message for now is that we MUST keep the people we have here — TFWs, spouses, families,” Henderson said in an email. “Extend their work permits for two years to give all of us time to settle on a new approach to immigration that, among other things, meets the needs of rural communities.”
IRCC pointed to measures intended to retain some workers who are already established in Canada. Its one-time In-Canada Workers Initiative is expected to accelerate the transition of up to 33,000 workers to permanent residence in 2026 and 2027, beginning with eligible work-permit holders who have already applied through regional programs and occupation-based pilots.
The department also cited temporary flexibilities introduced for rural employers under the Temporary Foreign Worker Program in March 2026. But IRCC continues to describe that program as an extraordinary and temporary measure intended to address short-term labour shortages when Canadians or permanent residents are unavailable.
For Henderson, that is the meaning of the phrase he has been using throughout the debate: “One size does not fit all.”
The issue is not simply whether immigration cuts affect employers or newcomers. In some municipalities, local leaders and observers say federal decisions are beginning to touch the systems city halls actually run: housing, property-tax collection, local services and economic development.
This is forcing municipalities into the middle of an immigration debate where they have little formal power but growing exposure to the consequences.
Shilpashree Jagannathan
Shilpashree Jagannathan is a journalist from India. She now lives in Toronto and has worked as a business reporter for leading newspapers in India. She has tracked telecom, infrastructure, and real estate news developments and has produced podcast series. She currently focuses on human rights, feminist movements, and other related issues in Canada and India. Her weekends are spent bird watching in one of the Toronto birding hotspots; she loves trails, biking, and a lot of sun.