In 2025, Canada’s international education sector is undergoing one of its most dramatic transformations in recent memory. A recent forecast by ApplyBoard, based on federal data, indicates that the number of newly issued study permits could fall to just 163,000 this year—down nearly 70% compared to 2023. While this drastic reduction is expected to impact international enrollment, tuition revenue, and even university operations, it may also open a rare window of opportunity for Canadian domestic students.

A Tighter Cap, Stricter Controls on International Students

The federal government has steadily tightened control over international student intake since 2024, when it introduced a national cap on study permits to address rising temporary resident numbers. This year, the pressure continues: Canada’s study permit quota for 2025 has been reduced by another 10%, and—for the first time—graduate programs are now subject to this cap as well.

Although the total number of study permits may reach 437,000, only 163,000 of those will go to new international students. The rest will be distributed among students seeking permit renewals or transferring programs, significantly lowering the number of newcomers entering the country’s post-secondary institutions.

Application numbers and approval rates have also taken a hit. From January to April 2025, new study permit applications dropped by 30% compared to the same period in 2024, and approvals plunged to just 33%, a significant fall from the previous average of over 60%.

Changing Immigration Rules Disrupt Future Planning

Beyond permit caps, the federal government has also adjusted the Post-Graduate Work Permit (PGWP) program, removing 178 previously eligible fields and adding only 117 new ones. These changes have cast a long shadow over the “study-work-immigrate” pathway that many international students previously relied on.

As Lisa Brunner from UBC’s Centre for Migration Studies points out, the growing uncertainty around post-graduation immigration options is deterring many prospective students. In fact, search engine trends show that international interest in studying in Canada has declined more sharply than in the U.K., Australia, or the U.S.

ApplyBoard’s report highlights two major structural shifts in Canadian international education: a steep decline in approvals for new study permits and a surge in permit renewal applications. In 2025, renewals account for over 60% of study permits issued, up from 44% in 2024 and 29% in 2023.

An Emerging Advantage for Domestic Students?

While these changes pose challenges for universities and international applicants, they may quietly benefit local students. Historically, highly competitive Canadian universities such as UBC, the University of Toronto, and the University of Waterloo have admitted large proportions of international students, particularly in programs like computer science, engineering, and business.

As international application volumes shrink, domestic applicants may find themselves facing less competition for coveted spots. This shift could translate to higher acceptance rates, more access to competitive programs, and potentially even greater access to financial aid or merit-based scholarships tailored to Canadian students.

Moreover, institutions may respond to international enrollment declines by allocating more resources or program capacity to domestic students, either intentionally or as a result of rebalancing admission targets.

That said, this opportunity window may be temporary. Once global interest rebounds or immigration pathways stabilize, application numbers could rise again. For Canadian families, the next two to three years represent a valuable chance to position their children for successful admission into top-tier institutions.

Strategic Planning Is Key During Policy Shifts

Periods of policy transition don’t mean families should wait and see. On the contrary, this is the best time for domestic students to strengthen their academic profiles, refine their personal statements, and build standout extracurricular portfolios. As competition becomes more localized, those who prepare strategically will be best positioned to seize emerging opportunities.