As the federal government reportedly considers reducing the number of international students coming into Canada, McMaster University's president says a cap would mean "a loss" for the institution.

"If we lost our international students, we would not be as rich from a learning-environment perspective," David Farrar said on Wednesday, adding it depends on how big the proposed changes would be.

This week, McMaster announced Farrar will step down when his term ends in June 2025. He spoke with CBC Hamilton about McMaster's future and its place in the community.

As CBC News has reported, the number of international students admitted to Canada has increased significantly, with the country hosting about 900,000 in 2023. Experts and observers have noted that these students, who often pay higher fees, end up competing for housing in an already tight market.

A federal government source told CBC News that Ottawa is planning to reduce the number of students coming to some provinces. Immigration minister Marc Miller has discussed capping temporary residents to address housing unaffordability.

Of McMaster's roughly 32,000 students, Farrar said, about 5,000 are international. "We're not dependent on them from a funding perspective," he said.

Investigations by CBC's The Fifth Estate have determined some post-secondary institutions rely on international students, including public colleges in Ontario. The Fifth Estate reported that in 2021, about 25,000 students had been enticed to enrol at private career colleges in Ontario that partner with public colleges and that those colleges that have grown dependent on the international students' much higher tuition fees, typically four to five times what a domestic student pays.

Jovial Orlachi Osundu, president of the international students association at Université de Moncton, told Rosemary Barton Live Canadians shouldn't blame international students for the housing crisis in Canada.

"I feel it's pretty unfair to use them as scapegoats to explain the wrong decisions that our political actors took in the past. I believe that we need to support them."

Farrar said the extra fees international students at McMaster pay help cover the cost of 3,000 domestic students the university does not receive government funding for. "We would have to cut our domestic student body if we didn't have [international students]."

He said having a more diverse campus enriches the learning experience.

When it comes to housing, Farrar said, McMaster is "very focused" on building more, and just broke ground on a new residence that will eventually hold about 1,300 students.

A new downtown residence, which opened to some students in the fall, has faced criticism from student tenants that it opened too early, while it was still under construction.

Farrar didn't address that specific case but said the university lacks the space to build many more residences and is looking to the private sector to develop more housing.

He said around three quarters of students live within a 45-minute drive from the west-end Hamilton campus, but that the school wishes they could live closer. "It would be so much better if they could commute to the university either by walking or by public transit."

Despite its ambitions, Farrar said McMaster is "really tightening our belt" to keep its budget balanced.

In late 2023, an Ontario government-appointed expert panel found the financial sustainability of Ontario's post-secondary sector to be at "serious risk," due to factors including frozen provincial funding and inflation. While the panel's suggested responses include tuitions hike and increased government funding, the Ontario government said institutions should be more efficient.

"We've been very careful with our budgeting, but it is starting to affect our ability to admit the students that we're trying to have here," said Farrar, who began in his role in 2019, having previously worked in administration at the University of British Columbia.

After he concludes his term as president, Farrar — a chemist by trade — said he hopes to finish some papers on carbon capture. Then, he and his partner are looking to retire to Niagara-on-the–Lake, where they own property.

That was Farrar's plan before he took on McMaster's top job, he said.

"It's an amazing university and it's been a fantastic opportunity for me."