Canada’s International Student Cap: Effects, Criticism, Outlook

Canada's International Student Cap- Canada has long been a top destination for international students worldwide. Apart from its image as a diverse, safe, and economically robust country offering many opportunities and high-quality education, its welcoming immigration policies have contributed enormously to this trend. In fact, the government has been advertising post-secondary education in Canada as a more accessible path to permanent residency, highlighted by the prominent slogan, “Study, Explore, Work, Stay.” There are over 1 million international students currently in Canada. However, numerous announcements impacting international students have emerged over the last year.

What is Happening?

Canada’s international student numbers have surged recently, driven by the country’s appeal globally and the absence of target limits for temporary residents. Between 2018 and 2023, IRCC issued over 1.5 million study permits for post-secondary education. Despite Canada’s often-praised education system, international students often lack the necessary support to succeed and may even face exploitation. Since their tuition fees are approximately four to five times higher than those of domestic students, some unscrupulous individuals and institutions prioritize enrolling large numbers of international students at inflated prices and with subpar educational standards.

Consequently, numerous international students encounter challenges securing jobs in their respective fields post-graduation. Some may experience financial hardships caused by unexpectedly steep living costs in Canada, while others may struggle to find housing or fall prey to immigration scams.

This crisis surrounding international students is occurring amidst a larger issue affecting Canada’s entire temporary resident population, which currently makes up a staggering 6.2% of the country’s overall inhabitants. Amidst global inflation, a lack of affordable housing, a tightening job market, and access to essential services like healthcare, the public’s support for immigration has declined. As production and construction struggle to keep pace with rapid population growth, some blame the country's unprecedented immigration numbers. With 42% of Canada’s temporary residents consisting of international students, effectively managing their arrivals has become one of the government’s key priorities.

IRCCs Measures

IRCC’s latest announcements regarding international students include the following:

1. International students now face doubled financial requirements, aligning more closely with actual living costs in Canada. The minimum amount needed for the first year of study is now $20,635.
2. In response to previous immigration fraud cases, a new verification process now ensures the authenticity of Acceptance Letters (LOA) for new international students. Although this currently does not apply to MA and PhD students, they have been included in the 2025–2026 study permit intake cap.
3. In January, a two-year cap for new international students was introduced, aiming for a 35% decrease in approved study permits. In the Fall of 2024, Minister Miller revealed a further 10% reduction effective for the next two years, now also including MA and PhD students.
4. The Post-Graduation Work Permit (PGWP) Eligibility has been tightened to better align international studies with the labour market and immigration goals:
   • Students enrolled under a public-private partnership are no longer eligible.
   • PGWP applicants will need to provide official language results.
   • To qualify for a PGWP, those applying for a NEW study permit on or after November 1 must either graduate with a university degree or from a college program linked to a national labour market shortage.
5. Additional restrictions regarding spouses of international students have been implemented.
6. The 2025-2027 Immigration Levels Plan reflects the government’s commitment to helping temporary residents transition to permanent residence by implementing a new “in-Canada focus” category.
7. For the first time, the plan includes temporary residence targets alongside a 50% reduction in approved study permits and lower overall immigration goals for permanent residency between 2025 and 2027.

Effects and Criticism

Effects on International Students

The government's actions have made Canada seem unwelcoming to international students. Many aim for PGWP and permanent residency, but recent policy changes have discouraged them. University enrollment has dropped significantly, exceeding government targets.

After one decade of being the number one choice for international students worldwide, Canada has now been overtaken by the US, the UK, and Australia. According to a recent IDP Education Survey among 6000 prospective or current students worldwide, Germany has also become a popular destination due to its relatively low tuition fees and accessible student visas. In contrast,  interest in Canada has decreased from 25% to 16% within the last year. The increased financial requirements to secure a study permit also discourage many, with some delaying their study abroad plans.

The announcements, paired with increased processing times, have generated uncertainty, stress, and anxiety among current international students. With ongoing changes, many worry they won't meet their immigration goals after investing thousands of dollars and years of trying to establish themselves in Canada. Others feel unfairly targeted, leading them to protest against the government’s recent policy changes, demanding realistic pathways to permanent residency.

Despite numerous changes and increased challenges for prospective international students, the government seems to remain committed to grandfathering current students. For example, PGWP restrictions related to a student’s college program of choice only affect new study permit applicants.

Many existing rules protect students from fraud, ensure quality education, and prepare them for the job market. Aligning college programs with labor market demands will help students gain permanent residency through post-graduate work experience. The new immigration levels plan's “In-Canada Focus” category, which allocates over 40% of 2025 admissions to temporary residents, could benefit current international students.

Effects on Canada’s Reputation

Canada's student cap could harm its global reputation and competitiveness. To counter aging and declining birth rates, Canada needs young global talent. Many international students are ideal permanent residents. Limiting global talent risks losing skilled professionals and study-abroad opportunities for Canadians.

The Postsecondary Education Sector

Experts worry the student cap could harm research and education quality. The cap has already disrupted post-secondary education. International students contributed over $37 billion in 2022, supporting 360,000 jobs. The new policies could reduce revenue, leading to job losses, program closures, and potential bankruptcies. This may limit opportunities for Canadian students and lead to tuition increases. Experts criticize the government's rushed regulations, arguing they should have targeted only bad actors.

Future Outlook

Stakeholders criticize the rush and lack of transparency. While rules for new study permits tightened, Canada remains committed to international students. It's crucial to avoid creating uncertainty, as this could harm Canada's reputation and deter talented students. Such a loss would hurt students, the economy, education, and the community.

Canada remains a welcoming destination for immigrants. Despite recent declines, the country aims to exceed pre-pandemic and G7 immigration levels. Immigration is vital for Canada's economy, society, and culture.