In Canada, the issue of student housing and the surge in international student enrollment has drawn significant attention, including from high-ranking officials. A recent report released by four Canadian Senators underscores the need for rigorous oversight of international student recruitment and their living conditions within Canada.
The pressing challenge of housing affordability in Canada has reached a critical juncture. For several years, housing prices and rents have surged out of sync with average incomes, a trend that has only worsened during and after the pandemic. The initial wave of ultra-low mortgage rates at the pandemic’s onset drove housing prices skyward. Subsequently, a sharp increase in mortgage rates has tempered these price hikes but, in turn, exacerbated affordability issues by burdening borrowers with mortgage payments not witnessed in decades.
As prospective homebuyers postponed their purchases in response to rising mortgage rates in the first quarter of 2022, they opted for extended rental tenures, anticipating a more favorable housing market later. This surge in demand for rentals led to a scarcity of available rental properties, a situation that escalated further with the arrival of millions of temporary workers and students in Canada over the past 19 months.
Particularly alarming is the shortage of student housing in smaller towns, where some international students are compelled to reside in substandard accommodations. Reports have surfaced of students inhabiting overcrowded basements unfit for human habitation.
Experts in Canada attribute the surge in housing demand to the sudden increase in the resident population, driven by the influx of immigrants and temporary workers. Another substantial contributor to this housing demand is the burgeoning number of international students, whose ranks have swelled in recent years. In 2022 alone, Canada’s population increased by a million individuals, thanks in large part to the influx of temporary workers and international students.
Canada’s demographic landscape, characterized by an aging population, has led higher education institutions to increasingly depend on international students. Historically, it was Canada’s eastern maritime provinces that grappled with demographic deficits, as aging populations and youth migration westward in search of job opportunities created imbalances.
However, the demographic slowdown has now extended to the central and western provinces of Canada. Even the Greater Toronto Area (GTA), the country’s largest urban center and the nucleus of its largest conurbation, is exhibiting signs of demographic weakening. For decades, high schools across southern Ontario produced a surplus of graduates who filled lecture halls not just in the Toronto region but across Ontario and beyond.
The era of an uninterrupted supply of high school graduates in Ontario is nearing its end. Universities in the Greater Toronto Area are reporting a decline in applications, a phenomenon previously unseen. Concurrently, Ontario universities have expanded their focus to include international students, a strategic pivot undertaken at a time when government funding has either remained stagnant or failed to keep pace with operational costs.
International recruitment has played a pivotal role in bridging the funding gap in Ontario’s educational institutions. Recent financial analyses of universities in Ontario have revealed that the tuition fees paid by international students now surpass the funding received from the provincial government. It’s essential to note that most Canadian universities are publicly funded by their respective provincial governments.
The report from the Canadian Senators recognizes that while international students contribute billions to Canada’s economy, there are concerns about whether Designated Learning Institutions (DLIs) and the agents recruiting students for them have consistently acted in the best interests of these international students. The report highlights the absence of incentives and oversight by Canadian authorities to ensure that both agents and DLIs place international students in institutions most aligned with their educational, career, and immigration objectives.
With the international student population in Canada projected to reach 900,000 in 2023, the federal government is considering imposing a cap on international student numbers. This move comes as Canada grapples with labor shortages that, if unaddressed, will necessitate a significant increase in the recruitment of international students in the coming years.
Consequently, the onus falls squarely on universities and colleges to provide quality education to all students while intensifying efforts to expand student housing options.
Murtaza Haider is a professor of Data Science and Real Estate Management at Toronto Metropolitan University. He also serves as the research director of the Urban Analytics Institute. Professor Haider holds an adjunct professorship of Engineering at McGill University. In addition, he is a Director of Regionomics Inc., a boutique consulting firm specializing in the economics of cities and regions. Dr. Haider is the author of Real Estate Markets: An Introduction (2020) and Getting Started with Data Science: Making Sense of Data with Analytics (2016).