Canada restricts foreign student numbers; Indians likely to be hit

CANADA on Monday (22) unveiled a plan to implement a two-year cap on the admission of overseas students, responding to the housing shortage exacerbated by the country's substantial recent increase in student arrivals. Government data revealed that Canada issued nearly a million study permits last year, a threefold increase compared to a decade ago. The proposed measures aim to reduce the intake by nearly one-third.

Marc Miller, Canada's immigration minister, announced that the Liberal government will introduce a temporary two-year limit on student visas, projecting the issuance of approximately 364,000 visas in 2024. The proposals also include restrictions on post-graduate work permits for foreign students, encouraging them to consider returning to their home countries. Previously viewed as a straightforward route to permanent residency, these permits will now have limitations. Individuals pursuing master's or post-doctorate programmes will remain eligible for a three-year work permit.

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Additionally, spouses of international students enrolled in various levels of study, such as undergraduate and college programmes, will no longer qualify, according to Miller. The acceptance of new study permit applications in 2025 will be subject to reassessment at the end of the current year, he added.

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The North American country has over the years emerged as a popular destination for foreign students since it is relatively easy to obtain work permits there after completion of courses. But the steep rise in arrival of the students has resulted in an acute shortage of rental accommodations, pushing up the rents. According to Statscan, rents across Canada went up by 7.7 per cent in December compared to what it was a year ago.

The affordability issue has hurt Canadian prime minister Justin Trudeau's popularity and opposition leader Pierre Poilievre has overtaken the former in opinion polls ahead of next year's election. The government has also come under questioning over the quality of education that some of the institutions are imparting, Reuters reported.

The move is expected to hit the Canadian economy since international students contribute about C$22 billion (£13 billion) annually to it. It will also affect institutions that had expanded their operations to allow continued flow of students.

Besides, businesses including restaurants and retail sectors, have also warned that a restriction on foreign students will lead to a shortage of temporary workers.

Restaurants across Canada are facing labour shortages with nearly 100,000 vacancies, and international students made up 4.6 per cent of 1.1 million workers in the food service industry in 2023, a lobby group told Reuters last week.

Canadian banks had also benefited from the influx of new students, as each student was required to have a Guaranteed Investment Certificates of more than C$20,000 (£11,719), a prerequisite for international students to cover living expenses.

The vast majority of the international students -- about 40 per cent -- come from India, while China is in the second slot with about 12 per cent, according to official data from 2022.

(With Reuters inputs)