Canadian colleges and universities are responding to a cash crunch brought on by Ottawa鈥檚 cut to international student permits with layoffs, hiring freezes and service reductions, say people in the post-secondary education sector.

A year ago, the federal government announced a 35 per cent reduction in study permits 鈥� bringing the number down to an estimated 360,000 for 2024 鈥� one of the first major reductions in Canada鈥檚 permanent and temporary immigration targets.

International students pay much higher tuition fees than their domestic counterparts. Post-secondary institutions across the country are still struggling to fill that hole 鈥� and to decide which programs and services they can live without.

Council of Ontario Universities president Steve Orsini said that schools in his organization, which includes 20 of the province鈥檚 top universities, expect a combined loss of $330 million this fiscal year and $600 million in the upcoming fiscal year.

鈥淚t鈥檚 had a profound negative effect on the sector at a time when Ontario universities are facing significant financial challenges,鈥� Orsini said.

鈥淲e鈥檙e seeing across-the-board cuts in programming and services, layoffs, hiring freezes, deferred capital investments. We have nine student residence projects 鈥� that have either been cancelled or delayed.鈥�

British Columbia Federation of Students chair Jessie Niikoi said students are seeing cuts and reductions to services 鈥渁cross the board,鈥� including reductions in library hours and services and reduced access to academic advisers.

鈥淭he work that we do is going to continue in terms of advocating for more funding, especially now more than ever, and I think institutions need to take that step in terms of advocating for more funding because we鈥檙e seeing the system get worse and worse, one budget cut at a time,鈥� Niikoi said.

Tuition rates vary across the country but international students consistently pay significantly more than domestic students.

Domestic tuition at Toronto Metropolitan University ranges from around $7,200 to $11,000 for undergrads. International students taking the same courses pay roughly $35,000 to $40,000.

At the University of British Columbia, most domestic undergrads pay around $5,900 for their first-year courses. International students in the same programs pay about $47,000.

Roughly 19 per cent of Ontario university students are from outside Canada, said Orsini.

He added that the loss of tuition revenue from international students is being compounded by Ontario鈥檚 tuition freeze for domestic students and by operating grants that don鈥檛 keep up with the cost of running universities.

鈥淪o universities really are facing a perfect storm. All three funding levers have been cut and frozen,鈥� he said.

Immigration Minister Marc Miller said the international student system was set up to attract talent to fill key roles in the labour market, but he had to make the cut because the program got 鈥渙verheated.鈥�

As for the funding challenges facing universities and colleges, Miller said that鈥檚 not the federal government鈥檚 problem.

鈥淚 didn鈥檛 tell any university or college to charge international students four or five times what we charge domestic students. That isn鈥檛 my role in this,鈥� Miller told The Canadian Press in late December.

Both the B.C. and Ontario governments put more money into post-secondary institutions following the introduction of the international student cap.

B.C. announced a 24 per cent increase for post-secondary institutions in that province鈥檚 2024/25 budget, bringing the total to $3.12 billion.

Ontario launched a three-year sustainability fund for universities and colleges, valued at $903 million, and committed to maintaining the provincial tuition freeze.

The number of international study permits for those two provinces was essentially cut in half with the international student cap.

A report by Higher Education Strategy Associates says tuition from Indian students alone contributed more to funding Ontario鈥檚 post-secondary institutions than the provincial government.

Orsini said that with Ontario鈥檚 stability funding expiring in a little over two years, and the tuition freeze remaining in place for roughly the same amount of time, more cuts are expected.

Miller acknowledged the international student cap is a 鈥渂lunt instrument鈥� to address 鈥渂ad actors鈥� in the education system. The minister said these are primarily for-profit career colleges he compared to puppy mills.

While Miller doesn鈥檛 have jurisdiction over funding for post-secondary institutions, he said the business model of many post-secondary institutions needs to change.

鈥淪o that鈥檚 not a healthy business model, and it鈥檚 one that Ontario in particular needs to address quickly,鈥� Miller said.

鈥淭hey鈥檙e feeling it now that their institutions are in a bit of trouble and that鈥檚 unfortunate for a sector that prides itself on being one of the best in the world.鈥�

Niikoi said she wants to see the provincial and federal governments boost funding for the post-secondary sector to set up the next generation of workers for success.

鈥淲e鈥檝e seen declining enrolments ever since the announcement happened, and I think on the national side Canada is no longer a desirable place because of the announcements,鈥� she said.

鈥淣othing can happen unless (the provincial and federal) governments work together, and we need the government to act now so we have that reliable funding for public institutions, and we don鈥檛 have to rely on international student numbers or their tuition for funding.鈥�