Canada has long been a popular study abroad destination for students from India and around the world. In 2022 alone, over 230,000 Indian students went to Canada to pursue their education, accounting for over 40% of all international students in the country.
However, due to strains on Canada’s housing and labor markets, the government recently announced a cap that limits the number of international students in the country over the next two years.
This new policy is expected to significantly impact both Indian students aspiring to study in Canada as well as Canada’s economy which has greatly benefited from international student tuition fees and living expenditures.
While the cap aims to make housing more affordable for Canadians and address labor shortages, it also risks major revenue losses for Canadian universities and colleges.
Why Did Canada Impose a Cap on International Students?
For many years, Canada has had an open-door policy when it comes to international students. Education is a major export sector, bringing in billions in revenue every year.
However, the unchecked growth in international student numbers has led to some unintended consequences.The influx of students has put intense pressure on Canada’s already strained housing markets, especially in major cities like Toronto and Vancouver.
With students competing for rental accommodations, it has driven up rents and housing prices, making it increasingly unaffordable for average Canadians.
Additionally, some argue that the gig economy’s reliance on international students willing to work for low wages has suppressed wage growth for Canadian workers. Businesses in retail, hospitality, delivery services often prefer hiring temporary foreign workers and international students over local workers.
To address these issues and slow down unsustainable growth while Canada builds more housing and infrastructure, the government decided to temporarily limit study permits for international students to a maximum of two years.
How Will This Cap Impact Indian Students?
India sends the most international students to Canada out of any country. In 2022, over 230,000 Indian students went to pursue post-secondary education in Canada. This represented over 40% of all international students in the country.
The new cap will significantly slow down the growth of Indian student numbers in Canada. Only students in longer degree programs like undergraduate and post-graduate degrees are likely to be unaffected. However, those planning to enroll in shorter programs like certificates, diplomas, and PG diplomas may not be granted the full length of study permits required to complete their programs under the new cap.
Students will also find it much more competitive to gain admission into Canadian universities and colleges as institutions will now be forced to limit international student intake. The cap may also lead to tuition fee hikes by Canadian institutions to limit demand. All these factors will make studying in Canada more difficult for Indian students.
The tens of thousands of Indian students who travel to Canada each year also contribute massively not only to the Canadian economy through tuition fees and living expenses but also through part-time work. If student numbers decline, it could significantly impact businesses and sectors that rely on international students as employees and consumers.
How Will This Impact Canada’s Economy?
International students contribute over $22 billion to Canada’s economy each year according to the Canadian Bureau of International Education. They not only pay far higher tuition fees compared to domestic students, but their living expenditures on accommodation, food, transport, discretionary spending, etc. also support economic growth and job creation, especially in cities with major student populations.
It’s estimated that for every $1 spent on educational services in Canada, international students spend roughly $3 to $4 on living expenses. A decline in international student numbers could risk billions in lost revenue for the Canadian economy. Moreover, Canada’s labor market and essential services have come to rely on international students for talent and manpower.
From universities and hospitals to retail, hospitality, gig economy companies, they support business operations through low-wage work. Capping student visas risks worsening Canada’s labor shortages in these critical sectors. Finally, over 60% of international students aim to transition into permanent residency after graduation.
As skilled immigrants, they contribute economically and help Canada address its aging demographics. With fewer international students transitioning to permanent residency, Canada could lose out on this vital source of skilled immigrants.
While the cap offers short-term relief to Canada’s overheated housing markets, if the government wishes to sustain the massive economic benefits of international education, it will need to implement long-term strategies like expanding housing supply, upgrading infrastructure, and creating clear pathways to permanent residency.
What Next for Indian Students?
For Indian students committed to gaining an international education, Canada’s restrictions may influence plans to study there in the near future. However, excellent alternatives exist across countries like the UK, Australia, Germany, Ireland, and the US.
These countries are actively recruiting international students. Government policies and post-study work opportunities are also increasingly favorable for Indian students in these countries. Students should research which countries best align with their academic and career goals.
Factors like program quality, tuition fees, cost of living, post-study work eligibility, ease of gaining permanent residency, etc. must be evaluated before selecting an overseas education destination. While Canada’s policy changes are disappointing for many Indian students, by carefully reviewing all their options, students can find alternative destinations to achieve their study abroad dreams.
