Canada struggling to attract and retain global talent 

In Canada, two years into the government’s introduction of caps on international student enrolments and related reforms to lower these enrolments, substantial data is now available to assess the impact of these policies across a range of measures.

The data suggests that the Canadian government’s reforms have achieved many stated goals, but that these achievements have come at considerable cost to the country’s economic potential. Canada’s population is in decline, and there are significant skills gaps in critical areas. The Canadian Chamber of Commerce notes:

“To function at its peak and provide a better life for all Canadians, our economy needs to fill tens of thousands of critical positions in engineering, technical occupations (medical technologists, dental care occupations), higher-skill goods (mechanics, electrical trades), and other higher-skill services (nurses, teachers, social services and therapy professionals). The worker shortage in these “clusters”, as categorized by the Conference Board of Canada in a recent report, is costing us a lot — around $2.6 billion this year already … but simply put, we’re short on Canadians.”

Have the policies been effective?

The stated aims of Canada’s new policy settings include:



• Reducing demand pressure on rental prices, affordable housing, and health care;
• Responding to public unease about immigration levels;
• Eliminating the ability and financial incentive for institutions and agents to recruit aggressively and irresponsibly in overseas student markets.

International student policy reforms have played a role in spurring progress in all these areas – except for alleviating the strain on health care. For example, polls show that Canadians are now slightly less worried about immigration levels than in 2024. Rental prices increased at a slower pace in 2025 than in 2024, though a rapid injection of new housing supply is as much a reason for this as fewer new temporary residents.

As for health care, the decline in new international students has not resulted in more health care capacity and quality for Canadians. Instead, there is a growing shortage of doctors and nurses in Canada. The National Library of Medicine notes that “Canada faces a 22,823-family physician shortfall, with only 1,300 new graduates annually, making it impossible to close the gap at the current rate, especially in rural areas.”

Similarly, the Canadian Association of Schools of Nursing told the House of Commons Standing Committee on Citizenship and Immigration (CIMM) in 2025 that the reforms are exacerbating Canada’s acute shortage of nurses, particularly in rural areas:

“Beyond the financial implications [of reduced international student tuition] for schools, certain locations rely on international student nursing graduates to fill shortages in local health care institutions. This is particularly true of programs that operate in linguistic-minority contexts and rely on international students to meet the increasingly diverse health industry and population needs. Current reforms are therefore significantly affecting provinces’ health human resources needs and increasing the vulnerability of precarious, yet essential, nursing programs. In the short term, the decisions affect the viability of programs (such as through program closures, layoffs, hiring freezes). In the long term, they affect the academic institution’s capacity to address the increasing needs of a diverse population.”

The effects have been significant

A central goal of the reforms was to reduce the number of international students in “low-demand” programmes such as business, which accounted for the lion’s share of new international student enrolments between 2018 and 2023. But international enrolments in a much wider range of fields have fallen dramatically, including at the graduate level and in the STEM specialisations Canada needs most for its global competitiveness.

In September 2025, The Logic, a leading source of Canadian business and technology news, interviewed Robert Asselin, the CEO of the U15, which is the association representing Canada’s most highly ranked research universities such as the University of Toronto, McGill University, and the University of British Columbia. Commenting on the effect of the cap and associated reforms, Mr Asselin said:

“Like capital, talent is mobile. [International talent] can go elsewhere if they feel that they’re not welcome here, and this is what’s happening.”

According to U15 data, between September 2023 and September 2024 (when the study permit cap started affecting Canadian college and university admissions) international enrolments fell by -21.4% in electrical and computer engineering. Double-digit declines also occurred in graduate medical residencies, chemical engineering, environmental sciences, and biology and botany.

In a statement to The Logic, Matthew Krupovich, a spokesperson for Immigration Minister Lena Metlege Diab, said, “Cutting the number of university grad students was never the government’s goal. Canada remains open to graduate students.”

But the “the Canadian message heard abroad is rather different,” said the U15’s Mr Asselin:

“What we’ve said around the world is, ‘Don’t come to Canada. We don’t want you here. Even if you’re smart, even if you have the best grades, the best marks, we’re closing the door.’”

It seems clear that the government is aware of falling graduate enrolments in vital subject fields. It recently announced that it would exempt international students applying for master’s and PhD programmes at public higher education institutions from the study cap.
 
After removing the cap on PhD and graduate students (along with their families), Immigration Minister Lena Metlege Diab said:

“We recognize that we need them here to grow our economy. And we also recognize that when you’re coming as a graduate student and a PhD student, you’re obviously coming for that purpose. So I think that’s a great start for now.”

The PhD and graduate student exemption came into effect in January 2025. It won’t erase the losses of key talent over the past couple of years, but it may help reverse the tide.

Retention is also an issue

A report from the Institute for Canadian Citizenship (ICC) and the Conference Board of Canada, The Leaky Bucket 2025: Retention Challenges in Highly Skilled Immigrants and In-Demand Occupations, reveals that Canada has not only lost potential global talent as a result of its broad-based international education policies, but that it is also losing the global talent it already has.

The report's main insights are:

• Immigrants are leaving Canada at near-record rates;
• The most educated and skilled immigrants are leaving at twice the rate of other immigrants;
• The weakest retention rates are immigrants skilled in high-demand fields such as business and finance management, information and communications technology, engineering and architecture management, and manufacturing and processing engineering.

The report concludes:

“[These findings are] particularly noteworthy given Canada’s demographic reality. The country’s fertility rate has hit a record low of 1.26, placing it among the lowest in the world. With births declining and an aging population, Canada’s immigration model has become essential for maintaining workforce levels and economic growth. Reduced immigration targets mean fewer newcomers will arrive. Coupled with onward migration, economic impacts will compound.”

For additional background, please see:

• “Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy” 
• “Canada announces new incentives for international recruitment of masters and PhD students”
• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years”