Atlantic Canadian universities are facing significant financial losses due to a federal cap on foreign student enrolment. A report by Halifax-based Gardner Pinfold Consulting, commissioned by the Association of Atlantic Universities (AAU), estimates that the region has lost approximately $163 million as a result of the government’s policy. The cap has led to a reduction of nearly 3,000 international graduate and undergraduate students in the region.
The restriction on foreign student permits is part of the federal government’s effort to manage the impact of international students on the housing market, among other concerns. However, universities argue that this policy is not only harming their financial sustainability but also threatening Canada’s reputation as a top destination for international students.
Ottawa’s Cap on Student Permits
Last month, the Canadian government announced its decision to cut the number of international student permits by another 10 per cent, following an earlier decision in January to reduce new student permits by more than a third this year. These measures have taken universities by surprise, particularly in Atlantic Canada, where post-secondary institutions rely heavily on international students to bolster their enrolment and revenue streams.
Peter Halpern, executive director of the AAU, expressed concern over the new targets, explaining that universities had expected a higher number of international students this year.
“If we hadn’t had these [federal] policy changes, international students probably would have accounted for about $1.3 billion of total spending in the region this year,” Halpern said.
The report highlights the importance of international students to the regional economy. With many of these students living off-campus and working while attending school, they contribute significantly to the local and provincial economies.
Economic Contributions of International Students
According to the report, 86 per cent of foreign students in Atlantic Canada take on part-time jobs during their studies, and 75 per cent live off-campus. This creates a substantial economic boost for communities, as students spend on housing, food, transportation, and other essentials.
“That makes a big contribution economically to a community, to a province, and to the region,” Halpern noted.
The federal government’s decision to limit international student permits is partly based on concerns that the influx of foreign students is exacerbating the housing crisis in Canada. Immigration, Refugees and Citizenship Canada (IRCC) has set a new target of 437,000 student permits for 2025 and 2026, down from 485,000 permits in 2024.
Debate Over Housing Impact
Despite the federal government’s concerns, Halpern disputes the notion that international students are to blame for Canada’s housing crisis. He pointed out that many universities in Atlantic Canada have sufficient space in their student residences, with some campuses not operating at full capacity.
“I can only speak from our sector’s point of view, but I know that in many of our institutions, there is capacity in our student residences for students. They’re not at full capacity. Some are, but some aren’t,” Halpern explained.
This suggests that the issue may not be as straightforward as linking international student numbers to housing shortages, at least in Atlantic Canada. The broader housing crisis may involve other factors, including local market dynamics and broader policy issues.
Impact on Canada’s Global Reputation
Beyond the immediate economic effects, Atlantic Canadian universities are worried about the long-term impact of the federal cap on international student permits. Rob Summerby-Murray, president of Saint Mary’s University in Halifax, expressed concerns that the policy could damage Canada’s standing as a top choice for international students.
“Our universities are deeply concerned that recent IRCC policies have severely damaged Canada’s reputation as a great destination for young talent from all over the world,” Summerby-Murray said.
The perception that Canada is becoming less welcoming to international students could deter potential applicants from choosing Canadian institutions in the future. This could have a ripple effect on the financial stability of universities, many of which depend on international students to offset declining domestic enrolment.
“The IRCC policies are negatively affecting Canada’s brand as a welcoming country for international students, threatening the future financial sustainability of our universities and undermining an important and growing stream of new immigrants,” Summerby-Murray added.
Long-Term Consequences for Immigration
International students are often seen as a key source of future immigrants. Many students who come to Canada for education decide to stay and build their careers in the country. By limiting the number of student permits, the federal government may also be restricting a vital pipeline of skilled immigrants.
Atlantic Canada, in particular, has been relying on international students as a means of addressing population decline and labour shortages. With fewer international students coming to the region, universities and local governments may struggle to meet their economic and demographic goals.
Summerby-Murray emphasized the role that international students play in supporting immigration and workforce needs: “International students represent a growing stream of new immigrants, and they contribute to the cultural and economic vibrancy of our communities.”
Challenges for Atlantic Canadian Universities
The financial losses resulting from the cap on foreign student enrolment are already being felt by universities in Atlantic Canada. These institutions have long relied on international students not only for their tuition fees but also for the diversity and global perspectives they bring to campuses.
As the number of domestic students declines, universities have increasingly turned to international students to maintain enrolment numbers. The federal government’s decision to limit international student permits could lead to lower revenue and financial strain on post-secondary institutions.
For smaller universities in Atlantic Canada, which are more reliant on international students than their larger counterparts, the impact could be particularly severe. Reduced enrolment may force some universities to cut programs, lay off staff, or raise tuition for domestic students to compensate for the loss of international student revenue.
Looking Ahead
As the debate over international student enrolment and its impact on the housing market continues, Atlantic Canadian universities are urging the federal government to reconsider its policy. They argue that limiting international students will hurt not only the universities but also the local economies and Canada’s reputation as a global education leader.
Universities are calling for a more nuanced approach to addressing the housing crisis, one that does not place the blame solely on international students. Instead, they advocate for solutions that increase housing supply and address broader market issues without compromising the country’s ability to attract foreign talent.
In the meantime, the loss of nearly $163 million in revenue serves as a stark reminder of the economic importance of international students to Atlantic Canada. Without a change in federal policy, universities in the region may face even greater financial challenges in the years ahead.
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