Understanding the Surge in International Students Before Reforms

Canada's International Student Program has been a cornerstone of the country's higher education landscape for decades, attracting talent from around the world to its universities and colleges. Between 2019 and 2023, applications for study permits skyrocketed by 121 percent, leading to over one million international students enrolled in post-secondary institutions by 2023. This boom was fueled by post-secondary institutions' reliance on higher tuition fees from international students—often three to five times higher than domestic rates—to offset chronic underfunding from provincial governments. Universities like the University of Toronto, University of British Columbia, and McGill University saw international enrollment comprise up to 30 percent of their student bodies, injecting billions into local economies through tuition, housing, and spending.

However, this rapid growth strained housing markets, public services, and even led to concerns about program quality, as some institutions aggressively recruited via unregulated agents. Designated Learning Institutions (DLIs)—over 700 colleges and universities authorized to host international students—became central to this expansion. The Immigration, Refugees and Citizenship Canada (IRCC) managed study permits under the Immigration and Refugee Protection Act, requiring proof of acceptance from a DLI, financial support, and intent to leave post-studies. Yet, as numbers swelled, red flags emerged: ghost students not attending classes, fraudulent documents, and misuse as a pathway to permanent residency rather than genuine study.

Key Reforms Introduced to Curb Growth

In January 2024, IRCC announced caps on new post-secondary study permits, allocating targets to provinces based on population and prior enrollment. The goal: reduce approvals by 35 percent from 2024 levels, stabilizing the program at sustainable levels. Provinces issued Provincial Attestation Letters (PALs) to applicants, verifying capacity. Additional measures included a new online tool to verify letters of acceptance from DLIs and restrictions on family members accompanying students.

By September 2025, results were stark: only 50,370 new permits approved against a 255,360 forecast for the year, and 149,559 in 2024 versus 348,900 projected—a 67 percent drop from 2023 projections. Smaller provinces like Manitoba, Nova Scotia, and New Brunswick experienced over 59 percent declines in approvals compared to 2023, far exceeding the intended 10 percent cuts. This over-correction has prompted debates on whether the government 'stopped too many' students, as Auditor General Karen Hogan noted.

Auditor General's Core Findings on Integrity Shortfalls

Auditor General Karen Hogan's report, tabled March 23, 2026, praises growth controls but lambasts integrity gaps. While the acceptance letter verification tool processed 841,403 letters since December 2023—97 percent automated, 94.1 percent confirmed genuine by DLIs—broader safeguards faltered. Institutions flagged 153,324 potentially non-compliant students in 2023-2024 (e.g., not reporting addresses or enrollments), but IRCC's funding limited probes to 2,000 annually. Only 4,057 investigations launched; of 3,105 completed, 1,401 confirmed compliance, 1,654 ignored queries, and just 50 were non-compliant—leaving 40 percent open.

Fraud detection revealed 800 study permits (2018-2023) issued despite fraudulent documents or misrepresentation. Shockingly, 92 percent of holders pursued other statuses: 501 extensions/work/visitor permits (351 approved), 124 permanent residency bids (105 approved), 110 asylum claims. No warnings flagged files for future officers, enabling approvals without scrutiny. Of 549,000 expired permits in 2024, 93 percent retained status; 39,500 should have left, but only 16,000 confirmed departures via Canada Border Services Agency—no robust exit tracking exists.

Compliance Monitoring and Fraud Response Weaknesses Exposed

IRCC's processes for post-approval checks are under-resourced. DLIs must report student status twice yearly, but follow-up on flags is minimal. In a sample of 51 high-risk applications, 14 lacked proper fraud probes, two approved unchecked. Study permit extensions surged relative to new permits, with inadequate risk reassessments for Student Direct Stream (fast-track for 14 countries) approvals.

The report recommends IRCC collaborate with provinces for better allocations, activate fraud response mechanisms, and tighten extension controls. Hogan emphasized: 'The department has information on potential non-compliance and fraud but isn't acting on it effectively.'

Financial and Enrollment Pressures on Canadian Universities and Colleges

Canadian post-secondary institutions, heavily dependent on international tuition (up to 40 percent of revenues at some colleges), face existential threats from the cap's fallout. New student arrivals plunged 60 percent in 2025 versus 2024; by November 2025, study permit holders dropped to 476,330 from 670,000 early 2024. Universities report 36 percent bachelor's and 35 percent master's enrollment declines across 75 percent of institutions surveyed.

Examples abound: Ontario's Georgian College cut 229 jobs amid $45 million deficits; Fanshawe College suspended nine programs; Acadia University laid off 31 staff. Smaller colleges in Atlantic Canada, hit hardest by disproportionate cuts, warn of program closures and reduced research capacity. Universities Canada has urged balanced reforms, arguing international students enhance diversity, innovation, and cross-subsidize domestic access.Read the full Auditor General report

Perspectives from Higher Education Leaders

Experts like York University's Roopa Trilokekar decry the report's erosion of public trust: 'It questions the immigration system's integrity and doesn't reassure on reforms.' College presidents highlight recruitment challenges, with agents' unregulated practices persisting despite bans on new commissions. Amid caps, institutions pivot to master's programs (exempt initially) and domestic growth, but warn of quality erosion without funds for labs, faculty, and support services.

• Enhanced DLI accountability: Mandatory enrollment reporting, agent oversight.
• Balanced caps: Province-specific adjustments to protect regional institutions.
• Investment in compliance tech: AI for fraud detection, exit tracking.

Government Response and Ongoing Reforms

Minister Lena Metlege Diab acknowledged progress in growth control but committed to centralizing investigations and implementing recommendations. Reforms continue through 2027, including open work permits limits and language proficiency hikes. IRCC plans risk-based prioritization for the 150,000+ backlog.Minister's statement

Future Outlook for Canadian Higher Education

The report underscores a pivotal moment: balancing integrity with economic benefits. Projections show continued declines unless caps ease—2026 targets halved again. Universities advocate public funding boosts to reduce intl reliance, diversified recruitment from underrepresented regions like Latin America, and policy alignment with labor needs. Actionable steps include DLIs investing in compliance training and IRCC-provincial data sharing.

Stakeholders foresee a 'quality over quantity' shift, with genuine students bolstering research hubs like UBC's AI labs or U of T's global partnerships. Yet, without swift fixes, more layoffs loom, threatening Canada's reputation as a top study destination.

Photo by Yuhan Du on Unsplash

Implications and Actionable Insights for Institutions

For colleges and universities, diversify revenue: Seek grants, corporate partnerships, online programs. Enhance agent vetting via platforms like ICEF. Track compliance proactively to build IRCC trust. Students: Prepare robust applications with verified finances, PALs. The path forward demands collaboration—government, institutions, provinces—to sustain a program benefiting all Canadians.