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Economic Impact of International Education in Canada – 2016 Update

Table of contents

1. Introduction

International education, owing to its impact on Canada’s ability to develop and retain the necessary knowledge and skills, plays an important role in the globalization of its economy allowing it to thrive in a fast-changing and competitive environment.

The importance of international education to Canada’s economic prosperity has been recognized through a national comprehensive International Education Strategy which encompasses [3]:

  • Foreign students studying in Canada for any length of time;
  • Canadians studying outside of Canada;
  • Collaboration between educational and research institutes in Canada and abroad; and
  • Sharing of Canada's education models with foreign countries and the online delivery of Canadian education around the world.

There are different aspects of international education that contribute to the benefits of Canada’s economy. Roslyn Kunin and Associates (RKA) has been commissioned by Department of Foreign Affairs, Trade and Development Canada (currently Global Affairs Canada) to conduct this study to determine the value of the impact of international students studying in Canada to the Canadian economy by using the best available data and Statistics Canada’s 2010 input output model. The current study builds on the 2012 study of the same purpose with more up-to-date information as well as refinements to the estimation approach.

The study covers the long term students at schools, colleges, and universities, as well as the short term students. For the number of long term international students (those pursuing education and training for periods longer than six months and requiring study permits), we rely on Immigration, Refugees and Citizenship Canada (IRCC) data. For the short term students (less than six months duration), we rely on Languages Canada’s data. In order to calculate the student expenditures, we relied on data from the various sources including Statistics Canada’s annual Tuition and Living Accommodation Costs survey. To fill in the gaps in data, we had to make several assumptions including those with respect to scholarships and bursaries provided by Canadian government (federal, provincial or territorial) or institutions as well as expenditures by the friends and families visiting international students, thus adjustments to the original sets of data. These adjustments are detailed in Appendix 1. We have also carried out sensitivity analysis with respect to some key variables. This is presented in Appendix 2 and Appendix 3.

To capture the overall impact of international education services on the Canadian economy, we have used Statistics Canada’s inter-provincial expenditure impact model. In this study, we have not only quantified direct economic impact associated with international student spending, but have taken a total impact approach to quantify direct, indirect, and induced impacts. These include quantifying activities of businesses providing goods and services to entities where direct expenditures occur (thus including direct + indirect impacts). In addition, as a result of increased local household income, there may be further increases in overall expenditure. This is considered a spun-off (or induced) impact. Total impact includes all three – direct, indirect, and induced impacts of an initial spending. The total impact can be considered the upper band of economic impacts, whereas the sum of direct and indirect impacts provides relatively conservative level of impacts on the economy. In this study, we are taking a conservative approach and focussing on the direct and indirect impacts.

The layout of the report is as follows:

  • Overview of recent trends in international student mobility and economic impact
  • Data and methodology
    • International student data
    • Expenditure data
    • Additional “tourism activities”
  • Economic impact assessment
    • Direct economic impact
    • Direct plus indirect economic impact
    • Total (direct, indirect, and induced) impact
    • Government tax revenue
    • International students and Canada’s export
  • Conclusions and recommendations

While the study essentially follows the same methodological approach as the earlier reports prepared in 2009 and 2012 by Roslyn Kunin and Associates, comparisons with previous modelled expenditure results would not be appropriate, as there are differences in the data sources, assumptions, as well as the model specification, in addition to the use of more recent data.


[3] Source: http://international.gc.ca/global-markets-marches-mondiaux/education/strategy-strategie.aspx?lang=eng.

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Date Modified:
2016-10-04