- The online resource developed by the University of Waterloo also provides overarching financial information to students prior to their arrival. This resource outlines simple but critical information, such as the amount of money that the average international student will require in their first few months in Canada, how to set up a Canadian bank account, and how to pay tuition fees to avoid delays and late penalties. By providing this information for students to learn some banking and financial basics, they are helping to alleviate financial anxiety, while also ensuring that students understand common Canadian banking norms.
- York University has developed a series of pre-arrival webinars to provide students with information they need to make informed decisions while planning their finances. This includes the general cost of living in Canada, available sources of aid and resources for budgeting and financial planning.
- McMaster University has a series of pre-arrival webinars for international undergraduate and graduate students, which is centered around the processes of opening a bank account, obtaining a credit card, and gaining insight into effective money management in Canada.
- RBC also offers educational resources, providing an overview of Canadian banking basics. These resources also provide a snapshot of some common issues that international students face, including how to find a part-time job, managing money and how to build a professional network. By providing these resources, international students can learn long-term strategies of how to manage and build financial resources within the Canadian context.
Financial Vulnerability
Official statistics indicate that in the 2023-2024 academic year, international undergraduate students paid 538% more than domestic undergraduate students, while international graduate students paid 291% more in tuition than their domestic student counterparts (Statistics Canada, 2023a). This significant difference in tuition exacerbates the cost-of-living crisis that many Canadians, including international students are experiencing in today’s economy. Statistics Canada estimates that living costs have risen by 3.9% in 2023, following gains of 6.8% in 2022, which was the largest increase in 40 years (The Daily, 2024). Research has also found that international students often have high levels of debt but also bear the high expectations of their families and home communities. Since January 1, 2024, there has been an adjustment in the financial requirement for study permit applicants in Canada. To ensure that incoming international students have adequate funds to live in the country, they will now need to demonstrate financial resources totaling $20,635, in addition to their first-year tuition and travel expenses (IRCC, 2023b). This increase reflects the rising cost of living in Canada, which has escalated significantly since the initial requirement of $10,000 set in the early 2000s. As a result, both federal authorities and post-secondary institutions acknowledge that the previous amount no longer suffices to meet the financial needs of many students.
The limited availability of government funded services, such as the Ontario Health Insurance Plan (OHIP), accessible exclusively to Canadian citizens, permanent residents, or protected persons (refugees) (Ontario Council of Agencies Serving Immigrants [OCASI], 2022), causes additional financial strain for international students. Financial stress has been linked to significant negative mental health outcomes. Students with fewer financial resources are likely to have diminished academic performance, poorer physical health, and increased levels of anxiety and depression. They may be forced to drop out of their studies due to these financial issues and are also likely to struggle with developing healthy coping mechanisms, which can affect their overall quality of life.
In October 2022, there was a federal policy change that allowed international students to work more than 20 hours off-campus, which was extended until April 30, 2024. It has now concluded. Starting September 2024, the Government of Canada intends to increase the work limit to 24 hours per week off campus (IRCC, 2024b). The temporary policy allowing students to work an unlimited number of hours was aimed at alleviating labor shortages caused by the COVID-19 pandemic while also helping eligible students address rising living costs. The introduction of new rules around off-campus work hours for international students marks a new policy whose impact remains to be seen in how it will address the structural issues that place students in a position of increased financial vulnerability and strain. The adjustment addresses the national affordability crisis and presents an opportunity for international students, allowing them to manage high tuition fees, accumulate savings, and support their families back home. However, the new policy has the potential to increase levels of stress for students as they are required to balance their academic commitments with their employment commitments. Furthermore, employers often prefer to hire Canadian workers due to the perceived complexities, language barriers, cultural differences, potential discrimination, and administrative burden of dealing with work permit requirements, making it more challenging for international students to find and maintain jobs (Choi et al., 2021b).
Qualitative research has demonstrated that international students often lack an in-depth understanding of personal finance and the Canadian financial system. This is especially concerning as these students are undertaking expensive educational pursuits and may have taken large loans that will have long-term impacts on their financial and overall wellness. Research consistently demonstrates that international students are uninformed about the Canadian banking system, and often struggle with making sound financial decisions to help fund their education. Data shows that families often underestimate the full cost of their Canadian post-secondary education for their students. Post-secondary institutions often have dedicated staff in place to help support international students with their transition, but this staff is often not equipped to provide personal finance education to students, who are often navigating these issues on their own for the first time in their lives. While many institutions have made information on emergency loans or bursaries accessible for students, international students often require more support, given the fact that they have significantly higher costs.
Financial norms also differ between countries, and international students may be unaware of common Canadian standards. For example, it is common to use credit cards for everyday purchases in Canada, including online transactions, while many other societies rely on cash. Many students have also struggled with a weakened home currency, increasing their chances of experiencing financial hardship. These unique factors mean that international students often require increased support compared to their domestic counterparts. These supports are not only vital for the long-term success of students but also to ensure that they have enough financial savvy not to fall prey to scams. Research demonstrates that students would benefit from having financial conversations embedded into their orientation experience. Furthermore, having ongoing opportunities to educate students on the basics of Canadian banking, and ensuring they have timely access to important resources, such as emergency bursaries and financial professionals is also critical.
SPOTLIGHT
Recommendations
- Enhance financial literacy programs and support – Develop comprehensive financial literacy programs specifically tailored for international students.
- Examples: Programs can include topics such as personal finance, budgeting, banking systems, and navigating the Canadian financial landscape. Offer ongoing support and resources, including access to financial professionals and emergency bursaries, to ensure students have the necessary tools to make informed financial decisions and manage their financial well-being effectively. Ensure ongoing opportunities for financial education and support throughout students’ academic journey.
- Embed financial conversations into orientation and ongoing support – Integrate financial education and conversations into the orientation process for international students.
- Examples: Resources and workshops during orientation to educate students about the Canadian banking system, credit cards, and financial norms. Realistic estimates of the cost of living in Ontario. Realistic estimates of the time needed to find a job in Ontario.