Colleges and universities in Canada are making billions from international students, but many of those students have spoken out about living under precarious conditions.
Jovial Orlachi Osundu, president of the international students association at the University of Moncton, says international students are being wrongfully blamed for housing and job shortages.
“It is pretty unfair to use them as scapegoats to explain the wrong decisions that our political actors took in the past,” Osundu said.
Schools are now facing major reductions in the number of study permits for international students that they’ll be allocated after the federal immigration minister announced a temporary cap on Monday, with the goal of targeting institutional “bad actors” and addressing the impact on the housing market.
But how did we get to this point in Canada’s international student program in the first place?
Why Canada’s international student program needs fixing
Many post-secondary schools have boosted international enrolment in recent years because provincial funding for colleges and universities has declined. But officials are calling out ‘bad actors’ who they say mislead students about the real cost of living and ‘puppy mill’ schools that don’t provide a quality education.
Breaking down post-secondary education funding
There are more than one million international students in Canada, according to figures from Immigration, Refugees and Citizenship Canada.
Economist Mike Moffatt, an assistant professor at the Ivey Business School at Western University in London, Ont., says post-secondary institutions boosted international enrolment in response to provincial governments cutting back on funding “over the last decade or more.”
In Ontario, data from the provincial government shows operating grants for universities were lower in 2021 — $8,350 per student — than in 2008, when they were $8,514 per student, not accounting for inflation.
“At least a handful of schools have kind of gone above and beyond what was necessary to fill in the financial blanks and have massively increased their enrolment,” Moffatt said.
Moffatt notes that colleges, in particular, are relying heavily on international students and it’s most pronounced in Ontario.
About 76 per cent of all tuition fees for colleges in that province come from international students, according to a report by consulting firm Higher Education Strategy Associates.
The report estimates that students from India alone will provide Ontario colleges with $2 billion in operating revenue for the 2023-2024 school year. That’s slightly more than those colleges receive from the provincial government.
Who are the ‘bad actors’ in the sector?
The surge in international students has coincided with reports of some recruiters misleading those students about the education they’ll receive and the real cost of living in Canada.
Both federal and provincial officials have referenced these “bad actors” in the post-secondary sector, who they say have preyed upon international students.
In a statement, Jill Dunlop, Ontario’s minister of colleges and universities, said “some bad actors are taking advantage of these students with false promises of guaranteed employment, residency and Canadian citizenship.”
CBC’s The Fifth Estate exposed some of those false promises in their undercover investigation in 2022 that exposed what some recruitment agents in Punjab, India, told students planning to study in Canada.
Education recruitment agents caught misleading student and father in India
The Fifth Estate went undercover in India to reveal the pitch made to some students planning to attend Canadian colleges. The father and son in this video are interested in a Canadian education and agreed to wear a hidden camera as they met agents.
The investigation found “sub-agents” working in the industry — recruiters who don’t work directly with schools, but through third-party aggregators.
A report from Ontario’s auditor general in 2021 found Canada’s increase in international students was influenced by prospective students viewing our post-secondary institutions as “a pathway for immigration.”
But a Statistics Canada study that same year found only about 30 per cent of people who come to Canada on a student visa obtained permanent residency within a decade.
Ashish Gill is a first-year hospitality student at Fanshawe College’s Toronto campus, which is part of a partnership with the private ILAC International College. Gill is from India and says he hopes he’s able to work in Canada once his studies are complete.
“People are here for the [permanent residency]. They have the mindset of getting P.R.,” Gill said.
George Jiang, an international student in his third year at the University of Prince Edward Island, agrees. “Most of us have a goal to immigrate to Canada,” he said. “The living quality is generally higher than a lot of our home countries.”
As the prospect of permanent residency has contributed to an increasing number of study permit applicants, many of those students are attending private colleges.
‘The diploma equivalent of puppy mills’
Federal Immigration Minister Marc Miller calls some private colleges in Canada “the diploma equivalent of puppy mills that are just churning out diplomas.”
Miller and other officials say these “puppy mill” schools are often entirely dependent on international student tuition. Some are located in strip malls and Miller says they don’t provide a quality educational experience.
Miller pointed to B.C. and Ontario in particular as areas where private institutions are giving out what he called “fake” degrees. He said these institutions have “exploded in the last couple years.”
B.C. to target ‘egregious’ providers who mistreat international students
B.C. is set to announce measures that will improve oversight and accountability of private education providers that advertise services to international students, Post-Secondary Education Minister Selina Robinson tells BC Today host Michelle Eliot.
Moffatt says part of the problem is that the responsibility for regulating the industry lies with multiple levels of government.
“It allows for a lot of finger-pointing between orders of government,” Moffatt said.
Prospective students who are applying for a study permit need an acceptance letter from a school that’s on Canada’s list of designated learning institutions. Provinces and territories are responsible for licensing those institutions and the federal government maintains the full list.
Canada needs to rein in institutions granting ‘fake’ degrees, minister says
Immigration Minister Marc Miller, who announced that the federal government will cap the number of international student permits over the next two years, told CBC’s David Cochrane that there are hundreds of ‘degree-granting institutions’ across the country, and that the provinces bear part of the responsibility for cracking down on them.
CBC News reached out to Miller’s office to ask whether “puppy mill” schools are on that list and how the federal government plans to address them if provinces and territories don’t act.
Julie Lafortune, a communications adviser for Immigration, Refugees and Citizenship Canada (IRCC), said in a statement that IRCC will adopt a “recognized institutions” framework to identify designated learning institutions that “set a higher standard.”
The statement says the government plans to implement that framework in time for the fall 2024 semester.
Demands for government intervention in Air Canada labour talks could negatively affect airline competition in Canada, the CEO of travel company Transat AT Inc. said.
“The extension of such an extraordinary intervention to Air Canada would be an undeniable competitive advantage to the detriment of other Canadian airlines,” Annick Guérard told analysts on an earnings conference call on Thursday.
“The time and urgency is now. It is time to restore healthy competition in Canada,” she added.
Air Canada has asked the federal government to be ready to intervene and request arbitration as early as this weekend to avoid disruptions.
Comments on the potential Air Canada pilot strike or lock out came as Transat reported third-quarter financial results.
Guérard recalled Transat’s labour negotiations with its flight attendants earlier this year, which the company said it handled without asking for government intervention.
The airline’s 2,100 flight attendants voted 99 per cent in favour of a strike mandate and twice rejected tentative deals before approving a new collective agreement in late February.
As the collective agreement for Air Transat pilots ends in June next year, Guérard anticipates similar pressure to increase overall wages as seen in Air Canada’s negotiations, but reckons it will come out “as a win, win, win deal.”
“The pilots are preparing on their side, we are preparing on our side and we’re confident that we’re going to come up with a reasonable deal,” she told analysts when asked about the upcoming negotiations.
The parent company of Air Transat reported it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31. The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
It attributed reduced revenues to lower airline unit revenues, competition, industry-wide overcapacity and economic uncertainty.
Air Transat is also among the airlines facing challenges related to the recall of Pratt & Whitney turbofan jet engines for inspection and repair.
The recall has so far grounded six aircraft, Guérard said on the call.
“We have agreed to financial compensation for grounded aircraft during the 2023-2024 period,” she said. “Alongside this financial compensation, Pratt & Whitney will provide us with two additional spare engines, which we intend to monetize through a sell and lease back transaction.”
Looking ahead, the CEO said she expects consumer demand to remain somewhat uncertain amid high interest rates.
“We are currently seeing ongoing pricing pressure extending into the winter season,” she added. Air Transat is not planning on adding additional aircraft next year but anticipates stability.
“(2025) for us will be much more stable than 2024 in terms of fleet movements and operation, and this will definitely have a positive effect on cost and customer satisfaction as well,” the CEO told analysts.
“We are more and more moving away from all the disruption that we had to go through early in 2024,” she added.
This report by The Canadian Press was first published Sept. 12, 2024.
