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MONTREAL — New visas for international students will be slashed by more than one-third this year as the federal government tries to slow a rapid increase in temporary residents that has put immense pressure on Canada's housing system.

Immigration Minister Marc Miller announced the temporary cap on new student visas at a cabinet retreat in Montreal on Monday. Affordability and housing are top items on the agenda, with a growing focus on the role record immigration has been playing in both.

Miller said the two-year cap will give federal and provincial governments time to tackle problems in the student visa system that have allowed some bad actors to take advantage of high international student tuition while providing a poor education.

"It's a bit of a mess," he said. "It's time to rein it in."

Miller said the number of new visas handed out this year will be capped at 364,000, a 35 per cent decrease from the nearly 560,000 issued last year. The number for 2025 will be set after an assessment of the situation later this year.

That total will be divided between the provinces by population so some provinces will see a bigger impact from the cap, he said.

Ontario, which has seen a larger share of growth in international students, will see its allotment of new visas cut in half.

More than 900,000 foreign students had visas to study in Canada last year and more than half of them had newly issued permits. That's more than three times the number 10 years ago.

While Miller has presented the issue for months as being mostly about abuse and fraud in the system — schools making false promises of an education and guaranteed employment — all those extra students also need somewhere to live. 

That has put significant stress on housing, said Mike Moffatt, an economics professor and housing expert from Western University.

"In some cities it's making a massive difference," he said before making a presentation on housing to the federal cabinet.

Moffatt said the increase in temporary residents means thousands more people are competing for lower-cost rentals and investors are buying up properties to convert into student housing.

"It's good to see the federal government start to bring some rationality back to the number of international students," he said. "We need to bend the curve and allow the housing market to catch up to our population growth."

Housing Minister Sean Fraser said he thinks the cap will alleviate pressure in areas hit particularly hard by an influx of students, such as the Peel Region in Ontario.

Miller had warned provinces in the fall that they needed to crack down on unscrupulous schools abusing the system or he would take action.

He indicated Monday that while there have been some positive discussions, action didn't come fast enough.

Provinces are in charge of accrediting schools to allow them to admit international students, and Ottawa issues visas to students who have letters of acceptance from those accredited schools.

Miller also had harsh words for what he called unscrupulous schools "sitting on top of a massage parlour" that offer sham degrees, taking advantage of foreign students and the high tuition fees they pay. 

In some cases the schools are a way into Canada for people who can parlay a student visa into permanent residency, but Miller said the program must be there for people to get an education.

"If you need a dedicated channel for Uber drivers in Canada, I can design that, but that isn't the intention of the international student program," he said.

Conservative Leader Pierre Poilievre blame Prime Minister Justin Trudeau for the problems in the system.

"We had the most successful immigration system in the history of the world here in Canada," said Poilievre. 

"And then along came Justin Trudeau, and through his total incompetence and irresponsibility, through his endless and nauseating virtue signalling, (he) has destroyed that common sense consensus on immigration."

In 2022, a report from Ontario's auditor general said the province's schools had become dependent on tuition fees from international students, particularly after the province forced public universities and colleges to cut and then freeze tuition fees for 91Ô­´´ students in 2019.

In a written statement Monday, Ontario Colleges and Universities Minister Jill Dunlop did not say what she thinks the impact will be on her province.

"International students play an important role in our communities, providing meaningful benefits to Ontario and our post-secondary institutions," she said.

"That said, we know some bad actors are taking advantage of these students with false promises of guaranteed employment, residency and 91Ô­´´ citizenship. We’ve been engaging with the federal government on ways to crack down on these practices, like predatory recruitment."

A report commissioned by the Ontario government recommended the province unfreeze tuition and increase funding to its post-secondary institutions. Dunlop has not acted on that recommendation.

Manitoba Premier Wab Kinew said Ottawa has provided no detail on what the cap means for his province, and warned if it results in fewer foreign students it may force tuition up for 91Ô­´´ students.

Universities Canada said it is concerned the cap will simply add more stress to an already stressed system, but is also waiting for more detail from the federal government.

Michael Sangster, CEO of the National Association of Career Colleges, said in a statement Monday the organization supports the move to "bring stability to the international student system." 

But Sangster is concerned that Miller said Canada has a preference for graduate students over those in career colleges that train, for example, health-care workers, tradespeople, early childhood educators and truck drivers.

He fears Ottawa is "scapegoating" registered career colleges as being the root of the international student problem and wants to see more data to show exactly where the problems lie.

This report by The 91Ô­´´ Press was first published Jan. 22, 2024.

— With files from Liam Casey in Toronto, Steve Lambert in Winnipeg and Nojoud Al Mallees and Laura Osman in Ottawa.

Mia Rabson, The 91Ô­´´ Press