Canada’s limitation on international student entry, blaming them for the housing crisis, has attracted expert criticism for unfairly using students as “scapegoats,” with doubts that this measure will effectively solve the problem.
Canada early this year announced an immediate, two-year cap on international student permits and said it would also stop giving work permits to some students after graduation as it seeks to rein in record numbers of newcomers seen escalating a housing crisis.
The cap is expected to result in approximately 360,000 approved study permits in 2024, a decrease of 35% from 2023, according to a statement from the immigration ministry.
In the third quarter of last year, the population grew at its fastest pace in more than six decades, with non-permanent residents – mostly students – increasing by 312,758, the most in more than five decades, according to Reuters.
“[Immigration] is one of the things putting pressure on the housing components of inflation,” the Financial Times quoted Bank of Canada governor Tiff Macklem as saying.
A poll conducted by the Canada-based research unit Environics Institute last September found that 44% of respondents felt there was an excessive amount of immigration to Canada, marking the strongest disapproval rate since the late 1990s. Of those who expressed doubtuoted about immigrants, 38% believed that immigrants were driving up property prices.
“A larger increase in newcomers than in the past is adding pressure to the structural supply constraint in housing,” says the Monetary Policy Report released by the Bank of Canada early this year. “This has helped to push the overall housing vacancy rate to record lows, which has underpinned house prices and led to higher rents.”
Statistics Canada reported a total population increase of 1.16 million permanent and non-permanent residents as of July 1, 2023, a 2.9% increase over July 1, 2022 and the highest population growth rate recorded for a 12-month period since 1957.
The agency said 98% of that increase was due to immigration. Statistics Canada said that by the end of 2023, there were 2.5 million non-permanent residents in the country, including international students and temporary foreign workers, compared to 1.3 million in the fall of 2021.
The record levels of immigration are driving up the cost of housing, CBC quoted the Bank of Canada as saying.
The average home price has surged 68.4% from 10 years ago to C$657,000 (US$484,300) by the end of last year, according to the Canadian Real Estate Association.
Particularly, Vancouver and Toronto, two cities with large populations of immigrants, saw their average home prices shot above C$1 million in the same period.
The national vacancy rate for Canada’s primary rental market reached a new low of 1.5% in 2023, the lowest recorded rate since 1988, according to the latest Rental Market Report (RMR) released by Canada Mortgage and Housing Corporation (CMHC).
Scapegoating migrants
Some experts said the government is scapegoating migrants for the housing crisis although they contribute over $22.3 billion per year to the Canadian economy – greater than exports of auto parts, lumber or aircraft.
The majority of international students cannot afford to compete with Canadians for homes or for rentals, suggesting they are not the cause of the country’s housing crisis.
York University Prof. Tania Das Gupta’s research on Punjabi international students has found many students can only afford to spend a few hundred dollars a month on rent, forcing them to live in overcrowded and illegal basements, to share beds, to live in their cars or to face homelessness.
Canada’s housing availability and affordability crisis has been decades long in the making. Experts believe the housing bubble was caused by a confluence of factors including municipal, provincial/territorial and federal government policies, municipal zoning laws, developers’ interests and central bank policies, according to the Conversation.
Some experts believe the cap on international students is largely a matter of optics, a move that would show that the government was “doing something.”
Carolyn Whitzman, a housing policy expert and expert advisor to the Housing Assessment Resource Tools project, calls the cuts “largely performative.”
“It says we’re doing something, but it doesn’t address any of the underlying causes, which include (the government having) no idea of how many students are coming in, what kind of housing they need and at what cost, ” Global News quoted Whitzman as saying.
Whitzman said the lack of rental and student housing affects not just international students, but domestic students too. She said the cap will not have a major impact on vacancy rates or rent.
“Trying to temporarily dampen demand through choosing this particular scapegoat (international students) isn’t really going to solve the supply shortage, which has gotten worse over the last year,” she said.
Migrant Students United, the student wing of Migrant Workers Alliance for Change (MWAC), said immigrants in general, and migrant students in particular, were being scapegoated to distract from those who are actually responsible.
She said the logic that immigrants have been driving up housing prices is not sound.
“We’ve seen that even when people were not able to come to the country on work or study permits (during the lockdowns of 2020 and 2021) housing prices continued to rise,” she said.
Flawed
Whitzman said the big problem in Canadian housing policy is that it does not count large swathes of people when it comes to measuring something called core housing need.
Canada’s method of calculating core housing need is flawed she said. “It doesn’t include homeless people.”
She said students, who are considered to be in a “temporary and voluntary” state of homelessness, are not counted either. Therefore, there is no national housing policy specifically geared towards addressing the needs of students.
Last November, a report by the Office of the Federal Housing Advocate (OFHA) said that Canada is short 4.4 million affordable homes – three million more than what the Canada Mortgage Housing Corporation (CMHC) estimates.
Experts argue that policies designed to limit the number of international students not only fall short of solving the housing crisis but also result in losses for Canada’s universities.
Tuition is usually provincially regulated for domestic students, while international student fees are not subject to the same rules, and serve as a golden goose for postsecondary institutions.
One example is Sheridan College in the Toronto suburbs, where 38% of students are foreign, and their tuition is C$8,103 per term, about six times the amount a domestic student pays.
Sheridan College’s president warned staff that the cap would cause a loss of up to C$100 million in revenue in the next two years, projecting almost C$55 million in tuition losses next school year. The school has enacted an indefinite freeze on hiring and professional development to manage costs.
Both Immigration Minister Marc Miller and his predecessor Sean Frase have said that without more immigration, Canada won’t have the workers it needs to build more homes. “We’re soon going to hit a bottleneck with the productive capacity of the Canadian workforce to build the homes we need,” Fraser said.
To bolster the housing supply, the Canadian government rolled out the Housing Accelerator Fund and allocated C$4 billion to it until 2026-27 to encourage more home-building in cities. The fund’s objective is to build 100,000 more units across the country by streamlining land-use planning and development approvals.
Nonetheless, these solutions are expected to take time to yield results.
“While recent government actions should help moderate some of these constraints, the imbalances are expected to be resolved only gradually,” says the Monetary Policy Report.
