Move to curb international students is undermining post-secondary institutions and weakening the economy
ROSLYN KUNIN
OTTAWA – Canada isn’t just facing bad news from the ever-changing chaos south of the border; we’re generating our own with damaging policies right here at home.
Nowhere is this more evident than in the higher education sector, which is grappling with budget shortfalls, layoffs, hiring freezes, program reductions and cuts to capital projects. The primary cause? Government-imposed restrictions on international student admissions.
Canada hosts over 800,000 international students, a number that has grown significantly over the past decade as universities increasingly rely on them for revenue. The recent drastic reduction in student visas has upended what was once a win-win scenario.
Why does this matter? Universities rely heavily on government funding, with domestic student fees covering only about 20 per cent of their costs. Many institutions are also restricted in how much, or even if, they can raise tuition. Most provinces regulate tuition increases to keep higher education affordable for domestic students, leaving universities with few options to increase revenue outside of government grants and international student fees.
Universities have long warned that grants and tuition alone are insufficient to sustain operations, yet governments remain unwilling to bridge the gap. At the same time, provinces discourage universities from taking on debt, as it reflects poorly on public budgets.
International students provided a solution to this financial deadlock. Demand for Canadian education is high, and these students pay tuition fees many times higher than domestic students. Their contributions don’t displace Canadians—government funding requires universities to maintain a set number of seats for domestic students. Instead, international tuition revenues enhance institutional operations, making them a crucial financial lifeline.
The financial impact of cutting international student numbers is already being felt. Kwantlen Polytechnic University, facing a $49-million revenue loss from international students, is laying off 70 faculty members. Simon Fraser University projects a $50-million shortfall. Other institutions, including the University of Victoria and the University of the Fraser Valley, are also reeling.
Not all faculty losses are announced publicly because universities increasingly rely on sessional instructors—hired on short-term contracts—who simply won’t be rehired. Dalhousie University, among others, has implemented a hiring freeze, a silent but significant contraction of its teaching workforce.
The financial impact is nationwide. Ontario universities face a $300-million budget drop this year, with the shortfall doubling next year. McGill University anticipates a $45-million revenue decline, followed by further losses of $16 million and $14 million in the coming years.
Beyond education, limiting international students hurts Canada’s broader economy. Many remain in the country, filling critical labour gaps in skilled professions and often making substantial long-term investments in Canada, further strengthening the economy.
More importantly, international students are an export—one that isn’t subject to tariffs or U.S. trade influence. Canada provides educational services to foreign students just as it exports wheat or manufactured goods, bringing in significant foreign exchange.
In 2022 alone, international students contributed $37.3 billion to the economy—more than the value of wood, machinery, aluminum or fertilizer exports, many of which are vulnerable to trade restrictions. Their tuition payments help universities stay open, while their spending on rent, food and transportation supports local businesses. In cities with large student populations, this spending represents a crucial economic driver.
With Canada’s trade increasingly threatened by external factors, why would we voluntarily shrink one of our most stable exports? The rationale for cutting international student numbers is linked to Canada’s housing shortage, with the assumption that reducing immigration will ease housing pressures.
But this logic is flawed. While the federal government argues that reducing immigration—including international students—will ease housing demand, most experts point out that Canada’s housing crisis stems from years of underbuilding rather than the number of newcomers.
Cutting back on foreign students won’t change this reality. Many live in university residences, and budget cuts now prevent universities from building more housing. Others share small apartments, meaning their absence won’t free up significant housing stock.
This policy is a self-inflicted wound. It weakens universities, limits workforce growth, deprives home countries of skilled graduates and undermines a vital economic sector. At a time when external pressures already threaten Canada’s economy, restricting international students only deepens the crisis from within.
Dr. Roslyn Kunin is a respected Canadian economist known for her extensive work in economic forecasting, public policy, and labour market analysis. She has held various prominent roles, including serving as the regional director for the federal government’s Department of Employment and Immigration in British Columbia and Yukon and as an adjunct professor at the University of British Columbia. Dr. Kunin is also recognized for her contributions to economic development, particularly in Western Canada.
