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Economic Impact of International Education in Canada - An Update

Foreign Affairs and International Trade Canada - Roslyn Kunin & Associates, Inc., May 2012 

Table of Contents|Section: 1 2 3 4 5 6 7 8 9|References|Appendix:1 2

Executive Summary

We estimate that in 2010, international students in Canada spent in excess of $7.7 billion on tuition, accommodation and discretionary spending; created over 81,000 jobs; and generated more than $445 million in government revenue.

Altogether there were more than 218,200 long-term (staying for at least six months) international students in Canada in 2010, generating more than $6.9 billion to the Canadian economy. It is estimated that nearly 37 percent of that revenue came from two countries – China and South Korea. As of December 2010 there were 56,900 Chinese and 24,600 South Korean citizens in Canada undertaking a formal education program. Ontario and BC hosted nearly two thirds of the international students in Canada (85,300 and 60,500 respectively) while Quebec was a distant third.

Short term students who pursued language training also contributed an estimated $788 million to the Canadian economy.

Overall, the total amount that international students spend in Canada ($8.0 billion) is greater than our export of unwrought aluminium ($6 billion), and even greater than our export of helicopters, airplanes and spacecraft ($6.9 billion) to all other countries.

When the value of educational services provided in Canada to international students is compared to the value of the more traditional goods that Canada exports, the impact for some countries is even more striking. The Saudi Arabians, for example, spend the equivalent of 44% of the value of the goods they import from Canada on educational services. Similarly, we see that South Korea (19.1%), China (13.9%), India (27.9%), and France (14.2%) all spend significantly for educational services when compared to the trade in goods they import from Canada.

In total, the annual expenditure of $8.0 billion by international students translated to estimates of almost $4.9 billion worth of contribution to GDP, 86,570 jobs, and $455 million of government tax revenue.

Summary Table I Economic Impact of International Education Services in Canada, 2010
 Total
Expenditure
GDPEmploymentGovernment
Revenue
Long-Term Students    
Newfoundland &
Labrador
$40,670,000$27,614,000370$1,480,000
Prince Edward Island$27,760,000$6,191,00060$621,400
Nova Scotia$217,167,000$123,568,0001,890$12,000,000 
New Brunswick$93,576,000$66,975,0001,030$3,425,300
Quebec$1,014,526,000$593,069,0008,000$81,226,000
Ontario$2,902,608,000$1,808,730,00029,970$202,975,000
Manitoba$153,784,000$87,342,0001,640$10,831,000
Saskatchewan$120,503,000$69,887,0001,050$4,479,000
Alberta$486,637,000$300,332,0004,770$13,249,000
British Columbia$1,864,093,000$1,151,116,00021,460$66,897,000
Yukon, Northwest
Territories and
Nunavut
$623,000$174,0000$8,000
Sub-Total
Long-Term Students
$6,921,947,000$4,234,998,00070,240$397,191,700
Short-Term Languages
Canada Students
$788,162,180$455,708,00010,780$48,108,400
Additional Tourism
Benefits
$336,389,440$187,680,0005,550$9,739,000
Grand Total$8,046,498,620$4,878,386,00086,570$455,039,100

Source: RKA

The quantitative results are summarized below.

  • The economic benefit of international students studying in Canada is substantial. Total expenditure of long-term international students in Canada amounted an estimated $6.9 billion in 2010. This translates to almost $4.2 billion in GDP contribution to the Canadian economy, and represents about 7% of the GDP contributed by the overall education services sector in the Canadian economy.
  • International education services serving these long-term students contributed to 70,240 jobs in the labour market. This represents about 5.7% of the total number of jobs in the overall education services sector in Canada.
  • Those international students in short-term language training programs in Canada were estimated to have contributed an additional $788 million per year in total spending to the Canadian economy. This is equivalent to about $455 million in GDP, 10,780 jobs, and $48 million in government revenue.
  • In addition to capturing the economic impact that has resulted from students’ spending on tuition, fees and basic living expenses, we estimate that $336 million per year can be attributed to additional tourism related activities, enjoyed by the international students and their family and friends.
  • Governments also benefit from international education services as the total amount of net indirect taxes collected in 2010 was estimated to be $455 million (including tax revenue generated from serving long term and short term international students, as well as from tourism activities).  Out of this amount, we estimate that $180.6 million was tax contribution to federal government, and $273.9 million contributed to provincial and territorial government tax revenue.
    International students visit Canada from all over the world. The top source countries from which students visit Canada and the export value of their education is detailed in the tables below. It is important to note that over 50% of students are from Asian countries (primarily China, India, South Korea and Japan).

Summary Table II Value of International Education Services by Top Ten Countries by Level of Study, 2010

Click to view full size version of Summary Table II Click to view full size version of Summary Table II

We have also examined the value of education services versus the total exports to each of these same countries. Canada’s international education services for long-term students alone contribute to the equivalent of 1.7% of Canada’s total export in goods to the world. However, for top international student source countries such as China, South Korea, and Saudi Arabia, Canada’s international education services to these countries contribute to more than 10% of Canada’s export in goods to these countries.

Summary Table III Comparison of International Education Services with Total Exports in Goods from Canada to the Top Ten International Student Source Countries and to All Countries, 2010
Area/CountryAll Long-Term StudentsAll Exports in GoodsEducational Services as % of All Goods Exports
China$1,836,427,000$13,232,891,00013.9%
Korea$707,402,000$3,709,307,00019.1%
India$583,588,000$2,088,683,00027.9%
Saudi Arabia$427,662,000$977,758,00043.7%
USA$369,131,000$299,068,000,0000.1%
France$333,539,000$2,349,565,00014.2%
Japan$180,728,000$9,194,118,0002.0%
Mexico$125,380,000$5,009,864,0002.5%
Hong Kong$121,451,000$1,897,603,0006.4%
Taiwan$101,466,000$1,289,112,0007.9%
Top 10 Areas$4,786,774,000$338,816,901,0001.4%
All Areas/Countries$6,921,769,000$399,434,000,0001.7%

Source: RKA Estimates based on DFAIT data

Recommendations

This report provides evidence showing that international students make a very significant contribution to the Canadian economy, job base and government revenues. Therefore, it is important to get more consistent, complete and accurate data on students and their expenditures in Canada. Such data is not readily available now. Therefore, we put forward the following recommendations:

  • Ensure that international students are recognized and supported commensurate to their importance to Canada relative to other similar sized exports of goods and services.
  • Consider the possibility of establishing a survey method like that undertaken in Australia where a sample of visitors leaving the country would be surveyed regarding their activities in Canada. This would need to be done at all major international airports and would need to be carried out in a number of languages.
  • Work with stakeholders (including CIC, Statistics Canada, and universities, colleges, and other training institutions) to develop a consistent system of record-keeping to track international student expenditures while in Canada.
  • Work with Statistics Canada to develop a national survey of public and private educational institutions to determine international student enrolment, tuition rates, and other expenses for degree/diploma granting programs as well as adult and continuing education classes of under six months.
  • Coordinate with provincial governments and national organizations to determine consistent survey questions for international students.

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Date Modified:
2013-12-31