The decline is unfolding as Canada’s new policy settings – a cap on international enrolments and other measures – continue to impact international students and the Canadian education system alike. The government’s reforms, which were intended to reduce the number of international students in Canada and improve programme integrity, have considerably overshot the mark.

A recent report from The Office of the Auditor General of Canada (OAG) found that the Canadian government significantly underestimated the effects of its enrolment cap and did too little to improve the integrity of the system. The Auditor General also observed: “The department did not know why [study permit] approval rates were lower than projected.”

The full-year data for 2025 from Immigration, Refugees and Citizenship Canada (IRCC) provides the answer: lower-than-expected permit grants were due to (1) the erosion of international student demand and (2) historically low approval rates for new study permit applications.

“Last year, IRCC processed 211,000 new post-secondary applications from prospective international students,” says a new analysis from . “Compared to 2024, demand was -55% lower year-over-year.” In other words, much fewer international students applied for a study permit last year than was the case in 2024, and this was on the heels of another substantial applications drop in 2023.

At the same time, approval rates have fallen sharply over the last five years. In 2021, 57.9% of new study permit applications were approved. That approval rate fell to 44.9% in 2024 and then took another significant step down to 35.7% – in 2025.

These two declining trends are closely linked. Simply put, students do not need to wait for official statistics to understand that many of their peers are having their applications rejected and that they should perhaps consider other options.

Can we talk about the overcorrection?

Another newly released study, this time from the , reinforces the point: “The [enrolment] cap and related reforms are reducing [international student enrolment] in excess of the provincial and territorial allocation targets, because they damage the brand and reputation of Canada’s International Student Program…After two years of caps, the 2024 policy changes seem to have reduced new study permit applications and enrolments much more than IRCC planned – and much more than provinces, territories and DLIs expected.”

The Committee’s study of the International Student Program was carried out from September to November 2025 and included testimony and written briefs from dozens of expert witnesses and organisations.

The Standing Committee finds that, “Although education and the regulation of learning institutions fall under provincial and territorial jurisdiction, the federal government was responsible for issuing an unsustainable number of study permits and allowing the system to be abused.” However, “While IRCC is attempting to reduce the number of international students in some provinces and territories, and to address overreliance on international students by colleges, its policies are impacting enrolment in regions and institutions across the country and in higher numbers than anticipated. Despite the government’s complex allocation formula, the policy is too broad and ignores regional institutional realities…While universities in some regions, such as Quebec, have not generally had problems with growing international student populations too quickly, nor with housing these students, the cap has decimated enrolment from coast to coast to coast.”

In his testimony during the Committee hearings in September 2025, Alex Usher, President of Higher Education Strategy Associates, said:

“What we ended up with was a federal government that barely understood what was going on, lashing out, acting alone, doing anything it could to bring the numbers down with only the barest understanding of the system it was regulating…We have almost no instinct anymore for co-operative federalism. This was a clear case where governments should have been talking to one another, and they weren’t. They should have been including institutions, as well. We have brutally siloed decision-making.”

Among the 10 recommendations put forward to the Government of Canada by the Standing Committee, perhaps the most compelling one is the related point that: “To give time for all actors in the international student system to adapt, and to give more certainty to current and prospective international students, the [committee recommends] that Immigration, Refugees and Citizenship Canada consult more extensively with the provinces and territories about long-term plans for the International Student Program.”

Needless to say, the stakes are high – both for the country and for prospective students seeking access to education – and there is an urgent need for more thoughtful and effective policy making. The issues at hand transcend international student statistics and extend to the larger questions of Canada’s long-term social and economic development, in particular its ability to attract talented students, scholars, and researchers and what that means to larger national goals of innovation and productivity.

As Larissa Bezo, President and Chief Executive Officer of the Canadian Bureau for International Education, said in her Committee testimony:

“We need to be clear that this isn’t solely an immigration issue. Talent development and attraction cuts across departments and needs whole-of-government coordination.”

For additional background, please see:

• “Canada: Government audit finds impact of international student cap far greater than expected“
• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years“
• “Canada: Study permit numbers are in steep decline in 2025“

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Some of these changes are in effect immediately; some are still pending.

What has already changed?

As of 1 April 2026, international students no longer need a separate co-op work permit that are part of their post-secondary programme in Canada. This change applies to work-integrated learning components within the student’s programme of study, including co-op placements, internships, practicums, and mentorships.

This is a significant departure from the previous practice where students pursing any such work-integrated learning placement were obliged to obtain a separate co-op work permit in addition to their study permit.

Commenting on the change on LinkedIn, Ankita Goyal, an adjunct professor of immigration law at Queen’s University, said, “Removing the need for a co-op work permit means students won’t be stuck waiting to start their placements—something that has historically caused delays, stress, and even lost opportunities.”

“This change simplifies the administrative process for students by requiring only one permit to complete a single study programme,” adds a statement from IRCC. “It does not increase the number of students who are authorised to work or affect temporary resident volumes; it simply removes an administrative step that is no longer necessary.”

In order to be eligible to carry out any such work-integrated learning with only a study permit, the work placement must be a requirement of the study programme. The updated IRCC guidance says that eligible students must meet all of the following conditions:

• “You have conditions printed on your initial study permit that say you’re allowed to work on campus.
• You have a letter from your DLI [Designated Learning Institution] that confirms the work placement is a requirement of your study program.
• You have a valid study permit or you applied to extend your study permit before it expired.
• You’re a full-time student at a DLI.
• Your study programme is at least 6 months long, at a post-secondary level and leads to a degree, diploma or certificate.
• The work placement of your study programme totals 50% or less of your study programme.”

Further easing ahead?

In addition to those immediate changes around co-op of other work placements, IRCC has also proposed to rules around post-graduation work permits (PGWP).

Most notable among these is a proposal, for which consultations will be ongoing for the next month or two, that would allow international students to work without a work permit in cases where:

• An international student is waiting for a decision on a study permit extension; and
• An international graduate is awaiting a decision on an application for a post-graduation work permit (PGWP).

“When international students finish their programme, they can apply for a PGWP. However, there’s a gap between graduating and receiving the PGWP,” says a related report on . “Currently, gaps between permit expiry and approval of a new permit can leave students and graduates in limbo, and unsure about their ability to work, even though current regulations do allow graduates to begin work before receiving their work permit.”

The process and timeline for implementation of any new rules around PGWPs is not yet clear, but the current proposals reflect the government’s stated intention to streamline and Canada’s immigration system, and so seem likely to proceed in some form.

For additional background, please see:

• “Canada: Government audit finds impact of international student cap far greater than expected“
• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years“
• “Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy“

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As of this year, however, that pathway enrolment has now dwindled to the “low single digits” according to industry experts. This dramatic shift is the result of new immigration settings that essentially upended that national network of joint programmes.

Not enough PALs

The challenge to the pathway model first appeared in the form of Canada’s cap on foreign enrolment in January 2024. That cap is in part administered through an inventory of Provincial Attestation Letters (PALs) that are allocated by the federal government to each Canadian province or territory. Each provincial or territorial government in turn distributes its PAL inventory among its respective Designated Learning Institutions (DLIs). The pattern that has emerged over the first years of the cap system is that (1) PAL allocations tend to be heavily weighted to public institutions and (2) the allocations for language schools are often very modest.

In 2026, for example, Ontario, the province that is home to the country’s largest share of international students, allocated 96% of its PALs to public colleges and universities in the province. Only 4% were reserved for language schools, private universities, and other institutions.

The change of status problem

Subsequent to the introduction of the enrolment cap, Immigration, Refugees and Citizenship Canada (IRCC) also introduced that sets out that an international student, “Must be enrolled in the designated learning institution (DLI) named on [their] study permit. This means [they] can no longer change DLIs by letting us know through [their] online account. To change DLIs, [they] need to get a new study permit by applying to extend [their] current one.”

This directly impacted the traditional pathway model in Canada in that students would now need to apply for a new study permit as they moved from one pathway partner (one DLI, that is) to the next.

In short, that combination of a limited inventory of PALs for language schools and the additional uncertainty introduced around the new change of status provisions meant that the conventional pathway model in Canada was no longer viable.

Creating a new pathway model for language study

On the heels of those earlier policy changes from 2024, IRCC introduced a further revision to its rules for “joint programmes resulting in a single credential” in July 2025.

Languages Canada, the peak body for language training in the country, sought clarification from IRCC as to how that new rule might apply to pathway programmes. “The idea we began with,” says Languages Canada Executive Director Gonzalo Peralta, “is that language itself could be the joint programme.”

In November 2025, the association received confirmation from IRCC that the new rule around joint programmes could indeed be applied to a language study pathway.

This determination led Languages Canada to create a new model for pathways – the (JPP) – and to operationalise that new model via a limited pilot beginning in February 2026.

Languages Canada explains that in the JPP, “Lower-level language education is delivered by the private partner, followed by upper-level language education at the public partner. Students remain within a single joint programme under one study permit. The public institution issues a [letter of acceptance, LOA] and PAL naming both DLIs and specifying the joint programme. The public institution conducts LOA verification and compliance reporting, and issues a conditional LOA for the academic programme [outside of the JPP].”

That model is based on IRCC’s current for joint programmes which set out that:

“Students pursuing a joint programme that results in a single credential may be issued

• one provincial/territorial attestation letter from the province or territory of the DLI issuing the credential and
• one study permit for the DLI issuing the credential for the entire duration of their studies (or for the duration of their passport validity, whichever comes first).

The DLI issuing the credential must

• issue the LOA with no academic conditions required to advance to the next DLI in the joint programme
• complete the LOA verification activity
• complete the international student compliance regime report, which includes reporting on the student when they are studying at any other DLI that is part of the administration of the joint program”

With that operational guidance in place, the benefits for each partner in the JPP are clear. As Languages Canada explains, “For private language schools, the JPP creates a compliant pathway for study permit students and helps navigate PAL scarcity. For public institutions, it offers a way to increase intake by partnering with trusted private partners and leveraging established recruitment pipelines in diverse markets.”

Going nationwide

Based on the findings from the early pilot and on the considerable demand from prospective pathway partners, Languages Canada announced at its annual conference in March 2026 that the JPP pilot will now be rolled out nationally. “The Joint Pathway Program aims to bring language pathway programmes back to Canada’s education ecosystem, in a structured and responsible way that protects students, institutions, and Canada,” says Mr Peralta. “By aligning language education with post-secondary pathways in a clear and coordinated way, we are restoring confidence in Canada as a destination of choice for international students.”

Along with ILSC and Oxford International, ILAC is a participant in the pilot. “As an established leader in Canadian pathway programmes, ILAC is committed to using the JPP to continue delivering an exceptional student journey, offering a smooth, supported transition from our language programmes to post-secondary institutional partners,” adds Senior Vice President Partnership Development and Career Colleges Magdalena Link. “The IRCC-approved JPP further amplifies these opportunities, opening new doors for students pursuing higher education in Canada. The benefits for students are clear: the JPP removes the risk associated with change of status or applying for a new study permit. It offers more certainty as students can transfer from the private language school partner to the public post-secondary partner under a single study permit.”

“Our objective is to bring pathways back to Canada,” says Languages Canada’s Peralta. “Within three to five years, we want to have at least 10% of language students in pathways.”

For additional background, please see:

• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years“
• “Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy“
• “Canada announces international student cap numbers for 2026 and updated programme guidance“
• “Nearly 30 Canadian language programmes closed in Q1, marking the ‘sharpest decline in the sector’s history’“
• “Canada’s language sector buffeted by policy changes in 2024“

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The report, , concerns Immigration, Refugees and Citizenship Canada’s (IRCC) imposition of an ongoing cap on new study permits as a way of controlling the growth of international students in Canada.

The OAG found that:

• The reduction in new study permits disproportionately affected smaller provinces.
• The department introduced a tool to strengthen application processing but did not effectively respond to other weaknesses in integrity controls.

The Auditor General also documents the continued trend of new study permit grants coming in much lower than government expectations, culminating in 2025, when the forecast was 255,360 new permits. Instead, the number came in at 50,000. The chart below illustrates the contrast between predictions and actual approvals.

The OAG also found that “The department did not know why approval rates were lower than projected.” In addition, it determined that there were “weaknesses in how the department responded to suspected cases of study permit non compliance and immigration fraud.”

In essence, the Canadian government underestimated the effects of the cap, and the OAG found that IRCC did too little to achieve one of its main goals: improving the integrity of the system.

Insufficient tracking and adjustments

The distribution of study permits across Canada resulted in deep losses of international enrolments in Canada’s smaller provinces. The projection for 2024 was that study permit approvals for Manitoba, Prince Edward Island, Nova Scotia, and New Brunswick would decrease by roughly -10% or less. They did decrease – but by at least -59% across those provinces.

What’s more, the intention was for study permit increases in Newfoundland and Labrador and Saskatchewan. What happened were significant decreases, as shown in the chart below.

In 2025, the downward trend continued, with between -15% and -49% fewer approvals than projected.

The smaller provinces were disadvantaged in large part because of the cap’s design. IRCC allocated study permits based on each province’s population, but it did not factor in that smaller provinces experience lower approval rates than others. The report concludes:

“The department’s approach resulted in smaller provinces experiencing two compounding challenges: limited allocation spaces and lower study permit approval rates. This was made worse by decreasing application volumes.”

The OAG found that overcorrection was not monitored or addressed. The report states:

“This finding matters because the Immigration and Refugee Protection Act mandates Immigration, Refugees and Citizenship Canada not only to manage immigration, but also to ensure its benefits are shared across Canada. The department also has a statutory obligation to consult provinces on immigration planning and consider regional economic priorities.”

OAG looked into IRCC’s response to the situation and found it profoundly lacking. It also asked provincial representatives for their insights on any constructive consultation that has happened: “Provinces reported to us that they were not informed of their allocations in a timely manner in either 2024 or 2025, which impacted their ability to plan for the changes and implement processes to meet the department’s requirements.”

Finally, the report found that IRCC did not follow up on several cases when fraudulent documentation was detected after study permits were issued.

Effects on institutions, provinces, and towns

Canada’s national public broadcaster, CBC, post-secondary representatives in British Columbia, the second-largest host of international students in Canada after Ontario, to hear how the study permit cap has affected them. Representatives spoke about programme cuts, staff layoffs, and negative impacts on smaller towns and workforces.

Dale McCartney, a professor at University of the Fraser Valley who has researched years of international student policy in Canada, said:

“It’s very clear how few people in Ottawa are actually thinking about this from the lens of what serves international students, what serves Canadian communities, what serves, you know, universities or colleges.”

Further, Prof McCartney spoke of the broader implications for Canada, noting that “in a few years, there could be a generation of post-secondary students who have very few international colleagues … leading to a lack of global perspectives. I would say it’s a very poorly conceived policy that was created haphazardly. And the effects of it are very clear.”

At the University of the Fraser Valley, 45 faculty and staff were recently laid off as a result of a CA$20 million deficit in the 2026/27 fiscal year.

Also interviewed was Jen Wrye, president of the North Island College Faculty Association, who said :

“We are the thick of closing down programmes that have either high demand and or important economic outcomes for this region and for this country.”

These examples are far from unusual. Dozens of institutions and smaller towns are reeling from the effect of Canada’s cap on new study permits for international students.

For additional background, please see:

• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years”
• “Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy“

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The data suggests that the Canadian government’s reforms have achieved many stated goals, but that these achievements have come at considerable cost to the country’s economic potential. Canada’s population is in decline, and there are significant skills gaps in critical areas. notes:

“To function at its peak and provide a better life for all Canadians, our economy needs to fill tens of thousands of critical positions in engineering, technical occupations (medical technologists, dental care occupations), higher-skill goods (mechanics, electrical trades), and other higher-skill services (nurses, teachers, social services and therapy professionals). The worker shortage in these ‘clusters,’ as categorized by the Conference Board of Canada in a recent report, is costing us a lot — around $2.6 billion this year already … but simply put, we’re short on Canadians.”

Have the policies been effective?

The stated aims of Canada’s new policy settings include:



• Reducing demand pressure on rental prices, affordable housing, and health care;
• Responding to public unease about immigration levels;
• Eliminating the ability of and financial incentive for institutions and agents to recruit aggressively or irresponsibly in overseas student markets.

International student policy reforms have played a role in spurring progress in all these areas – except for alleviating the strain on health care. For example, polls show that Canadians are now about immigration levels than in 2024. Rental prices in 2025 than in 2024, though a rapid injection of new housing supply is as much a reason for this as fewer new temporary residents.

As for health care, the decline in new international students has not resulted in more health care capacity and quality for Canadians. Instead, there is a growing shortage of doctors and nurses in Canada. The National Library of Medicine notes: “Canada faces a 22,823-family physician shortfall, with only 1,300 new graduates annually, making it impossible to close the gap at the current rate, especially in rural areas.”

Similarly, the told the House of Commons Standing Committee on Citizenship and Immigration (CIMM) in 2025 that the reforms are exacerbating Canada’s acute shortage of nurses, particularly in rural areas:

“Beyond the financial implications [of reduced international student tuition] for schools, certain locations rely on international student nursing graduates to fill shortages in local health care institutions. This is particularly true of programs that operate in linguistic-minority contexts and rely on international students to meet the increasingly diverse health industry and population needs. Current reforms are therefore significantly affecting provinces’ health human resources needs and increasing the vulnerability of precarious, yet essential, nursing programs. In the short term, the decisions affect the viability of programs (such as through program closures, layoffs, hiring freezes). In the long term, they affect the academic institution’s capacity to address the increasing needs of a diverse population.”

The effects have been significant

A central goal of the reforms was to reduce the number of international students in “low-demand” programmes such as business, which accounted for the lion’s share of new international student enrolments between 2018 and 2023. But international enrolments in a much wider range of fields have fallen dramatically, including at the graduate level and in the STEM specialisations Canada needs most for its global competitiveness.

In September 2025, , a leading source of Canadian business and technology news, interviewed Robert Asselin, the CEO of the U15, which is the association representing Canada’s most highly ranked research universities such as the University of Toronto, McGill University, and the University of British Columbia. Commenting on the effect of the cap and associated reforms, Mr Asselin said:

“Like capital, talent is mobile. [International talent] can go elsewhere if they feel that they’re not welcome here, and this is what’s happening.”

According to U15 data, between September 2023 and September 2024 (when the study permit cap started affecting Canadian college and university admissions) international enrolments fell by -21.4% in electrical and computer engineering. Double-digit declines also occurred in graduate medical residencies, chemical engineering, environmental sciences, and biology and botany.

In a statement to The Logic, Matthew Krupovich, a spokesperson for Immigration Minister Lena Metlege Diab, said, “Cutting the number of university grad students was never the government’s goal. Canada remains open to graduate students.”

But the “the Canadian message heard abroad is rather different,” said the U15’s Mr Asselin:

“What we’ve said around the world is, ‘Don’t come to Canada. We don’t want you here. Even if you’re smart, even if you have the best grades, the best marks, we’re closing the door.’”

It seems clear that the government is aware of falling graduate enrolments in vital subject fields. It recently announced that it would exempt international students applying for master’s and PhD programmes at public higher education institutions from the study cap.
 
After removing the cap on PhD and graduate students (along with their families), Immigration Minister Lena Metlege Diab said:

“We recognize that we need them here to grow our economy. And we also recognize that when you’re coming as a graduate student and a PhD student, you’re obviously coming for that purpose. So I think that’s a great start for now.”

The PhD and graduate student exemption came into effect in January 2025. It won’t erase the losses of key talent over the past couple of years, but it may help reverse the tide.

Retention is also an issue

A report from the Institute for Canadian Citizenship (ICC) and the Conference Board of Canada, , reveals that Canada has not only lost potential global talent as a result of its broad-based international education policies, but that it is also losing the global talent it already has.

The report’s main insights are:

• Immigrants are leaving Canada at near-record rates;
• The most educated and skilled immigrants are leaving at twice the rate of other immigrants;
• The weakest retention rates are immigrants skilled in high-demand fields such as business and finance management, information and communications technology, engineering and architecture management, and manufacturing and processing engineering.

The report concludes:

“[These findings are] particularly noteworthy given Canada’s demographic reality. The country’s fertility rate has hit a record low of 1.26, placing it among the lowest in the world. With births declining and an aging population, Canada’s immigration model has become essential for maintaining workforce levels and economic growth. Reduced immigration targets mean fewer newcomers will arrive. Coupled with onward migration, economic impacts will compound.”

For additional background, please see:

• “Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy”&�Բ�����;
• “Canada announces new incentives for international recruitment of masters and PhD students”
• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years”

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That is, to put it mildly, a historic drop.

The more provided by Immigration, Refugees and Citizenship Canada (IRCC) underscores the point.

IRCC reports that as of December 2023, there were 673,970 foreign students in Canada with a study permit. Also as of that month, there were another 320,830 students in Canada with both a study permit and work permit. Combining the two groups adds to a total of 994,800 students.

Fast forward to November 2025, and those numbers had fallen to 476,330 and 244,900, respectively, for a total of 721,230 international students.

That amounts to an overall decline of -27.5%, or 273,570 students.

That precipitous decline in Canada’s foreign student population was ushered in by new policy settings that were largely introduced over the first half of 2024. Those measures include a hard cap on foreign enrolment, new restrictions on post-study work rights, and surging rejection rates for study permit applicants.

The net effect of those new settings has been to substantially reduce the numbers of new students coming to Canada to begin their studies, another key underlying trend that we see illustrated in the following chart.

IRCC highlights that student arrivals are down by -60% for January to November 2025, compared to the same period in 2024.

Needless to say, with so few new students arriving, Canada’s foreign enrolment base will be further reduced over the course of 2026. Canada’s says the country expects to welcome 155,000 student arrivals in 2026 (a -49% reduction from the 2025 target), and then 150,000 per year in 2027 and 2028. This compares to the 293,100 actual student arrivals reported by IRCC for 2024.

More broadly, Canada’s Immigration Levels Plan aims to reduce the Canada’s population of temporary residents – a category primarily composed of international students and temporary foreign workers – to less than 5% of Canada’s population by the end of 2027.

In December 2025, reported, “On October 1, 2025, there were 2,847,737 non-permanent residents in Canada (6.8% of the total population), down from 3,024,216 on July 1, 2025 (7.3% of the total population). The decrease in the estimated number of non-permanent residents was the result of larger, record-high outflows (339,505) – that is, permits expiring – compared with inflows (163,026), which reflect permits issued.”

Canada’s larger goals in terms of managing its temporary resident population down (as a percentage of total population) have been hindered by the continued growth in the number of temporary foreign workers over the last two years. Indeed, the number of foreign nationals in Canada with work permits continued to increase until June 2025, and only begin to decline marginally over the second half of 2025. Put another way, most of the reductions that have been observed in temporary resident numbers in Canada to date have come from the declining number of international students.

Canada’s total population is projected to reach 41.6 million by the end of next year. In order to come under the government’s target threshold to bring the number of temporary residents to under 5% of the total population, the number of non-permanent residents in Canada will have to fall to roughly 2.08 million by then; down from a total of about 2.7 million as of November 2025.

For additional background, please see:

• “Canada cuts foreign enrolment cap by nearly 50% as current year trends below COVID levels“
• “Canada: Study permit numbers are in steep decline in 2025“
• “Measuring the impacts of the first full year of Canada’s foreign student enrolment cap“

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Keystone Education Group’s 2025 data reveals a dynamic year for international student mobility, with some sharp declines across traditional powerhouses alongside rapid growth in emerging destinations.

The data, drawn from millions of annual student search indicators and enrolment data, shows that international student mobility is increasingly being shaped by a combination of supply-side policies and demand-side preferences among students.

Fredrik Högemark, CEO of Keystone Education Group, said: “This year has been one of the most volatile we’ve tracked in our data. Students are weighing affordability and safety more than ever, and as return on investment becomes a necessity, this is leveling the playing field beyond the ‘Big Four’.”

“Policy changes announced mid-cycle in 2025 forced students to rapidly adjust their plans, while we have also observed numerous anti-globalisation measures that have inadvertently affected international education.”

Since fall 2023, international interest in the US across Keystone’s platforms dropped by -47%.
However, the growth of post-study work opportunities and OPT continues to influence enrolments in the US, particularly with the two largest source markets – India and China.

And, when we look at the second half of 2025 in isolation, interest in the US is showing signs of stability again and it remains the most searched destination across Keystone sites.

The decline in US interest, while extreme, is not the steepest globally. Canada and Australia also experienced similar drops in interest over the same period.

For Australia, this trend also might be starting to turn for 2026, with early indications in Keystone’s Q3 2025 data showing a more positive outlook – with search interest up +8% compared to Q2 in 2025.

The UK was Keystone’s second leading study destination in 2025, recognised globally for its academic reputation. Beyond its reputation, Keystone’s 2025 State of Student Recruitment Report found the UK also ranks highest for reputation and safety of the Big Four.

Fredrik added:

“We have seen very strong trends for UK study across Keystone’s platforms this year and data from September 2025 also showed study visa applications are up 7% over 2024, so the environment had been looking stable for 2026. However, the news in October of a shorter post-study-work entitlement in the UK will likely have an impact on interest there. The question is how much impact?”

Europe as a collective also continued to amass student interest, particularly at the end of 2025, with five of the top 10 searched destinations in November in Europe.

Spain, Italy, Germany, and France all recorded more student search interest than Canada and Australia, with Spain’s search volume rivalling the UK’s popularity.

Nordic destinations have also experienced an upward trend, with a +33% rise in interest as of April 2025. Meanwhile, the UAE continues to build its profile as a global education hub, with Keystone data showing a near +90% increase in search interest for UAE study opportunities in June 2025.

It has also been a breakthrough year for the Asian Tigers – Malaysia, Singapore, Thailand, and South Korea.

Malaysia led the surge with a +64% increase in student searches from March to May on Keystone sites, followed by Singapore with +51%. Japan’s popularity also grew in this period, while South Korea entered the top 10 study destinations for the first time.

Fredrik added: “It is no surprise South Korea and Japan are growing in popularity. Japan has a very pro-international policy – it is launching more and more English-taught programmes and the good collaboration between higher education and the government is evident. South Korea is in a similar situation. Both have been fully embracing and supporting international education.”

West Africa was an unlikely player in 2025 but saw a surge in searches from international students, with a +25% increase in interest in the region on Keystone’s sites between May and July this year.

For additional background, please see:

• “Global trends in international enrolments and policies as we head into 2026”
• “Canada and the US are losing international student enrolments to Europe and Asia”
• “The changing face of international student mobility”

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There is that falling international student numbers have helped to ease rental rates in some cities and towns. But the other part of the story is that more rental housing has been built in the past couple of years, and this additional supply to more affordable housing on the market.

Housing costs aside, what effects have the cap and other blanket immigration policies had on the Canadian economy?

Those effects can already be measured in the billions, and financial losses are just one aspect of them. The Canadian postsecondary system is reeling, and local economies are losing essential talent.

No immediate way to mitigate plummeting student numbers

Research from higher education consultant Alex Usher finds that between 2010 and 2023, “international student tuition was responsible for 100% of new operating revenue in [Canada’s post-secondary] sector.”

Should things have gotten to that point, where postsecondary institutions became so entirely dependent on international students for survival? Of course not. But a few other realities explain how this state of affairs came to be. From by chartered bank RBC:

“Public spending on postsecondary institutions in Canada has fallen from 1.47% of GDP at its height in 2011 to the current OECD average of 1.1% – a sustained decline that is rare among other OECD countries. As a percentage of GDP growth, public spending is CDN$13 billion short of where it was 15 years ago.”

On top of this, provincial governments have prevented postsecondary educators from raising domestic tuition fees: “Most undergraduates are paying roughly what they would have paid 10 years ago for the same programme.” Needless to say, while tuition rates have been frozen, nearly all categories’ operating costs have continued to increase.

These facts highlight:

1. How impossible it has been – for years and years – for many institutions to generate sufficient operating revenues outside of international student tuition.
2. How difficult it has been for these institutions in the past two years of the cap to keep staff and programmes running given that any significant increase in public funding is nowhere to be seen.

The list of damages resulting from the cap is long.

Across only six institutions in Ontario, the Canadian province with the most international students, financial losses already exceed CDN$140 million since 2024. Relatedly, the Globe & Mail reports that, as of July 2025, Ontario’s public colleges have already had to suspend 600 programmes and .

In British Columbia, the next largest enroller of international students in Canada, postsecondary institutions’ losses are expected to be surpass CDN$300 million annually. At one of the province’s colleges, Okanagan College, the student union has met with institutional leadership to voice a concern about as the college’s staff increase their focus on recruiting enough students to keep programmes open.

In the province of Saskatchewan, at least 100 staff have been laid off at Saskatchewan Polytechnic (Sask Polytech) – a research powerhouse in Canada that ranks first in the Top 50 Research Colleges list compiled by . International enrolments at this institution are down 40% and revenue losses are in the tens of millions.

Profound, multifaceted damage

The example of Sask Polytech reveals that current revenue drops are only a small slice of the damage the caps are inflicting on Canada’s postsecondary system and local economies. Larry Rosia, the polytechnic’s president, told the : “We were able to run additional programmes with additional seats for domestic students as a result of our international enrolments, and that won’t happen now. We just don’t have the funds.”

In other words, domestic high school students are facing a more impoverished postsecondary system because the steep drop in operating revenues caused by the cap is affecting the number and quality of programmes and the research capacity of colleges and universities. The think tank adds: “Financial losses also reduce funding for additional student supports such as mental health services, financial aid and expanded work-integrated learning opportunities.”

Sask Polytech’s struggles also highlight the cap’s impact on research and innovation specific to local economic needs and skills gaps. The institution is known for its collaboration with provincial industry partners to help them to improve processes and respond to issues in communities. Examples have included:

• A collaboration in 2022/23 with Ground Truth Agriculture Inc., a company that specialises in real-time grain quality data, in which the polytechnic helped to refine their advanced artificial intelligence systems through its Digital Integration Centre of Excellence.
• A collaboration with NWC Wild Rice Company to create an efficient and easily repairable propulsion system for wild rice harvesters in northern Saskatchewan. This project also included a complementary community-based training program for maintenance and repair.
• A Virtual Interventions and Community Connections for Indigenous Youth (VICCIY) initiative in 15 rural and remote communities across Saskatchewan, with a focus on addressing disparities in mental health care access and support experienced by Indigenous youth.

The polytechnic has four campuses across the province, further enabling it to refine programmes to local needs.

Here, another element of the cap’s design is worth noting: It considers national rather than regional labour force needs, which experts believe is detrimental to local economies. With revenue losses as steep as those experienced at Sask Polytech (and many other Canadian institutions known for strong industry collaborations), smaller towns and/or those in rural regions become more vulnerable in terms of:

• Job losses (e.g., at the college or university in their community);
• Programme closures;
• A reduced pool of graduates with skills relevant to local realities.

noted in October 2025: “Lower student and staff spending ripples through retail, food service, fitness, transit, and neighborhood services, softening sales for small businesses and reducing demand for street-front and strip-mall space near campuses.”

Policy Options adds: “When we starve an institution of its training capacity, we directly undermine local employers, industry and in some cases regional economic sustainability.”

“If we were talking about any other industry – the steel industry, the auto industry, the lumber industry – it would be on the TV every night and the federal government would be stepping in to help,” says Mr Rosia.

Rural towns are the most affected

points out:

• “Once international students graduate, they often continue to work in the communities where they studied, through the Post-Graduate Work Permit program (PGWP) or Provincial Nominee Program (PNP).
• Small and rural communities tend to rely on newcomers and migrant workers more than urban centres to fill workforce gaps, especially in care work, as rural communities are aging faster.
• Small and rural communities also rely more on post-secondary campuses as economic anchor institutions. Beyond the direct jobs that campuses bring to a community, students and staff spend money in the local community, supporting small businesses, housing, and other services; sporting and artistic activities bring a sense of pride; and often campuses offer opportunities for partnerships between local industries and researchers.”

of the link between higher education access and rural economic health in its April 2025 interview with Coralee Oakes, former British Columbia shadow minister for postsecondary education. Ms Oakes called higher education institutions “the hub of the wheel for small communities struggling with everything from health care to jobs to mental health and addiction.”

She told The Tyee that having a College of New Caledonia satellite campus in her hometown of Quesnel has been integral to sustaining local health care:

“If we didn’t have the health-care training at our local college, we wouldn’t have a hospital that’s functioning. We can’t recruit our way into filling these gaps.”

Geoff Dawe, national president of the Public and Private Workers of Canada, or PPWC, a union representing support staff at Selkirk College in British Columbia’s southern interior region, also spoke with The Tyee and made this point:

“We need to make sure that our rural communities stay strong, viable, economical places to raise kids and grow. [Because of international tuition losses affecting the community], people are going to go to different communities or bigger cities where they will offer these programmes.”

Suffice to say, this will run counter to the federal government’s

The third year of the cap

Despite business and education stakeholders’ concerns about the sweeping impacts of the cap, Canadian Prime Minister Mark Carney announced this fall that a maximum of 155,000 study permits will be issued in 2026. For reasons including plummeting international student demand and high visa rejection rates, this total will almost certainly not be met.

Data provided to ���Ϲ��� Monitor by IRCC shows that the total number of new study permits issued in 2024 was 267,890 – a roughly -48% reduction from 2023 levels and nearly 100,000 study permits below the official IRCC target.

What’s more, 2025 was the second year in which Canada’s colleges, universities, and economy have seen far fewer new international students than could be accommodated under the enrolment cap. IRCC data indicates the department processed only 104,980 study permit applications for new students (as opposed to renewals for continuing students) between January and June 2025. Of those, only 31,580 were approved (an approval rate of just over 30%). This compares to the 223,551 new study permit applications processed during the same period in 2024. Of those, 113,368 were approved (a 51% approval rate).

While full-year numbers are not yet available for 2025, the projection is that Canada will approve only about 80,000 new study permits – more than 230,000 below the cap for this year. If that projection holds, that will be the lowest volume of new study permits issued in a decade, and it will fall below even the 2020 COVID level.

Gabriel Miller, president of Universities Canada, sums it up this way: “The challenge here was always to lower numbers in a smart way. It’s a bit like they decided to go on a diet and they stopped eating vegetables.”

The diet is certainly extreme, and its continuing impacts – on students, communities, postsecondary institutions, and the Canadian economy – will only become more apparent in 2026.

For additional background, please see:

• “Canada announces new incentives for international recruitment of master’s and PhD students“
• “Canada cuts foreign enrolment cap by nearly 50% as current year trends below COVID levels“
• “Canada: Study permit numbers are in steep decline in 2025“
• “Measuring the impacts of the first full year of Canada’s foreign student enrolment cap“

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