Y’all may recall January 22^nd, when federal Immigration Marc Miller slapped a national cap on international student visas which implied a 35% cut (but larger in Ontario) and effectively killed off the PPP industry for (mainly Ontario) community colleges. You may also recall September 16th, when Miller returned to say “surprise! Now the cap includes graduate students” and also made changes to the post-graduate work-visa program which are likely to obliterate colleges’ ability to recruit students (the guesses I am hearing from the sector right now about the expected drop international enrolment are in the 70-80% range from 2023 levels).

Until two weeks ago, most of what I was hearing from the sector did not indicate a thorough understanding of what kind of carnage this was going to cause. The talk was mostly about hospitality and travel budgets. Now, however, I think the sector is slowly coming to grips with how much this is going to re-shape the system. Let me summarize how this is going to play out in different parts of the sector.

Ontario Colleges. Think of these institutions as ground zero for the disaster to come (though of course, some of them are also responsible for said disaster). Roughly 50 percent of their income comes from international student tuition fees. The January changes will start to bite over the current school year (remember, they are still getting tuition fees from students who enrolled last year before the January changes were implemented), but by 2025-26 the expected recruitment losses will mean an average drop of about 35-40% in total income, system-wide (higher in some places lower in others).

How is that going to play out? Well, as noted back here, many institutions have some healthy surpluses they can use as a buffer. And to the extent they haven’t used previous surpluses on building new campuses, they can use money banked from the last few years to cushion the blow. But an income drop that serious is going to burn through any reserves very quickly, so we should expect institutions to try to restructure their way back to structural balance within two years (i.e. 2026-7 at the latest). And that’s going to mean a lot of job cuts. First off at the various PPP institutions around the GTA (we have no idea about numbers here, but I’d guess around 3,000 full-time employees there, maybe 4,000), but then also at the “home” campuses, where we can expect full-time headcount loss in the 20-25% range (again, this is an average, YMMV). All told, that’s job losses of at least 9,000 full-time employees, and probably at least that many part-time instructors as well (my sincere best wishes to everyone involved in OPSEU bargaining this fall).

Think we’re going to get through this without program closures? Think again. We’re talking about hundreds of program closures and all those high-cost programs in health and trades are 100% on the table, because the provincial government simply does not fund these programs at an adequate level. They’ve been cross-subsidized for years by international students. And as I said back here, its going to be a program apocalypse, one provincial governments are completely unprepared to handle because international student fees have allowed them to stay in denial about the extent of their own underfunding over the past decade.

You’ve heard the phrase “f— around and find out”? We’re about to get to the find out phase.

Colleges Outside Ontario. The effect of the latest Miller announcement on college enrolments across the country will mirror those in Ontario, but the financial effects will be different because the level of dependence on international student fees varies so much. In Quebec, close to zero income is coming from this source. It’s a bit higher in the Atlantic, higher still in the Prairies, and in BC higher still (though not quite on the same plane as in Ontario). So the dynamics elsewhere are going to be similar in terms of program closures (with health and trades programs being in the front lines) and job losses (my estimate on the latter would be about 3,000, mostly in British Columbia) but somewhat attenuated. 

Universities. It’s harder to work out what’s going to happen in universities for a variety of reasons. The September policy changes to PGWP did not affect universities, but we know for certain that changes that international enrolments are down, even in places that were totally unaffected by Miller’s January policy changes. I understand that Université Laval is apparently down 25% in new international students this fall. Since Laval is located in a province that was effectively untouched by Miller’s January policy announcement (the province already had letters of attestation and was nowhere near using its cap allotment), you’d have to figure that this is kind of the minimum drop we are likely to see elsewhere. 

Another data point: yesterday, the Atlantic Association of Universities released its October 1 enrolment figures. The basic figures are that international student numbers are down about 3,000 from last year, about one-third from first-time first-year undergraduate students, one-third from students transferring from 2+2s or 3+1s arrangements. One surprise was the number of graduate students who in theory were not affected by policy changes but who were probably put off by Minister Miller talking down Canadian higher education for most of last winter and spring. You can’t quite tell from the data what the percentage drop in new international students is, but my read of the above data is that this is probably down about 40%, which is consistent with the observation that many institutions could not meet their visa allocation cap.

At the university level, international student fees account for 20% of total income. A drop of 25-40% in international student enrolments therefore implies – eventually – a drop of 5-8% in total revenue. But how quickly all this happens depends on the structure of an institution’s enrolments. If all of its international students are in four-year programs, then it will take four years for the full effects of the policy change to be seen and the immediate hit will only be 1.25-2%, with the rest coming in subsequent years. However, If most international students are in undergraduate 3+1 or 2+2 programs, or are in one-year graduate programs, then the income stream is going to dry up a lot faster. And of course, numbers might rebound. The changes to PGWP mean colleges aren’t going to need as many spots under the provincial caps, and universities might actually have room to expand in future years. Maybe. If the country’s image abroad stops tanking, if the institution can offer the right programs at the right price point, etc.UniversitiesoutsideOntario, Quebec and British Columbia might also be able raise their fees to counteract the loss of student numbers, though this too is uncertain.

In other words, it’s not really clear how much universities are going to lose. It is clear, though, that income growth isn’t on the cards anymore. And so, at the very minimum, maintaining the practice of staff and faculty salaries rising at roughly 3% per year either has to come to an end or has to be counteracted by trimming staff counts. If you had to make me guess about how this will play out in terms of staff numbers, I’d say we’re probably looking at losses of 5-10% of full-time jobs (i.e. 6,000 to 12,000 positions) over the next four years achieved largely through attrition. 

Tl;dr: the carnage will be immediate and catastrophic in Ontario colleges, immediate and severe in colleges elsewhere, and slow-moving but severe in universities. With, in total, probably something like 20,000 job losses. It’s not going to be pretty. And it’s deeply unnecessary: true, something had to be done about Southern Ontario’s housing market. It’s just not clear this was that something.

The only ray of hope here is that there is at least a chance that the system on the other side will be smarter, leaner, better. But for that to be true, we have to resist the lure of “enshittification” —attempting to keep doing the same thing we’ve always done but with fewer resources. This is a terrible idea, of course, but one made very likely because of the way university governance operates (college governance tends the same way but not quite as hard). Reimagination and redesign of programs and services is the preferable if more difficult course. Better is possible, even in a financial crisis. 

The blog is off next week. See you again on October 30^th