Students and pedestrians walk along Gould St. on the Toronto Metropolitan University campus on Jan. 22. FRED LUM/THE GLOBE AND MAIL

Postsecondary schools across the country are trying to come to grips with the financial impact of the federal government’s cap on international study permits, assessing short-term issues such as visa processing delays and longer-term threats to entire programs and schools.

The study permit cap, announced Jan. 22 by Immigration Minister Marc Miller, is likely to mean a loss of hundreds of millions in tuition revenue across universities and both public and private colleges.

Private colleges that offer programs under a licensing agreement with public colleges are expected to be hit hardest. The government’s decision to end work permit eligibility for graduates of these public-private partnerships threatens to drive these programs, which have been a financial lifeline for some Ontario colleges, out of business.

TriOS College, one of Canada’s largest private career colleges, with 9,000 students and nine campuses in Ontario, has Greater Toronto Area satellite partnerships with two public colleges, Hamilton’s Mohawk College and Sault College of Sault Ste. Marie.

TriOS chief executive officer Frank Gerencser said the government’s policy shift is creating chaos in the postsecondary sector. He criticized Mr. Miller for applying a “blunt instrument” to a complicated problem.

“Shutting you down by half, literally overnight, is not well thought out, because there’s going to be disruptions everywhere. I’m already seeing it,” Mr. Gerencser said in an interview.

Mr. Miller said the international student program was contributing to the strain on housing and health care across the country, adding that its integrity was under threat as schools upped their intake of foreign students to increase revenue.

The cap is designed to reduce the number of new study permits issued by 35 per cent for the next two years, to about 360,000 a year. Provinces will be given a share of the permits based on their population size. Ontario and British Columbia will lose under this plan – in Ontario’s case, it will cut the number of new international students by as much as 50 per cent.

Mr. Gerencser said the rationale for the cap has been, at least in part, to crack down on what the government calls “bad actors.” But the policy doesn’t distinguish between schools that achieve good results and those that do not, he said.

The innuendo has focused on private career colleges, but their numbers are relatively small.

According to Immigration, Refugees and Citizenship Canada preliminary data, of the roughly 575,000 study permits issued in 2023 that could be sorted to either a public or private institution (an additional 110,000 permits could not be sorted by IRCC to either category), only about 57,000, or about 10 per cent, were for students at private career colleges. Figures compiled by the National Association of Career Colleges put the number at their member institutions lower, at about 5 per cent.

By far the biggest permit consumers are public colleges and universities, which accounted for 46 per cent and 30 per cent respectively of permits that could be sorted by IRCC in 2023. The rest, about 13 per cent, went to language schools and primary and secondary schools, among others.

Ontario’s colleges, in particular, account for a huge portion of the international student category, having increased their numbers from 35,000 new study permits in 2016 to more than 140,000 in 2022; as a result, 23 of the province’s 24 colleges ran surpluses last year despite low levels of government funding. Ontario universities, by comparison, went from 20,000 permits to 40,000 in the same period; nonetheless, today as many as 10 are projecting deficits.

Part of that college enrolment explosion is owing to the expansion of public-private partnerships.

In 2017, consultant David Trick warned that these arrangements, often run out of strip malls and office buildings, were difficult to monitor and posed a major reputational risk to the entire college system, which led to a moratorium on further expansion.

But the election in 2018 of the Doug Ford government in Ontario brought a new outlook. Colleges were allowed to expand their satellite partnership programs within certain limits. Today there are 15, up from six in 2017.

Ontario wasn’t the only province relying on international students. The pandemic interrupted six straight years of roughly 15-per-cent annual growth across the country in international students. The number of permits then jumped 30 per cent in 2022 and roughly 25 per cent in 2023.

Elizabeth Buckner, a professor who specializes in international higher education at the Ontario Institute for Studies in Education, said the government’s decision to act seems closely related to the moment when rising study permit numbers were connected to housing issues in public discussions.

“It’s the ramping up of concerns over housing that’s probably driving this,” Dr. Buckner said.

In a letter to Mr. Miller and other political leaders, Mr. Gerencser criticized them for oversimplifying the complex issue of a housing crisis that developed over many years.

“This whole international student cap policy announcement seems to be driven by the need for Canada to be seen as addressing the housing crisis, and international students are seen as the latest ‘bogeyman’ for the situation,” Mr. Gerencser wrote.

With colleges and universities anticipating a financial pinch, the federal government has placed a key decision in the hands of the provinces: how to allocate the study permits. Colleges and universities will lobby for a greater share, with each side feeling entitled to keep what it already has.

Joseph Wong, vice-president, international, at the University of Toronto, said his university, the largest in the country, accounts for a relatively small share of new study permits – roughly 7,600, or 2.8 per cent of Ontario’s total in 2022 and early 2023. About 30 per cent of U of T’s student population is from abroad, with no major increases planned, he said.

He added that while it’s clear some parts of the system need fixing, universities have been increasing their international student populations at a responsible pace.

He’s also concerned about the consequences of painting international students as the source of issues around housing.

“There’s a narrative out there where international students are the cause of all of these challenges. And we know the housing crisis is much more complicated than just the influx of international students,” Prof. Wong said.

The Globe and Mail, February 6, 2024