Punching Passports and Diplomas

Canada’s democratization of higher education proved widely popular, but it was a victim of its own success. Most of the eligible age cohort was already being captured by the system, while institutions faced increasing funding challenges. By the 2000s, enrollment came up against demographic and economic constraints.

At the same time, the economic rationale for investing in higher education began to weaken. Rising income inequality, stagnant labor productivity, and a growing number of “mismatched” workers — those overqualified for their jobs — undermined the promise that a degree would guarantee economic mobility. Public financing peaked in the late 2000s, when Canada spent more on higher education as a share of GDP than any other industrialized country — almost double the OECD average. Since then, many provincial governments have reduced funding, reallocating resources to meet growing demands in health care and other areas.

During this period, Canadian policymakers also grew concerned about the demographic slowdown facing most of the industrialized world. In response, Canada pursued an ambitious immigration policy, bringing in qualified immigrants with pathways to citizenship. From 1970 to 2024, Canada welcomed about twelve million authorized immigrants — more than double the per capita rate of the United States. Thanks to this policy, along with its geography, climate, and other factors, Canada has maintained comparatively low unauthorized immigration — around six hundred thousand, or just 1.5 percent of the population, compared to about 3.2 percent in the United States.

Like other Western nations, Canada has hosted international students for decades, although its numbers remained modest until the late 2000s, when it joined countries like the UK and Australia in actively recruiting these students. Policies were introduced to facilitate work permits and provide pathways to citizenship to keep them around after graduation.

Under this paradigm, prospective international students applied to approved programs at designated institutions. If accepted, they received a study permit, a type of nonpermanent immigration status that allowed them to work while studying. Until recently, there was no limit on the number of study permits issued, effectively creating a backdoor open borders policy.

After completing their studies, graduates could apply for a postgraduation work permit to remain in Canada for up to three years. During this period, they could apply for permanent residency (PR), Canada’s equivalent of a US green card. If one’s ultimate goal was to achieve permanent residency, this three-step study-work-PR route was much easier and more likely to succeed than the traditional, single-step PR process. Surveys show that the opportunity to obtain PR was indeed a major motivation for many international students. And once granted PR, they could later apply for citizenship.

Nation of Campuses

This policy achieved several objectives. First, it created a new permanent immigration stream composed of applicants already familiar with the country because they’d been both studying and working there. And it helped ease certain labor shortages because many students were willing to work in low-skilled jobs that credentialed Canadians were less inclined to. Second, because tuition fees for international students were unregulated, and roughly five times higher than the regulated fees for domestic students, universities and colleges significantly boosted their revenues. These revenues cross-subsidized programs for Canadian students. Finally, international education also functioned as a highly successful export industry, comparable to tourism, generating billions of dollars of additional economic activity and tax revenue.

In response, some universities and many colleges radically expanded international enrollment. They established new programs tailored to international students and overhauled their recruitment strategies, often partnering with private recruiters. This led to unprecedented growth — the number of international students rose from 350,000 in 2015 to more than a million in 2024, with the majority enrolled at colleges. By that time, international students accounted for 20 percent of higher education enrollment. By comparison, international university students account for only 6 percent of enrollment in the United States.

One of the most aggressive institutions vying for international students has been Conestoga College, located in the Kitchener-Waterloo area of Ontario. Between 2016 and 2023, it expanded from an enrollment of twelve thousand to forty thousand students — thirty thousand of whom were international. Its revenues more than quadrupled in that period, resulting in large surpluses. Some of this surplus was captured by the long-serving president, who received a 55 percent salary increase between 2022 and 2024, making him likely the highest-paid higher education president in all of Canada, with a salary of $465,000.

When the current Liberal government took office in 2015, there were about eight hundred thousand international students and other nonpermanent residents (NPRs) in Canada, roughly 2.3 percent of the total population. Driven mostly by the growth in international student numbers, this figure climbed to 3.6 percent by April 2022. But over the following twenty-seven months, the NPR population more than doubled — reaching three million by July 2024, accounting for 7.3 percent of the population. At the same time, the Liberal government had been increasing permanent immigration, based on a recommendation from its business-oriented advisory council to increase new PRs from 300,000 in 2016 to 450,000 by 2021, hitting a record 480,000 in 2024.

In total, Canada’s population increased by 2.6 million from April 2022 to July 2024, the fastest relative increase in Canada since 1959, the peak of the baby boom. As expected, adding an average of ninety-six thousand people per month put strain on the physical and social infrastructure of the receiving regions.

The Backlash

Unlike the baby boom, this population surge was naturally not composed of babies that would be absorbed into existing households but mostly adults that needed separate housing and jobs. In cities where international students settled, already unaffordable housing prices rose even further. Students themselves often ended up in overcrowded and unsafe rentals hastily erected by opportunistic landlords looking to cash in. Unionization rates dropped and labor markets loosened, especially in low-wage and entry-level sectors, driving down wages across the board.

For the first time in half a century, significant portions of the Canadian population started to question the country’s long-standing support for immigration.

In response, the federal government introduced a cap on the number of international students and revised the PR target levels, aiming to slow the growth of both temporary and permanent immigration to about 2017–19 levels. These targets are still ambitious and remain much higher than those in the United States. Although reduced relative to the boom, enrollment and revenues from international students will remain high. This will alleviate, but not solve, the fiscal challenge to make good on the still strong social consensus that everyone in Canada should have access to quality, affordable higher education.

But while most Canadians continue to support a traditional single-step permanent immigration system, the more long-lasting damage may be political.