Canada to slash study permit cap by more than half

The proposals would reduce Canada’s new international student targets from 305,900 in 2025 to 155,00 in 2026, and 150,000 for the two following years. Elsewhere, the budget allocates CA$1.7bn to attracting international researchers.

Delivering the budget, finance minister François-Philippe Champagne said the government was “taking back control of our immigration system and putting Canada on a trajectory to bring immigration back to sustainable levels”.

The measures build on previous international student caps, cutting study permits by 35% in 2024, and a further 10% this year. Crucially, the overall target of issuing 437,000 study permits in 2025 included extensions, whereas the figures proposed in Carney’s budget announcement apply only to new arrivals.

Excluding study permit extensions, Canada is on track to fall drastically short of federal targets this year, with 60% fewer international students arriving in the country in the first half of 2025.

Given this context, stakeholders have suggested the government’s latest target represents an adjustment to the current reality, though the message sent to prospective international students remains significant.  

According to Higher Education Strategy Associates presidents Alex Usher: “These ‘cuts’ to new visas issued aren’t really cuts but rather targets catching up to reality”. 

“The damage to institutional finances… aren’t going to happen next year – they’ve already happened,” he wrote on social media.  

The tightening of study permit caps is part of the government’s goal of reducing overall temporary resident admissions from roughly 670,000 in 2025 to 370,000 over the next three years – a near 45% decrease.  

Temporary migration to Canada peaked at 7.5% of the total population in 2024, more than double what it was in 2018. The government has said such “unprecedented growth” was putting pressure on housing supply, healthcare and schools.  

After the budget was unveiled, Conservative MP Chris d’Entremont crossed the floor to join the Liberals, meaning the minority Liberals now only need two opposition party votes to pass their financial plan which will be debated in the coming days.  

In addition to its immigration targets, the budget allocates CA$1.7bn over 13 years for a new International Talent Attraction Strategy and Action Plan to support the recruitment of over 1,000 international researchers, doctoral students and post-doctoral fellows. 

“This budget invests in people who will help build Canada’s future,” said Universities Canada president Gabriel Miller: “With strong, sustained partnership, universities are ready to turn these commitments into the skilled workforce our country needs to grow and thrive.”  

The budget also sets out plans for an “accelerated pathway for H1-B visa holders” to boost Canadian innovation and attract top talent in healthcare, research and advanced industries specifically from the US, to be launched in the coming months.  

Sector stakeholders have welcomed the investment in attracting global talent, though some say that these goals seem at odds with the slashing of study permit allocations.  

“There’s a strong economic rationale for sustained international education efforts,” Chris Busch, University of Windsor assistant vice president of enrolment, told The PIE. 

“The budget highlights a need for engineers, scientists, tradespeople, and healthcare professionals,” said Busch, emphasising the need for “serious investment in labs, placements and support structures for both domestic and international students”. 

The [immigration] plan must match this government’s talent and economic agenda

Universities Canada

Universities Canada, the country’s representative body for higher education, said while it recognised efforts to build a sustainable immigration system, “the plan must match this government’s talent and economic agenda”. 

With the full details of the Immigration Levels Plan 2026-28 yet to be announced, it vowed to continue advocating “for practical solutions that promote predictability, coordination and support for responsible institutions”. 

Elsewhere, institutions have welcomed increased investment in AI and recruiting international researchers, though they have criticised cuts to core research funding amounting to CA$83m in annual cuts to three federal research granting councils.  

What’s more, the budget allocates CA$97m over five years to improve foreign credential recognition to ensure immigration can help to address labour shortages.  

“Over half of immigrants with a bachelor’s degree or higher are overqualified for their jobs, which is costing Canada’s economy billions of dollars every year,” states the budget document, which says the efforts will be focused on health and construction sectors.  

The news comes as the Canadian Bureau for International Education (CBIE) launches a new campaign designed to reintroduce Canada to the world, following rapid policy changes and mixed public messages that have led to confusion about Canada’s openness to international students. 

The campaign seeks to reach prospective international students, their families and recruitment partners through digital storytelling and social engagement that showcases the country’s academic excellence, diverse study locations and inclusiveness.

Domestically, it seeks to remind Canadians of the important role that international students play in “strengthening communities, supporting labour market needs and enriching the fabric of Canada for its future success and prosperity,” CBIE president Larissa Bezo wrote in a timely piece for The PIE.

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