Canada is facing a sharp decline in international student arrivals, with study permit approvals down 60% in the first half of 2025 compared to the same period in 2024. The latest data from Immigration, Refugees and Citizenship Canada (IRCC) paints a stark picture of how the federal government’s immigration overhaul is reshaping one of Canada’s most important education sectors.
Between January and August 2025, fewer than 90,000 new international students entered Canada. This figure makes it nearly impossible for the country to meet its revised goal of 437,000 study permits for the year; a target already reduced by 10% from 2024 levels.
Study Permits Drop Signals Wider Immigration Crackdown
The drop in study permits is not happening alone. It is part of the Carney government’s broader immigration reform plan.
The aim is to cut Canada’s temporary resident population, which includes both work permit and study permit holders.
IRCC’s August 2025 report shows a 22% fall in total work and study permit holders from August 2024.
Active study permits now stand at 802,425; 21% fewer than last year.
This is the lowest level since 2021, when the pandemic disrupted global travel and international student mobility.
Government officials have described this downturn as evidence that “the measures we’ve put in place are working.” However, many education and immigration experts see it as a warning sign for Canada’s reputation as a global education hub.
Educational Institutions Brace for Financial Strain
Universities and colleges across Canada are preparing for significant financial strain. Many institutions had based their 2025 budgets on the government’s earlier cap of 437,000 study permits. The steep drop in approvals means those projections will not be met, leaving funding gaps that could affect staffing, programs, and infrastructure.
For many schools, international students represent more than just classroom diversity. International tuition fees are often three to four times higher than domestic rates. In 2022, international students contributed over CA$40 billion to the Canadian economy, according to the Canadian Bureau for International Education (CBIE).
CBIE has urged the government to introduce a renewed International Education Strategy to protect Canada’s position in global education. “International students are vital to local economies, labor markets, and Canada’s global reputation,” the organization stated.
Study Permit Policy Tied to Temporary Resident Targets
The study permit decline aligns with Ottawa’s broader goal to reduce the temporary resident population to below 5% of the total population by 2027. Currently, temporary residents including those with work permits, study permits, and visitor visas, account for about 6.8% of Canada’s population.
Prime Minister Mark Carney has repeatedly stated that reducing temporary residents is essential for easing housing pressure and rebalancing Canada’s labor market. While the government aims to transition some temporary residents to permanent residency, it has also tightened entry channels, particularly for new international students.
Immigration experts note that study permit approval rates have dropped sharply since early 2024, when stricter eligibility reviews were introduced. These include new attestation letter requirements for students applying through designated learning institutions (DLIs) and additional financial proof thresholds.
According to McDonald, “The government is concerned about the floor, not the ceiling—about wrestling down the temporary resident population below five percent. That’s the real target.”
Impacts on Provinces and Local Communities
The reduction in study permits is being felt unevenly across Canada. Provinces like Ontario, British Columbia, and Nova Scotia are among the hardest hit.
Smaller towns and cities that depend on foreign students for local business growth, rental income, and part-time labor are also struggling. Many colleges in Atlantic Canada and Ontario’s suburban areas have already reported sharp revenue losses.
Housing market analysts have suggested that the study permit cuts could ease demand for student housing in some urban centers, but the relief may be temporary. “It’s not a housing fix but a shock to the education economy,” one policy researcher at a Toronto university said.
International Reactions and Policy Comparisons
The steep decline in Canada’s study permit approvals has sparked concern among international partners, especially in countries like India, Nigeria, and the Philippines, which send large numbers of students abroad.
Education agents report growing uncertainty among applicants, who now face longer processing times and unclear approval chances. Some are turning to alternative destinations such as the United Kingdom, Australia, and Germany, where post-study work options remain attractive.
Industry observers warn that if Canada fails to stabilize its study permit system, its global reputation as a welcoming destination for education could take lasting damage.
Anticipation Builds for Canada’s 2025–2027 Immigration Levels Plan
The IRCC’s new data release comes less than two weeks before the federal government is expected to unveil its 2025–2027 Immigration Levels Plan. Analysts believe the report serves as a signal of what to expect—continued restraint on temporary residents and stricter study permit issuance policies.
McDonald described the release as “a weather balloon, alongside updated processing times, to test public reaction.” The Carney administration is closely watching how Canadians respond to the message that immigration levels are “under control.”
The plan, which will coincide with the 2025 federal budget, is expected to lay out a multi-year framework for immigration, including pathways for temporary residents to transition to permanent status. However, few expect major increases in study permit allocations in the short term.
Calls for Balance and Transparency
Stakeholders in the education and immigration sectors are urging Ottawa to provide greater transparency about how study permit quotas are being distributed among provinces and institutions. Some have called for more collaboration with provinces to ensure fair and predictable caps.
Some experts say Canada needs a better balance between controlling immigration and supporting international education. A senior education official noted that Canada’s global reputation was built on openness and opportunity. They warned that cutting study permits too harshly could harm the country’s long-standing international goodwill.
The CBIE has also emphasized the role of international students in supporting Canada’s workforce shortages, particularly in healthcare, technology, and engineering sectors. Many graduates transition from study permits to work permits before applying for permanent residence, contributing to long-term economic growth.
Outlook for 2026 and Beyond
Immigration consultants expect the federal government to keep strict control over study permit approvals until at least 2027.
Temporary residents may still have pathways to permanent residency, but new applicants will likely face tougher eligibility requirements.
As the 2025–2027 Immigration Levels Plan approaches, many are watching how the government will balance its goals and obligations.
Officials must reduce temporary residents while supporting universities, colleges, and communities that depend heavily on international students.
Experts believe Canada can regain its advantage by improving policies, speeding up processing, and rebuilding trust with global education partners.
A 60% decline in study permits marks a major shift in Canada’s immigration policy and its future education strategy.
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