A leaked memo Friday afternoon put Canada’s international education sector on notice that cuts are coming. According to the memo, “The number of international study permits [to be cut] is still undetermined, but IRCC indicated they will aim to return to more sustainable levels, possibly rolling back international student numbers to where they were at least two years ago.”
Canada – Study permit holders by country of citizenship and year in which permit(s) became effective
2023:579K
2022:548 K (-5 %)
2021: 443K (-23 %)
2020: 255K (pandemic) (-56%)
It is unlikely that a 5 percent reduction would be enough to satisfy public concern. The volume of immigration to Canada including the invisible surge of temporary residents , which include international students, is among Canada’s hottest political issues as of late. Earlier in 2023 Statistics Canada, Canada’s data authority, allegedly miscalculated the volume of temporary residents, including international students, in the national census by almost a million people.
The public policy debate on this issue started in earnest this past summer (2023). Economist Mike Moffat visited Ottawa to discuss the increased volume of international students and the impact on housing affordability. I also had a chance to discuss this issue with Mike Moffat summer of 2022. Public concern over housing affordability is an acute voter concern in Canada, which under its Liberal government, is experiencing the highest inflation rate in 40 years and increased levels of immigration.
The federal government’s calculations are out of date but media in Canada estimates the value of Canada’s education export has grown to approximately $30 billion annually. Canada’s growth has stemmed from a sheer increase in volume of in-bound students, mainly from India, with few control mechanisms in place to ensure responsible or sustainable growth. Canada’s International education policy planning documents show the government intended to host 450,000 international students in Canada by the end of 2022, but ended up with well over 800,000.
As the memo reads, “Under the proposed plan, provinces will be provided an allotment from IRCC for international study permits, and provinces will determine how these allotments are to be divided among specific institutions.”
This would appear to leave the provinces to determine how best to manage their capped volume intake. Student entry volume – federal jurisdiction; who profits and best benefits – provincial jurisdiction. The Federal government has set a timer for provinces to organize their own backyards, according to limits yet to be disclosed. There was industry speculation that jurisdictional disputes might delay policy developments out of Ottawa.
The memo suggests that the Liberal governments proposed “Recognized Institution Framework” (a matrix evaluation system that had been proposed in lieu of a cap) may be delayed for up to two years until after the next election. Angus Reid polling currently has Justin Trudeau’s approval rating at 30%.
Most likely to be Impacted:
Considering recent growth of post grad certificate programs at community colleges, one might expect the bulk of cuts to occur there, unless it is clear that graduates fill areas of labour market need. Unfortunately, most colleges and provinces do not presently have data to support this, which complicates decisions at the provincial Ministry level.
Provincial data from Ontario (the host province of most international students) has seen rapid growth throughout the sector, but explosive growth at public-college private-college partnership (PCPP) campuses. In particular high PCPP enrollments have been an issue of contention due to their concentration in the Greater Toronto area, also an area that experiences large influxes of immigrants landing for permanent settlement. Despite concerns related to housing shortages and the academic integrity of PCPP’s, by fall of 2021 they made up 26% of college sector full-time enrollment. Previously a government commissioned report had recommended PCPP’s be shut down entirely.
There have also been general calls from industry lobbyist, in the public sector, to focus cuts on private sector colleges which have continued to expand despite their lack of post graduate work permit eligibility. Private college enrollments have continued aggressive expansion in recent years. Currently there are 529 designated learning institutions (schools allowed to support study permits applications) in Ontario alone.
Economic impact on education agents and agent aggregator platforms servicing the Canadian market should be expected. It is believed that agent aggregators are highly dependant on the Indian market and Ontario college placements for revenue. Both are now riddled with uncertainties. It had just been reported last week that Canada’s edu-export volumes to India dropped approximately 80% in Q4 compared to 2022 volumes. There are further questions on how the new provincial cap system will impact the availability of letters of acceptance, which have been issued at rates as high as 5 times enrollment volumes by some DLIs. There is evidence on hand that large recruitment companies have been using LOA issuance volume to project long term revenue despite the discrepancy this presents compared to eventual earnings.
It being the weekend, Universities Canada and Immigration Refugee Citizenship Canada have not responded to requests for comment. There will be a lot of questions to answer in the coming weeks.
