1) Georgian College President Warns Federal Cap On International Students Will Impact Local Employers, Communities

Courtesy Barrie360.com and Canadian Press, Ian MacLennanPublished: Jan 25th, 2024

Files from The Canadian Press

Georgian College President Kevin Weaver says he is disappointed the federal government has introduced a two-year cap on international students without consultation to understand “the far reaching and damaging impacts that will follow.”

Ottawa announced on Monday that new visas for international students will be slashed by more than one-third as the federal government tries to slow a rapid increase in temporary residents that has put immense pressure on Canada’s housing system.

In Ontario, the cut could be more than 50 per cent.

“At Georgian, we are concerned about what the cap will mean for students, local employers and our communities,” said Weaver in an statement on Thursday. “Governments must work together and meaningfully consult with public colleges and students to ensure the implementation of new measures does not have unintended consequences.

Weaver added that international students are valued contributors to the region’s classrooms, communities and economy. He said Georgian was truly a global college with about 6,300 of 12,488 full-time students in total at its seven campuses coming from 86 countries.

“Many will stay after graduation to build a life in Canada. The only way we’ve been able to deliver the labour force and programs that our communities and employers rely on was to increase international enrolment, especially given the pressures facing some of our rural and northern communities in Central Ontario. Without access to that critical talent pipeline, their organizations just can’t compete and their continued operation is jeopardized,” he warned.

Immigration Minister Marc Miller has said the two-year cap will give federal and provincial governments time to tackle problems in the student visa system that have allowed some bad actors to take advantage of high international student tuition while providing a poor education.

“It’s a bit of a mess,” he said. “It’s time to rein it in.”

More than 900,000 foreign students had visas to study in Canada last year and more than half of them had newly issued permits. That’s more than three times the number 10 years ago.

2) (Update)’There Will Be An Impact For Georgian’, Says College President, As Feds Announce Two-Year Cap On International Student Admissions

Courtesy of Barrie360.com and Canadian PressPublished: Jan 22nd, 2024

By Mia Rabson in Montreal

files – Barrie 360

New visas for international students will be slashed by more than one-third this year as the federal government tries to slow a rapid increase in temporary residents that has put immense pressure on Canada’s housing system.

Immigration Minister Marc Miller announced a temporary cap on new student visas at a three-day cabinet retreat in Montreal. Affordability and housing are top items on the agenda, with a growing focus on the role record immigration has been playing in both.

Miller said the cap on new student visas will be implemented for this year and next. The number of new visas handed out this year will be capped at 364,000, a 35 per cent decrease from the nearly 560,000 issued last year. The number for 2025 will be set after an assessment of the situation later this year, he said.

“In the spirit of fairness, we are also allocating the cap space by province based on population, such as that some provinces will see much more significant reductions,” Miller said.

Ontario, which has accounted for a larger share of growth in international students, will see its allotment of new visas cut in half. 

Barrie 360 reached out to Georgian College to see how the cut will impact the school.

“Georgian is working closely with government to understand how these policy changes will be implemented in Ontario,” Kevin Weaver, president CEO, Georgian College said in an email statement. “Regardless of the implementation process, there will be an impact for Georgian. We will continue to do what’s in the best interest of our students and we will update the Georgian community about the impact of today’s announcement as we learn more.” 

As of last September, Georgian said there were 12,000 full-time students in total at its seven campuses, of which 6,300 were international students.

In October, Georgian College announced it would work with EY Canada to develop a student housing strategy.

3) Cap On Student Visas Should Help Take Pressure Off Soaring Rents, Macklem Says

Canadian PressPublished: Jan 26th, 2024 11:59am

By Nojoud Al Mallees in Ottawa

As the debate rages on about how to tackle rapidly rising housing costs, Bank of Canada governor Tiff Macklem says the newly announced cap on international student enrolments should help ease rent price inflation. 

“You saw this week the government capping student visas,” Macklem said in an interview with The Canadian Press. 

“That, I think, will help take a bit of pressure off rents going forward.”

The federal government announced a two-year limit on new study permits to get a handle on a soaring international student program. 

Immigration Minister Marc Miller said at a cabinet retreat in Montreal on Monday that the number of new visas handed out this year will be capped at 364,000, a 35 per cent decrease from the nearly 560,000 issued last year. The number for 2025 will be set after an assessment of the situation later this year.

The decision was prompted in part due to the strain strong population growth is putting on the housing market.

Many economists agree that capping the number of new study permits issued may help moderate rent price inflation, however the degree to which it could ease rental prices is unclear. 

“While I could see the growth rate and rent cooling off a little bit, I sincerely doubt that rents are going to go in the opposite direction,” said Douglas Porter, chief economist at Bank of Montreal.

“So bottom line is, I believe, we’re still going to be dealing with some pretty serious rent inflation in the next couple of years.”

The Bank of Canada has made significant progress in its fight against inflation that began in March 2022 when it started raising its key interest rate target. Prices are growing at a slower pace across the economy and fewer goods and services are seeing abnormally large price increases. 

Though there have been bumps on the path back to the bank’s two per cent target, Canada’s inflation rate has become much more manageable, sitting at 3.4 per cent in December. 

However, the Bank of Canada faces a thorny problem: shelter costs are rising quickly and interest rate hikes can do little about it.

Porter says that during normal times, the Bank of Canada may have been able to ignore a sharp rise in shelter costs.

But after two years of above-target inflation, he says the central bank can’t afford to let inflation stay elevated for much longer because it risks feeding into higher inflation expectations.

“We are in this tough situation where, yes … inflation (other than for) shelter basically has to be below target for a while here for the bank to come close to hitting its target,” Porter said.

On Wednesday, the Bank of Canada announced its decision to hold its key interest rate at five per cent once more and signalled it has begun discussing the timeline for rate cuts. 

But the central bank emphasized the role housing and food prices are playing in holding up inflation, noting shelter costs are now the primary driver of above-target inflation.

“We do expect to see some continued deceleration in food prices,” Macklem said in the interview Wednesday. “Housing, I will admit, is tougher to predict.”

In December, shelter costs, which take into account home ownership and rental costs, were six per cent higher than a year ago, significantly outpacing overall inflation.

Data from Rentals.ca and market research firm Urbanation showed the average asking rent for December in Canada jumped 8.6 per cent year-over-year to a record high of $2,178 per month. 

When asked how the central bank envisions getting back to two per cent inflation if shelter prices continue soaring, the governor said slower price growth in other parts of the economy would need to offset housing cost increases.

“You do need to see some further deceleration in some of the other components (of inflation),” he said.

Royce Mendes, a managing director and head of macro strategy at Desjardins, says the Bank of Canada should be patient and allow for shelter price inflation to ease over time. 

“The governor should be careful about reading too much into shelter price inflation when it comes to determining the future path of monetary policy,” he said. 

Being too aggressive and keeping interest rates high for too long time would cause significant economic pain, he said. 

“If the bank wants to get total inflation down to two per cent in the near term, they’re going to have to crush the economy to get all of that other inflation down to virtually zero,” Mendes warned. 

Housing affordability has been a major issue in Canada post-pandemic for a host of reasons, including strong population growth that’s exacerbated a pre-existing housing shortage. 

Mike Moffatt, a housing expert and economics professor at Western University, said the crush of international students coming to Canada has put stress on the housing market. 

The increase in temporary residents means thousands more people are competing for lower-cost rentals and investors are buying up properties to convert into student housing, he said.

“It’s good to see the federal government start to bring some rationality back to the number of international students,” Moffatt said. 

“We need to bend the curve and allow the housing market to catch up to our population growth.”

The Bank of Canada’s policy decisions however have also contributed to shelter price inflation by raising mortgage interest costs for homeowners. Meanwhile, housing developers are less inclined to build when financing is expensive, leading to more strain on housing supply.

At best, Mendes said that the effect of monetary policy on housing costs is “ambiguous.”

“At worst, the Bank of Canada’s elevated interest rate policy is actually fuelling some of that shelter inflation,” he said. 

The Bank of Canada has been more vocal over the last few months about its limited ability to control soaring housing costs.

It has noted that strong population growth has blunted the effect of higher interest rates on other components of shelter, such as home prices, and pointed to a lack of housing supply.

Rents have also skyrocketed as more newcomers enter the country and look for a place to live. 

“We’ve had a long-standing structural supply issue on housing in Canada,” Macklem said. “With the rapid rise in immigration recently, that has exacerbated that problem.”

The governor didn’t have an answer when it comes to the net effect of population growth on inflation and thereby the central bank’s monetary policy decisions. Instead, he noted that population growth fuelled inflation through housing, but helped alleviate price pressures by easing labour shortages. 

Both Mendes and Porter estimate that the recent population growth has contributed to the run-up in inflation.

“I think the net impact of population growth on inflation has been positive. But that’s due to the fact that it’s exacerbated existing, longer term structural supply constraints in the housing market,” Mendes said. 

In the long run, Porter said the effect of population growth on inflation could be neutral.

Although Canada’s housing challenges are expected to persist in the short run, Macklem expressed some optimism that recent government announcements regarding housing — including making more land available and reducing red tape — will help narrow that gap between supply and demand over time.

—  With files from Mia Rabson

“The project, focused on student housing in Barrie, begins this month with data gathering and consultations with key constituent groups, including students,” the college said in a news release on Oct. 3, 2023. ” The full project will take place over the next six months to analyze student demand, develop options and recommendations, assess the economic impact and ultimately result in a housing strategy for the college.”

The cap will apply only to post-secondary undergraduate students, not those seeking visas for master’s programs, doctoral degrees or elementary and high school students.

The minister hopes it will give federal and provincial governments time to tackle problems in a system that he says is taking advantage of high international student tuition while providing, in some cases, a poor education.

“It’s a bit of a mess,” he said of the student visa system. “It’s time to rein it in.”

More than 900,000 foreign students had visas to study in Canada last year, though the visas are issued for three years at a time, so not all of them were newly admitted to Canada in 2023.

The total number of foreign students is more than three times what it was a decade ago. 

The federal government issues the visas but the provinces approve schools to accept international students. Each province has its own criteria for deciding which schools can be designated for international students.

Miller has had harsh words for what he calls unscrupulous schools springing up to take advantage of the high tuition fees paid by foreign students without offering a solid education in return. 

In some cases the schools are a way into Canada for students who can parlay a student visa into a permanent residence. 

“It is not the intention of this program to have sham commerce degrees or business degrees that are sitting on top of a massage parlour that someone doesn’t even go to and then they come into the province and drive an Uber,” Miller said. “If you need a dedicated channel for Uber drivers in Canada, I can design that, but that isn’t the intention of international student program.”

Tuition freezes and provincial cuts to funding for universities and colleges have pushed many institutions to rely heavily on tuition from international students, and to recruit more of them to keep their operating funds balanced. In 2022, 70 per cent of all tuition paid to schools in Ontario came from international students.

Miller said the government will also bar students in schools that follow a private-public model from accessing postgraduate work permits as of Sept. 1.

And in a few weeks, open work permits will only be available for the spouses of students enrolled in masters and doctoral programs, as well as professional programs such as medicine and law.

Miller warned provinces in the fall he expected them to take action to stop unethical school operators from taking advantage of the visa program or he would implement caps they may not like. 

He said Monday that some provinces have started to make moves, but in most cases it was not fast enough. He said the federal government will work with the provinces.

Mike Moffatt, an economics professor and expert on housing from Western University, is speaking to the cabinet Monday about the housing crisis. He welcomed the temporary cap, noting that few things are contributing more to Canada’s housing crisis than explosive growth in temporary residents.

“In some cities it’s making a massive difference,” he said. 

Moffatt said not only are thousands more people competing for lower-cost rentals, driving up the price, investors are also buying properties to turn into student rentals, eating into the supply of single-family homes for first-time buyers.

“It’s good to see the federal government start to bring some rationality back to the number of international students,” he said. “We need to bend the curve and allow the housing market to catch up to our population growth.”

Michael Sangster, CEO of the National Association of Career Colleges, said in a statement Monday the organization supports the move to “bring stability to the international student system.” 

But Sangster is concerned that Miller said Canada has a preference for graduate students over those in career colleges that train, for example, health-care workers, tradespeople, early childhood educators and truck drivers.

He fears Ottawa is “scapegoating” registered career colleges as being the root of the international student problem and wants to see more data to show exactly where the problems lie.