Why Canada’s cap on international students will hit Canadians, not just Indians – India Today

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Canada, recognised for its open-door policy towards international students, is currently undergoing significant changes that have repercussions for both aspiring international students and the Canadian economic landscape.

Over the last decade, Canada has experienced an unprecedented inflow of international students, with 2023 witnessing a staggering threefold increase since 2013 in granting study permits to over 1-million students.


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However, this surge has prompted a reevaluation of the open-door policy, especially concerning the strain on housing resources.

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Canada’s immigration minister, Marc Miller, recently announced a temporary two-year cap on student visas. This new directive will restrict the issuance to approximately 364,000 visas in 2024, signifying a substantial reduction from the previous years, reported Reuters.

“This is about protecting students, protecting our housing market, and protecting our services,” Canada’s Immigration Minister Marc Miller said in a statement. He acknowledged concerns about private colleges that “prey on international students with high fees and subpar services,” but added that easing housing pressure remained the primary driver of the policy shift.

Moreover, the regulations encompass limitations on post-graduate work permits, nudging foreign students towards returning to their home countries post-studies.

IMPACT ON INDIANS AND HOUSING AFFORDABILITY

Indians might be the biggest nationality after the cap on international student permits by Canada.

At 37%, Indians were the biggest national cohort to be issued study visas by Canada in 2023. Though the number had seen a dip after the recent Indo-Canadian diplomatic spat.

Indians see the study visa route as a cheaper and easier way to Canadian permanent residency, and then citizenship.

However, the popularity of Canada as an international student hub has led to a housing shortage in the North American country, resulting in a staggering 7.7% increase in nationwide rents in December, according to Statscan.

This housing crisis has adversely affected Prime Minister Justin Trudeau’s popularity, among Canadians already grappling with rising living costs, and has bolstered the position of opposition leader Pierre Poilievre.

ECONOMIC REPERCUSSIONS FOR CANADA

While the visa caps aim to address domestic concerns, they also bring about economic repercussions for Canada.

International students are a substantial financial asset, contributing an impressive $22 billion annually to the Canadian economy.

The decision to reduce their numbers will impact educational institutions that have expanded in anticipation of a continuous student inflow, particularly in Ontario, the province receiving the highest share of international students.

The Canadian Alliance of Student Associations (Casa), a student advocacy group, criticised the cap.

“The biggest problem is that … there’s been announced a cap that is a reaction to the housing crisis,” said Casa Director of Advocacy, Mateusz Salmassi, adding that what is needed is more support and housing for international students.

WORKFORCE SHORTAGE AND ECONOMIC STRAIN

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Beyond the educational sector, businesses in Canada, especially in the hospitality and retail sectors, are concerned about potential labour shortages.

The restriction on foreign students, who make up 4.6% of the 1.1 million workers in the food service industry, could exacerbate the existing problem of nearly 100,000 job vacancies. This shortage not only affects daily operations but could lead to economic challenges in sectors relying on international student labour.

Canadian banks have also benefited from the influx of international students, as each student is required to have a Guaranteed Investment Certificate (GIC) of over C$20,000. This prerequisite for covering living expenses has not only supported financial institutions but has also contributed to the overall economic stability of the country.

India stands out as a significant contributor, with around 40% of foreign students coming from the country.

This places India at the forefront of countries shaping Canada’s international student landscape. The recent diplomatic tensions and the suspension of visa facilities add a layer of complexity, potentially impacting not only students already in Canada but also those awaiting visa approvals.

ECONOMIC DOMINO EFFECT

The economic impact stretches beyond education, as international students, particularly those from India, play a pivotal role in sustaining Canada’s gig economy.

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Their contributions, whether through tuition fees, living expenses, or low-wage jobs, have far-reaching effects on Canada’s real estate market and overall labour market dynamics.

While the decision to cap student visas addresses immediate concerns within Canada, it puts the country in a delicate position. The over-reliance on international students, particularly from India, poses a risk to Canada’s economic stability. The challenge lies in finding a balance that ensures sustainable growth without compromising the quality of life for both residents and students.

To encapsulate the gravity of the situation, it’s essential to highlight key statistics. In 2022, 2.26 lakh students out of 5.5 lakh international students in Canada were from India, according to Canadian government data.

As Canada navigates through these visa restrictions, the impact on both Indian students and the Canadian economy is evident. Striking a balance between economic gains and the well-being of its citizens remains a complex challenge for the Canadian government.

The outcome will not only shape the future of international education in Canada but also determine the country’s economic resilience in the years to come.

Published By:

Girish Kumar Anshul

Published On:

Jan 23, 2024

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