Minister of Immigration, Refugees and Citizenship Marc Miller arrives for the federal cabinet retreat in Montreal on Jan. 22.Christinne Muschi/The Canadian Press
The federal government imposed an immediate cap on the number of international study visas that it issues and temporarily froze the application system for foreign undergraduate students across much of the country while provinces implement the policy to rein in the skyrocketing growth.
The changes are aimed at easing the pressure that foreign students are having on services such as housing and health care. Economists largely welcomed the move because the number of newcomers has grown so dramatically under the Liberals that the economy can no longer absorb them. However, the policy will put pressure on the bottom lines of universities and colleges that rely on international student fees.
Immigration Minister Marc Miller made the announcement on the first full day of the Liberals’ cabinet retreat in Montreal on Monday.
Mr. Miller unveiled three interconnected changes that he said will stop the growth in the foreign study visa program and squeeze out the private colleges that the minister says have been churning out foreign graduates like “puppy mills” and providing a subpar education.
“It is not the intention of this program to have sham commerce degrees or business degrees, that are sitting on top of a massage parlor, that someone doesn’t even go to, and then they come into the province and drive an Uber,” Mr. Miller said.
Under the Liberals the program has nearly tripled in size. In 2015 there were 352,325 foreign students in Canada; by the end of 2023 that had soared to 1,028,850.
The Immigration Minister said for the next two years there will be “no further growth” in the number of international students in Canada, meaning the government will grant visas approximately equal to the number that expire.
For 2024 that means Ottawa will reduce the number of new international study permits it issues by more than one-third compared with last year.
The cap will be applied equally across provinces on a per capita basis. Because some accept disproportionately more foreign students than others, Mr. Miller said those provinces, such as Ontario, will have to cut intake by about 50 per cent.
The government said it will announce the cap for 2025 by the end of this year.
“We’ve got two years to actually get the ship in order. It’s a bit of a mess, and it’s time to rein it in,” Mr. Miller said.
Ottawa’s foreign student cap will create financial risks, university and college leaders say
The cap will apply to college and undergraduate programs, meaning people pursuing master’s and doctoral degrees will not be affected nor will students who are renewing existing visas. The restrictions won’t apply to elementary and secondary school permits.
The government will require foreign students to submit an attestation letter from a province or territory with their federal application. Ottawa gave the premiers until March 31 to establish a process for issuing the documents. Until then the application program for those entering undergraduate or college programs is paused, except in Quebec which already has a process in place.
The second change Mr. Miller unveiled is that beginning in September, international students who begin a study program at a school operating under a public-private partnership model will not be eligible for a post-graduation work permit. That permit was a key draw for students to attend private colleges that team up with public colleges through curriculum licensing agreements.
Lastly, the minister said the government will restrict new work permits for spouses of students to those with partners in graduate studies.
Temporary residency programs, such as study permits, are the biggest driver of population growth in Canada, which is at its quickest pace since the 1950s.
That immigration growth is one of the reasons economists say Canada’s housing shortage is so pronounced: The number of new rental and housing units is not keeping up with demand. And internal documents obtained by The Canadian Press show the federal government was warned about a “misalignment” in population growth and housing supply as early as 2022.
Top economists from Canada’s biggest banks roundly criticized the government earlier this month for losing control of the program and being slow to rein it in. A senior government official acknowledged to The Globe and Mail Monday that the Liberals were slow to react, but they said it only became clear in 2022 that the post-pandemic bounce in applications wasn’t levelling off.
The source said the minister chose to act after he received a briefing last fall in which civil servants said without a cap the foreign student program would hit 1.4 million people by the end of 2024. The source said the government had hoped the provinces would rein in their programs last fall, but they didn’t.
According to the official, beyond concerns around housing supply, the government was worried that the system would fall into chaos if it allowed in vastly more students than the permanent residency program that those same students often apply to after graduation could accommodate.
The Globe is not identifying the source because they were not authorized to disclose the internal deliberations.
Benjamin Tal, deputy chief economist at CIBC Capital Markets, who gave a briefing at last year’s cabinet retreat on immigration and housing affordability, told The Globe the cap on international students was a “bold and aggressive move in the right direction.”
He said it was “perhaps the most significant one in recent years to address affordability.”
Implementing the cap is largely being left up to provinces that will have to decide how to apply it across different schools.
Mr. Miller said it is also up to the provinces, which hold jurisdiction over postsecondary institutions, to root out the schools that are abusing the system and address the public funding crunch that has left those schools relying on higher foreign tuition fees.
“I’m not the minister of postsecondary-education-underfunding, I’m the Minister of Immigration,” he said.
Ontario and British Columbia issued statements saying they would work with the federal government. B.C. said it will release its plan next week, which will in part “significantly increase quality standards.”
Brampton Mayor Patrick Brown, whose city west of Toronto is one of the epicentres of the student-induced housing crunch, welcomed the cap but reiterated his call for student visas to be contingent on housing that is close to the school, rather than hours away and in cities like his.
Conservative Leader Pierre Poilievre supported the cap but said it could have been avoided if the Liberals had better managed the program in the last eight years.
“International students and temporary foreign workers are not to blame for his incompetence,” Mr. Poilievre told a press conference.
Housing Minister Sean Fraser defended his record on Monday, telling reporters he had begun to look at imposing a cap when he was still immigration minister. He said the cap had the potential to alleviate pressure in the housing market, but the long-term answer will be to build more units.
NDP immigration critic Jenny Kwan said her party is opposed to the foreign student cap and the government should have worked with universities to create a housing plan for those coming from abroad.
With a report from Laura Stone.