Wonky Math: The Student Visa Cap & What It Means for Metro Vancouver
To those following—or immersed in—conversations about population growth in Canada, the role of international migration in that growth, and the generally insufficient supply of housing in most metro regions across the country, the recent student visa cap announcement by the federal government didn’t come as much of a surprise.
What Was the Announcement?
In summary, the number of post-secondary study permits that will be approved in Canada in 2024—364,000—will represent a 35% reduction from 2023’s record of almost 560,000. The permits will then be allocated to provinces and territories based on their shares of Canada’s total resident population—a significant departure from the current distribution—with the decision of how to dole out those permits to universities and colleges left to each respective provincial and territorial government. (Additional program details were shared as part of the government’s announcement, but this is the real meat of it, and it’s what we’ll focus on here.)
Marc Miller, Canada’s Immigration Minister, said that the measures are being adopted “to ensure that as future students arrive in Canada, they receive the quality of education that they signed up for”, while Sean Fraser, Housing Minister, said he expects that “some pressure” on housing markets in areas that attract large numbers of international students will be relieved.
The Context
With the notable exception of 2020, the number of post-secondary study permits issued in Canada has increased steadily in recent years, from an estimated 218,900 in 2015 to an estimated 556,700 in 2023—a 154% surge over that period. (Note that we’ve had to impute the data for December 2023, as Immigration, Refugees, and Citizenship Canada has not yet released figures for last month.) With a 35% drop into 2024, post-secondary study permit issuance will return to levels last seen between 2018 and 2019 (2020 notwithstanding).
What It Could Mean for Bc & the Mainland Southwest
Bear with us on the math, here—this is where things get a bit wonky.
With British Columbia accounting for 14% of Canada’s population, BC will be allocated 14% of the country’s 364,000 study permits in 2024. This translates to 50,100 post-secondary study permits this year, which would be 48% (and 46,700 permits) lower than the estimated 96,800 that were issued in BC in 2023 (again, data for December 2023 has been imputed).
Using data from The BC Data Catalogue, we can estimate that almost three-quarters (73%) of international students in BC live in the Mainland Southwest region of the province, which includes Metro Vancouver and the Fraser Valley primarily, but also Squamish-Lillooet and the Sunshine Coast. Assuming that the Mainland Southwest region experiences a drop in allocated permits that is proportional to its share of the existing international student population within BC, then universities and colleges within the Mainland Southwest region would be allocated 34,000 fewer post-secondary permits in 2024 than in 2023.
So what, you ask? For this author, who spends more time thinking about housing markets than the education system, it begs the question of what the implications might be for housing demand.
If we assume a standard household size of 2.5 people per home (the 2021 Census measure for Metro Vancouver; of course, student household sizes could conceivably range considerably, but we’ll use this as a baseline), then 34,000 fewer permits being issued translates to 13,600 fewer homes being demanded by students. For context only, this is more than all of the rental homes started in Metro Vancouver in 2023 (10,800).
Note that this analysis considers only the “inflow” of international students vis-a-vis post-secondary study permits, and does not contemplate the other side of the ledger—that is, how the existing stock of international students is evolving over time, as some proportion of them will see their permits expire each year and they will leave the country, while others will acquire new study permits, and others still will transition to work permits and/or permanent residency.
Whether or not this policy shift makes a perceptible difference to Metro Vancouver’s housing market, as Minister Fraser suggested it could, remains to be seen. But on paper the above mathematical exercise does suggest—at least at the margin—that the federal government’s new student visa cap could have the effects of narrowing the gap between housing that’s needed and housing that’s being built.
