With the changes in the domain of international education in Canada, Immigration Minister Marc Miller’s recent decision to cap Canada study permit applications is a noteworthy development. According to a recent report by RBC Economics, while this move won’t immediately reverse the inflationary impact on rents, it is expected to exert a slowing effect on the pace of this inflation.
Understanding the Numbers
RBC economist Rachel Battaglia estimates that, based on post-pandemic enrollment rates and outflow patterns, approximately 391,000 new international students will enter Canada in the current year. Simultaneously, about 291,000 students will graduate or see their study permits expire. This implies a net increase of 100,000 international students, representing a 55% reduction from the net increase observed in 2023.
Moderating Growth, Not Halting Demand
While this growth in the international student population will moderate the pressure on rents caused by their housing demand, it is unlikely to lead to an immediate drop in rental demand. The economist suggests that, given the assumption that nearly all international students live in rented accommodation (97%), this slowdown could potentially halve the demand for new rentals compared to the previous year.
Context of Policy Changes
The context of these changes lies in the significant population growth Canada has experienced, especially with half of it being women, as highlighted by Immigration Minister Marc Miller in November 2023. The removal of the 20-hour weekly work restriction during the COVID-19 pandemic aimed to address severe labor shortages, but the subsequent decision to extend the deadline to April 2024 indicates ongoing policy adjustments.
Challenges and Concerns
The proposed reduction in international students’ work hours comes amid the processing of over one million study permit applications in 2023. The recent cap set at 606,250 study permit applications for 2024, a decrease of 35% from 2023, is expected to distribute permits more evenly across provinces, with implications for international student populations.
Impact on Business Landscape
While these changes are positioned to address concerns of inflation and housing crises, some business leaders, such as Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), express worries about potential ramifications. Kelly emphasizes the need for careful consideration of changes, especially for smaller and rural communities that have come to rely on immigrant contributions.
As Canada continues to refine its approach to international student immigration, the implications on rental markets and the broader economy remain dynamic. The RBC report provides valuable insights into the expected effects of study permit caps, emphasizing the need for ongoing evaluation and responsiveness to the evolving landscape of immigration policies.
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