Canada’s Auditor General Reviews Study Permit Caps and Non-Permanent Residents

(CANADA) — Canada’s Auditor General released a report on March 23, 2026, finding that federal reforms to the international student program curbed rapid growth in study permits but hit smaller provinces harder than expected and left gaps in fraud detection and non-compliance follow-up.

The audit said Immigration, Refugees and Citizenship Canada, or IRCC, brought down the number of study permit holders from over 1 million in January 2024 to 725,000 by September 2025. That drop aligned with Ottawa’s wider effort to bring temporary residents below 5% of the population by 2027.

Karen Hogan, Auditor General of Canada, examined how IRCC applied study permit caps, tougher financial rules, integrity measures and related changes after the federal government moved in 2024 to slow growth that had strained housing and public services.

Caps Worked Faster Than Planned

Her report said the caps worked faster and more sharply than planned. Study permit applications had climbed 121% from 2019 to 2023, but new study permits approved in 2024 fell to fewer than half the forecasted levels, and by September 2025 only 50,000+ of 255,360 projected permits had been approved.

Several provinces recorded steeper declines than federal projections anticipated. Manitoba, Prince Edward Island, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Saskatchewan posted declines of 59% or more even though projections had pointed to 10% drops or increases.

British Columbia also saw a larger-than-expected contraction. The province recorded a 66% drop against an 18% planned decline, adding to concerns among institutions already facing recruitment freezes and layoffs.

The report lands as Prime Minister Mark Carney’s government continues to pursue tighter control over temporary migration. As of Jan. 1, 2026, non-permanent residents stood at 2,676,441, and they fell by 171,296 in Q4 2025 alone.

2026 Allocations and Attestation Letters

IRCC had already tightened its targets before the audit arrived. On November 25, 2025, the department set 2026 allocations of up to 408,000 total study permits, down from 437,000 in 2025 and 485,000 in 2024.

That 2026 figure includes 155,000 new arrivals and 253,000 extensions. Of the total, 180,000 require Provincial Attestation Letters or Territorial Attestation Letters, while 309,670 application spaces were distributed using population and approval rates.

Among the provincial figures released, British Columbia received 24,786 spaces and Alberta 21,582. Ontario’s number was not listed, though it was described as proportionally largest.

One of the biggest shifts took effect on January 1, 2026. Master’s and doctoral students at public Designated Learning Institutions became exempt from caps, with 49,000 expected issuances and no PAL or TAL requirement.

Primary and secondary students were also carved out, with 115,000 slots. Another 64,000 permits were reserved for other exempt groups, including students extending permits at the same DLI and level and other priority groups.

Those changes were tied to the 2026-2028 Immigration Levels Plan, which aims to direct international student intake toward areas such as emerging tech, health care and trades. Doctoral applicants outside Canada also gained 14-day processing, including family members, through a new IRCC graduate webpage.

Quebec remains separate from the attestation system through its own CAQ process. Financial proof for students has stayed at CA$20,635 since January 1, 2024, in addition to tuition and travel costs.

Fraud Detection and Non-Compliance Gaps

The audit found that IRCC made progress on document verification even as other weak spots persisted. A letter-of-acceptance verification tool launched in December 2023 authenticated 97% of 841,000 letters by September 2025.

That performance addressed one of the most visible fraud risks in the system. But the same audit said the department flagged over 153,000 students for potential non-compliance between 2023-2024 and had resources to investigate only 2,000 cases annually.

Of 4,057 launched investigations, 40% — more than 1,600 — remained unresolved because students did not respond to requests. Three investigations found 800 fraudulent permits issued from 2018-2023, and most of those permit holders later sought another immigration status.

The review also raised concerns about extension requests and Student Direct Stream applicants, pointing to the need for stronger risk assessments. IRCC accepted recommendations to improve fraud follow-up, tailor provincial allocations with provincial and territorial partners, and tighten extension screening.

Government Response and Sector Impact

Lena Metlege Diab, Canada’s immigration minister, welcomed the report on March 23, 2026, while acknowledging that more work remains. Her department said the reforms had eased housing pressure and broadened the mix of international students entering Canada.

The audit covered the first 18 months of changes that stretch through 2027. It also noted that the final outcomes were shaped not only by caps and permit rules, but by provinces underusing allocations and by wider affordability pressures.

The speed of the decline has reshaped campus planning across the country. Universities and colleges that relied heavily on international tuition revenue now face sharper competition for a smaller intake, especially among undergraduate and college applicants who still need provincial or territorial attestation letters.

At the same time, public universities welcomed the graduate exemption. U15 Canada CEO Robert Asselin and Canadian Bureau for International Education president Larissa Bezo said the move would support research and talent attraction while freeing PAL spaces for other students.

The broader numbers show how quickly the market has turned. Study permits issued fell from 681,155 in 2023 to 516,275 in 2024, and in Q1 2025 Canada issued 96,015 study permits in total, including 30,640 to Indian students, down 31%.

Those declines came after Ottawa first introduced a cap in January 2024 and later tightened it further. The government had initially announced a 437,000 cap for 2025-2026 on September 18, 2024, before lowering the 2026 target again.

What the New Rules Mean

For students, the new structure means fiercer competition for the 155,000 new-arrival places available in 2026. Graduate students at public institutions gained a clearer route because they no longer need PALs or TALs, but they still must meet financial and other screening requirements.

For schools, the changes create uneven pressure. Large public institutions gain from graduate exemptions, while schools in smaller provinces and institutions that depended on high international intake face lower revenue and pressure to rethink recruitment.

For communities, the government argues the reduction has helped cool demand on housing and health systems. Supporters of the reforms also say slower growth could make the program more sustainable if Canada can still attract students tied to labour shortages and research priorities.

The audit pointed to another area of concern: asylum claims from study permit holders. It cited 20,245 asylum claims in 2024 and a 22% rise in Q1 2025, adding weight to calls for better tracking of misuse inside the student stream.

Opposition leader Pierre Poilievre has pressed for even tighter caps. Carney’s government, however, has tied its approach to the broader temporary resident target rather than promising another immediate reduction beyond current plans.

The report’s title, “International Student Program Reforms”, captures the balance Ottawa is trying to strike. The government wants to cut abuse and reduce pressure on services without shutting off a stream that feeds universities, labour markets and longer-term immigration pathways.

That balance remains unsettled. The audit said the caps succeeded in slowing growth, but it also showed that one national framework can land very differently across provinces and institutions.

IRCC’s application process now rests on a narrower set of spaces and stricter screening. Most undergraduate and college applicants must secure acceptance from a DLI, prove at least CA$20,635 in funds, obtain a PAL or TAL if required, and satisfy officers on language, ties to their home country and compliance history.

Renewals at the same DLI and level remain outside the cap, giving current students more continuity than new applicants. Doctoral applicants outside Canada now move faster, with 14-day processing that also covers accompanying family members.

The next phase of the reforms will test whether Ottawa can push numbers down while closing enforcement gaps that the audit laid bare. For now, Canada’s Auditor General has confirmed both sides of the government’s reset: the study permit caps curbed growth quickly, and the system still struggles to keep pace with 153,000 potential non-compliance cases.