What the international student cap means for Nova Scotia

Cape Breton University (and Sydney) will feel the brunt of the impact

The federal government recently announced a two-year cap on international students. Starting this fall, 360,000 permits will be issued. Provinces will be allocated spots based on their population. For Nova Scotia, that means about 9,000 allocated students. Currently, the province has 14,500 international students. Meaning, the province will see a 38% reduction in international students.

That won’t affect NS universities equally. Really, it will only affect one.

Cape Breton University (CBU) has ramped-up international enrollment unlike any other university in the province. 75% of the enrolment at CBU is international students.

There are so many ways to see how crazy CBU’s mix enrolment is, here’s another view: CBU has 6% of Nova Scotia’s Canadian students enrolled, but 48% of its international students.

There are several ways the province can allocate the spots, but given the outsized exposure, CBU is at risk of losing 50-60% of its enrollment, based on how I cut the numbers.

Will CBU go broke?

Disclaimer: This is “fun with numbers” and should not be considered authoritative. I have no non-public information, and very little public information either.

For a quick recap, CBU revenues have doubled from 2018 to 2023 (fiscal), from $70m to $140m. Given that enrolment surged another 54% since the last audited financial statements, I’d put current revenues close to $185m.

So, from $185m, if enrolment declines by ~50%, that will cut tuition revenues by $65m, bringing total revenues to ~120m. The last reported expense figure was $112m, but that was before adding ~3,200 students in the latest years, which inevitably brings higher costs. My guesstimate for current expenses lands at $142m.

The silver-lining in CBU’s financials are the huge revenue surplus it has, $22m in the last reports, and likely something like $45m currently. I don’t know if that revenue was needed for something, but it could cushion some of the blow.

But, under a 50% decline scenario, CBU could see its financial position go from ~$45m annual surplus to a $26m annual deficit - before any cost cutting. Returning to balance would require a ~20% cost cut (using my guess of 50% enrolment decline and my current revenue/expense guess.

Audited Financials up to 2023, guesstimates thereafter, and 2025 is assuming the cap brings a ~50% reduction in enrollment and tuition revenues

What’s it mean for Sydney?

A lot of attention has gone to the stress GTA-area colleges have put on Toronto rental markets. But I think it’s likely that no housing market will feel this international student cap quite like Sydney, Nova Scotia.

CBU will have to cut enrolment by about 4,500. The population of Sydney in the 2021 census was 30,970¹. Cape Breton as a whole has about 93,000 residents². The enrolment reduction could reduce Sydney’s population by a stunning 15% (or the entire regional population by 5%). CMHC reported a 0.8% vacancy rate in Cape Breton as of October 2023, that is sure to rise next year if my numbers are anywhere close to reality. I would not want to be a Sydney landlord next year…

1. International students don’t count in population figures

2. Some news stories have pointed to some CBU students living as far as Halifax…