Canada’s international education and temporary workforce sectors are facing a significant contraction in 2025, with new data from Immigration, Refugees and Citizenship Canada (IRCC) revealing a nearly 60% decline in new international student arrivals compared to 2024. The decline reflects the impact of major reforms to student and temporary worker programs introduced since late 2023.

According to IRCC, the number of new international student arrivals fell by approximately 132,000 within a year, marking one of the steepest drops in recent memory. In August 2025 alone, just 45,380 new students arrived, a stark contrast to pre-pandemic trends when monthly arrivals often exceeded 100,000 during peak intake periods.

Reasons Behind the Decline

The reduction is primarily linked to Canada’s efforts to tighten control over its International Student Program. In early 2024, the federal government introduced an annual cap of 360,000 study permits nationwide. This measure aimed to “stabilize growth” and address mounting pressures on housing, infrastructure, and public services.

In 2025, the cap was further reduced by 10%, limiting allocations across provinces and territories. These stricter limits mean fewer permits are available for students, particularly in high-demand provinces such as Ontario, British Columbia, and Quebec.

The federal government also implemented stricter verification measures. Every acceptance letter now must undergo official verification to prevent fraud and unauthorized enrollments. Additionally, financial requirements for study permit applicants have been increased to ensure students can adequately meet living costs in Canada, especially given ongoing high inflation.

The reforms, combined with slower processing of applications submitted under previous rules, have compounded the decline in new arrivals. Experts say these changes, while aimed at maintaining quality and sustainability in Canada’s education system, have had an immediate dampening effect on international student flows.

Implications for Canada’s Education and Workforce

Canada has long been a preferred destination for international students, who contribute significantly to the country’s economy and labor force. Beyond tuition fees, international students support housing markets, retail, and local services, and many stay on to join Canada’s temporary and permanent workforce.

The sharp drop in arrivals could have ripple effects. Educational institutions, particularly colleges and universities heavily reliant on international tuition, may face revenue shortfalls. Programs catering to international students might need to adjust enrollment targets, staffing, and budgeting.

The temporary worker segment could also feel the impact. Many international students transition to work permits post-graduation, feeding skilled labor pipelines across sectors such as IT, healthcare, and hospitality. Fewer arrivals this year may constrain these talent streams in the near term.

Expert Opinions

Education analysts say the reforms reflect a balancing act by the Canadian government. “The intention is to stabilize growth and ensure that students who come to Canada are well-prepared and financially secure,” said a senior policy analyst. “However, the short-term consequence is a visible drop in arrivals, which universities and employers will need to navigate.”

Institutions may need to adjust recruitment strategies, focusing on regions or programs less affected by the cap. Meanwhile, some students may explore alternative destinations with fewer restrictions, such as the United States, the United Kingdom, or Australia.

The Canadian government has indicated that the measures are part of a long-term strategy to ensure sustainable international education growth. While the cap and stricter eligibility criteria have reduced numbers in the immediate term, authorities expect more stable, predictable growth in subsequent years.

For prospective international students, the message is clear: securing a study permit in Canada is now more competitive, requiring careful planning, financial preparation, and compliance with verification procedures.

As Canada navigates these reforms, the international education landscape is entering a period of recalibration — balancing quality, affordability, and sustainable growth against its historical reputation as a top destination for students worldwide.