As the federal government considers placing a limit on foreign student visas, one housing expert says a cap may be necessary to quell outsized demand in Canada’s rental market – while others are skeptical of the idea.

Housing Minister Sean Fraser suggested this week that a cap on visas for foreign students is an option the government is considering to reduce the pressure on Canada's overheated rental housing supply. Fraser said that if colleges and universities wish to bring in record numbers of international students, those institutions should play a role in housing those students. 

Some experts have raised concerns about the feasibility of the idea, arguing that it risks scapegoating international students as the source of Canada’s complex housing affordability challenges. Quebec has said it opposes the plan.

But McMaster University professor Steve Pomeroy, also an executive advisor at Canadian Housing Evidence Collaborative, said in a Wednesday interview with BNN Bloomberg that issues surrounding international students and Canada’s housing market have “crept on us slowly.”

A cap on student visas might slow the demand for rental housing that is driving up prices, he said, as the country works towards boosting its supply of housing.

“I think in the short term, it does actually make sense,” he said.

“Clearly, managing demand by somehow managing the student intake is a very sensible approach to policy.”

Pomeroy said that various researchers, including himself, have found is that increased demand for housing from international students along with temporary foreign workers has contributed to higher rents amid high price tags for home purchases.

At the end of 2022, figures from the Immigration Department showed 800,000 active study permits, marking a 170 per cent increase over the previous decade. 

“Having that number of people add to demand, which is already constrained by the fact that young families can’t buy a home so they’re stuck in the rental market … has really created a tsunami of demand,” Pomeroy said. 

Pomeroy said that there is a large focus on increasing housing supply in order to moderate costs – however, this typically “takes three or four years.”

The supply side of the issue can’t be increased in the short term, he argued, and so “you need to manage the demand side.” 

PURPOSE-BUILT HOUSING

Another way to address the supply side of the issue, according to Pomeroy, is to look for ways to incentivize purpose-built student housing. 

This type of development is “more beneficial and more lucrative” than typical building projects, he said, because more students are paying rent in each unit compared with the wider rental market. 

While some see a cap on foreign student visas as an effective way to lower demand for rental housing, other experts disagree. 

WOULD A CAP WORK?

Vancouver Immigration lawyer Will Tao said he has doubts about comments from Fraser’s this week that suggested a link between student exploitation and housing, noting that he wants to see more data on the matter. 

“I think international students are kind of a scapegoat. It's the easiest thing to blame. It's the ones with the least pushback,” he told The Canadian Press. 

Mike Moffatt, a senior policy director at the Smart Prosperity Institute, told The Canadian Press he is in favour of lowering student visas while saying that what he has heard about the federal government’s approach to the matter sounds “overly complex and doomed to fail.” 

Moffatt suggested the federal government should instead work to lower the demand for student visas rather than implement a cap on the total figure.

With files from The Canadian Press.