Who pays higher rents? Canadians or international students

On average, averages can be misleading.

A recent report from Statistics Canada suggested that international students and non-permanent residents, such as temporary foreign workers, pay higher rents than Canadian-born individuals and immigrants who have been in Canada for more extended periods.

This has naturally raised concerns among academics invested in the well-being of international students, who are integral to fostering new scholarship and innovation. 

Statistics Canada posed a thoughtful yet complex question: Do international students and temporary foreign workers pay more than Canadian-born individuals in the rental market? Many likely encountered this finding via news outlets, particularly the Toronto Star’s headline: “International students, foreign workers paying higher rents.” As intended, the headline grabbed attention—but not the whole story.

While Statistics Canada’s meticulous report noted that, on average, international students pay more rent, the devil, as always, lies in the details. Many international students reside in large urban centres with notoriously high rents. Comparing their shelter costs to those of all Canadians, many of whom live in smaller towns or rural areas, is akin to comparing condos to barn houses—apples and oranges, indeed.

The report clarified that international students pay slightly less in rent after accounting for factors such as location, household size, and housing quality. In fairness, The Toronto Star covered these details in their reporting. But many readers stop at the first paragraph, quarantined for nuanced information. 

Temporary foreign workers, however, do pay about 5% more on average, even after controlling for factors that explain rent differences. Yet this premium is not alarming for two reasons. First, while noticeable, a 5% difference is not substantial. Second, this may reflect a "risk premium" that landlords charge for renting to individuals without local references, rental or Canadian credit history.

For graduate international students—essential drivers of innovation and knowledge creation—rents are not systematically higher after adjustments. The larger concern is that rents are universally high for all Canadians born here or abroad. This underscores the importance of measures like the University of Toronto’s recent increase in guaranteed financial aid for PhD students to approximately $40,000 annually.

During a recent breakfast celebrating the University of Toronto’s class of 1974, I had a brief but memorable conversation with Prof. Meric Gertler, the university’s president. He shared that the institution is embarking on a multi-billion fundraising campaign, primarily to support students.

Canada's bright future is bolstered by our graduate students' exceptional talent and ambition, many of whom are international talent. It is up to us to find meaningful ways to support them in their academic pursuits and in navigating broader challenges like housing affordability.