Student caps appear to be working

In the short term, cutting population growth is the biggest lever available

September 2024 Rentals.ca Rent Report.

Mike Moffatt on Twitter:

The international student reforms the federal government made earlier this year have provided substantial rent relief. We didn't see the summer spike in rents we experienced in 2021, 22, and 23.

Rent relief follows federal cap on foreign students. Jason Kirby, Globe and Mail.

In January the federal government capped the number of international student visas it issues, with the move expected to reduce Canada’s foreign student intake by 35 per cent this year compared with last year. However by some estimates, international study permits could be on track to drop by almost half this year.

While it’s impossible to say exactly how much of the asking rent slowdown is owing to those policy changes, it is likely significant, said Mike Moffatt, a senior director of policy at the Smart Prosperity Institute.

“Every summer you were adding tens of thousands of extra renters to some communities who weren’t there the year before, coupled with supply that wasn’t increasing much,” he said. “Rents in college and university towns had gotten completely out of whack and that was the rationale for the federal government to make these changes.”

In some cities, asking rents are now falling, with Vancouver seeing an annual decline of 6.4 per cent and Toronto a drop of 7.5 per cent, while Kitchener, Ont., Barrie, Ont., Hamilton and Calgary were among other cities where asking rents are falling.

More tightening on the way

Federal government to further limit number of international students. Stephanie Ha, CTV News.

“The international student cap is here to stay,” Immigration Minister Marc Miller told reporters on Wednesday.

In January, Miller first announced a temporary two-year cap on international students to reduce levels by 35 per cent this year. Next year’s number will go down by another 10 per cent.

“I would say that the measures that we've taken up to now are working,” Miller said. “You have seen more than anecdotal evidence that there has been an impact on certain rental markets where students are more prevalent.”

The cap is national with each province assigned to its own quotas based on its population.

The federal government also announced Wednesday that it’s limiting work permits to spouses of master’s degree students to only those whose program is at least 16 months long, and to spouses of foreign workers in certain sectors with labour shortages. Changes will also be coming this fall to the post-graduation work permit program to align immigration goals and labour market needs.

An IRCC news release gives more details:

• The 2025–2026 study permit intake cap will include master’s and doctoral students who will now have to submit a provincial or territorial attestation letter. We will be reserving approximately 12% of allocation spaces for these students in recognition of the benefits they bring to the Canadian labour market.

• Graduates from programs at public colleges will remain eligible for a Post-Graduation Work Permit (PGWP) of up to three years if they graduate from a field of study linked to occupations in long-term shortage.

Alex Usher on Ontario college financials

The Eighth Wonder of the World: Ontario College Finances to 2023-24. Alex Usher on Twitter: “I went through every Ontario college's financial statements so you don't have to and boy howdy is it fascinating. A perpetual money-making machine - until someone turned off the supply of visas.”

With the possible exception of Australia, there is really no other college or college-equivalent sector in the western world like this. In every other part of the world, the non-university post-secondary sector is based around principles of access and affordability. It would be inconceivable anywhere else for such a sub-university sector to get 64% of its revenues from tuition fees, the way Ontario does.

Quite clearly, in 2022-23, colleges as a whole were doing pretty well. College leaders could have looked at the huge growth to date and said to themselves: “we are absolutely satisfied with what we have, we don’t need any more growth.” But as a sector (there were a couple of honourable exceptions), they simply said “damn the torpedoes” and tried to grab another $1.3 billion in revenue on the assumption that minting money via international students was an exercise that could go on ad infinitum.

All in all a remarkable story, one with very few parallels anywhere in the world of higher education. Even more remarkable was that it was the federal government, rather than the provincial one, that had to put a brake on all this.

More

• We need to fix the problem regardless of who's to blame. “With Ontario failing to act, the federal government needs to do it.” Marc Miller imposes province-wide caps on international student numbers. Alex Usher: Ontario colleges flooded the system. Amnesty for illegal immigrants is a bad idea.

• More than 200,000 international student work permits to expire by 2025, making transition to permanent residency harder. Vanmala Subramaniam, Globe and Mail. There’s only about 100,000 Express Entry spots per year, and with more applicants, the required scores are much higher.

• Border crackdown: Canada turning away more foreigners. Anna Mehler Paperny, Reuters. More people are being found inadmissible at the border by front-line CBSA workers.