Canada’s once-booming international education sector is facing an unprecedented slowdown, with new student arrivals plunging nearly 60% in 2025 amid sweeping immigration reforms. The sharp decline is reshaping the country’s higher education landscape and challenging its status as a top global study destination.

Data from Immigration, Refugees and Citizenship Canada (IRCC) shows that between January and August 2025, new study-permit holders fell 59.7% compared to the same period in 2024. In August alone, only 45,380 students arrived—down from 79,795 a year earlier.

Overall, the international student population shrank 21%, falling to 802,425 from over a million in 2024.

Experts attribute the downturn to Ottawa’s recalibrated policies aimed at “sustainability.” Stricter study permit caps, higher financial thresholds, and reduced post-graduation work opportunities have combined to produce a more selective system.

“The era of open doors for global students is over,” says Dr. Meera Nair, an education consultant in Toronto. “Canada is still attractive academically, but the pathway has narrowed significantly.”

Under new rules, study permit allocations are capped nationally and trimmed further by 10% in 2025, forcing institutions to limit intake across provinces. Colleges that had relied on continuous international enrollments are now scrambling to adapt.

The government also rolled out Acceptance-Letter Verification (ALV), requiring institutions to digitally validate every admission before visa applications can proceed. While aimed at curbing fraud, the system has slowed approvals, creating uncertainty for students and institutions alike.

Financial barriers have surged. Proof-of-funds requirements doubled from CAD 10,000 to CAD 20,635 to account for higher living costs, pricing out many applicants from cost-sensitive markets such as India, Nigeria, and Kenya.

Post-graduation work permits are now restricted to select programs tied to labor market needs, while spousal work permits have been tightened, further limiting households’ financial flexibility.

The consequences are visible on Canadian campuses and in college towns. Cafés are quieter, rental demand is down, and universities—long reliant on higher international tuition fees—are beginning to feel financial strain. Smaller institutions have already started scaling back programs and staff.

For Indian students, who make up nearly 39% of Canada’s international cohort, the changes are particularly stark. “Families who once saw a clear ‘study-work-settle’ route are now facing higher costs, longer wait times, and fewer post-study opportunities,” notes Rajesh Sharma, an education consultant in Delhi.

Inquiries are shifting to Germany, the UK, and Australia, where visa policies and living expenses appear more predictable.

While Canada’s global reputation and multicultural appeal remain strong, accessibility has narrowed sharply. By prioritizing control and sustainability, Ottawa has cooled a previously overheated system—but at the cost of scale, diversity, and one of the country’s most potent soft-power engines.