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  • When Immigration Funding Shrinks, Smaller Communities Feel It Differently 

When Immigration Funding Shrinks, Smaller Communities Feel It Differently 

The Toronto Star reports that Canada will slash millions in federal funding intended to support immigrant settlement with Ontario being among the hardest hit.

Posted on:   Wednesday Feb 25th 2026

Article by:   Maysa Husseini


Northern Ontario and Newcomer Retention

At a time when immigration is one of the most debated issues in the country, the headlines are predictable: spending cuts, fiscal restraint, a recalibration of targets. And specifically, cuts to services like employment counselling, information and orientation, and translation help for newcomers’ appointments.


Our Research

Settlement services like these are foundational to newcomer integration and belonging and particularly in smaller communities, where social isolation can be more prevalent and where our research indicates that belonging is a key predictor of long-term retention.

Our Welcoming Communities Analysis in Thunder Bay, for example, pointed directly to the key drivers of integration in a Northern Ontario community. The findings underscored the importance of sustained supports that foster social connection and help newcomers navigate complex systems such as housing, childcare, healthcare, and employment pathways. Without these connective supports, attraction efforts risk falling short of long-term community stability.


Different realities in smaller communities

When support systems are reduced, smaller communities like those in Northern Ontario don’t experience it the same way large urban centres do.

In major cities, settlement services are layered and redundant. There are multiple agencies, larger newcomer populations, and established cultural networks that can absorb funding fluctuations (even if painfully).

But in smaller cities like Thunder Bay, that ecosystem is thinner.

When funding is reduced in large cities, services contract. When funding is reduced in small communities, services can disappear entirely. And that has direct consequences for retention.


Many small communities rely on:

A small number of settlement workers

One lead agency serving a vast geographic region

Limited language training options

Volunteer-driven integration supports

sign on wall in thunder bay

Photo taken by me at Prince Arthur’s Landing (Marina Park) in Thunder Bay, Ontario.


Programs to Address Immigration in Smaller Communities

Programs like the Rural and Northern Immigration Pilot (RNIP) and now the Rural Community Immigration Pilot (RCIP) were created precisely because traditional immigration systems were not working for smaller labour markets.

These programs are employer-driven, targeted and modest in scale. But such success hinges on something beyond job offers: retention.

If newcomers arrive to fill critical roles in healthcare, mining, education, childcare, or manufacturing – but lack adequate language training, housing and healthcare navigation, employment support for spouses, or community integration pathways – they leave. Either to larger cities with more support in place or back to their home country.

And when they leave, the labour shortage returns.

RCIP was designed as a tool to stabilize communities experiencing chronic workforce gaps. But without sufficient settlement infrastructure, it becomes harder to translate attraction into long-term growth.


A Smaller Margin for Error

Large cities have scale. They can adjust. Smaller communities operate with thinner margins.

If one settlement agency loses funding, there may not be another within a 500-kilometre radius. If one language training program closes, there may not be an alternative nearby.

Retention is already a central challenge for rural immigration. Reduced supports risk undermining the very programs designed to address labour shortages outside major urban centres.


The Bigger Question

National conversations about immigration often focus on intake numbers. But intake is only half the equation. Our work confirms the key factors driving retention and belonging.

For regions like Northern Ontario, the real question is whether we are aligning immigration targets with the right on-the-ground supports to make regional programs succeed.

If Canada wants immigration to ease pressure in major cities and strengthen smaller communities, then rural and northern regions cannot be an afterthought when funding decisions are made.

Newcomer Retention Research
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Maysa Husseini

Senior Research Associate,
Public Affairs


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