Recent Rapid Reductions in IRCC Funding: Implications for Canada’s Newcomer and Settlement Sector

Canada’s Newcomer and Settlement Sector

In recent years, Canada’s federal agency responsible for immigration, Immigration, Refugees and Citizenship Canada (IRCC), experienced a remarkable upswing in funding. IRCC’s functions span a broad spectrum: from visa issuance and settlement programs, to refugee resettlement support and citizenship services. Historically, these responsibilities have made IRCC a key player in fulfilling Canada’s humanitarian goals while also supporting critical workforce needs.

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Under the Liberal government’s ambitious approach to mass immigration, which started roughly in the mid-2010s, IRCC’s budgetary resources significantly expanded. This period saw IRCC increase the scope of its programs—particularly around refugee protection, resettlement, temporary worker programs, and educational pathways for international students—on a scale rarely witnessed in previous decades. The rationale was multifaceted. On the one hand, Canada faced impending labor shortages, threatening both economic stability and broader social structures. On the other hand, the government espoused an international humanitarian commitment to maintain Canada’s longstanding reputation as a welcoming refuge for people fleeing conflict or seeking better opportunities.

Several flagship programs exemplified this considerable expansion. For instance, the Interim Housing Assistance Program (IHAP) was renewed in July 2023 with a hefty allocation of $212 million to mitigate surging shelter costs for asylum claimants (IRCC’s 2024–2025 Departmental Plan). Subsequently, as asylum volumes remained historically high, an additional $362.4 million was injected into IHAP for the 2023–2024 fiscal year, ensuring no claimant was left homeless or underserviced by provincial or municipal governments. Similarly, other large-scale investments flowed into the settlement sector, particularly to fortify language training, skills development, and job search programs.

Yet, as Canada’s immigration numbers continued to climb—alongside housing and infrastructure challenges—public debates turned more pointed and polarizing. Critics contended that rapid population increases in certain regions exacerbated housing shortages, drove up property costs, and burdened municipal resources. In addition, concerns arose over ballooning government expenditures at a time when fiscal prudence was, in some quarters, increasingly demanded. These negative outcomes, or at least the perception thereof, placed growing political pressure on the government to reassess its approach.

By early 2023, Budget 2023 signaled a decisive shift: IRCC’s spending underwent rapid reductions as part of a broader federal push to curb overall government expenditures and address concerns around the impact of high immigration on housing. A phased reduction of about 3% was introduced, totaling $7.0 billion over four years across various departments. For IRCC specifically, the directive meant curtailing the very programs that had once seemed indispensable for meeting the needs of newcomers.

This retreat from previous expansion is reverberating across the settlement landscape. Nonprofit agencies, which had steadily grown capacity to accommodate more clients for years, suddenly find themselves grappling with funding cuts that threaten core service delivery. As a direct result, many settlement agencies are already reporting reductions in language class availability, cutbacks to job search workshops, and staff lay-offs that strain their ability to meet their local communities’ needs.

Hence, the story of IRCC’s funding is one of contrast and complexity. On the one hand, it underscores Canada’s global humanitarian leadership, and on the other, it reveals how shifting political and fiscal priorities can rapidly alter the resources and scope available to support newcomers. The tension now comes to a head: how does IRCC continue meeting essential objectives—supporting new immigrants, maintaining robust citizenship pathways, and safeguarding the vulnerable—within a tightened fiscal regime?

Budget 2023 and Departmental Spending Reductions

The federal government’s Budget 2023 outlined a series of cost-saving measures spanning multiple departments. For IRCC specifically, the government aims to reduce roughly 3% of eligible expenditures by 2026–2027 (Budget 2023). These reductions particularly target professional services, including management consulting and travel expenses. While superficially moderate, these changes pose clear risks to the settlement and integration services IRCC currently supports.

IRCC, per its 2024–2025 Departmental Plan, has been tasked with examining precisely how these cuts can be implemented without jeopardizing its ability to deliver on core responsibilities. For frontline newcomer organizations, there is looming concern about whether a “trim” to travel and consulting will spill over into larger programmatic areas. Indeed, many settlement agencies rely on IRCC’s discretionary funds not only for direct client support but also for professional development, program evaluation, and infrastructural upkeep. The fear is that once specific line items come under scrutiny for cost-cutting, the subsequent ripple effects could compromise service quality.

Coinciding with funding cuts is the recent adjustment to Canada’s Immigration Levels Plan. Released in October 2024, the Plan scales down the trend of heightened permanent resident admissions targets, referencing concerns around housing availability and overall integration capacity (AAISA). In practice, this signals fewer new arrivals through 2025–2027 than initially projected, aiming to align overall immigration with what IRCC deems feasible in terms of housing, social services, and labor market integration.

Though IRCC frames this reduction as a strategic balancing act, settlement agencies and municipal partners worry that it could lead to shortfalls in federal support for those still arriving—particularly asylum seekers and vulnerable newcomers who rely on robust services. The fear is that if fewer newcomers come, IRCC might assess that fewer settlement services are necessary, and then trim funding even more. Yet, the settlement process for any given newcomer often spans years, not months, meaning demand remains for earlier cohorts well into the future.

Around the same time of these cuts, IRCC launched the Call for Proposals 2024 (CFP 2024) in November 2023, with funding slated to begin in April 2025 (CIC NEWS). This CFP has a strategic focus on four themes: (1) newcomer settlement and integration; (2) Francophone integration and pathways; (3) Indigenous integration support; and (4) service delivery improvements.

Under normal circumstances, a multi-year funding envelope provides stability for frontline organizations, enabling them to craft tailored programs. Nonetheless, it remains to be seen if the newly announced budget reductions will affect the actual allocations under these four thematic areas. Many agencies—especially those that conduct language training for newcomers or run specialized job search workshops—are at risk of receiving smaller grants or no funding at all.

Effects on Newcomer and Settlement Agencies

Organizations in the newcomer and settlement sector are already facing issues with funding with notices from IRCC that their longstanding funding will stop in a matter of months (personal communications). Many are pivoting from a posture of steady growth to one of urgent fiscal austerity. For example, organizations that used to run robust Language Instruction for Newcomers to Canada (LINC) classes are downsizing, citing the immediate priority of rent and overhead costs over additional instructors (personal communication). Others, such as the Settlement Workers in Schools (SWIS) program, face partial closures even as schools witness a growing need for in-class newcomer support (personal communication).

The difficulty is compounded by the fact that many programs are interdependent. For instance, a Job Search Workshop (JSW) might coordinate closely with language instructors to ensure clients improve linguistic and employment-related competencies. Once these linkages weaken due to funding cuts, it risks diminishing the overall efficacy of an agency’s settlement strategy.

While these are some examples, the growing and real impact on this sector is uncertain, and some organizations are trying to identify what policy levers are available to them to mitigate or reduce the impact of IRCC funding changes. But importantly, the settlement sector’s workforce is also at stake. Skilled settlement practitioners—counselors, instructors, social workers—who have built institutional knowledge and trusting relationships with the newcomer communities may lose job security. A sector notorious for precarious or short-term contracts could see increased staff turnover, further weakening service continuity.

Concluding Reflections

At this juncture, IRCC’s evolving funding priorities embody a delicate balancing act: reconciling Canada’s historical openness to immigration with pressing public concerns about fiscal stewardship and housing affordability. For settlement agencies and newcomers, these reductions feel like a sea change—one that introduces new layers of precarity to an already complex domain.

While the overarching reason for cutbacks rests on broader economic and political arguments—especially the emphasis on housing shortages—there remains ample debate around the effectiveness of curtailing immigration as a “solution.” Scholars and housing advocates underscore that targeting newcomers masks deeper systemic issues, from inadequate housing policies to insufficient infrastructure planning.

From a qualitative perspective, the lived and living experiences of settlement workers and the stories of newcomers who depend on these programs reveal how disruptive abrupt policy shifts can be. They underscore the importance of sustained and flexible funding models that adapt to surging arrivals flows, changing demographics, and overarching global humanitarian crises. Any approach that focuses too narrowly on cost-cutting in the name of short-term expedience could risk undermining the success of newcomers’ integration and Canada’s long-term reputation and prosperity.

Therefore, even as IRCC navigates a more constrained budgetary environment, it remains critical for policymakers, practitioners, and the broader public to co-create strategies that preserve robust settlement supports. The Canadian immigration model, often lauded internationally for its effectiveness, now finds itself at a crossroads—where funding decisions, in many ways, will define the next chapter of Canada’s engagement with newcomers.

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