International student fallout hits the bottom line

Universities across the country are tightening their financial belts after watching international student enrolment plummet – in some cases by more than 50 per cent – and they are bracing for even more federal immigration restrictions to come in the next two years.

Together with provincial realities such as limited funding and declining domestic student revenue, the changes have created a perfect storm across the entire postsecondary sector, leading to impending job losses, hiring freezes, early retirement incentives, fewer courses and sections, and even campus closure.

The result is a “dual threat” to Canada, said Gabriel Miller, president and CEO of Universities Canada. The country faces a “constrained ability to create opportunity” for domestic students to get a university education due to lack of money to run programs, and “a loss of really invaluable talent coming into Canada,” he said, because promising international graduate students are turning away from the country for better prospects elsewhere.

In Ontario, universities are “at a tipping point” and headed toward a “financial cliff,” according to the Council of Ontario Universities. Ontario government underfunding, provincially mandated frozen domestic tuition rates and the exacerbating effect of the federal immigration changes, which alone is predicted to sap university budgets of about $1 billion in the first two years, represents an “unprecedented” situation for the university sector, Steve Orsini, the council’s president and CEO told University Affairs.

“We’re going to see significant cuts to student programs and services,” he predicted. “One of our fastest growing expenditures is student services, coaching, career counselling, mental health, housing, extracurricular activities. All that is at risk of being impacted.”

In British Columbia, “there’s no institution that’s going to come through this unscathed,” insisted Nikki Macdonald, president of the British Columbia Association of Institutes and Universities. Staff and faculty reductions are well underway among her members, though avoiding layoffs through tools such as attrition and voluntary retirement, she said. And while drastic measures haven’t been required yet, by next year, when the impacts of the changes are more fully felt through enrolment numbers and revised budgets, “the fear is that we’re going to have to do pretty significant program cuts.”

Kwantlen Polytechnic University, an association member, is among those offering early retirement to some faculty, reporting a 53 per cent cut to new international student enrolment this past fall, going from 1,060 students in fall 2023 to 502 a year later. Applications from international students, who last year made up about 36 per cent of total enrolment, are also down for January and May.

Looking further east, the University of Saskatchewan reported a 57 per cent drop in new undergraduate international students this past fall and an overall international student decline of 11.5 per cent (the university had 3,848 international students last year). Although that only represented a one per cent hit to the university’s operating budget, its current strategy is to work on “diversifying our revenues,” spokesperson Victoria Dinh wrote in an email.

The University of Calgary reported just under nine per cent fewer international students overall (6,998 last year and 6,394 this fall), resulting in an $11-million revenue drop. A provincial government-ordered review of Alberta’s postsecondary funding is about to get underway in the wake of the fall federal immigration study permit cuts, to be led by Jack Mintz, an economist and president’s fellow at the U of C’s school of public policy. “The landscape has changed. We have seen federal policies around international students that [are] going to impact the revenues that postsecondaries are going to get,” Alberta Minister for Advanced Education, Rajan Sawhney, told CBC news in early November.

Universities and colleges have increasingly relied on international students to fill funding gaps as well as to internationalize their campuses. But the federal government changed the rules of the game last January when it announced it would cap and cut study permits for foreign nationals in 2024 and 2025 and roll back eligibility for post-graduation work permits, which enhanced the attractiveness of a study-in-Canada plan. Last September, this year’s 35 per cent study permit cut was increased by an extra 10 per cent for 2025 and 2026. Graduate students, previously exempt, were included in the restricted numbers.

Voluntary retirement programs, hiring freezes and strategic financial reviews with an eye to cost containment have been common first lines of attack against the worsening financial situation at universities. The University of Winnipeg, Simon Fraser University, Thompson Rivers University, McGill University, Queen’s University, Dalhousie University, University of Waterloo and Memorial University are among those under some form of hiring freeze in the last year.

Given the seriousness of the situation, many universities are going public, Mr. Orsini said. “They’ve had town halls. They’re communicating reductions in programs.”

At UWaterloo, which is dealing with a $75-million deficit, “[o]ur November’s important enrolment data show that we have enrolled around 30 per cent fewer international students than last year, meeting just half of our target,” president Vivek Goel told a Nov. 18 townhall. “The additional pressures affecting our budget do not show any signs of easing up … We need to find ways to reduce spending to balance the budget.” York University is dealing with an even higher deficit this year, at $111 million, reported to its senate in November.

Atlantic universities suffered an 11.4 per cent decline in overall international enrolment  – nearly 3,000 students  – prompting the Association of Atlantic Universities to speak out. “[T]he loss of these students is projected to have a regional revenue and spending loss of $163 million,” Peter Halpin, the association’s executive director wrote in a UA op-ed, pointing out that on average, Atlantic universities depend on international students for about 30 per cent of their enrolment. Memorial (4,805 to 4,058 international students), Dalhousie (4,175 to 3,429), Saint Mary’s University (1,639 to 1,400), and Cape Breton University (6,939 to 5,764) were among the handful of universities with a higher than average decline in international enrolments between fall 2023 and fall 2024.

The impact was less acute at Quebec universities, reflecting only a one per cent decline in overall international student enrolment. However, risk remains as half of Quebec universities have relied on international students to compensate for low domestic enrolment, as noted in a report by the Quebec Federation of University Professors (Fédération québécoise des professeures et professeurs d’université). The report was written in response to Bill 74, passed by the Quebec government in early December to give the province more control over restricting international student admissions. Some universities – notably Bishop’s and Concordia and, to a lesser extent, Laval, McGill, École de technologie supérieure, Université du Québec à Trois-Rivières, HEC Montréal and Polytechnique Montréal, were above the average rate of decline, according to the Bureau de Coopération Universitaire’s fall 2024 enrolment report.

Several universities told UA that some of their international students had to defer their enrolments last fall due to slow federal study permit process. And while Immigration Minister Marc Miller and his department are taking “some steps” towards addressing the sector’s concerns, “we want them to move faster and we want them to be more ambitious,” said Mr. Miller of Universities Canada, calling for “a sustainable plan to regain our place in international education.”

With the 2025-2026 round of admissions about to get underway, provinces were still waiting for their federal allocations for study permits in mid-December. The immigration department wrote in an email to UA that provinces and territories would have their 2025 study permit application allocations before Jan. 22, when the clock resets for another year of restrictions. It also said that it was continuing development of a recognized institutions framework to provide expedited study permit processing for postsecondary institutions providing high quality service to international students. But IRCC refused to answer when that framework would be released, something Mr. Miller said is key to improving study permit processing times.

“One, let’s get these allocations out to the provinces and two, let’s improve processing times – that’s the first immediate priorities,” he said.

Editor’s note: Universities Canada is the publisher of University Affairs.