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Algoma University’s Brampton Campus on Sept. 29, 2021. Ontario Auditor-General Bonnie Lysyk found that 90 per cent of students at this campus were international students, generating 65 per cent of Algoma's revenue as of 2021-22.Fred Lum/the Globe and Mail

Housing Minister Sean Fraser’s suggestion that Ottawa may consider limiting the “explosive growth” in foreign student visas, which many experts say has contributed to Canada’s housing affordability crisis, is giving indigestion to college and university administrators.

Canadian postsecondary institutions have increasingly turned to international students, who pay tuition fees as much as 10 times higher than domestic ones, to balance their budgets in recent years. Capping foreign student visas could drive some institutions over the financial cliff, while forcing others to dramatically slash capital projects and investments in research.

The number of foreign students with active study permits soared to 807,750 last year, a 31-per-cent increase from 2021. Publicly funded universities and colleges accounted for less than half of the total. But they nevertheless remain addicted to juicy tuition revenues to stay afloat. They now fear becoming victims of a knee-jerk policy reaction in Ottawa, as Prime Minister Justin Trudeau’s government scrambles to address the housing crisis.

However, capping foreign student visas is not as simple as it sounds.

The truth is that a big proportion of international student visa holders who arrive here to attend career colleges spend more time working than studying. Indeed, as immigration minister earlier this year, Mr. Fraser lifted the 20-hour-per-week work limit for international students – providing proof if any were needed that the foreign student visa program is also a temporary foreign worker program aimed at helping desperate employers fill low-paying service-sector jobs. Capping visas for these students would leave hundreds of employers in the lurch.

As for colleges and universities, a sudden reduction in the number of foreign students they are allowed to accept would have disastrous financial consequences. Provincial funding has been stagnant for years, while a freeze on tuition fees for domestic students in Ontario has forced institutions to turn to international enrollees to make up for the shortfall.

Admittedly, this has led some institutions to play a risky game.

The sudden loss of Saudi Arabian students after a diplomatic spat with Canada in 2018 was a contributing factor in Sudbury, Ont.-based Laurentian University’s decision to file for bankruptcy protection. Laurentian’s dependence on foreign students last year prompted Ontario Auditor-General Bonnie Lysyk to examine the situation at four other universities in the province in similar circumstances.

What she found was eye-opening. Sault Ste. Marie-based Algoma University, which was created in 2008 with a “special mission” to provide cross-cultural learning between Indigenous communities and other communities in Northern Ontario, has instead pursued a growth strategy focused almost entirely on attracting students from India at its satellite campus in Brampton.

“As of 2021-22, the Brampton campus generated 65 per cent of the university’s revenue and 51 per cent of the university’s total enrolment; 90 per cent of Brampton’s enrolment are international students,” Ms. Lysyk stated in her November, 2022, report. “As a result, international students accounted for 76 per cent of Algoma’s tuition revenue for all campuses combined in 2020-21.”

At the University of Toronto, first-year students from within Ontario will this year pay $6,100 in tuition, while domestic students from outside the province will pay slightly more. Tuition for first-year international students is set at $60,510. Even a modest reduction in the number of international students would have a huge impact on the bottom line.

“The university continues to welcome a large community of international students. Experience and data show consistently that this is an important factor in academic excellence and global competitiveness, as well as a major benefit to the regional and national economy,” U of T explains in its most recent financial report. (A university spokesperson could not provide data on total revenue generated by international student tuition fees.)

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Canadian universities and colleges are not alone among their developed-country peers in recruiting foreign students to pad their budgets. In May of this year, Australia had 608,942 international students on study visas, which is proportionally even more than Canada.

“At a time when funding for and domestic enrolment in Canadian institutions is in decline, [capping foreign student visas] would be short-sighted and counterproductive,” the Canadian Bureau for International Education told Ottawa in an April submission. “A cap on international student enrolment would also constrain Canada’s ability to use international education (i.e., “soft power”) to advance foreign policy objectives in certain regions.”

While most international students eventually apply for permanent residency status in Canada, the rest return to their home countries after completing their studies here. “The more positive and successful their educational experience in Canada, the likelier they will be to serve as de facto ambassadors for Canada and use their contacts, networks and understanding of what Canada has to offer to mutual advantage.”

Alas, capping foreign student visas could create a whole new set of problems to fix.

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