The Canadian federal government’s attempt to address the housing crisis has led it to its latest brainchild- a cap on international students. If implemented, The move will attempt to reduce the number of foreign students arriving in the country.
In 2022, Canada hosted more than 800,000 international students.
Are Universities responsible for the explosion of International student numbers?
The current federal Housing, Infrastructure and Communities Minister, Sean Fraser, took aim at some institutions enrolling international students at numbers beyond what they can support and accused them of exploiting students and prolonging the housing crisis.
“When you see some of these institutions that have five, six times as many students enrolled as they have spaces for them in the building … you’ve got to start to ask yourself some pretty tough questions,”
“There are good private institutions out there and separating the wheat from the chaff is going to be a big focus of the work that I tried to do with [Immigration Minister Marc] Miller.”
Steve Pomeroy, a policy research consultant at Carleton University’s Centre of Urban Research, corroborated the Housing minister’s words, stating that Canadian Universities are accepting a larger quota of international students to drive their revenue.
In 2022, Canada finalized 739,000 study permit applications or 30% more than the 2021 record.
How International students impact the housing market
A majority of International students usually rent housing over the course of their stay as opposed to owning one. Predictably, an increasing number creates an excessive demand for rental housing in an already tight rental market that usually caters to low-income workers and people reliant on social assistance.
In 2022, the average Canadian rent increased by 10.9%, and experts predict an additional 5% rise in 2023.
Canada’s Housing crisis
Canada currently faces a housing crisis, with the supply of housing units in the major urban centres failing to keep up with the growing demand of an ever-increasing population that just recently passed the 40 million mark. Currently, a large proportion of Canadians are left with only a limited selection of exorbitantly priced houses.
According to the CMHC, the country requires 3.5 million housing units by 2030 to address this affordability issue.
In an unflattering statistic, Canada had the lowest number of housing units per 1000 residents among the G7 countries, along with the highest household debt.
What has been done to solve this crisis
The Bank of Canada raised its lending rate to 5% as a long-term measure to curtail spending and bring down inflated housing prices.
A two-year ban was also imposed on foreigners buying housing in Canada to ensure that residential properties are used to fulfil housing needs and not as instruments to park wealth for foreign buyers.
Regional authorities have also been active in the search for solutions. Toronto recently passed a new policy allowing single-family homes to be converted to low-rise multiplexes to increase the city’s housing supply.
Future of the plan to impose a cap on International student numbers
The plan is already off to a shaky start before its implementation, with Quebec rejecting the federal government’s suggestion.
Colleges and Institutes Canada, which represents Canada’s post-secondary education network, also responded with a statement opposing the government’s plan, saying:
“Although implementing a cop on international students may seem to provide temporary relief, it could have lasting adverse effects on our communities, including exacerbating current labour shortages. Furthermore, we want to emphasize that students are not to blame for Canada’s housing crisis; they are among those most impacted.”