As university students head back to campuses across Canada this school year, fewer international students will be among them, but the dip in enrolment is deeper than the federal government had designed.

According to Universities Canada, enrolment from outside of Canada has dropped below the federally imposed cap on student visas imposed earlier this year.

“What we are seeing is a real steep decline in interest, which has obviously led to a decline in applications to universities,” Universities Canada vice-president of member services Julia Scott said.

In January, the Liberal government imposed limits on post-graduate work permits and announced a two-year cap on the number of international student applications it would approve.

This year, the target was set at 364,000 undergraduate study permits, a 35 per cent decrease from the nearly 560,000 permits issued in 2023.

Universities Canada says the cap has had a chilling effect, prompting major financial concerns for post-secondary institutions.

“The changes have been incredibly damaging to universities, and they will have ramifications likely for decades to come,” Scott said. “What we are seeing now is Canada’s reputation as a premier destination for education taking a hit.”

The group wants a pause on any future changes until the full impacts of the current drop are appreciated, which is expected to come into focus by September, when students start showing up for class.

Immigration Minister Marc Miller was not available for an interview on Friday.

He has previously stood by the government’s decision to tamp down international student population levels – which he’s previously called “out of control” – citing examples of abuse in the system.

Immigration, Refugees and Citizenship Canada confirmed that “early signs” indicate application numbers for study permit applications are below what was projected.

“Overall, we have seen a decrease in intake and approvals in 2024 compared to the same period in 2023,” the department said in an unattributed statement.

The department cautioned that the busiest enrolment season for study permit processing is August and September, so it is “too early to fully assess the data and analyze any impact of the intake cap.”

Federal immigration officials will work closely with academic institutions to “develop a sustainable path forward for international students,” the statement said.

Immigration a fast growing issue: Nanos

While universities wait to see how low international student enrolment is in the months ahead, the broader issue of how many newcomers Canada welcomes every year is already shaping up to be a political issue this fall.

This week, amid surging use of another program, Prime Minister Justin Trudeau announced stricter rules to reduce the low-wage stream of temporary foreign workers.

The immigration minister then told CTV News that the federal government was “looking at a number of options” to re-evaluate permanent resident levels in Canada.

“Now it’s time to take a look at them and put real options on the table for the prime minister and for other cabinet ministers to look at,” Miller said. “And not cosmetic changes simply to deal with public opinion. Real significant change.”

When pressed on what “significant” changes to permanent resident levels mean, Miller said “all options are on the table.”

On Thursday, Conservative Leader Pierre Poilievre was pressed for his position on Canada’s current immigration approach.

He said a Conservative government would “only admit international students if they have a way to pay their bills, a house to live in and a real admission letter to a real educational institution.”

Though on permanent residency levels, he’d only say Canada should have a population growth rate that is “below the growth in housing, health care and employment.”

“If you want an idea of how I would run the immigration system overall, it’s the way it was run for the 30 years prior to Trudeau being prime minister. We had a common sense consensus between Liberals and Conservatives for three decades,” he said.

Polling over the last year shows Canadians think federal immigration targets are too ambitious, and many voters view the issue as linked to housing affordability, according to pollster Nik Nanos.

Amid this persisting sentiment, Nanos said his numbers show that while jobs and the economy remain the top issues, immigration has become one of the fastest growing issues of concern.

“It’s doubled actually in the last four weeks,” he said. “This is a typical hot button issue.”

Nanos said with the Liberals “playing a little bit of catch-up,” and the Conservatives seeking to draw contrast, the issue is likely to be high on the political agenda when Parliament resumes next month.

“It’s probably going to be seen of as political opportunity for both the Liberals and for the Conservatives,” Nanos said.

With files from CTV News’ Stephanie Ha