Canada’s Foreign Student Cap Triggers Rs 8,000 Crore Loss For Colleges – What It Means For The Future

In 2024, Canada introduced a cap on international study permits, reducing the number of permits issued and triggering a financial crisis for its post-secondary education sector.

Heavily reliant on international students, particularly from India, many Canadian colleges and universities are grappling with sharp revenue declines, layoffs, programme suspensions, and even potential closures.

Financial Losses

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The cap has led to an estimated total loss of approximately $998 million (Rs 8,000 crore) for Canadian colleges and universities, not accounting for losses in provinces like British Columbia or unreported institutions.

Breakdown of Losses

1. Ontario Universities:
   • Current year loss: $330 million.
   • Next year projection: $600 million.
2. Mohawk College (Ontario):
   • Projected deficit for 2025-2026: $50 million.
3. Northern College (Ontario):
   • 2025-2026 deficit: $6 million.
   • 2026-2027 projection: $12 million.
4. General Post-Secondary Sector (Ontario):
   • First-half spending drop for 2024-2025: $752 million (overlaps with Ontario university losses).

Impact

• Mohawk College:
  • Announced a 20% reduction in administrative staff.
  • Suspended 16 programmes for the 2025 academic year.
  • Projected 200-400 job cuts.
• Northern College:
  • Operational deficit climbing from $6 million to $12 million within two years.
  • 88% of its enrolment in 2021-2022 came from international students, primarily from India.
• Sheridan College:
  • Suspended 40 programmes.
• Seneca College:
  • Temporarily closed its Markham campus due to declining enrolment.
• Centennial College:
  • Halted 49 programmes after the policy change.

Federal Policy

The federal government’s policy caps international study permits at 437,000 for 2025 and 2026, a 10% reduction from 2024. This decision aims to address questionable practices at some for-profit career colleges, but it has also created significant financial strain for public and private institutions alike.

Dependency

International students accounted for 43% of enrolments in Ontario’s post-secondary sector in 2023-2024. Indian students alone made up 67% of that group. With many colleges, such as Northern (88% international enrolment) and Lambton (85%), relying heavily on international tuition, the policy change has revealed the fragility of their funding models.

No-Show Students

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In 2024, approximately 50,000 international students who received study permits failed to enrol at their designated institutions. Among them, nearly 20,000 Indian students were reported as no-shows. This issue highlights potential abuses of the international student system, which some have used as a pathway for immigration rather than education.

Government Responses

Immigration Minister Marc Miller defended the cap as necessary to address systemic issues but called the reliance on international tuition unsustainable. Miller also criticized institutions for charging international students four to five times the domestic tuition rates.

Provincial Interventions

• British Columbia: Allocated £3.12 billion for post-secondary institutions in 2024-2025, a 24% funding increase.
• Ontario: Introduced a three-year, £903 million sustainability fund while maintaining a tuition freeze for domestic students.

The Road Ahead

Canadian colleges and universities face uncertain futures as they adapt to reduced enrolments and funding challenges. To mitigate the crisis:

• Institutions may need to diversify revenue streams, reducing dependency on international students.
• Reforms to the international student system, such as requiring upfront tuition payments, could deter abuses.
• Enhanced government oversight can help address gaps in funding models and institutional accountability.

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The cap on study permits has highlighted systemic vulnerabilities in Canada’s post-secondary sector. While necessary for curbing abuse, it underscores the urgent need for sustainable funding strategies to support the education system.

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