Canada’s Cap on Foreign Students and Impact on Educational Institutes

Canada’s Cap on Foreign Students and Impact on Educational Institutes

TORONTO - Canada has unveiled a two-year limit on the intake of foreign students in response to the significant growth in recent years that exacerbated the country's housing shortage. Government data reveals that last year, Canada issued nearly 1 million study permits, marking a threefold increase from a decade ago. The new initiative aims to reduce the intake by almost a third.

The immigration minister, Marc Miller, announced that the Liberal government will implement a temporary cap on student visas for two years, resulting in approximately 364,000 visas being issued in 2024. Additionally, the proposal will impose restrictions on post-graduate work permits for foreign students, potentially encouraging them to return to their home countries. Previously considered a pathway to permanent residency, these permits will now have limitations. However, individuals pursuing master's or post-doctorate programs will remain eligible for a three-year work permit.

Moreover, spouses of international students enrolled in various study levels, including undergraduate and college programs, will no longer qualify, according to Miller. The acceptance of new study permit applications in 2025 will be subject to reassessment at the end of the current year.

The government's crackdown stems from the surge in international students, making Canada a popular destination due to the relatively easy access to work permits post-graduation. This influx, however, led to a severe shortage of rental apartments, causing a 7.7% nationwide increase in rents in December compared to the previous year, as reported by Statscan.

Prime Minister Justin Trudeau's popularity has suffered due to the affordability crisis, with opposition Conservative Party leader Pierre Poilievre leading in opinion polls ahead of next year's election. Aside from housing concerns, the government is also alarmed about the quality of education provided by some institutions.

The impact of these measures will extend to the economy, as international students contribute approximately C$22 billion ($16.4 billion) annually. Many educational institutions that expanded their campuses anticipating a continuous influx of students will be adversely affected. Ontario, the most populous province, received the largest share of international students, and various businesses, including restaurants and retail sectors, warn of a potential shortage of temporary workers.

Restaurants across Canada are already grappling with labor shortages, with nearly 100,000 vacancies. International students constituted 4.6% of the 1.1 million workers in the food service industry in 2023, according to a lobby group.

Canadian banks, too, had benefited from the surge in international students, as each student was required to have a Guaranteed Investment Certificate (GIC) of more than C$20,000 to cover living expenses.

Official data from 2022 reveals that the majority (40%) of foreign students come from India, with China following at 12%. The University of Toronto expressed its willingness to collaborate with all levels of government to ensure the allocation of study permits recognizes institutions like U of T and addresses the challenges at hand.

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