The Realities of Canada’s International Student Limit - A $50 Million Deficit at Mohawk College

International students in Canada have long been an essential revenue stream for educational institutions, as their tuition fees often exceed those of domestic students by five to six times. However, recent government policies aimed at limiting the number of international students to protect housing and education opportunities for domestic residents have led to unexpected consequences for Canada’s educational institutions and local economies.

The Financial Crisis Triggered by Declining International Student Numbers

According to a statement from Steve Orsini, President and CEO of the Council of Ontario Universities, released on October 18, 2024, changes in Canada’s international student visa policy have caused Ontario universities to project a loss of over $300 million in the 2024-25 academic year. If this trend continues, the losses could exceed $600 million in the following year, leading to a total deficit of nearly $1 billion over two years. This could have serious consequences not only for universities but also for local economies and employment.

For example, Mohawk College in Ontario, where domestic student tuition costs around $2,708 per year, charges international students $14,817—a five and a half times difference. Due to the reduction in international student enrollment, Mohawk College is expecting a $50 million deficit next year and is considering drastic measures, such as layoffs. With fewer international students, revenue is decreasing, making it difficult to cover operational costs. This situation is becoming a major burden for many educational institutions across Canada. As the number of international students drops, institutions may be forced to reduce programs, cut staff, and compromise on service quality.

The Ripple Effect of Declining International Students

International students contribute far beyond just tuition fees. They have a positive impact on Canada’s economy, stimulating labor markets and economic activity across various industries. In addition to tuition, international students spend money on living expenses, food, and housing, which in turn boosts local businesses. In areas with large numbers of international students, apartment rents fluctuate according to student population, and small businesses, including shops and restaurants, rely heavily on their spending. Therefore, a decline in the number of international students inevitably harms the local economy.

The Backlash of the Policy

While the intention behind limiting international students was to increase opportunities for Canadian residents, the reality is that the policy has had negative consequences for Canadians as well. Due to budget shortages, educational institutions are forced to cut staff, which in turn reduces employment opportunities for Canadians. Additionally, program reductions and declining educational quality will affect students, including Canadians, diminishing the quality of education in the country. The benefits that Canadians expected from limiting international students are limited, and instead, the policy is having unexpected negative effects on Canadian life.

A New Approach to Attracting International Students

Rather than limiting international students, Canada should focus on finding ways for them to contribute positively to the economy and society. Strengthening student visa regulations to prevent misuse or expanding on-campus housing to alleviate housing issues could be effective solutions. Moreover, creating programs that allow international students to stay and work in Canada after graduation would foster their long-term economic contributions. This would not only benefit local communities and the economy but also help prevent the brain drain from Canada.

Conclusion: A Path for Coexistence Between International Students and Canadians

International students have played a vital role in Canada’s economy and education system, and the economic impact of limiting their numbers cannot be ignored. They are not just foreigners; they are an integral part of the Canadian economy, and helping them create greater value while staying in Canada will ultimately benefit the country as a whole.

Canada’s international student policy needs to shift from a short-term perspective to a long-term approach. Now is the time to explore new policies that will allow international students and Canadians to thrive together.