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Canada looking to reduce the number of international study permits as much as 50%

Giancarlo Randazzo

Having earned a Bachelor of Arts in Philosophy with designations in Applied and Practical Ethics with an emphasis on business transactions, Giancarlo�...

Having earned a Bachelor of Arts in Philosophy with designations in Applied and Practical Ethics with an emphasis on business transactions, Giancarlo�...

Jan 23 6 minutes read

In the ever-evolving landscape of Canadian immigration policies, the recent announcement by the Honourable Marc Miller, Minister of Immigration, Refugees, and Citizenship, has sent ripples through the educational and real estate spheres. The federal government's decision to implement a two-year cap on international student permits, reducing them by 35% or 50% for some provinces, aims to address housing concerns and ensure a sustainable level of temporary residence. As we delve into the intricacies of this policy shift, we'll also explore the dynamics of Toronto's rental market, which has experienced a notable slowdown.

The heart of this policy lies in its effort to strike a balance between welcoming international students and addressing public concerns about immigration's impact on affordable housing. The cap, effective from January 22, 2024, spans two years and will result in a reduction in new international student permits, with individual caps for provinces and territories.

The allocation process is meticulous, with provinces and territories expected to issue attestation letters for each study permit application. Some exemptions exist, including renewals, master's and doctoral pursuits, and elementary and secondary education. Changes also extend to the Post-Graduation Work Permit Program (PGWPP), affecting curriculum licensing arrangements and introducing a 3-year work permit for master's graduates. Spousal work permits will now be limited to master's and doctoral programs.

While the government emphasizes collaboration with provinces, concerns linger about the impact on the education system and the enforcement of restrictions in high-density areas.

Amidst these policy changes, 2023 witnessed a surge in Canada's international student population, setting the stage for a potential record-breaking year. Projections estimate around 900,000 international students for the end of 2023, with an anticipated 1.4 million international student applications by 2027.

This rapid increase, marked by nearly 300,000 additional study permit applications annually from 2019 to 2022, showcases Canada's allure for global learners. The government's proactive stance, issuing over 280,000 new study permits in the first half of 2023 alone, signals a 77% increase from the same period in 2022.

Traditionally popular provinces like Ontario, British Columbia, and Quebec continue to attract students, but affordability concerns are steering learners toward provinces with lower tuition and living costs. Alberta and Saskatchewan, in particular, have experienced substantial growth in the issuance of study permits.

Demographically, students from Nigeria, Nepal, Ghana, Côte d’Ivoire, and Guinea have shown significant growth, with Nigeria poised to become Canada's second-largest source country for international students.

While the cap aims to address concerns about housing affordability and maintain a sustainable level of temporary residents, criticisms have emerged. The measures have faced skepticism regarding their effectiveness and the potential stress they might impose on the education system.

Advocacy groups, including the Canadian Federation of Students, criticize the government for scapegoating international students rather than addressing broader issues such as high tuition fees, housing, and food insecurity. Universities Canada has expressed concerns about processing times and the potential impact on students choosing other countries for post-secondary study.

Simultaneously, Toronto's rental market, a significant player in the broader GTA, has witnessed a slowdown. Despite being one of the most expensive major markets, Toronto experienced considerably slower rent growth compared to previous years. The annual rent growth moderated to 2.1%, a notable decrease from earlier periods.

Several cities, including Richmond Hill, Kanata, Barrie, and Guelph, ranked among the most expensive small- and mid-sized markets. However, the overall trend indicates a moderation in rental demand and supply dynamics. Rental demand is expected to remain strong but with some moderation in 2024, as an increase in apartment completions and higher tenant turnover is anticipated to add more supply to the market.

The potential impacts on Toronto's rental market are multifaceted. The slowdown in rent growth may provide a breather for tenants, offering a more stable environment. However, it also poses challenges for landlords and real estate professionals, necessitating strategic adaptations to the evolving market dynamics.

Moreover, Toronto and the GTA represent a segment of the broader Ontario market, with regional variations in rent growth. Understanding these local dynamics becomes crucial for real estate professionals navigating the landscape.

Canada's two-year cap on international student permits, alongside changes in the PGWPP and spousal work permits, reflects the government's commitment to balancing educational opportunities with concerns about housing affordability. As we peer into the future, the collaborative efforts between the federal government and provinces will likely shape the effectiveness of these measures.

Simultaneously, Toronto's rental market, while experiencing a slowdown, remains a vital component of the broader real estate landscape. Navigating these changes requires a nuanced understanding of legislative shifts, regional dynamics, and the evolving needs of both students and the rental market.

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