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Economic Impact of International Education in Canada – 2016 Update

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5. Conclusions and Recommendations

In this report, Roslyn Kunin and Associates, Inc. (RKA) has used mainly secondary sources to collect information for estimating the quantitative impact of international students on the Canadian economy. The RKA team has worked extensively with international education stakeholders and organizations to collect data on different types of expenditure items and their dollar amounts, and calculated total expenditure by level of study and by province/territory.

In addition to capturing economic impact resulted from spending on tuition and fees and basic living expenses, we also capture additional tourism related activities associated with visiting family and friends. The analysis also accounts for the scholarships and bursaries provided by the Canadian governments (federal as well as provincial), universities, and other Canadian institutions.

  • The economic benefit of international students studying in Canada is substantial. We estimate that in 2014, international students in Canada spent almost $11.4 billion on tuition, accommodation, and discretionary spending. This results in $9.3 billion contribution to Canada’s GDP. This figure of $9.3 billion includes $6.7 billion direct contribution to GDP associated with tuition, food, and accommodation, and $2.6 billion indirect contribution to GDP when firms supplying goods and services to the education services and other sectors are also taken into account.
  • The amount of overall annual spending by international students also generated almost $2.1 billion tax revenues and supported 122,700 jobs (equivalent to 104,100 FTE) in the Canadian economy.
  • Canada’s international education services represent 11% of Canada’s total service exports to the world, or 2.2% of Canada’s total merchandise exports. The top 10 source countries accounted for $8.4 billion international student spending, which translates to 13% of the total export of services, or 1.9% of the total merchandise exports to these countries from Canada. 
  • Ontario, with the largest number of students, shows the largest contribution to GDP at $4.4 billion (47.3% of $9.3 billion), followed by BC with 23.4%, and Quebec with 14.1%.
  • Of the annual total spending by international students, long-term international students accounted for 92%. International education services for these long-term students contributed $8.6 billion worth of GDP of the Canadian economy, and supported 113,100 (equivalent to 95,900 FTE) jobs in the labour market.
  • International students in short-term language training programs in Canada contributed an additional $919.4 million per year in total spending to the Canadian economy. This represents about $697.8 million contribution to GDP, and supporting 8,100 jobs (or equivalent to 5,900 FTE jobs).
  • Using a total impact approach (including direct, indirect, and induced impacts) to account for the $11.4 billion international students spending, we estimate a much higher contribution of around $12 billion to Canada’s GDP, and support for around 152,700 jobs.
Table 19 - Economic Impacts of Annual Spending of All International Students, Canada, 2014
DirectDirect and IndirectDirect, indirect & Induced
Output$10.283bn$15.208bn$19.773bn
GDP$6.742bn$9.316bn$11.998bn
Labour Income$4.011bn$5.583bn$6.848bn
Jobs - FTE74,500104,100129,400
Jobs (incl. f/t, p/t, temporary)89,900122,700152,700
Indirect Taxes - Federaln/a$182.6m$333.3m
Indirect Taxes - Provincialn/a$485.1m$787.1m
Indirect Taxes - Municipaln/a$456.6m$602.5m
Indirect Taxes - Overalln/a$1.124bn1.723bn
Personal Income Taxesn/a$971.3m$1.192bn

During the process of data collection and analysis, we faced many challenges, which are identified below:

  • There is not one single, comprehensive source of data with regard to international students. As a result we rely on several secondary sources.
  • On student spending amount and pattern, we need a better handle on tuition for specialized studies, part-time versus full-time students, public versus private school students, as well as expenditure associated with incremental tourism activities from families and friends.
  • There is a great need for data on scholarships and bursaries provided by governments and/or universities in Canada to promote international student mobility.

Other aspects of international education services that have implications for the number of international students, and would benefit from further research and investigation include:

  • the impact of post graduate retention and employment policies,
  • the impact of financial incentives (cost coverage, scholarships) in attracting the top talent, and
  • the ability to work and immigrate for skilled workers.

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Date Modified:
2016-10-05