By Mata Press Service

Ottawa is shrinking the department that runs Canada’s immigration system, cutting newcomer supports, offloading more health costs onto refugee claimants, and winding down housing aid for cities sheltering asylum seekers.

The federal government says the changes are part of a move toward sustainable immigration levels and more efficient digital service. Critics say they amount to a major service rollback that could hit newcomers and municipalities hardest.

The numbers in Immigration, Refugees and Citizenship Canada’s 2026-27 departmental plan are stark.

IRCC’s planned spending drops to about $4.42 billion in 2026-27, down from a $6.05 billion forecast in 2025-26. On the department’s future-oriented statement of operations, total expenses fall from $7.07 billion to $5.42 billion, a year-over-year decline of roughly $1.64 billion.

The department is also getting smaller. IRCC projects 11,476 full-time staff in 2026-27, falling to 10,788 in 2027-28 and 10,036 in 2028-29. That is a drop of 1,440 positions, or 13 per cent, over three years. The departmental plan says the reduction is tied to the end of temporary funding, lower immigration targets, one-time initiatives winding down and personnel cuts linked to Ottawa’s spending review.

Inside that broader retrenchment is a separate belt-tightening exercise under the federal Comprehensive Expenditure Review. IRCC says those savings alone will total about $155 million in 2026-27, rising to $231.4 million in 2027-28 and $284.6 million in 2028-29, with an expected loss of about 318 full-time jobs by 2028-29.

The federal government is framing the shift as a smarter, more digital immigration system. IRCC says it will keep rolling out a single online account that gives clients one digital window for applications, support and real-time status updates. It also says it is streamlining internal services, using technology to improve productivity and reducing reliance on external consultants.

But the department’s own plan shows that the changes go well beyond back-office efficiency. IRCC says it is readjusting the Settlement Program by limiting eligibility for some economic immigrants, while still supporting most recent arrivals. It is also adjusting the Interim Housing Assistance Program in line with lower asylum claimant volumes and introducing a co-payment model under the Interim Federal Health Program for supplemental products and services such as prescription medication and dental care.

In simple terms, that means some newcomers will face a leaner support system when they arrive, and some refugee claimants will be asked to pay part of costs that were previously more fully covered. For families trying to secure housing, work, language training, legal stability or urgent medical help, those changes could make an already difficult transition even harder.

That matters even more in immigrant-heavy communities where settlement agencies and local charities are already stretched states the, Canadian Centre for Policy Alternatives arguing the damage could be severe.

In its March analysis, the CCPA says the cuts are “old-fashioned service cuts” rather than a genuine efficiency drive. It says two fifths of IRCC’s cut package is tied to health care for asylum seekers, a third falls on the Settlement Program, and a further 12 per cent comes from ending support for cities housing otherwise homeless asylum seekers. It warns that the staffing reductions come on top of earlier cuts that have already helped backlogs balloon again.

That backlog warning is particularly important. The CCPA says that by December 2025, none of the major IRCC application types were meeting backlog targets, compared with three that were under the standard a year earlier. It argues that reducing staff while leaning harder on automation will not fix that problem and may instead push more applicants into court challenges such as judicial review or mandamus applications to force decisions.

The settlement side may be one of the most consequential cuts for immigrant communities. The CCPA says the latest reductions come on top of previous rounds of cuts and amount to a roughly 30 per cent decline in support for newcomer integration, with Quebec shielded from some of the impact because of its separate accord with Ottawa. The report warns that slower integration means Canada risks selecting immigrants for their skills and then failing to give them the support needed to use those skills quickly in the economy.

The cut to asylum supports could hit cities just as hard. IRCC’s plan confirms that funding for the Interim Housing Assistance Program is ending in 2026-27. The CCPA says large municipalities could be left carrying between $150 million and $250 million a year in housing costs for asylum seekers if federal support disappears. It says those costs will not vanish just because Ottawa stops paying them. They will be pushed downward onto cities, shelters and emergency systems already under intense pressure.

All of this is happening as Ottawa also moves to lower immigration inflows. Under the federal 2026-2028 Immigration Levels Plan, permanent resident targets are set at 380,000 a year for 2026, 2027 and 2028, while temporary resident arrival targets are set at 385,000 in 2026 and 370,000 in both 2027 and 2028. The government says those targets are meant to ease pressure on housing, health care and other services while still supporting economic needs.

Meanwhile, Ottawa’s cuts are arriving as public appetite for lower immigration appears to be growing. A new Nanos poll for Bloomberg News found that just over half of Canadians, 52 per cent, want Canada to accept fewer immigrants and temporary residents in 2027 than the levels planned for 2026. Only 9 per cent want higher intake, while 35 per cent favour keeping levels about the same. British Columbia stood out as less hawkish than the rest of the country, with only 37.2 per cent backing lower intake and 43.4 per cent preferring no change. The survey of 1,058 adults, conducted March 1 to 8, suggests the federal government may face less political pressure for service cuts than for lowering numbers, even as communities that rely on immigration continue to feel the fallout from a weaker support system.