Are International Students Responsible for Canada’s Housing Crisis?

Ever since Canada reported a housing shortage, international students have been at the heart of discussions, blamed for causing the crisis.

Confronted with the urgent need to handle the housing crisis, the Canadian government announced the first-ever cap on international students as a measure to solve the issue, Erudera News reports.

“Rapid increases in the number of international students arriving in Canada also puts pressure on housing, health care and other services,” the Immigration, Refugees and Citizenship Canada (IRCC) said.

As a result, Ottawa set a cap on international student permits for the next two years. This limit is expected to result in nearly 360,000 approved study permits in 2024, a decrease of 35 percent from the previous year, IRCC said.

In other words, there will be 210,000 fewer international students in Canada, including those pursuing Master’s degrees and PhDs.

“IRCC will allocate a portion of the cap to each province and territory, who will then distribute the allocation among their designated learning institutions. To implement the cap, as of January 22, 2024, every study permit application submitted to IRCC will also require an attestation letter from a province or territory,” the announcement read.

It further stressed that provinces and territories are expected to develop a system for issuing attestation letters to students by March 31, 2024, at the latest. IRCC pointed out that new study permit applications for 2025 will be reviewed at the end of 2024.

The number of international students in Canada surged over the past ten years. There were 352,325 study permit holders in Canada in 2015, and the number increased to 807,750 study permit holders in 2022.

In 2023, the number of international students with valid study permits exceeded one million by the end of December. The majority settled in Ontario (526,015), followed by British Columbia with 202,565 and Quebec with 117,925 international students.

Most of these students hail from India, accounting for 37 percent of the total student body. Indians with study permits in Canada grew from 107,070 in 2018 to 215,190 in November 2023.

Different Views on the Main Contributors to the Housing Crisis

While the government continues to find the increase in international student numbers as the real challenge in the housing market, experts say the opposite. According to the latter, various factors together are the main contributors to the problem, including municipal, provincial/territorial, and federal government policies, among others.

Based on reports, affordability is one of the problems in the housing market in Canada. In July 2023, the Canadian Real Estate Association (CREA) observed a 6.3 percent increase in the average price of a home in the country compared to July 2022.

Other reports have highlighted different views on those responsible for the housing crisis in the country. Released in 2022, a report from the Environics Institute revealed that 15 percent of Canadians believe immigrants are making housing in the country unaffordable.

A poll conducted by Leger, the largest Canadian market research company, found that about three-quarters of Canadians believe immigrants have added pressure to the housing market.

On the other hand, another report by the Royal Bank of Canada (RBC) showed that higher residential construction prices have exacerbated the housing crisis. This source states that prices have been up since the start of the COVID-19 pandemic, especially due to a lack of skilled workers and supply of raw materials.

Those at the heart of the discussion - international students are left in uncertainty and anxiety, saying they should not be held accountable for the housing crisis.

“This will bring a lot of financial burden on people like us who have planned things in advance, Shah said. It will be more chaotic for people who are already under stress,” Kewal Shah, an Indian student, told RCI.

Besides the pressure on housing, the government mentioned that the rapid increase in international students has also put pressure on healthcare and other services sectors.

However, media reports say Canadians argue the healthcare system has been getting worse for over a decade, mainly due to structural issues.

Government’s Justification on the Cap: Addressing “Bad Actors”

Marc Miller, Minister of Immigration, Refugees and Citizenship, said the new rules have been prompted by the presence of “bad actors” in the international student program. But, more recently, the reason for the imposed cap has changed not only to ease the pressure on the housing market but also to protect students from inadequate services at high costs.

Last summer, more than 700 cases of fake admission letters were investigated.

These changes come following a government’s decision to double the cost-of-living requirement, meaning that from this year, international students planning to study in any Canadian province except Québec have to prove they possess $20,635.

Previously, international students were required to have access to $10,000, a requirement that has been in force since the early 2000s.

“For 2024, a single applicant will need to show they have $20,635, representing 75% of LICO, in addition to their first year of tuition and travel costs. This change will apply to new study permit applications received on or after January 1, 2024,” IRCC said in a statement released on December 7, 2023.

According to Statistics Canada, as of July 1, 2023, the population in the country experienced a rise of 1,158,705 permanent and non-permanent residents. This represents an increase of 2.9 percent compared to the same period in 2022, while it is also the highest growth rate recorded in a one-year period since 1957.

The same source reported that 98 percent of that increase was driven mainly by immigrants, with the other part attributed to natural growth, meaning the difference between deaths and births.

The number of non-permanent residents in the country, including international students, reached 2,511,437 at the end of 2023. This figure stood at 1,305,206 in the fall of 2021.

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