In January 2024, the federal government introduced a significant set of changes to the allocation and administration of international student visas and related immigration programs in Canada. These changes reduced the number of international students coming to Canada by about 40%, with large reductions to other temporary work visa streams as well, and were justified by claims that the reduction would ease pressures on housing, health care and other services.
This has created a crisis for universities and colleges across the country. Institutions are closing programs and laying off workers, and there are wider impacts on the economies and economic opportunities available in many towns and communities across the country. This is partly because once international students graduate, they often continue to work in the communities where they studied, through the Post-Graduate Work Permit program (PGWP) or Provincial Nominee Program (PNP).
The economic impact of these changes will hit small and rural communities harder than large urban centres. Small and rural communities tend to rely on newcomers and migrant workers more than urban centers to fill workforce gaps, especially in care work, as rural communities are aging faster.
Small and rural communities also rely more on post-secondary campuses as economic anchor institutions. Beyond the direct jobs that campuses bring to a community, students and staff spend money in the local community, supporting small businesses, housing, and other services; sporting and artistic activities bring a sense of pride; and often campuses offer opportunities for partnerships between local industries and researchers. Rather than being a drain on local resources, international students are a net financial benefit for governments, post-secondary institutions, and the communities that they live and work in.
Prior to 1992, 80% of funding for post-secondary institutions came from federal and provincial governments, but by 2024-25 less than half of their revenue came from public sources. To make up some of that gap in funding, universities and colleges charged higher and higher tuition fees to international students, and competed to attract more international students. In 2006/2007, the average tuition fees that international students paid for an undergraduate degree was 3 times higher than domestic students – by 2024/2025 that had risen to 5 and half times higher.
Temporary immigration, which includes migrant workers and international students, plays a crucial role in supporting the Canadian economy across multiple sectors. Here’s how:
1. Filling Labour Market Gaps
- Migrant workers, particularly those in the Temporary Foreign Worker Program (TFWP) and the Seasonal Agricultural Worker Program (SAWP), fill essential roles in sectors like:
- Agriculture – harvesting crops and maintaining farms
- Construction, hospitality, healthcare, and manufacturing
- These are often low-wage, high-demand jobs that Canadian residents are less likely to take.
- Without these workers, many businesses would face severe labour shortages, impacting productivity and food supply chains.
2. Supporting Postsecondary Institutions
- International students contribute billions of dollars to the Canadian economy annually through:
- Tuition fees (often significantly higher than domestic fees)
- Living expenses, such as housing, food, and transportation
- Their presence sustains many colleges and universities, especially in smaller or rural communities.
- They also help fund research, innovation, and the academic workforce.
3. Boosting Consumer Spending and Local Economies
- Temporary immigrants spend money locally, supporting small businesses, transportation, housing, and other services.
- Their consumption creates jobs and drives demand in local economies, especially in urban centers where populations are growing due to immigration.
4. Contributing to Long-Term Immigration Goals
- Many temporary immigrants transition to permanent residency, filling longer-term demographic and labour needs.
- They help offset Canada’s aging population and declining birth rate, which are major concerns for economic sustainability and healthcare funding.
5. Tax Contributions Without Full Access to Benefits
- Many temporary residents pay income taxes, sales taxes, and property taxes (indirectly through rent).
- However, they often don’t have full access to public services like healthcare or student financial aid.
- This results in a net fiscal benefit for the government.
Blaming temporary immigrants for infrastructure or housing challenges ignores the structural issues in planning, development, and policy. These workers and students are not just participants—they are key drivers of growth and resilience in Canada’s economy. Effective policy should recognize both their contributions and the need to invest in infrastructure that supports a growing and diverse population.