Massive and deep cuts are coming across a wide array of federal services as a result of the Comprehensive Expenditure Review (CER), which pile onto previous federal cuts from the last few years. While the federal government has spun these cuts as "efficiencies" whose effects will be softened with AI, a look at the numbers shows wide and deep cuts to services and offloading of costs to cities.

At Immigration, Refugees, and Citizenship Canada (IRCC), the cuts threaten to hollow out significant parts of Canada's immigration system. The cuts will target four key areas:

• Refugee health care: The largest cut, at $829 million over four years, is to health care for refugees and asylum seekers. We analyzed these cuts in greater detail in a previous analysis, which is available here.
• Settlement Program: The IRCC's Settlement Program ensures that economic immigrants are able to use their skills to improve the Canadian economy for example, by ensuring that doctors are not driving taxis. It manages credential recognition and language programs, among other things.
  • The CER threatens to slash $686 million from the program over four years. 
  • This category of immigrant is one of the few where the Canadian government is actually planning on increasing, by five per cent by 2027-28.
  • Combined with previous cuts, the entire Settlement Program's budget will fall by a third, which will ensure that these immigrants who are selected for their skills are not able to use those skills in a productive way.
• Asylum Housing: The Interim Housing Assistance Program (IHAP) is an IRCC mechanism that refunds municipal governments that pay for emergency housing for asylum seekers experiencing homelessness. The CER plans to eliminate IHAP funding.
  • In 2025-26, the federal government paid 95 per cent of the costs for asylum-seeker housing, while municipalities paid five per cent. The ratio appears that it would have been 50/50 by 2027-28, but now federal funding will fall to zero.
  • Half of the entire homeless population in Toronto consists of asylum seekers, as is 42 per cent of Ottawa's homeless population. 
  • Four municipalities Toronto, Peel region (Toronto suburbs), Ottawa, and Montreal account for nearly all IHAP funding, and those municipalities will now be forced to either pay the costs of refugee housing themselves, or accept a sharp increase in homelessness.
• Basic Service levels: A surge in staffing in 2023 and 2024 managed to get immigration application backlogs under control. However, major staffing cuts starting in early 2025 meant that by December 2025 no application stream was meeting its service goals. Decisions on applications are now languishing and more often ending up in federal court.

The areas outlined above comprise the vast majority of cuts to IRCC. All of them will coincide with a major reduction in services and service quality. In the case of housing, they will transfer massive costs to already-strained municipal governments. It's a humanitarian crisis in the making.

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