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New immigration policies introduced by the Canadian government are set to drain billions from the country’s post-secondary education sector, with Ontario alone expecting a CDN$1 billion loss over the next two years, according to a report published by International Consultants for Education and Fairs (ICEF) Monitor on Tuesday.
While Indian students, who make up the largest group of international learners, will be affected, it’s Canada that stands to bear the most financial impact as international enrolments dwindle.
Recap of policy changes
The Canadian government has implemented a range of new policies to manage the number of international students in the country. Among the most significant measures is a federally mandated cap on foreign enrolments, which will see a 35% reduction in new study permits for 2024, with a further 10% cut in 2025. These caps extend to master’s and doctoral students from 2025, adding further pressure to the system.
Other restrictions include:
* A savings requirement of over CDN$20,000 for students to qualify for a study permit
* Partners of some undergraduate and master’s students will no longer be eligible for open work visas
* Students from certain fields will lose their eligibility for the Post-Graduation Work Programme (PGWP) from November 2024
Indian students’ contribution to Canada
Indian students have played a vital role in the Canadian education system, with a 47% increase in study permit holders from India in 2022, totalling over 319,000. Their financial contribution has been crucial.
However, the numbers are dropping this year. As of August 1,37,445 Indian students received study permits, marking a 4% decrease from 2023.
There are currently around 6,00,000 Indian students in Canada, which includes new admissions as well, according to official data. However, the number could plunge further.
Ontario to lose most
Ontario, which hosts over 40% of Canada’s international students, stands to lose the most. According to Steve Orsini, president and CEO of the Council of Ontario Universities (COU), these policy changes will cost Ontario universities CDN$300 million in 2024/25 and a further CDN$600 million in 2025/26. “That’s nearly a $1-billion financial impact in the first two years alone,” Orsini said.
Ontario’s post-secondary institutions are particularly vulnerable because they receive the lowest funding in the country. This has made them highly reliant on international student tuition fees, which are often substantially higher than domestic fees.
The Ontario Federation of Faculty Associations (OCUFA) echoed these concerns, saying, “International students in Ontario pay the highest – and domestic students pay the fourth highest – tuition in Canada because Ontario’s funding is dead last in the country.”
Colleges and Institutes Canada (CICan) president Pari Johnston said, “The new policies will cause significant harm in the college sector and to local businesses that rely on the schools to supply graduates to the labour force.”
Already, three Ontario colleges have reported the loss of thousands of international students, either due to study permit delays or the students deciding against Canada altogether. Many have opted to defer their study plans or seek other countries for education.
Wider impacts across Canada
The financial strain is not limited to Ontario. Atlantic universities are also expecting a sharp decline in enrolments. The Association of Atlantic Universities (AAU) commissioned a report which estimates a loss of nearly 3,000 international students in the region, a decline of 11.4%. This translates to a CDN$163 million reduction in spending and over 2,200 job losses in the region.
Gabriel Miller, president of Universities Canada, called the inclusion of master’s and PhD students in the cap a serious concern. “Our international reputation has already taken a hit over the past six months,” he said. Miller added that the decline in international students could lead to bigger deficits across institutions, urging governments to step in before it results in cuts that harm students and the economy.
Why the focus on international students?
The economic contribution of international students to Canada cannot be overstated. A Global Affairs Canada (GAC) report showed that the total GDP contribution from international student expenditures was CDN$30.9 billion in 2022. India played a major role in this, with Indian students accounting for the largest share, a 47% increase with 319,130 study permit holders by 2022.
The rapid growth in student numbers has been a boon for Canada’s post-secondary system, doubling from CDN$15.5 billion in 2016 to CDN$37.3 billion in 2022. This trend would have likely continued in 2023, had the new restrictions not been introduced.
What’s next for Canadian institutions?
Many stakeholders believe that the Canadian government’s approach needs adjustment. Orsini pointed out that the government should target only unscrupulous post-secondary institutions, rather than penalising the entire sector. “While we recognise the need to address bad actors who have inflated international student enrolment, these measures are causing collateral damage to universities that offer quality education and provide strong support for their students,” he said.