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Treasury Board President Tony Clement speaks in the House of Commons on June 12, 2013.SEAN KILPATRICK/The Canadian Press

Ottawa has opened the door for arbitration with its striking foreign service workers as universities warn Canada's reputation with international students will suffer a long-term blow if visas are not issued in time for the fall semester.

Rotating strikes have targeted visa processing internationally, and wait times for student visas are growing – leaving university administrators bracing for the worst. International students, and the tuition they pay, are a pillar for Canadian universities, and visa problems could delay or derail their semester.

"It would be in the interest of the students, in the interest of the institutions, and in the interest of Canadian society in general, if there was a rapid resolution to this," said André Costopoulos, dean of students at Montreal's McGill University, which has about 6,000 full-time international students. Mr. Costopoulos first heard concerns about the strike a month ago.

"The reassuring part is that, a month later, I haven't heard about any large-scale systematic disasters. So that's a good thing. The bad thing is the deadlines are coming closer," he said.

The Professional Association of Foreign Service Officers (PAFSO) union began rotating strikes in April. Last week, it offered binding arbitration to Treasury Board President Tony Clement, who on Tuesday accepted the offer "with conditions" that he would not publicly specify.

The University of Toronto, which has more international students than any Canadian university, is monitoring the strike, but has not pushed back any registration deadlines. Halifax's Saint Mary's University, where international students make up 26 per cent of the student body, has extended some deadlines as a precaution. "Our hope is that there will be a resolution one way or another," spokesman Steve Proctor said.

It is not yet clear what the strike's impact could be, but the damage to Canada's reputation among international students "could be long-term if students now get the impression it's kind of iffy to apply to Canada, because there's always this [question] about visas," said Britta Baron, vice-provost at the University of Alberta.

Karen McKellin, the director of the University of British Columbia's International Student Initiative, said the university has long hoped for changes to speed up Canada's system for issuing student visas. It has not noticed a drop in registrations.

Citizenship and Immigration Canada figures show the wait for a student visa sent by mail is now 73 days, up from 66 earlier this month. The wait for online applications is 32 days, up from 25 days.

"Our focus is on a resolution, having that come as soon as possible and then addressing the backlog," said Jonathan Champagne, national director of the Canadian Alliance of Student Associations. "… This really has the potential to hurt Canada's brand and image as a magnet for attracting international students."

The foreign service officers' union said on Tuesday that it will review Mr. Clement's conditions. "PAFSO will need to assure itself that any arbitration mechanism allows for a full and fair hearing of arguments on both sides," it said. The strike will also continue until an agreement is reached, the union said.

The union is essentially seeking a higher wage scale for its roughly 1,350 members, who it says are underpaid by between $3,000 and $14,000 per year. The government will not say how much topping up the wages would cost.

The two sides remain at odds. The union says its members are underpaid compared to other federal workers, but Mr. Clement said the foreign service "cannot be compared to others." Higher salaries are needed to retain veteran workers, the union says, but Mr. Clement said Tuesday the foreign service "has no recruitment or retention issues."

Mr. Clement stressed the government's "goal is to have diplomatic, consular and other services to Canadians fully restored as quickly as possible."

The Tourism Industry Association of Canada has estimated the strike will cost the country $280-million in tourism this summer.

It is not clear when arbitration will begin.

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