(Bloomberg) -- A massive increase in international students coming to Canada in recent years is putting pressure on the property market and a cap on visas may be needed, Housing Minister Sean Fraser said.
“I think that’s one of the options that we ought to consider,” Fraser told reporters Monday when asked about capping student visas. “But I think we should start by trying to partner with institutions to understand what role they may play to reduce the pressure on the communities that they’re operating within.”
Fraser, who was previously Canada’s immigration minister, was named to the housing portfolio by Prime Minister Justin Trudeau in a cabinet shuffle last month.
He spoke at the start of a three-day cabinet retreat in the east coast city of Charlottetown. The soaring cost of Canada’s mortgages and rents is expected to be a major topic of discussion.
Fraser said the government needs to do some “serious thinking” about the issue of international student visas, noting that currently the system is driven entirely by demand, not a set target.
Federal data show the number of international students in Canada has nearly tripled in just over a decade, from 274,700 in 2012 to 807,260 in 2022.
“The reality is we’ve got temporary immigration programs that were never designed to see such explosive growth in such a short period of time,” Fraser said.
However, the new minister cautioned that finding solutions will first mean consulting with universities and colleges to understand their circumstances.
Fraser said the government’s goal is to work closely with educational institutions to “make sure if they’re going to continue to bring in record numbers of students, they are being part of the solution as well by making sure that they have a place to live.”
During the retreat, ministers will hear from housing experts including Mike Moffatt of the Smart Prosperity Institute and Tim Richter of the Canadian Alliance to End Homelessness. The two released a report last week that called for a sweeping industrial strategy to address soaring rental prices in Canada.
Fraser said he’d consider the recommendations in the report. Among other ideas, the authors recommended axing the federal sales tax on the construction of new rental housing and deferring the capital gains tax on the sale of rental projects if the proceeds were invested in building new homes for renters.
Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce who has studied the role of intergenerational wealth transfers on the housing market, will also speak at the retreat.
--With assistance from Laura Dhillon Kane.
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