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At one time, Canada could boast about its highly respected systems of immigration and higher education. You’d never know it from reading today’s headlines.
How did it come to this?
About a decade ago, the federal government made several changes to Canada’s immigration rules, effectively making it easier for international students to qualify for permanent residency, primarily by allowing them to stay and work after graduation. After three years, permanent residents can apply for Canadian citizenship.
These changes had several goals. Canada wanted to attract a larger share of international students and better compete with other top host countries including the U.S., the U.K. and Australia.
But the changes were also seen as a way to overcome one of the big problems with Canada’s points-based immigration system: Canada admits many highly trained workers who often have difficulty getting a job in their field because employers don’t recognize their foreign educational credentials and work experience.
International students were thought to be the golden ticket. Educated in Canada, they would have the language skills, the Canadian degrees and diplomas, as well as the domestic work experience that employers sought.
For universities and colleges, international students expanded their pool of high-calibre students and brought in additional revenue at a time when domestic enrolment was dropping because of demographic changes. Students from abroad pay much higher tuition fees than domestic students.
The number of international students in Canada studying at all levels reached more than one million at the end of 2023, up 29 per cent from 2022 and up more than 200 per cent from a decade earlier. More than half were in Ontario, with British Columbia as the second most popular destination at 20 per cent.
Enter public-private partnerships in Ontario
Many institutions benefited from the new rules, but some more so than others. In Ontario, public colleges, particularly those in northern regions and smaller cities, which were experiencing a more pronounced decline in domestic enrolments, found it difficult to attract international students.
To overcome this roadblock, they began striking agreements with private institutions located in the Greater Toronto Area (GTA), the region that most international students prefer.
Under these contracts, a student is admitted to a public college, but the training is provided by private institutions, which are mainly located in the GTA, often in strip malls and office buildings.
The college retains a portion of the fees paid by international students and graduates get a credential from the college, which then qualifies them for a post-graduate work permit and eventually permanent residency. In 2021, 11 Ontario colleges had partnerships with private institutions.
A 2017 review of these partnerships in Ontario by David Trick, a former provincial assistant deputy minister of post-secondary education, concluded they posed risks to academic quality and the reputation of the entire college system. He recommended shutting them down.
The then-Liberal government imposed a moratorium on new partnerships, which was subsequently lifted after the election of a Progressive Conservative (PC) government in 2018.
In 2019, the PC government also cut post-secondary student tuition fees by 10 per cent and imposed a freeze on future tuition fee hikes, which remains in place today. The lost tuition revenue wasn’t replaced with higher operating grants.
A 2021 report by the auditor general of Ontario noted that during the four years prior to the pandemic, college tuition revenue from international students increased to $1.75 billion in 2019-20 from $696 million in 2016-17 and accounted for 68 per cent of all tuition fee revenues.
The report also sounded the alarm over the growing popularity of public-private partnerships, finding provincial oversight of these agreements was lacking and there was no strategy to mitigate the risk that such a high reliance on international student enrolment posed for the province’s colleges.
The increase in international students extended beyond Ontario colleges. Universities too hopped on the bandwagon. International students at Nova Scotia’s Cape Breton University account for two-thirds of total enrolment and are the driving force behind its overall enrolment growth in recent years.
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A separate auditor general of Ontario report on the financial management of four Ontario universities — Algoma, Nipissing, Ontario Tech and Windsor — noted that the vast majority of students at these institutions were from India, including 85 per cent of students from abroad at Algoma and 60 per cent at Windsor.
Rapid influx causing growing concerns
Post-secondary institutions rightfully argue that these students bring many benefits to Canadian campuses beyond financial considerations, including diversity and cultural perspectives that provide valuable lessons for Canadian students. They also contribute to Canada’s highly skilled workforce and help offset labour shortages.
But the rapid influx has raised many concerns too. Incoming students have complained of long processing times for student visas and delays in getting their post-graduate work permits, as well as a shortage of affordable student housing, unethical practices among some student recruiters, and financial and mental health challenges. Some have been forced to turn to food banks.
Others have blamed the student influx for exacerbating Canada’s housing shortage and putting additional strain on our health-care services.
In response, Immigration Minister Marc Miller announced earlier this year that the federal government will set a cap on international student permits for two years. In 2024, the cap will be set at about 360,000 permits, down 35 per cent from 2023.
The permits will be allocated by province and territory, based on population. The provinces will then distribute the permits among institutions. The cap doesn’t apply to master’s and doctoral programs or the elementary and secondary sectors.
In addition, starting Sept. 1, international students who begin a program under a public-private partnership will no longer be eligible for a post-graduate work permit. This comes on top of previous announcements that raised the cost-of-living requirements for study permit applicants and other regulations.
Canada needs new immigrants, but must plan for the consequences
There has always been much to celebrate about Canada’s post-secondary education system. We routinely come out near the top of OECD rankings for educational attainment.
Our institutions run the gamut from world-renowned research-intensive universities to small liberal arts institutions and to the wide network of colleges that are supposed to cater to community needs. Presumably, this is what attracted international students in the first place.
All this appears in jeopardy now. Forced to deal with a reduction in international study permits, many institutions are bound to be left struggling.
In Ontario, Laurentian University filed for creditor protection in 2021 and Queen’s University has publicly warned about its financial straits, blaming it on the reduction in tuition fees, high inflation and a decline in international student enrolment during the pandemic. Will governments step in or will we see more go the way of Laurentian?
International students should play an integral role in our immigration system, but they shouldn’t be used as a vehicle to keep post-secondary institutions financially afloat. Governments need to restore proper funding to universities and colleges.
A recent report by an Ontario expert panel recommended ending the province’s tuition freeze and increasing per-student funding, noting: “Many colleges and universities have passed the point where they could survive financially with only domestic students.”
The Ontario government announced recently a $1-billion funding boost over three years — far short of the $2.5-billion increase recommended by the expert panel.
The institutions need to do their part too. They have been unwilling to acknowledge the fact that a smaller number of domestic students means they need to scale back their operations.
It’s time to restore the pride we once had in our post-secondary institutions and our immigration system.
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