Algonquin College projecting $32M shortfall due to new rules for international students

Algonquin College in Ottawa on Thursday, Aug. 27, 2020. (Sean Kilpatrick/THE CANADIAN PRESS)

Algonquin College is projecting a $32 million decrease in revenues due to the new federal cap on international students and changes to the eligibility for post-graduate work permits.

President and CEO Claude Brulé says international enrolment will be short nearly 2,400 incoming students, and the college will be forced to make "difficult budgetary decisions now" to deal with the funding shortfall.

"To be clear, the government policy decisions that have been announced will be with us for some time, and this will compound the financial impact on the College in the years to come," Brulé said in an open letter to Algonquin College.

"It is therefore imperative to take measures and make difficult budgetary decisions now, knowing that some actions will take time to be fully implemented and have the outcomes realized."

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In January, the federal government announced a temporary two-year cap on international student levels by 35 per cent this year. In September, the government announced new international student study permits will be reduced by another 10 per cent to 437,000 permits, with the target continuing into 2026.  The federal government also announced changes this fall to post-graduate work permits, with the permits restricted to areas that have labour shortages in Canada.

Brulé says Algonquin College's 2024-25 second quarter projection report confirms international student enrolment will be short by nearly 2,400 incoming students in comparison to the budget target of 7,447 new international students.

An internal review has determined that approximately 65 per cent of Algonquin College's programs have been deemed ineligible for post-graduate work permits for international students based on Immigration, Refugees, and Citizenship Canada's (IRCC) new criteria, according to Brulé.

"You should note that we continue to vigorously advocate for changes to these IRCC decisions," Brulé said.

"We are collaborating with provincial and federal government, as well as post-secondary partners – including Colleges Ontario and Colleges and Institutes Canada – to emphasize the significant contributions our graduates provide in all sectors of the economy."

Brulé says Algonquin College would like to see a "level playing field" for the post-graduate work permits.

"We know government is looking for certain key sectors to attract international students into and we offer a number of programs in those areas right now that are not eligible for post-graduate work permits," Brulé tells CTV News Ottawa.

"Early childhood education is not eligible, so we want to make sure we continue to advocate to have those programs on the list so we can continue to attract the right number of domestic and international students."

In addition to the new caps on international students, Brulé says the college continues to face "sustained financial challenges" due to the ongoing freeze on domestic student tuition.

"As a result of these challenges, I have tasked the College’s Executive Team to prioritize the needs of our learners and focus on the College’s financial sustainability," Brulé said.

Algonquin College says the current mitigation measures include:

• Deferring expenses wherever practical and reasonable and reducing corporate expenditures.
• Reviewing all hiring and staffing decisions to ensure that only roles that are essential to supporting learners and priority needs are being processed.
• We will be taking a measured, fair and transparent approach in order to mitigate impacts on employees.

"To be clear, the government policy decisions that have been announced will be with us for some time, and this will compound the financial impact on the College in the years to come," Brulé said.

Brulé tells CTV News Ottawa the college will reduce spending to avoid a deficit.

"We are going to reduce non-essential spending where it's reasonable and makes sense to do so. We're going to strategically allocate our resources to our core operations to that our learners are not affected," Brulé said.

Algonquin College's International Education Centre in Toronto has closed.

Algonquin College has 34,000 full-time students.

With files from CTV News supervising producer Stephanie Ha and The Canadian Press