To Cap or Not to Cap? Canada’s International Students Caps 2024

By: Ali Hosseini, Law Student

Supervisor: Ravi Jain, Lawyer, Certified by LSO as Specialist in Immigration Law

---

Can you name a country that is reducing – and putting a cap on – one of its highest contributors to its economy, namely international students? Hint: it is cold. That is right, it is Canada!

But, why? And what are the consequences? In addressing the questions, we will take a glance at the economic ramifications, expound on the repercussions for Canadian colleges and universities, and the implications of Study Permit applicants from countries of residence that already have a comparatively low acceptance rate.

Recent Announcements

Before we begin, let us take a few steps back and understand the context of the posed questions. In August 2023, former Minister of Immigration, Refugees and Citizenship Canada (IRCC), who is now the current Minister of Housing, Infrastructure and Communities of Canada, the Hon. Sean Fraser, expressed that putting a cap on international students coming to Canada is one of multiple solutions when it comes to addressing the housing crisis.^[1] Currently, Canada hosts about 900,000 international students in the country, who need a place to reside, even if they are here temporarily._^[2]

Not long after Minister Fraser made the announcement, there was a shuffle in the federal cabinet ministries. The Hon. Marc Miller became the new IRCC minister and in October 2023, in addressing the international students, the Hon. Miller said Canada “won’t be imposing a cap [and that] we are looking at a little more surgical approach to a problem that has branched out into many areas of complexity, including fraud […] doing surgery with a hammer, which is what a cap would have represented, was not a preference that I retained today.”^[3] However, he asserted that he reserves the right to cap it.

Just about a week ago, Hon. Miller articulated that “the challenge with the non-permanent resident targets is there are none. We have to take a look at that and rein it in, in many areas, but we need to be clear about what that means, exactly.”^[4]

On Friday, January 18^th during dinner time, news broke out about an internal memo by the Toronto Star, stating that “later this year, the federal government will assign a fixed number of international study permits to each province.”^[5] The “leaked plan” indicated that it will be up to the provinces to decide the study permit allocation split to their post-secondary institutions. 

On January 22, 2024, Hon. Miller finally cleared the air and conveyed that Canada will approve about 360,000 undergraduate study permits for 2024, which is a 35% decrease from 2023.^[6]

The new announcements may prima facie fix the housing crisis, but it may also come with a heavy price.

Impact on Canadian Economy

According to Global Affairs Canada’s ‘Economic Impact of International Education in Canada – 2020 Update’ report, it is estimated “that in 2017 and 2018, international students in Canada spent over $18.4 billion and $22.3 billion, respectively, on tuition, accommodations, and discretionary spending.” ^[7]

To put this into perspective, according to the Government of Canada’s ‘International Education Strategy 2019-2024’ report, the “educational expenditures by international students have a greater impact on Canada’s economy than exports of auto parts, lumber or aircraft.” ^[8] 

To pose a cap, international students may consider choosing other countries, and consequently, this would pose concerns for Canada’s competitive edge in the economy when we rely so much on international students. Other countries such as Australia, and especially the United States of America, have retained their numbers of international students, and are greatly benefiting from them.

The NAFSA: Association of International Educators declared that “international students studying at U.S. colleges and universities contributed [USD] $40.1 billion and supported 368,333 jobs to the U.S. economy during the 2022-2023 academic year.”^[9]  According to Forbes, “higher education is the 9th leading export of the United States […] importing students from around the world.”^[10] 

During the time Hon. Dan Tehan was Australia’s Minister of Education, he “stated that Australia’s total economic benefit from its “education exports” was AUD$37.6 billion in 2018-19, making higher education the country’s third-largest export earner, second only to coal and iron ore.”^[11] 

International students have proven to benefit the economy in many aspects for Canada and Canada’s competitors. For Canada to place a cap, the concern will be how we will stay competitive in the immigration industry to ensure economic growth, when we are cutting down on the very stream that has a greater impact than exports of auto parts, lumber or aircraft.

Implications for Study Permit Applicants

In addition to Canada’s economy, further concern pertains to the prospective international students, particularly those who unwillingly have the odds already against them. When reviewing IRCC’s 2022 figures, it is evident that certain countries exhibit higher refusal rates than others.

IRCC – Numbers of Study Permit Applications (Excluding Extensions) Processed & Refusal Rate* between January 1, 2022 – December 31, 2022, Broken Down By Year and Country of Residence By Immigration Category (In Persons) As of: April 10, 2023

Application Total Persons Count	Approved	Refused	Withdrawn	Refusal Rate	Refused
Taiwan	1,694	217	19	11%	1,930
Spain	2,357	128	8	5%	2,493
Mexico	6,677	906	48	12%	7,631
Korea, Republic of	6,241	348	63	5%	6,652
Japan	8,152	318	35	4%	8,505
Federal Republic of Germany	3,155	223	17	7%	3,395
France	10,328	1,227	49	11%	11,604

List of Certain Countries of Residence, with Study Permit Refusal Rate of Above 40%

IRCC – Numbers of Study Permit Applications (Excluding Extensions) Processed & Refusal Rate* between January 1, 2022 – December 31, 2022, Broken Down By Year and Country of Residence By Immigration Category (In Persons) As of: April 10, 2023

Morocco	3,269	3,369	45	51%	6,683
Senegal	1,557	3,773	14	71%	5,344
India	190,104	164,108	2,482	46%	356,694
Iran	8,055	7,229	92	47%	15,376
Algeria	4,195	7,229	92	47%	15,376
Bangladesh	5,054	4,963	51	50%	10,068
Congo, Democratic Republic of the	2,000	6,360	12	76%	8,372
Jordan	1,193	3,327	55	74%	4,575
Ghana	2,561	3,202	27	56%	5,790
Nigeria	13,451	22,134	271	62%	35,856
Pakistan	2,290	3,688	45	62%	6,023
Turkey	2,239	2,746	16	55%	5,001
Ethiopia	417	1,995	12	83%	2,424
Sri Lanka	3,716	2,539	61	41%	6,316

Study permit applicants with countries of residence such as Spain and Ethiopia both had around 2,400 applications submitted. However, Spain’s refusal rating was only 5%, whereas Ethiopia’s refusal rating was 83%. Sri Lanka and the Republic of Korea both had around mid-6,000 Study Permit applications submitted. Republic of Korea’s refusal rating was only 5%, whereas Sri Lanka’s refusal rating was 41%. The Democratic Republic of Congo and Japan both had around mid-8,000 Study Permit applications submitted. Japan’s refusal rating was 4%, whereas the Democratic Republic of Congo’s refusal rating was 76%.

Not only will applicants from countries of residence with higher refusal rates potentially experience increased hardship due to the cap, but they also may experience further hurdles depending on the Designated Learning Institutions (DLI) they plan to study at, which brings us to the third group that will be affected by the new announcement: colleges and universities.

Foreign Students: Impact on Colleges and Universities

Canada’s colleges and universities greatly depend on international students’ tuition fees. Bonnie Lysyk, Ontario’s former Auditor General, raised concerns pertaining to universities and colleges relying extensively on international students for their operations[12] such that by 2021, 68% of all tuition revenue by Ontario colleges were from international students, amounting to $1.7 billion.[13] Steve Orsini, President and CEO of Council of Ontario Universities said “at least 10 universities in Ontario [are] forecasting operating deficits totalling $175 million this year [2024], growing to $273 million next year.” ^[14]

One of the primary factors for the reason DLIs rely on the international students’ tuition is that the “system is starving and that’s why colleges and universities have turned to international students,” said a university president that did not want to be named.^[15] Building upon this notion, Philip Landon, President of Universities Canadian, said “there has been some severe underfunding of universities, particularly in Ontario […] International students have been helpful in making up that shortfall as provincial governments have not taken their responsibility to adequately fund the universities.”^[16] 

Experts argue that the fact that all colleges and universities seem to be affected by the cap may be unfair because “universities offer about 130,000 beds across the country for students coming in, so the issue of housing is not actually a university issue,” said Philip Landon.^[17] Since “we have a housing guarantee for students coming to an Ontario university […] you can impact the good performers [the universities with proper housing plan], when you really want to go after the bad performers, so they [IRCC] need a smarter policy, than just a blunt cap,” said Steve Orsini. ^[18]

As per Friday’s “leaked plan” and Monday’s affirmation,“ IRCC will allocate a portion of the cap to each province and territory, who will then distribute the allocation among their designated learning institutions.”^[19] There are uncertainties surrounding the criteria(s) the provinces will use to “split among authorized post-secondary institutions within their jurisdictions.”^[20] Will the consideration be solely centered on housing, or will other factors play a part in the distribution?   

Beyond the housing consideration, another factor could be the DLIs history of Asylum applicants, as it may seem to have mattered thus far. Whether the correlation is merely coincidental or whether IRCC takes DLIs history to account, that is a question the IRCC can answer.

The 2022 Asylum Claims made by Study Permits in DLI have increased by more than twofold between 2018 and 2022. A total of 15,935 international students filed for Asylum Claims in Canada.

 

Number of Study Permit Applications (Including Extension) Approved and Refused (Including Rates*) by IRCC between January 1, 2022 and December 2022, Broken down by Year, Application Type and Some Designated Learning Institution (DLI) Number**(in Persons), Including Top 15 Highest Asylum Claims (excluding ILAC) made by Applicants with Study Permits

Institution	DLI	Approved (2022)	Refused (2022)	Approved % (2022)	Refusal % (2022)	Asylum (2018-2022)
Study Permit Total		353,729	296,345	54%	46%	Total Asylum: 15,935
Seneca College	O19395536013	10,978	8,226	57%	43%	695
Niagara College Canada	O19396019469	4,529	6,158	42%	58%	455
Centennial College	O19394700003	11,926	7,333	62%	38%	450
Université du Québec à Trois-Rivières	O19359011172	1,404	3,809	27%	73%	435
George Brown College	O19283850612	5,870	4,216	58%	42%	395
Fanshawe College	O19361039982	8,953	7,329	55%	45%	385
Humber College	O19376943122	6,761	3,791	64%	36%	320
University of Regina, Including Campion College, First Nations University of Canada and Luther College	O19425660270	1,784	3,276	35%	65%	305
Conestoga College	O19376158572	21,034	22,144	49%	51%	300
University of Canada west	O19377235822	9,996	8,136	55%	45%	285
Sheridan college	O19385946782	6,794	3,412	67%	33%	255
York University	O19361109242	4,560	2,280	67%	33%	250
Cape Breton University	O19391556824	4,425	7,979	36%	64%	250
University of Prince Edward Island	O19220071452	868	653	57%	43%	230
La Cité Collégiale	O19395422135	1,296	1,739	43%	57%	225
Average		6,745	6,032	52%	48%	349

Number of Study Permit Applications (Including Extension) Approved and Refused (Including Rates*) by IRCC between January 1, 2022 and December 2022, Broken down by Year, Application Type and some Designated Learning Institutions (DLI) Number**(in Persons), Including Top 10 Lowest Refusal Ratings made by Applicants with Study Permits from DLIs with Significant Amount of Approval

Institution	DLI	Approved (2022)	Refused (2022)	Approved % (2022)	Refusal % (2022)	Asylum (2018-2022)
Study Permit Total		353,729	296,345	54%	46%	Total Asylum: 15,935
University of Toronto	O19332746152	6,923	727	90%	10%	15
University of British Columbia	O1 9330231062	5,263	715	88%	12%	60
McGill University	O19359011033	2,544	221	92%	8%	40
University of Waterloo	O19305471522	1,943	252	89%	11%	50
McMaster University	O19395535729	1,432	161	90%	10%	20
Columbia College	O19279591302	1,317	223	86%	14%	105
Simon Fraser University	O18781994282	1,102	153	88%	12%	35
Queen’s University	O19376023352	935	129	88%	12%	~10
Fraser International College	O19239078442	905	164	85%	15%	~35
University of Guelph	O19305391192	851	156	85%	15%	~25
Average		2,322	290.1	88.1%	11.9%	~39.5

There seems to be a correlation, on average, between the number of Asylum made by DLIs students and the refusal rate for the DLI. The DLIs that have the most Study Permit to Asylum, on average, have a higher refusal rate than the DLIs that had much less Asylum Claims. For example, the top 15 highest Asylum Claims in DLIs (excluding ILAC) had an average refusal rating of 48%; whereas the DLIs with significantly lower Study Permit to Asylum Claims had an average refusal rating of 11.9%. It is currently unknown where the country of residence of the students with Asylum Claims are “because the Immigration and Refugee Board itself does not collect data based on the status that a claimant initially came to this country under.”^[21]

With the uncertainties, something to look out for is how the provinces will distribute the number of students allowed into each post-secondary institution: is housing going to be the only factor they would consider, or will other factors, such as DLIs with high Asylum Claims have an impact on their decision?

Final Thoughts: Impact on International Students

We do have a housing issue, but to cut down and put a cap on international students, there may be severe consequences, some of which have been outlined thus far: the direct impact on Canada’s economy at large, the additional hurdles to students from countries of residence with disadvantages, and the severe economic pressure colleges and universities will encounter.

According to the recent discussion paper, ‘Strengthening the Integrity of Canada’s International Student Program’ written by four Canadian Senators, “research has found among international students who arrived to Canada in the 2000s, just 30% became permanent residents within 10 years of their arrivals.”^[22] In an attempt to combat the housing crisis, it might be concerning for Canada to single out international students, when we have other programs, such as the Permanent Resident Start-Up Business Applications, that have had an approval rating of 86% in 2022 and 91% in 2021.^[23]

In the words of Philip Landon, “international students bring a wealth of talent, skills, diversity to our campuses and to our communities and to our workforce, so I think anything that […] cuts that back, I think it is going to make for a weaker campus, weaker community, and a weaker workforce.”^[24]

Nevertheless, as Bonnie Lysyk once said, the “housing crisis in Canada is a systemic issue that has been growing in Canada for decades. We must make sure solutions to the housing crisis do not blame or punish newcomers to Canada.”^[25]