Ontario to invest $6.4 billion to make up for shortfall caused by fewer international students

Key Takeaways:  

• The international student cap has cost Ontario so much money that domestic students now must bear some of the cost 
• Schools around Canada are taking drastic steps to make up for the lost revenue 
• No increase is expected in the number of international students admitted to Canada this year 

Removing the tuition freeze will see tuition rise by up to 2% for the next three years for domestic students, then by 2% or the three-year average rate of inflation, whichever is lower. This is not great news for Canadian students in Ontario as they are now bearing some of responsibility for the revenue lost by capping international students. 

Still, Ontario’s government says that the increase is among the lowest of any other province in Canada and the bulk of the expense, $6.4 billion is coming from the province.  

How the international student cap is impacting Ontario’s schools 

The international student cap isn’t the only factor in rising tuition fees, but it is definitely a large part of it.  

In early 2024, IRCC announced a 35% reduction in the number of study permits issued to international students. Then-immigration minister Marc Miller indicated the system was out of control.   

He said that some universities were accepting too many international students solely for the revenue generated by their higher tuition fees, and that students were not offered adequate support to succeed in Canada. The sheer volume of students was also causing massive strain on Canada’s housing market and other social services.  

While pressure on the housing market has since eased and rents have fallen, Canada’s colleges and universities have been scrambling to make up the lost revenue. For example, the Ontario Council of Universities projects a revenue loss of $5.4 billion by 2028-29 based solely on the reduced number of international students.  

The reduction has also caused many Ontario universities to slash programs and jobs. The Toronto Star reports that 8,000 workers in Ontario’s colleges have lost their jobs. This doesn’t account for any losses at Ontario’s universities.   

The student cap also has farther reaching impact than Canada’s campuses. For example, CBC recently reported that in Kitchener-Waterloo there were 4.1M fewer Grand River Transit riders in 2025. Fewer riders mean less money for the city as a whole. 

Other provinces closing schools, programs and campuses  

The Manitoba Institute of Trades and Technology recently announced that it is closing down completely. Current students will need to transfer to other colleges to finish their program. It’s the first public college in Canada to completely close its doors, and might not be the last. 

On the east coast, a report for the Association of Atlantic Universities found that within the Atlantic Region (Nova Scotia, Newfoundland, New Brunswick and Prince Edward Island) in 2024, the international student cap caused a loss of:  

• $163 million in spending (direct output),     

• $165 million in provincial GDP,    

• $94 million in provincial income, and    

• 2,231 full‐time equivalent jobs.    

At the end of January, Memorial University of Newfoundland announced that it will close and sell its campus in the United Kingdom as well as its Signal Hill campus to make up part of a $21 million budget cut.  

Many post-secondary institutions are working on solutions to stay afloat, but we don’t expect to see any sharp increases in the international student cap, to help them out here.  

Last year, Canada saw just 105, 870 student arrivals (by November), less than the targeted 155,000 in the Immigration Levels Plan. This could be a trend that continues into 2026 when the target dips down to 150,000. 

Does this mean that International Students will need to pay more tuition? 

Could schools just charge higher tuition for international students? Technically, yes, but according to Statistics Canada, international undergrad students in Canada, on average, already paid more than $41,000 for the year in 2025/2026, up from $35,836 in 2022/2023. 

International student tuition isn’t typically included in tuition freezes, but increasing the cost too much, too soon would mean many students wouldn’t even apply, reducing enrolment and overall revenue Canadian schools could generate, even further. 

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