Wednesday, June 19, 2024

Why is Canada capping foreign students and who will be affected?

On January 23 in Toronto, Canada, the government announced a corrective measure in response to the rapid increase in international student permits, exacerbating the housing shortage issue. Contrary to a decade ago, where about one million study permits were issued last year, the new plan aims to reduce this intake by nearly a third. The Immigration Minister, Marc Miller, outlined a two-year cap on new student permits, limiting the issuance to approximately 364,000 permits in 2024.

Under these proposals, there will also be restrictions on work permits post-graduation for foreign students from specific institutions, seen as a straightforward pathway to permanent residency. Master’s and post-doctorate program participants will still be eligible for a three-year work permit. However, spouses of international students in other levels of study, such as undergraduate and college programs, will no longer qualify. Miller stated that the acceptance of new study permit applications in 2025 would be reevaluated at the end of the current year.

The government’s crackdown is a response to the housing shortage caused by the surge in international students. Canada’s appeal to these students is due to the relatively easy obtainment of work permits after completing their courses. The resulting scarcity in apartments has led to a 7.7% nationwide increase in rents from a year earlier, according to Statscan. Prime Minister Justin Trudeau’s popularity has suffered, mainly due to affordability issues, making the opposition leader, Pierre Poilievre, a frontrunner in polls ahead of the next election.

This policy change will impact the Canadian economy, as international students contribute approximately C$22 billion ($16.4 billion) annually. It will particularly affect educational institutions that expanded in anticipation of a continuous influx of students, with Ontario, the most populous province, receiving the highest number of international students. The move may also create a shortage of temporary workers in sectors such as restaurants and retail, where international students make up a significant portion. Canadian banks, which benefited from the requirement for international students to have Guaranteed Investment Certificates (GIC), will also feel the impact.

Official data from 2022 indicates that a plurality of foreign students, around 40%, come from India, with China following at about 12%. The University of Toronto expressed its commitment to collaborating with all levels of government to address the challenges posed by the allocation of study permits, emphasizing the need for a nuanced approach that recognizes institutions like U of T.

In the 2022-23 enrollment report, international students comprised almost 30% of the University of Toronto’s 86,297 students.

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