A large number of foreign students move to Canada for their higher studies every year.

The decision of the Canadian government of Prime Minister Justin Trudeau to cut down the intake of foreign students into the country from one million in 2023 to 364,000 in 2024 is both sudden and drastic. The ostensible reason behind the decision is the shortage of housing and the rise in rents by more than 7 per cent as a consequence. The government said the review would be reviewed in 2025. The story behind the move is quite complicated.

As Canada’s educational system is privately run, like in the United States and unlike in Europe, many of the institutions that have been set up by private players to attract the foreign students are being felt to be bringing down the standards of education in the country. This has a ripple effect.

Apart from denting the reputation of the country as a place of cheap educational institutions as in many of the east European countries, it also created other problems. Canada allows students who do their post-graduation to work in the country for three years. To discourage students from taking up master’s degree as a matter of course, the government’s new policy wants to push back students to their home countries by refusing the work-permits. And also the spouses of international students could take up sundry courses at a university or in a college. This too is being disallowed in the new rule system.

While this would make the necessary correction in the education system in Canada to preserve standards, the decision could have an impact on the economy. Foreign students are estimated to contribute C$22 billion to the Canadian economy, which is not an insignificant segment of an around $2 trillion economy. And the presence of the foreign students leads to a sprawling retail sector, especially restaurants. The decision then to restrict the intake of foreign students will not be a long-term one.

Canada might need the foreign students to keep a part of its economy on its feet. It is reckoned that 40 per cent of the foreign students are from India and 12 per cent, the second largest, are from China. The reason for the larger percentage of Indian students is because of the English language as much of Indian school and college education is in the English language.

Canada has so far enjoyed the image of a country open to immigrants compared to many other countries, including its southern neighbour, the United States. It still remains one of the most migrant-friendly countries. Though in terms of policy and state of affairs, Canada is an ideal multi-cultural society, there are bound to be tensions between the different communities, and a rivalry between the old migrants and the new ones.

So far, Canada seems to have managed its social mixing quite well. Racism is generally much less in Canada than in many other Western countries. With a population of 40 million, the country can absorb migrants. But it will remain both a political and social challenge, if not an economic one. The move to restrict foreign students is based on the infrastructure one of shortage of houses. And this could change if the housing sector were to grow rapidly in response to increasing demand. And this in turn could impel the government to lift the restrictions over foreign students.

It does however seem that the shortage of houses is only a pretext, and Canada is seriously reviewing its immigration policy in general. The conservatives in Canada, like conservatives elsewhere, do raise the prospect of the white population getting marginalised. There is however not much of an option. Canada like many other Western countries would need educated and skilled foreigners to run the economy.