Balancing Acts: International Students, Housing, and Canada's Economic Future
By Sara Ristic
Image by Beonbrand Inc.
Canada is a global economic leader and a major political power internationally. We have these vast resources and a highly educated population that we boast about, and yet we are facing deteriorating housing affordability, rising debt levels, and labour shortages. The highly educated population we’ve acquired over the years cannot seem to attain basic housing, and the younger generations of the Canadian workforce are suffering the most from it. A large portion of Canada’s educated population is acquired globally, and not produced domestically. With our relatively small population of 40 million, about 20% of which is over 65, we need consistent immigration to maintain and grow the economy and in turn, contribute taxes. Our social programs and national initiatives such as universal healthcare need taxpayers dollars to stay afloat, and it will only continue to burden our country in the future with a large portion of our workforce retiring, especially in the healthcare sector.
While any contribution to the economy is better than none, a highly skilled workforce is most appealing to Canada. Highly skilled workers means better pay, higher taxes paid, overall better quality of life, and hopefully happier citizens. To achieve a highly skilled workforce and to distribute those skills in needed areas such as healthcare, construction, and manufacturing, a certain level of formally recognized education is required. Many of these roles require post secondary education in order for workers to qualify. About 20% of occupations are regulated on some level in Canada, which are occupations that require a license or certificate to be practiced professionally in Canada. These occupations include accountants, physicians, architects, carpenters, electricians, nurses, teachers, and welders, among others. This should not be a problem for Canada, as we lead the world alongside Japan and South Korea in having the most educated population, with 57.5% of the workforce having a college or university credential. Yet we cannot seem to fill our gaps in labour shortages, as it seems as though domestic talent usually ends up venturing towards other industries. This is where international students come into play.
International students contribute largely to the multi-billion dollar post-secondary education sector as they study, along with supporting local, small businesses that rely on daily student traffic to stay afloat. Many of these students are likely to acquire Canadian citizenship at some point, as evident in the growing number of opportunities to find work and pursue permanent residence. In 2023 alone, Canada saw over 62,000 individuals receive PR status. To understand the scope of the international student ‘market’, an understanding of Canada’s history of immigration is advantageous. Starting in 1967, international students were able to apply for immigrant status during their studies, and their education generally meant they would be strong candidates. However, within the following years there was backlash against international students, catalysed by the events of the Sir George Williams University Affair. Members of Parliaments’ attitudes toward international students became increasingly hostile, and when the federal government reformed immigration policy in 1976, it moved to close student immigration avenues. The Immigration Act of 1976 formally designated international students as visitors, meaning they came to Canada “for a temporary purpose,” were barred from working in Canada, could not change institutions or program of study after arriving, and were prohibited from applying to be an immigrant while in Canada. They were made into a category of migrant, permanent outsiders to Canada. This was a substantial reform, and laid the foundation for one of the most important and lasting changes to international student policy: differential tuition fees.
Differential tuition fees for international students started in the 1970s due to provincial governments consistently cutting funding for post secondary institutions. These institutions needed revenue in order to stay afloat and continue operating efficiently, and therefore accepted international students with the promise of an internationally recognized Canadian education, but at the cost of paying extra fees that Canadian students did not have to pay. Without these additional fees that we still continue to use today, many Canadian universities and colleges would cease to exist. The additional fees from international students don’t only help the institutions, but they help the students’ presence contribute to the Canadian economy before students even enter the workforce. It’s estimated that international students contributed $36 billion to the Canadian economy in 2022 and are projected to contribute $42 billion in 2024. This is a greater contribution than the exports of auto parts, lumber or aircraft. The students annual spending also directly and indirectly contributed $3.1 billion in tax revenue alone in 2017. The Canadian government and economy reap incredible benefits of allowing students from around the world to study at one of our institutions, with likely future benefits as well. International students are a pillar of Canada’s immigration strategy, amid a structural demographic squeeze. Annually, about 17% of all new permanent residents and almost 40% of immigrants in the economic category have prior Canadian study experience. They are a rich source of highly-skilled global talent, and due to Canada’s more relaxed policies regarding international students and immigration compared to other developed countries, we are able to attract talent worldwide, which has helped to develop our country and economy in ways that likely would not have been possible with only domestic talent.
International students undoubtedly create many benefits for Canadians directly and indirectly, but they also experience quite a bit of backlash, especially in recent years. The current housing crisis has caused Canadians to panic about the availability of affordable housing, especially for the newer generation of the workforce. The rapid growth of the international student population in the last decade has taken up some percentage of available housing, which angers many Canadians over the lack of consideration they receive from the government to aid them in finding affordable housing. While international students are not necessarily the core problem of the housing crisis in Canada, and there are many other variables to consider, they often end up being placed at the forefront of the issue, as studying here usually means permanently immigrating here in the future. Therefore, blame is heavily placed on the government for allowing additional people into the country when there is a lack of housing and appropriate infrastructure to accommodate for the overall population. Hence the years of backlash, the Canadian government is curbing the number of foreign students allowed into the country amid rising public frustration about housing costs.
The federal government's new policy regarding international students comes from Marc Miller, Minister of Immigration, Refugees and Citizenship. He announced on January 24, 2024 that the Government of Canada will set an intake cap on international student permit applications to stabilise new growth for a period of two years. Trudeau is taking steps to slow immigration after letting it soar to record levels of up to 500,000 new immigrants a year; a surge in foreign students was a key part of that rise. Miller’s plan includes reducing the number of student visas by about 35 per cent from 2023 levels. The ban has officially started in Canada, therefore reducing the overall amount of people looking for housing and hopefully helping to temper the housing crisis. Alas, this temporary ban is not a long term solution for international students nor the housing crisis. The overwhelming reason why the Canadian government allowed international students in the first place was to reduce the government funds needed for post secondary institutions and to increase our overall population with skilled workers. Considering Canada’s ageing population, we consistently need immigration to make sure we can support the systems that we have created to be considered a global economic leader and an important player in global politics. Without a strong economy backing us, our concerns will carry little value on the world stage. The lack of highly skilled workers coming in will force us to rely heavily on domestic talent, and it is safe to assume that this will not be able to keep up with the growing need for capacity expansion in the healthcare sector and the rising energy demand, among other things. Not every Canadian citizen attends a post-secondary institution, especially in the context of manufacturing, healthcare, certain trade jobs can often be acquired through apprenticeships or experience, and transportation. These types of jobs tend to be overlooked by domestic talent and international students coming in have historically helped to fill in those gaps in some of these job sectors.
Canadians deserve a solution to the current housing crisis, but any given solution is going to come with a major trade off as of now. While the Canadian government intended in the first place to increase population numbers to boost the Canadian economy, it has backfired, we are experiencing first hand that no decision on such a large scale comes without a cost. The decrease in international students for the next coming years may solve some more immediate problems that Canadians, especially young Canadians, face today, but it will not be a long term solution. Canada’s economy now relies on consistent immigration of highly skilled workers, and without them continuing to come in, we could see real cracks in the economy in the future once the cycle catches up with itself.
