Open this photo in gallery Minister of Immigration Ahmed Hussen makes an announcement in Toronto on Jan. 14, 2019. Frank Gunn/The Canadian Press

The federal government is launching a pilot program to boost immigration in rural and northern communities struggling with labour shortages and population decline.

More than two-thirds of immigrants to Canada settle in bigger cities, which is why municipal leaders in smaller towns and communities have been calling on Ottawa to do more to help them attract newcomers.

They believe immigration is key to helping their communities fill labour gaps as more people leave small town Canada for urban centres.

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“This is a common, common ask – municipal leaders are saying, ‘Please, we need more people, more workers, more families,“’ Immigration Minister Ahmed Hussen said in an interview Thursday.

“Immigration is not the only tool, but it is one of the tools that can be used to address labour market shortages and skilled shortages.”

This new program is designed after an Atlantic immigration pilot, which has seen success in growing the population and filling labour market needs in the Atlantic provinces. The Atlantic model sees immigrants arriving in the region with a job offer and an individualized settlement plan for them and their families. Hussen pointed to a recent population increase in Nova Scotia this year as proof the program there has been working.

But retention of immigrants in areas outside of major urban centres has been an issue, notably in Atlantic Canada. Only 16 per cent of immigrants who filed tax returns in Prince Edward Island in 2011 were still living there five years later, according to 2016 census data.

The new rural pilot has a special focus on retention. Hussen said communities that are selected to participate will not only have to demonstrate a need for skilled workers, they will also have to prove they have the settlement infrastructure in place. That includes language and employment supports so the newcomers can “hit the ground running.”

Only rural and northern communities with a population of 50,000 people or less or who have been designated by Statistics Canada as a remote city can submit a proposal to be part of this pilot. It is open to communities in all provinces except Quebec and the Atlantic provinces.

This program is expected to welcome just under 3,000 people, or about 100 newcomers and their family members, per community. The winning communities will be announced in the spring.