What Canada’s 2025 Budget means for international education
Earlier this month, the Canadian government released its 2025 federal budget, including further caps on new international study permits, cutting levels by 49% next year and over 50% for the two years thereafter.
Initial reporting sparked fears about the impact of more cuts across the sector. When put in context, the reality of the cuts is much less drastic than many first thought, though considerable challenges remain for the sector.
In a separate announcement the day after the Budget, IRCC released its 2026-28 Immigration Levels Plan, providing further clarity and considerably altering the impact of the initial cuts.
The Budget’s headline figure for international education was the reduction of new international study permits from 305,900 in 2025 to 155,000 in 2026 and 150,000 for 2027 and 2028 – representing a more than 50% reduction across the next three years.
However, this year’s study permit issuance is down 60% on 2024 levels and Canada is on track to issue just 120,000 new permits this year, with experts expecting targets for both this year and next to be missed.
“2025 arrivals to Canada are projected to be a small fraction of what was targeted, and still far less than the reduced 2026 goal of 155,000,” CBIE senior adviser Dan Weber told The PIE News.
“There has been a significant overcorrection to the system, and achieving 155,000 arrivals next year is definitely a stretch goal,” he said.
Despite record levels of study permit extensions granted this year for students already in Canada, incoming cohorts have been much smaller than graduating cohorts for successive years, causing a continued erosion of international enrolments across institutions.
From U15 research intensive universities to colleges, as well as language schools, CEGEPs and school boards, Weber highlighted the far-reaching repercussions of the restrictions. “The snowball is still rolling downhill and getting bigger”, he warned.
There has been a significant overcorrection to the system, and achieving 155,000 arrivals next year is definitely a stretch goal
Dan Weber, CBIE
While in 2024 the government first capped study permit allocations at 485,000 students excluding graduate students – which was later reduced to 437,000 including graduate students – this time, it used the metric of new student visas.
Significantly, not only do the new limits exclude study permit extensions, but the government also announced in its immigration plan that the cap would not include graduate students enrolling at public DLIs, hailed as a strong signal of support for Canadian research and innovation.
Weber said the budget was a clear sign the government is prioritising recruitment for master’s and PhD programs, research and supportive infrastructure, pointing to the CAD$1.7bn investment in a new strategy to attract international researchers and doctoral students.
“The challenge is that Canada’s international reputation as a destination for advanced learning and research is at historic lows.”
“The funding is a good start, but Brand Canada needs to be rebuilt in parallel to these investments in order to attract the talent that the government has prioritised,” said Weber.
Elsewhere, stakeholders welcomed the graduate student exemption for freeing up study permit allocations for undergraduate applicants.
Moreover, the change is set to reduce universities’ administrative work and help them issue offers more quickly, which could “motivate graduate applicants to accept a Canadian offer rather than one from another country”, said Regulated Canadian Immigration Consultant (RCIC) Matthew McDonald.
On top of the cap exemption, the Levels Plan also established a new 14-day study-permit processing standard for doctoral applicants and accompanying family members, and IRCC launched a new webpage aimed at attracting graduate students.
The new measures align with the government’s stated aim of prioritising economic immigration and bring the system back in line with the initial 2024 caps that excluded PhD and master’s students.
Despite the budget providing some welcome updates, it brought no respite to undergraduate or college programs, which have been hit by a series of policy changes over the last two years that Weber warned were damaging regional labour market needs.
“While the government is achieving their desired reductions, they are also eliminating enrolments and programs whose graduates are needed for the government’s ‘Nation Building Projects’, not to mention tourism workers in Kelowna, and nuclear operators in Ontario,” he said.
Elsewhere, IRCC signalled it would continue efforts to expedite processing for transfer students and aim to introduce a shorter service standard by summer 2026.
It also said it would engage with institutions about removing co-op work permit requirements to ensure students can more easily take part in work-integrated learning.
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