Economic impact of international education in Canada – 2017 update
Table of contents
- Executive summary
- 1. Introduction
- 2. Data sources and methodology
- 3. Assessing the economic impact of international students in Canada
- 4. International students and Canada’s export
- 5. Trends in international student enrollment and economic impacts in Canada
- 6. Conclusions
- Appendix 1 – Detailed explanation of data sources and adjustments
- Appendix 2 – Economic impacts
- Appendix 3 – Scenario analyses
- Appendix 4 – Reconciliation of the study estimates with valuation by Statistics Canada
- Appendix 5 – Data tables for 2015
- Appendix 6 – Data tables for 2016
6. Conclusions and recommendations
This report provides an estimate of economic impacts in Canada in 2015 and 2016, and serves as an update to the previous valuations prepared for Global Affairs Canada for the years 2008, 2010 and 2014. The report is mainly based on IRCC data on international students studying in Canada for longer than six months and Languages Canada data for short-term students. Several other secondary sources have been used to collect information to estimate the quantitative impact of international students on Canada’s economy.
In addition to capturing the economic impacts of spending on tuition, fees and basic living expenses, we also capture additional tourism-related activities associated with visiting family and friends. The analysis also accounts for scholarships and bursaries provided by Canadian governments (federal and provincial), universities and other Canadian institutions in estimating net expenditures by international students in Canada.
- Our analysis clearly indicates that the contributions that international students make to Canada’s economy are continuing to grow. In line with an increasing number of international students, overall spending more than doubled between 2008 and 2016, from $6.5 billion to $15.5 billion, representing an increase of 11.4% per year.
- We estimate that in 2015 and 2016, international students in Canada spent over $12.8 billion and $15.5 billion, respectively, on tuition, accommodations and discretionary spending, which represents a 36.6% increase from the $11.4 billion spent in 2014.
This significantly higher level of annual spending resulted in $10.5 billion and $12.8 billion contributions to Canada’s GDP in 2015 and 2016, respectively, a significant increase over the $9.3 billion contribution in 2014.
- The amount of overall annual spending by international students also generated $2.3 billion to $2.8 billion in tax revenues and supported 140,010 to 168,860 jobs in the Canadian economy in 2015 and 2016, respectively, significantly up from the $2.1 billion in tax revenue and 122,680 jobs in 2014.
- In 2016, Canada’s international education services ($15.5 billion) amounted to 14.5% of Canada’s total service exports to the world, and equalled 3.0% of Canada’s total merchandise exports. The top 10 source countries accounted for $11.8 billion in international student spending, which translated to 17.2% of total exports of services, or 2.7% of total merchandise exports to these countries from Canada.
- In 2016, long-term students accounted for 93.5% of the total amount of spending by international students, they contributed $12.0 billion to Canada’s GDP and they supported 158,300 jobs. Ontario accounts for the largest share of contributions to GDP (50.1%) and jobs (47.2%). Short-term students contributed $770.1 million to Canada’s GDP and supported 10,600 jobs.
- Based on sensitivity analyses, we estimate that a 10% increase in spending by international students in 2016 would translate into $17.1 billion in student expenditure, a $14.1 billion contribution to GDP and support for 185,700 jobs. Similarly a decrease of 10% in spending by international students in 2016 would result in a $13.9 billion decrease in total student expenditures, bring down the GDP contribution by $11.4 billion, and decrease the number of jobs supported to about 150,800.
 It should be noted that Statistics Canada reports that the export value of Canada’s education-related travel services was $5.827 billion in 2015. The analysis in this report built on this number by exploring and adding other areas of export revenues, such as K-12 students and Languages Canada’s short-term students.
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