Canada : Housing crunch worsened by international students

Canada : In a surprising turn of events, the government of Canada is contemplating capping the number of international students allowed into the country, citing a pressing need to address a growing housing shortage. This shift in policy, driven by concerns over housing affordability and rising demand, challenges Prime Minister Justin Trudeau‘s longstanding commitment to boosting immigration as a cornerstone of Canada’s economic agenda.

Canada & Targets

The Canadian government has set ambitious targets for immigration, with plans to grant permanent-residency status to a record 465,000 immigrants this year, eventually increasing the target to 500,000 by 2025. These immigrants are expected to fill essential roles in healthcare, manufacturing, construction, science, and technology, making immigration central to Canada’s economic future.

However, this influx of immigrants has exacerbated the housing crisis in Canada. The country consistently ranks among the world’s highest in terms of housing prices, with rents also soaring. The Canadian Mortgage and Housing Corporation reports a vacancy rate of just 1.9% for rental units, the lowest since 2001.

Canadian Immigration Minister Marc Miller acknowledges that international students have contributed to the housing pressure in major cities, stating, “The micro-inflationary pressure that international students present in certain areas of the country, notably in big cities, is real.”

Prime Minister Trudeau, who initially downplayed housing as a provincial issue, has recently prioritized addressing the housing crisis. While he cautioned against simplistically blaming foreign students, he emphasized that “all ideas are on the table” to ensure housing affordability.

One challenge in addressing this issue is the absence of caps on student visas, a factor contributing to the surge in international students during Trudeau’s tenure. The number of student-visa holders doubled, from 352,325 in 2015 to 807,260 in the previous year, according to government statistics. Economist Benjamin Tal suggests that this count may be even higher, as it doesn’t account for those who overstayed their visas.

Foreign students, who face the same high rents as other residents, have also raised concerns about housing affordability. Jaspreet Singh, founder of the International Sikh Students’ Association, believes that colleges and provincial governments share the responsibility of ensuring sufficient housing for these students.

Moreover, immigration rules incentivize enrollment in for-profit colleges that aggressively recruit foreigners. These colleges may not always provide adequate housing solutions for their students.

However, supporters of international students argue that they fill crucial economic gaps, particularly in industries like healthcare, housing, and trucking that suffer from labor shortages. Michael Sangster, CEO of the National Association of Career Colleges, contends that Canada needs skilled workers to meet its job demands.

To address labor shortages, last year, the Canadian government temporarily relaxed restrictions on foreign student work hours, recognizing their potential contribution to the labor force. These rules are set to expire at the end of this year.

Philip Landon, interim president of Universities Canada, emphasizes that capping student visas could harm Canada’s ability to compete for top students globally. He points out that international students make up around 30% of total enrollment at the University of Toronto, which guarantees housing for first-year undergraduates.

While larger institutions like the University of Toronto can provide such guarantees, smaller colleges often struggle to meet housing demands. Canadore College recently faced protests from nearly 50 students demanding housing access due to the higher fees they paid for their programs. The college has since reached an agreement with the students, though details remain undisclosed.

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