Policy changes lead to a drastic drop in international student numbers

Breaking: Canada's International Student Crisis Shakes Higher Education

On This Page You Will Find:

• The dramatic decline in international student arrivals in Canada
• How federal policy changes are affecting universities
• The financial and human costs of reduced student numbers
• Implications for Canada's housing market and global education stance

Summary:

Canada's higher education sector is grappling with a 70% decline in international student arrivals in 2025, creating a financial crisis for universities and colleges across the country. Triggered by federal policy changes aimed at alleviating housing pressures, this decline has led to significant revenue losses, job cuts, and program suspensions. With study permit approval rates dropping to just 33%, the impact is reshaping Canada's educational landscape and threatening its global competitiveness.

🔑 Key Takeaways:

• International student arrivals in Canada decreased by 70% in 2025.
• Study permit approval rates fell to a historic low of 33%.
• Canadian universities face nearly $1 billion in projected revenue losses.
• Over 12,000 jobs in the education sector have been cut.
• The policy changes have eased housing market pressures but at a significant cost.

Sarah Chen had her acceptance letter from the University of Toronto in hand, her student visa application submitted, and dreams of studying computer science in Canada. But like tens of thousands of other international students in 2025, she received a rejection notice instead. "I never imagined the approval rate would drop to 33%," she says, reflecting a sentiment shared by students worldwide as Canada's doors to international education have dramatically narrowed.

Chen's story represents one of the most significant shifts in Canadian immigration policy in decades. The numbers tell a stark tale: 88,617 fewer international students arrived in Canada during the first half of 2025 compared to the same period in 2024—a staggering 70% decline that has sent shockwaves through the country's education sector.

The Policy Earthquake That Changed Everything

The federal government's decision to cap study permits at 437,000 for 2025—a 10% decrease from 2024—was designed to address mounting housing pressures and service strain in major Canadian cities. While the policy achieved its goal of reducing rental market competition, it created an entirely different crisis within university boardrooms and college administrative offices across the country.

In March 2025 alone, only 3,819 study permits were issued compared to 16,875 in March 2024. The approval rate crash from 47% to 33% means that two out of every three applicants now face rejection—a reality that has fundamentally altered Canada's appeal as a study destination.

"We're projecting just 163,000 new international students will arrive in 2025," explains an IRCC spokesperson. "That's the lowest number in a non-pandemic year since 2016, representing a complete reversal of the growth trajectory we've seen over the past decade."

Universities Face Financial Devastation

The financial mathematics are brutal for Canadian institutions. International students at Toronto Metropolitan University pay between $35,000 and $40,000 annually, compared to domestic students who pay $7,200 to $11,000. This tuition differential—often three to four times higher—had become the financial backbone supporting university operations, research programs, and facility expansions.

Ontario universities alone expect combined losses of $330 million this fiscal year, escalating to $600 million in the upcoming fiscal year. The University of Calgary reported an $11 million revenue drop with just a 9% decline in international enrollment, illustrating how even modest decreases create significant budget holes.

At Cape Breton University, administrators are slashing budgets by up to $20 million this year after losing 1,200 international students. "It's not just about the tuition revenue," explains the university's financial officer. "These students supported local businesses, filled rental properties, and created a vibrant campus community that benefited everyone."

The Human Cost: Thousands of Jobs Eliminated

Behind every budget cut stands a human story. Nineteen of Ontario's 24 colleges have eliminated more than 8,000 positions as of June 2025, with total job losses across Canadian universities and colleges approaching 12,000. These aren't just administrative cuts—they represent professors, support staff, maintenance workers, and student services personnel whose careers have been upended by policy changes implemented thousands of miles away in Ottawa.

Kwantlen Polytechnic University exemplifies this harsh reality, cutting new international student enrollment from 1,060 students in fall 2023 to just 502 a year later—a 53% reduction. The University of Saskatchewan reported an even steeper 57% drop in new undergraduate international students, forcing difficult decisions about program viability and faculty retention.

The institutional responses have been swift and severe. Sheridan College paused 40 programs entirely, while Mohawk College eliminated 20% of its administrative team. Seneca Polytechnic took the dramatic step of temporarily closing an entire campus, leaving students and staff scrambling for alternatives.

The Ripple Effect Across Canada's Economy

The economic implications extend far beyond university campuses. In 2022, international students contributed $37.3 billion to Canada's economy through tuition, accommodation, and discretionary spending, supporting 361,230 jobs nationwide. The current policy changes have eliminated more than $3 billion in economic activity, with over 5,000 jobs lost by May 2025.

Local communities that had grown dependent on international student spending are feeling the impact acutely. Restaurants near campus districts report decreased foot traffic, landlords struggle with vacant rental units previously occupied by students, and retail businesses face reduced sales from a customer base that simply no longer exists in previous numbers.

Looking Beyond the Numbers: Program Viability at Risk

The crisis goes deeper than immediate financial losses. University bachelor's programs saw applications drop 39% in 2025, while graduate programs declined 32%. These aren't temporary fluctuations—they represent a fundamental shift that threatens the viability of specialized programs, research initiatives, and academic departments that had relied on international enrollment to maintain critical mass.

"With fewer new students arriving, the pool of potential extension applicants will shrink in 2026 and beyond," warns a policy analyst at the Conference of Canadian Universities. "We're not just looking at a one-year adjustment—this could create declining enrollment for years to come."

The concern is particularly acute for graduate programs and research-intensive universities where international students often serve as teaching assistants, research collaborators, and future faculty members. The intellectual diversity and global perspectives these students bring cannot be easily quantified in budget spreadsheets, but their absence will reshape Canadian academic culture in ways that may take years to fully understand.

The Balancing Act: Housing vs. Education

Federal policymakers argue the changes were necessary to address legitimate concerns about housing affordability and service capacity in major Canadian cities. The 40% reduction in international student numbers has indeed eased rental market pressures, particularly in Toronto, Vancouver, and Montreal, where student housing had become a significant factor in overall affordability challenges.

"We had to make difficult choices," explains a government source familiar with the policy development. "The rapid growth in international student numbers was creating unsustainable pressures on housing and public services. While we recognize the economic benefits these students bring, we also have responsibilities to Canadian residents facing housing crises."

The policy appears to be achieving its intended effect on housing markets. Real estate analysts report decreased competition for rental properties in university districts, with some areas seeing modest rent stabilization after years of rapid increases driven partly by student demand.

What This Means for Future Students

For prospective international students like Sarah Chen, the new reality requires completely different strategies and expectations. The 33% approval rate means that acceptance to a Canadian university no longer guarantees the ability to study there. Students must now consider backup plans, alternative destinations, and the possibility that their Canadian education dreams may be deferred or permanently altered.

The changes also affect current students considering program extensions, graduate studies, or bringing family members to Canada. The tightened approval environment creates uncertainty that extends beyond initial study permits to every aspect of the international student experience in Canada.

The Road Ahead: Uncertain Recovery

As 2025 progresses, Canadian institutions face the challenge of adapting to a fundamentally different operating environment. Some universities are exploring increased domestic recruitment, enhanced online programming, or partnerships with international institutions that don't require student mobility. Others are lobbying for policy modifications that might restore some international student flow while maintaining housing market stability.

The long-term implications remain unclear. Will Canada's reputation as a welcoming study destination recover once housing pressures ease? Can institutions maintain program quality and research excellence with significantly reduced international enrollment? How will competing countries like Australia, the United Kingdom, and the United States capitalize on Canada's policy-driven retreat from international education?

What is certain is that 2025 represents a watershed moment for Canadian higher education. The sector that had grown accustomed to steady international student growth must now navigate a reality where global talent flows have been redirected by domestic policy priorities. The institutions, communities, and individuals affected by these changes are still calculating the full cost of Canada's dramatic policy pivot.

For students like Sarah Chen, the dream of Canadian education hasn't disappeared—it's simply become significantly more challenging to achieve. Whether Canada's education sector can maintain its global competitiveness while balancing domestic pressures will determine not just the future of individual institutions, but the country's position in the global knowledge economy for years to come.