Why Canada Attracts More Indian Students than the U.S.

November 7, 2022

Last week, Sean Fraser, Canada’s Immigration Minister announced that the country “aims to welcome 465,000 new permanent residents in 2023, 485,000 in 2024 and 500,000 in 2025.” The planned issuance of roughly 1.5 million permanent resident visas, over the next three years, exceeds the total of 1.3 million such visas issued during the five years 2016 to 2021.

A quarter of Canada’s 36 million population are immigrants. The country has a low birth-rate and a rapidly aging population. The aging population means that the worker-to-retiree ratio is expected to drop sharply from 7 to 1, in 1972, to 2 to 1 by 2035. This demographic imbalance, if not rectified by attracting adequate numbers of mostly skilled immigrants, will cripple the government’s ability to support the country’s free healthcare system and pay pension and other benefits to retirees.

Canada faces a major labor shortage, with about one million job openings. A strong tailwind in its favor, though, is the work visa issues and high cost of education in the U.S. faced by foreign students, especially those from India.  

Already Canada attracts more Indian students than the U.S. In 2021, there were about 199,000 Indian students in Canada, a nearly ten-fold increase since 2011, compared to 193.000 in the U.S.     

From 2016 to 2021, nearly a fifth of the permanent resident visas in Canada were issued to Indian immigrants and about a tenth each to those from the Philippines and China. Overall, about a third of those receiving the permanent visas came to Canada on work or student visas.    

About two thirds of the new permanent residents sought by Canada are expected to have skills needed to support the economy. The plan makes the country even more attractive to Indian professionals seeking to migrate, especially those starting out as students.   

Students from India find Canada more attractive than the U.S. because the tuition fees and costs are lower; they can work up to 20 hours a week and during school breaks without a work permit; the chances of getting a work visa after graduation are very high; most graduates get permanent residency within five years; and science, technology, engineering, medicine, and math (STEM) graduates with advanced skills can get a permanent resident visa in about three months.

Earlier, for about five decades since the mid-1960’s, U.S. universities were the first choice for Indians studying abroad. That began changing in 2016, under President Donald Trump, after he cut the number of immigrant work visas.  

Also, up until the late 1990’s, U.S. universities offered teaching assistantships and some financial grants to most foreign STEM students pursuing Master’s or Ph.D. programs. However, today, U.S. universities are dealing with major budget cuts and offer little or no financial aid to foreign graduate students.

Unless they come from a wealthy family, Indian students take on loans, ranging from $80,000 to more than $200,000 from banks in India, to cover the fees and costs of their U.S. education. Typically, the families of the students take on the loans from banks in India, with interest rates of 13% or more, using their homes as collateral.

Upon graduation in the U.S., Indians seek jobs on a practical training visa if they are hired by an employer. The training visas allow STEM graduates to work in the country for three years. The Indians hope that, within three years, the employer will hire them on a H1-B visa, or temporary skilled workers’ visa. Or, they expect, that if they do not get sponsored for a work visa, they will at least be able to pay down much of their education debt with the three years of income they earned in the U.S.

Indians pursuing MBAs and social science degrees take on a far greater risk of being unable to pay back their educational loans and risk losing their family homes to the banks. This is because even if they get a practical training job, their visa is valid for only one year.

Some Indians, who fail to get a practical training or work visa, take on more debt to enroll in additional educational programs, in order to continue staying in the U.S. in the hope of finding a job that sponsors them for a training or work visa. 

Once on a temporary work visa, and if the employer agrees to sponsor, Indians apply for a permanent resident visa or green card. The card allows them to work for any employer. Their spouses can also work in the U.S. and their children can attend schools and colleges.  A green card also enables the holder to qualify for U.S. citizenship after five years as well as travel freely outside the U.S. 

Each year the U.S. issues 140,000 permanent resident visas, less than a third of what Canada plans to issue in 2023. In fact, Republican Party leaders, who are expected to take control of the U.S. House of Representatives in this week’s election, want steep cuts in all immigration visas. President Joe Biden and the Democrats, while talking about expanding the number of immigrant visas, have done little.

In the U.S., more than half a million Indians on work visas, mostly in skilled technical jobs, are awaiting approval of their green cards. The wait is expected to be at least ten years and likely far longer. So, moving to Canada is a better option for Indians in the U.S. – those awaiting green cards, on training visas and graduates of universities who do not have a training or work visa.   

In fact, American and other companies, seeking to bypass the visa restrictions on hiring foreign talent in the U.S., are expanding their operations and hiring in Canada. Apple, Amazon, Microsoft, Google, Facebook, IBM, and other large U.S. companies have expanded their hiring in Canada. They can easily hire the skilled foreigners they need in Canada, including Indian graduates from U.S. universities.

In 2021, Infosys, an Indian information technology services company with a market value of $78 billion, said it is expanding its operations in Calgary and the Toronto region, expecting to double its Canadian workforce to 4,000 by 2023.

Fraser, Canada’s Immigration Minister, said in a statement that, the 2023-25 immigration plan “will help businesses find the workers they need, (and) set Canada on a path that will contribute to our long-term success…” 

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