Canada’s International Student Cuts: A Double-Edged Sword

This past September, the Canadian government announced another 10% cut to international student permits. This isn’t the first cut either. Earlier this year, there was already a 35% reduction in student visas, plus a cap of 364,000 visas this fall (down from last year’s 560,000). So, what’s behind these numbers, and what does it mean for Canada? Here on VOB, we like to dig into these controversial issues and explore how policies impact our communities and businesses. With all these restrictions on international students, there is a lot to unpack—and some potential serious consequences.

The conversation around international students has been heating up, especially with Canada’s housing crisis and labor shortages thrown into the mix. We’re seeing strong opinions on both sides. On one hand, there’s a group that says Canada’s infrastructure just can’t handle the volume of international students coming in. On the opposing side, national student associations argue that international students are wrongly blamed for the housing crisis. Cutting their numbers, they say, also hits universities hard, slashing a vital revenue stream.

And they’re not wrong—Canada’s colleges and universities really rely on international student fees, which are much higher than domestic ones. For example, Fanshawe College recently reported they’re expecting a whopping 39% cut in international students next January, with a 47% drop in first-year international students alone. The council of Ontario Universities also are projecting a loss of nearly $1-billion in revenue over two years with the drop from international student enrollment. Considering the average cost for an international student is around $36,000 a year, these reductions could severely impact funding for our post secondary institutions.

The reliance on international students has sparked some tough questions: are schools too dependent on these higher fees to make up for gaps in public funding? And what happens when this revenue source shrinks? Some wonder if Canadian institutions should rethink their business models and find a more balanced way to fund education without leaning so heavily on international students.

There’s another layer to all this: international students contribute more than just tuition fees. They’re a crucial part of Canada’s workforce, particularly in the hospitality sector. According to Statistics Canada, international students make up around 4.6% of that industry—a big deal in a sector that’s facing labor shortages. Plus, the Canadian Bureau for International Education shows that 70% of international students indicated they want to stay and work in Canada after graduation, which could further add to our growing talent pool. Their economic impact also extends beyond tuition, who support local businesses and contribute millions to the economy in consumer spending.

But, of course, we can’t ignore the housing issue. With more than a million international students in Canada, and vacancy rates as low as 1.7% in Ontario, housing is in high demand. More students mean more pressure on an already tight housing supply, which many Canadians feel directly. This is where the government’s policy shift could ease some of that strain, but it’s a double-edged sword. Fewer international students may help with housing, but it could significantly reduce revenues for post-secondary institutions and even lead to staff layoffs.
​
Ultimately, this situation highlights the complexity of relying heavily on international students. The recent policy changes make it clear: this isn’t just about the students. It’s about sustainable planning and strategies that support Canada’s needs, whether it’s in housing, education funding, or labor supply. Moving forward, we can only hope that these policy adjustments drive further investments in the infrastructure and resources needed to make Canada a stable place for everyone—both local and international residents.