Federal immigration cuts are taking a toll on Canadian businesses, and Prince Edward Island is experiencing some of the most severe effects.

According to a CBC report, employers on PEI are reducing staff hours and pushing remaining workers into longer shifts as federal immigration cuts shrink the pool of temporary foreign workers and international students.

At the Rodd Crowbush Resort on PEI's North Shore, kitchen staff are working six days a week with extended shifts because the kitchen is short three cooks. Executive chef Donovan Benoit said recruitment has become increasingly difficult.

It's been hard to find good people, and harder still to retain them through the full season. Benoit said younger workers with families are less willing to accept shifts spanning entire summer days.

Rodd Hotels and Resorts has relied on international students and graduates seeking permanent residency to fill at least 20 per cent of its jobs. But over the past nine months, more immigrants and temporary residents have left PEI than moved there, marking the Island's first population decline in years. Ottawa is also giving the province 20 per cent fewer permanent residency nominations this year than last.

Eriks Faccin, director of people and guest experience with Rodd Hotels and Resorts, told CBC that continued shortages could force the company to reduce operating hours at some restaurants.

If we do not hire more people, we'll potentially have to shut down during some hours or find ways to keep the business going. Faccin said.

He also noted that the company is limiting overtime for kitchen staff, adding that they cannot get workers doing 12-hour or 14-hour shifts in a kitchen environment.

Frédéric Gionet, Director of Legislative Affairs for Atlantic at the Canadian Federation of Independent Business, said that from a small business perspective, employers are losing access to workers who are already trained and integrated into their workplaces.

In PEI this is especially significant because many small businesses operate in smaller labour markets with limited applicant pools. When a restaurant, tourism operator or service business loses two or three key employees, that can be the difference between expanding hours, cutting hours, delaying growth, or turning away business.

Nearly half of Canadians say current immigration levels are too high, even as most acknowledge its role in addressing labour shortages.

Kevin Murphy, chairman of Murphy Hospitality Group, told CBC he is concerned about employees whose work permits are set to expire. They come all this way, invest in their education and now they're forced to leave.

He hopes Ottawa introduces a new immigration program directed at industries facing the greatest labour shortages, adding that this sentiment is shared across sectors.

The PEI government said it remains committed to strategic candidate selection and continues to advocate with Ottawa to align national immigration policy with the province's labour market needs.

While official targets may seem static, the real flow of new permanent residents will actually increase in the near term, according to RBC economist Rachel Battaglia.