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International Students Taking Brunt of Canada Immigration Cap; Scotiabank Sees Economic Headwinds

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Canada's recent immigration limits are hitting the international student population especially hard, as restrictions have reduced their numbers to well below the government's target, according to Scotiabank Economics.

The total stock of study and study-to-work permit holders has declined from a peak of more than 1 million in mid-2024 to just under 620,000 today, as a result of immigration restrictions and a substantial shortfall in international student arrivals, noted the bank in a note on Wednesday.

"While the decline in the number of temporary work permit holders has been gradual since the introduction of annual temporary permit holder arrival caps, the pace at which the international student population has declined has been rapid, to say the least," Senior Economic Analyst Anthony Bambokian said in the note.

Last November, the Canadian government set new immigration targets for temporary residents to lower non-permanent residents as a share of the country's population to 5% by the end of 2027. International student admissions were set at 155,000 for this year, declining to 150,000 in 2027 and the year after.

But inflows of new students are muted and there's no signs of and acceleration that would bring the number close to the 155,000 cap, Bambokian said. In the year to April, arrivals are down 42% from 2025 at 16,115, and 84% lower than January-April 2024.

Tighter access to permanent residency and greater uncertainty surrounding the renewal of study and work permits could significantly dampen demand for migration to Canada, according to Scotiabank.

"For a country where virtually the entirety of population growth comes from immigration, these can no doubt lead to significant structural economic issues in the long-run," Bambokian said.

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