The settlement and integration of immigrants and refugees into Canadian society has become one of the most important areas of public policy in Canada. There exists a notion of a mutual responsibility between newcomers and Canadian society/state to both make the necessary adjustments to facilitate settlement and integration. Canada’s main tool to fulfill its responsibility in facilitating newcomer integration is composed of the policies, programs and services that shape Canada’s model of settlement service delivery. Although the Canadian model of settlement service provision is often looked to in admiration, many academics, policy makers and nongovernment workers are pointing to sings of a crisis of the settlement sector. Due to the neoliberal restructuring of the settlement sector, numerous challenges and issues have arisen for immigrant settlement agencies (ISAs) in assisting their newcomer clients. The purpose of this paper is to critically examine the crisis of the settlement sector. It is argued that the issues plaguing the settlement sector disproportionately impact smaller, ethnocentric agencies and the visible minority and racialized clients they serve.