Canada is capping foreign student visas to ease housing pressures as the cost of living soars

Canada on Monday announced a two-year cap on international student visas to ease the pressure on housing, health care and other services at a time of record immigration.

Immigration Minister Marc Miller said that there will be a 35% reduction in new study visas in 2024. He said that institutions offering "sham" degrees have exploited the international students program, putting pressure on housing and health care.

"It's a bit of a mess, and it's time to rein it in," Miller said.

The number of new visas handed out will be capped at 364,000. Nearly 560,000 such visas were issued last year.

Prime Minister Justin Trudeau's Cabinet retreat in Montreal this week will prioritize affordability and housing, according to a government statement.

The government said that there are about 1 million foreign students in the country now, and without any intervention this number would keep increasing. The total number of foreign students is more than three times what it was a decade ago.

Miller said that officials have been working on stabilizing the number of people entering the country yearly as housing pressures mount.

Canada grew by about 1 million people last year, reaching a record of 40 million, as many Canadians struggle with an increased cost of living, including rents and mortgages.

"You cannot bring in 1.25 million people a year but only create 300,000 homes on average and think you're not going to have a structural problem on housing," TD Bank Group chief economist Beata Caranci said at the Economic Club of Canada's 2024 Annual Economic Outlook earlier this month.

The immigration minister said that there are unscrupulous schools that accept high tuition fees from foreign students without offering a solid education in return. In some cases, the schools are a way into Canada for students who can parlay their visas into permanent residencies.

"It is not the intention of this program to have sham commerce degrees or business degrees that are sitting on top of a massage parlor that someone doesn't even go to and then they come into the province and drive an Uber," Miller said.

"If you need a dedicated channel for Uber drivers in Canada, I can design that, but that isn't the intention of the international student program," he said.

The leader of the opposition Conservative Party of Canada, Pierre Poilievre, called it a mess and blamed Trudeau for granting study permits to tens of thousands of students who attend fake schools.

"People are still somewhat shell-shocked and responding to the steep inflationary increases of the past," said Nelson Wiseman, a political science professor at the University of Toronto

"There is some debate over the impact of immigration and the massive increase in foreign students on the housing market and rents. The overall view of economists and the public is that there is a connection. The student influx has largely impacted rents and not house prices as few students buy houses."

Wiseman said immigration targets will remain high if the opposition Conservatives win the next election, which is likely to be held in 2025.

"The policies are driven by economic realities - an ageing population dependent on government-funded social services such as health care," he said.