Canada’s new citizenship-by-descent legislated; relief for ‘lost Canadians’ which include Indian-origin families

Canada enacted Bill C-3 on Dec. 15, 2025, eliminating the controversial first-generation limit in its Citizenship Act and allowing people born before that date who were excluded by the old rules to apply for citizenship; the change follows a December 2023 Ontario Superior Court ruling that parts of the Act were unconstitutional and the federal government’s decision not to appeal. Under the new framework a Canadian parent born or adopted abroad can now pass citizenship to a child born or adopted outside Canada if, at the time of application, the parent can demonstrate three years’ residence in Canada prior to the child’s birth or adoption. The government says the reform restores rights to so-called “lost Canadians,” better reflects transnational family ties, and is expected to trigger a surge in applications—particularly from Indian-origin families—raising near-term workload implications for IRCC while providing long-term legal clarity.

Analysis

Canada enacted Bill C-3 on December 15, 2025, formally amending the Citizenship Act to eliminate the so-called first-generation limit that prevented some children born abroad from inheriting citizenship. The change follows a December 2023 Ontario Superior Court ruling that key parts of the Act were unconstitutional and the federal government’s decision not to appeal, creating a statutory pathway for affected individuals to apply for citizenship retroactively.

Under the new framework a Canadian parent born or adopted abroad can pass citizenship to a child born or adopted outside Canada provided the parent can demonstrate three years’ residence in Canada prior to the child’s birth or adoption, according to Immigration, Refugees and Citizenship Canada (IRCC). Immigration Minister Lena Metlege Diab framed the reform as restoring rights to so-called "lost Canadians" and aligning law with transnational family realities.

The government anticipates a surge in applications, particularly from Indian-origin families, which implies near-term increases in IRCC workload and potential processing backlogs. Implementation risks include disputes over residence evidence and short-term administrative costs, while the long-term effect is greater legal clarity for affected families and reinforced ties between citizens abroad and Canada.

Key Decisions for Investors

• Monitor firms that provide immigration legal services, application processing platforms and document-verification technology for potential revenue upside from higher application volumes
• Watch for IRCC procurement announcements and contractor activity as leading indicators of which vendors may benefit from capacity increases or modernization spend
• Be cautious on public-sector fiscal exposure: short-term backlogs and administrative costs could create transient demand spikes but long-term fiscal or regulatory impacts remain uncertain