Ontario's colleges are grappling with unprecedented financial pressures as federal caps on international study permits continue to slash enrollment numbers, triggering a wave of staff layoffs, program suspensions, and even mergers. What began as a policy to ease housing shortages has evolved into a full-blown crisis for post-secondary institutions heavily reliant on tuition revenue from abroad. Across the province and beyond, administrators are making tough decisions to survive, with ripple effects felt by students, faculty, and local economies alike.

In 2026 alone, Colleges Ontario reports that member institutions have faced a staggering $1.8 billion in revenue losses, leading to the suspension or cancellation of 600 programs and the elimination of around 8,000 jobs. This surge in college layoffs marks a pivotal shift in Canada's higher education landscape, forcing a reevaluation of business models long dependent on international students, who often comprised up to 80% of enrollment at some institutions.

🌍 The Roots of the Crisis: Federal Policy on Study Permits

The international student cap, formally known as the cap on study permits under Immigration, Refugees and Citizenship Canada (IRCC), was first introduced in January 2024 with a 35% reduction in new permits to address surging temporary residents and housing pressures. Subsequent adjustments in 2025 and 2026 have tightened the vise further. For 2026, the national target stands at 408,000 study permits—a 7% drop from 2025 and 16% below 2024 levels.

In Ontario, the hardest-hit province, allocations plummeted to 70,074 permits for public colleges and universities, representing a 42% year-over-year decline despite issuing 104,780 Provincial Attestation Letters (PALs). Graduate students are now exempt from PAL requirements but still count toward caps, adding complexity. This policy prioritizes high-demand fields like health care and trades, sidelining others.

Colleges, unlike universities with larger research grants, depended on international tuition—often unsubsidized by provinces—for operational stability. Provincial per-student funding has eroded 30% since 2006, compounded by tuition freezes, leaving institutions vulnerable.

Financial Fallout: Billions in Losses and Ballooning Deficits

The math is stark: International students paid premium tuition without drawing provincial operating grants, subsidizing domestic education. Enrollment drops of 48% in Ontario colleges translated to immediate shortfalls. Conestoga College, once a leader with the highest allocation, projects a $250 million deficit for 2026. George Brown Polytechnic slashed departmental budgets by 6% amid tuition freezes and rising costs.

Nationally, nearly 10,000 faculty and staff positions have been cut or are at risk, with Ontario bearing the brunt. Unions report an 'alarming' arbitration decision enabling mass layoffs, projecting over 10,000 losses province-wide. Rural colleges like Selkirk in B.C. face $9 million gaps on $73 million budgets, closing campuses and centres.

Case Study: George Brown Polytechnic's Wave of Layoffs

George Brown College exemplifies the turmoil. In March 2026, it issued layoff notices for 51 staff, followed by a second, larger round affecting 82 more (76 salaried, 6 hourly) effective June-July 2026. Its renowned chef school halted one-third of programs. Pre-cap, international students fueled growth; now, enrollment plunged, prompting 'last resort' measures.

Faculty and support staff bear the brunt, with unions decrying the human cost. 'It's painful,' one report quoted, as respected colleagues face uncertainty.

More Layoffs: Humber, Fanshawe, and Beyond

Humber Polytechnic offered voluntary exits but proceeded with layoffs for 2026-27 to close fiscal gaps. Fanshawe, Mohawk, Georgian, and Centennial (suspending 49 programs) announced staff reductions. In B.C., Trinity Western cut 75 jobs; Kwantlen and Langara followed. Manitoba's Providence University College anticipates 50% revenue drop, threatening operations.

• Humber: Voluntary packages insufficient; targeted cuts.
• Centennial: 49 programs gone amid 43% intl drop.
• Selkirk College: 43 full-time equivalents reduced.

Program Suspensions: 600+ Axed Across Ontario

Beyond jobs, 600 programs suspended or cancelled, hitting hospitality, business, and arts hardest. George Brown's culinary cuts symbolize broader shifts to 'in-demand' areas. Northeastern Ontario colleges shuttered graduate immigration programs. This disrupts student pathways and local training needs.

Global News reports on Ontario's deepening college struggles, highlighting how caps exacerbate underfunding.

🔗 Mergers on the Horizon: Fleming and St. Lawrence Lead the Way

In a historic first, Fleming College (Peterborough) and St. Lawrence College (Kingston) announced a merger to achieve 'greater scale' amid caps. Unions criticize low provincial funding; campuses stay open, but integration by 2027 aims at sustainability. More consolidations loom as small colleges struggle.

National Scope: Impacts Rippling Across Canada

Ontario leads, but B.C. saw 66% permit drop, prompting Langara cuts. National Auditor General critiques policy flaws, yet caps persist. Universities project $265M Ontario deficits; rural areas face population decline without skilled immigrants.

Voices from the Frontlines: Stakeholders Weigh In

Colleges Ontario urges funding formula review: 'Further destabilizes colleges and communities.' Minister Nolan Quinn pledges collaboration. Unions highlight 'blindsiding' mergers; faculty lament personal toll. Students face disrupted programs, uncertain futures.

Implications for Students, Faculty, and Communities

Domestic students inherit fewer options; intl aspirants pivot elsewhere. Faculty job insecurity rises; local economies lose (e.g., West Kootenay's tourism). Aging workforces suffer without training.

Paths Forward: Adaptation and Policy Solutions

Institutions pivot to domestic recruitment, high-demand programs, online delivery. Calls grow for boosted provincial funding, cap exemptions for grads/trades. Long-term: Diversify revenue via partnerships, philanthropy. Optimism lies in resilience, but urgent reform needed.

IRCC's official 2026 cap allocations underscore the policy's permanence, pushing sector innovation.

Photo by claire jane strafford on Unsplash

Outlook: A Transformed Higher Ed Landscape

By 2027, expect more mergers, targeted growth. Canada's post-secondary system must balance sustainability with access. For educators and job-seekers, opportunities emerge in resilient institutions prioritizing quality over volume.