Ontario's colleges and universities say the federal government's cap on international students is taking a toll on the higher education sector as some schools face growing deficits, layoffs and, in at least one case, a temporary campus closure.

St. Lawrence College in Kingston, Ont., said it has eliminated 30 administrative and support positions and warned of further job cuts after its foreign student enrolment dropped by 50 per cent.

President and CEO Glenn Vollebregt said the college is participating in a provincewide efficiency review that is expected to conclude early next year and as that unfolds, "SLC cannot guarantee that there will be no further layoffs."

However, the school will "continue hiring positions of all types" — including a director of Indigenous services — to ensure it can still operate "efficiently," Vollebregt said in a statement. Mohawk College in Hamilton has also told its staff that layoffs are on the horizon, while Seneca Polytechnic will temporarily shutter one of its campuses north of Toronto by the end of the fall semester.

"Due to recent decisions by the federal government related to international students, we are expecting enrolment at Markham Campus to decline," Seneca said in a statement last month, adding that students displaced by the closure will be moved to two other campuses.

Several universities say they're also staring down cuts amid financial uncertainty.

Groups representing post-secondary institutions say this may just be the tip of the iceberg, as dramatic drops in international student enrolment exacerbate some schools' existing budget shortfalls.

The federal government has said it will issue approximately 300,000 fewer international student permits over the next three years — a move that especially affects Ontario as it had seen a larger share of growth in foreign students.

Ottawa is also limiting international college students' work permits after graduation to areas that have labour-market shortages in Canada.

While the full impact of these policy changes on college programs and staffing levels is yet to be known, early signs are not looking good, said Michael McDonald, director of government relations and policy for Colleges and Institutes Canada.

The organization says international students contributed nearly $31 billion to Canada's economy and supported more than 360,000 jobs in 2022.

But around 70 per cent of programs colleges currently offer are deemed ineligible for post-graduation work permits, McDonald said. Close to $2 billion in revenue is potentially at risk as international student enrolment declined by 54 per cent across the country, he added.

McDonald said some colleges have already initiated "workforce adjustments," while others are considering the same.

"We know there's a lot of ... anxiety and concern in the system right now and unfortunately, there's not a lot of clarity," he said.

Sean Coffey, director of communications and special events at Mohawk College, said the school is projecting a $50-million deficit for the 2025/26 academic year, which makes job cuts inevitable.

"There will be layoffs, but we don't have numbers at this point," he said. "The impact will be felt across the entire college and not limited to one area."

Algonquin College, which has campuses in Ottawa and the Ottawa Valley, said it is facing a $32-million revenue loss due to a drop in international student enrolment.

"We've projected that for this year, our actual enrolment will fall short of what we had projected about a year ago by about 2,400 students," said Claude Brule, the college's president and CEO.

"All institutions that have recruited internationally will have experienced an impact of some sort to a lesser or greater degree depending on how intently they were recruiting internationally," he said in a phone interview.

He said while Algonquin is in the midst of conversations about potential job cuts, no decisions have yet been made. But the college's executive team has been tasked with reducing corporate expenses and reviewing all hiring and staffing decisions, he said.

The financial challenges come amid ongoing negotiations between OPSEU, a union representing 15,000 professors, instructors, librarians and counsellors, and the College Employer Council over wages, workloads, and job stability. Union members voted last month in favour of a strike if bargaining fails.

Immigration, Refugees and Citizenship Canada didn't answer questions about the impact of declining international student enrolment on colleges and universities. But it said measures taken by the federal government were necessary to reduce the number of temporary residents in the country and to make sure schools can adequately support their foreign students.

"The annual growth in the number of international students couldn't be sustained while ensuring students receive the support they need," said IRCC spokesperson Isabelle Dubois.

Ontario's universities are also feeling the effects of the study permit cap, even though fewer than 20 per cent of their students come from overseas.

The University of Windsor said it is facing a $10-million shortfall this year, which is projected to increase to $30 million next year in part due to international student limits and a domestic tuition freeze that's been in place since 2019.

"We can expect layoffs. They are going to be immediate, they are going to be ongoing, and they are going to affect every category of employees at the university," Clinton Beckford, vice president of people, equity, and inclusion, told university staff at a town hall meeting last week.

In Ottawa, Carleton University said it had initially estimated its 2024-25 operating budget deficit would be $26 million, but the projection is now "significantly higher" as the number of its international undergraduate and graduate students have declined by 55 and 35 per cent respectively.

Steve Orsini, president and CEO of the Council of Ontario Universities, said universities are facing financial losses of $300 million this year, which are projected to double next year due to a declining international student population.

"You're going to see hiring freezes and layoffs as a result," he said in an interview. "You're going to see programs and services becoming less frequent available to students, whether it's coaching, mentoring, and the demand for mental health will be more difficult to meet in the future."

Universities were already struggling financially and they are now seeing a "double whammy effect" with the loss of revenue foreign students brought, he said.

Orsini called on the province to increase operating grants for universities and lift the funding cap for domestic students to help universities to admit more high school graduates.

"The sector is at a critical juncture, and without additional support, Ontario risks not having the vital talent and research needed to foster economic growth and prosperity," he said in statement.

A spokesperson for the Minister of Colleges and Universities Nolan Quinn said funding for post-secondary institutions is "higher than it's ever been," pointing to $1.3 billion Ontario announced earlier this year to "stabilize" the sector.

Dayna Smockum also said that decisions related to job cuts and staffing "lie solely" with colleges and universities and that the province "will not put additional costs on the backs of students and families by raising tuition."