The number of international students in Canada is expected to grow by 100,000 in 2024, or 55% less than the net increase last year, assuming similar enrollment rates and outflow patterns after the pandemic, Rachel Battaglia, an economist at Royal Bank of Canada, wrote in a note on Wednesday.
STUDENT VISA CAP TO SLOW CANADA RENTAL DEMAND GROWTH, RBC SAYS
If the visa cap is maintained at the current level beyond its 2025 expiry, the country could start to see a drop in the number of international students in 2026 as outflows surpass new arrivals.
“If this materializes, an outright decline in the number of international students in Canada would relieve rental market pressures more meaningfully,” she said. “In the meantime, post-secondary institutions and other stakeholders must find creative ways to grow the student housing stock amid challenges in quickly building new structures.”
Prime Minister Justin Trudeau’s government last month set an intake cap for international study permits at about 360,000 for 2024, or a decrease of 35% from last year, with the 2025 limit to be reassessed later this year. It’s an effort to quell public anger over a housing shortage exacerbated by an influx of foreign students and temporary workers.
Regional Impact
The national cap is allocated to the provinces based on their population shares. It’s expected to be “most constraining” on Ontario and British Columbia, where foreign student enrollments outweighed the number of residents, said Battaglia.
Ontario has a 53% share of Canada’s total international student admissions but a 39% share of the Canadian population, while BC has a 19% share of foreign students but 14% of the country’s residents.
Both provinces are expected to see the number of foreign students remaining flat this year, helping to stall new rental demand.
The cap will also be restrictive in Atlantic Canada but to a lesser degree, she said, where she estimates a 10% pullback in foreign student demand for rental housing this year.
Battaglia doesn’t expect the cap to restrain rental demand in Quebec and the Prairie provinces.
Story by: Financial Post
