Canada: Government audit finds impact of international student cap far greater than expected

The Office of the Auditor General of Canada (OAG) has released a report that analyses the effect of government reforms on Canada’s international student programme. OAG reports are independent from the government and are created to assess “how well government is managing its activities, responsibilities, and resources” across priority areas and issues.

The report, International Student Program Reforms, concerns Immigration, Refugees and Citizenship Canada’s (IRCC) imposition of an ongoing cap on new study permits as a way of controlling the growth of international students in Canada.

The report explains that the OAG found that:

• The reduction in new study permits disproportionately affected smaller provinces.
• The department also introduced a tool to strengthen application processing but did not effectively respond to other weaknesses in integrity controls.

The Auditor-General also documents the continued trend of new study permit grants coming in much lower than government expectations, culminating in 2025, when roughly 50,000 study permits were issued. The forecast had been 255,360. The chart below illustrates the contrast between predictions and actual study permit approvals.

The OAG also found that “The department did not know why approval rates were lower than projected.” In addition, it determined that there were “weaknesses in how the department responded to suspected cases of study permit non compliance and immigration fraud.”

In essence, the audit finds that the Canadian government vastly underestimated the effect on international student numbers and IRCC did too little to achieve one of its main goals: improving the integrity of the system.

Insufficient tracking and adjustments

The distribution of study permits across Canada resulted in deep losses of international enrolments in Canada’s smaller provinces. The projection for 2024 was that study permit approvals for Manitoba, Prince Edward Island, Nova Scotia, and New Brunswick would not decrease by roughly -10% as expected. They did decrease – but by at least -59% across those provinces.

What’s more, the intention was for study permit increases in Newfoundland and Labrador and Saskatchewan. What happened were significant decreases, as shown in the chart below.

In 2025, the trend continued, with between 15% and 49% fewer approvals than projected. This followed the even deeper decreases in 2024.

The smaller provinces were disadvantaged in large part because of the cap’s design. IRCC allocated study permits based on each province’s population. However, some provinces experience lower approval rates than others. The report concludes:

“The department’s approach resulted in smaller provinces experiencing two compounding challenges: limited allocation spaces and lower study permit approval rates. This was made worse by decreasing application volumes.”

The OAG found overcorrection was not monitored or corrected. The report states:

"This finding matters because the Immigration and Refugee Protection Act mandates Immigration, Refugees and Citizenship Canada not only to manage immigration, but also to ensure its benefits are shared across Canada. The department also has a statutory obligation to consult provinces on immigration planning and consider regional economic priorities.”

OAG looked into IRCC’s response to the situation and found it profoundly lacking. It also asked provincial representatives for their insights on any constructive consultation that has happened: “Provinces reported to us that they were not informed of their allocations in a timely manner in either 2024 or 2025, which impacted their ability to plan for the changes and implement processes to meet the department’s requirements.”

Finally, the report found that IRCC did not follow up on several cases when fraudulent documentation was detected after study permits were issued.

Effects on institutions, provinces, and towns

Canada’s national public broadcaster, CBC, interviewed post-secondary representatives in British Columbia, the second-largest host of international students in Canada after Ontario, to hear how the study permit cap has affected them. Representatives spoke about programme cuts, staff layoffs, and negative impacts on smaller towns and workforces.

Dale McCartney, a professor at University of the Fraser Valley who has researched years of international student policy in Canada, said:

"It's very clear how few people in Ottawa are actually thinking about this from the lens of what serves international students, what serves Canadian communities, what serves, you know, universities or colleges.”

Further, Prof McCartney spoke of the broader implications for Canada, noting that “in a few years, there could be a generation of post-secondary students who have very few international colleagues … leading to a lack of global perspectives. I would say it's a very poorly conceived policy that was created haphazardly. And the effects of it are very clear.”

At the University of the Fraser Valley, 45 faculty and staff were recently laid off as a result of a CA$20 million deficit in the 2026/27 fiscal year.

Also interviewed was Jen Wrye, president of the North Island College Faculty Association, who said mismanagement and poor decision-making has led to staff cuts and programme eliminations: "We are in the thick of closing down programmes that have either high demand and or important economic outcomes for this region and for this country.”

These examples are far from unusual. Dozens of institutions and smaller towns are reeling from the effect of Canada’s cap on new study permits for international students.

For additional background, please see:

• “Canada’s foreign enrolment has fallen by nearly 300,000 students over the last two years”
• "Canada: A case study of immigration policy impacts on postsecondary institutions and the wider economy"