Policy tightening, housing strain behind Canada’s 74% visa rejections: Expert on latest policy changes

Nearly three out of every four Indian applications for Canadian student permits were rejected in August 2025, marking a sharp rise from 32% a year earlier, according to government data cited by Reuters. Figures from Canada’s immigration department show a 74% rejection rate among Indian applicants this August, while the global rejection rate stayed steady at around 40%. In comparison, only 24% of Chinese applicants faced refusals during the same period.

This record surge in rejections comes as Canada enforces stricter visa scrutiny and tighter migration controls, a trend that has disrupted plans for thousands of Indian students, traditionally the largest cohort in Canada’s international education system.

Explaining the shift, Saurabh Arora, Founder and CEO of University Living, told Business Today, “The sharp rise in Canada’s visa rejections reaching 74% stems from a mix of policy tightening and heightened scrutiny. In recent months, Canada has intensified verification processes to detect fraudulent documentation and misrepresentation, leading to more stringent application reviews.”

According to Arora, the government’s aim is twofold: to ensure transparency and to control temporary migration amid mounting pressure on housing and resources. “There’s a stronger focus on assessing applicants’ academic intent, financial readiness, and post-study plans, reflecting Canada’s broader effort to reinforce the integrity and transparency of its international education system,” he added.

Fewer Indians Applying, Caution Rising

The rejections have also led to a drop in applications. Arora noted that Indian students are becoming more cautious and diversifying their study destinations. “Many students are taking a more thoughtful approach toward studying in Canada, considering factors like evolving visa policies, processing timelines, and accommodation availability,” he said.

He added that students are now exploring alternatives such as Germany, France, New Zealand, and the UAE, which offer simpler visa procedures, affordable tuition, and attractive post-study work options. “This indicates a more informed and pragmatic approach, where students are prioritising stability, clarity, and return on investment in their overseas education decisions,” Arora said.

Canada’s Policy Overhaul: Stricter Caps and Higher Barriers

Canada’s new framework, designed to make international education “sustainable and quality-driven,” has imposed a 35% cap on study permits in 2024 and a further 10% reduction in 2025, bringing the new limit to 437,000 permits. Other changes include increased financial requirements, revised Post-Graduation Work Permit (PGWP) rules, and a mandatory Provincial Attestation Letter (PAL) to verify student authenticity.

While the policies apply globally, their impact is felt most by Indian students due to the sheer scale of applicants and recent fraud cases that heightened scrutiny. “The rise in refusals reflects a push for stronger quality control, not discrimination,” Arora said. “The emphasis is now on transparency and authenticity — encouraging students to apply through verified platforms and reputable institutions.”

Institutions Recalibrate as Impact Grows

The reduction in study permits has also forced Canadian universities and colleges to rethink their recruitment strategies. “With limited seats, universities are streamlining admissions and focusing on higher-quality student cohorts. More allocations are being directed toward master’s and PhD programs, reinforcing research-led education and attracting advanced talent,” Arora said.

He added that institutions are now diversifying revenues by developing micro-credentials, short-term programs, and industry partnerships, helping them remain financially resilient amid declining undergraduate enrollments.

Employability and Housing: Key Drivers Behind the Crackdown

Arora emphasised that employability concerns and housing shortages were central to Canada’s recent clampdown. “With a surge in international graduates seeking permanent residency and jobs, concerns have grown about labour market saturation and the displacement of local workers in certain entry-level roles,” he said. The new policy aims to align student programs with national skill needs, ensuring the talent pipeline supports real workforce gaps.

On the housing front, he added, “The surge in international students over the past few years has added pressure to an already strained housing market, leading to affordability and availability challenges in major cities. By capping study permits and tightening oversight, the government aims to manage student inflow more sustainably.”