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ARCHIVED - Economic Impact of International Education in Canada - An Update
Table of Contents
- Executive Summary
- 1. Introduction
- 2. Methodology
- 3. Literature Review
- 4. Number of International Students in Canada
- 5. Student Expenditure
- 6. Assessing the Economic Impact of International Education in Canada
- 7. Additional Benefit from Tourism Activities
- 8. Canada’s Performance in the Global Market
- 9. Conclusions and Recommendations
- Appendix 1 Reconciliation of RKA Estimates with Valuation by Statistics Canada
- Appendix 2 Scenario Analysis
RKA’s methodology for the study on the economic impact of international education in Canada includes extensive secondary research involving literature review, collecting existing statistical data and information, as well as consulting with provincial and territorial education sector representatives, and representatives from organizations promoting and researching trends in international education in Canada and/or provinces.
When we first conducted the research for this project in 2009, one of our first thoughts was to go to national organizations representing large groups of private and public schools and institutions. What became evident very quickly is that these organizations (except for Languages Canada) do not collect data on international students from their member institutions.
While some organizations (BC Progress Board, Conference Board of Canada and others) completed reports on the economic impact of international education, two things became apparent when following up with them on these studies. First, they have not kept up with the research, so much of the work is out of date, and second, they ran into many of the same problems that we did.
In this section, we will describe the different sources of data that are available, the ones we use for the project, and any limitation with the data sets. We will also point out the differences in data sources and methodology between our estimates and those adopted by Statistics Canada in its estimate of Canada's trade in international education services.
One of the main purposes of this study is to understand the number of international students in each province and territory and in different levels of study – public or private, in the K-12 system, college level, undergraduate and graduate students in the university system. Also, we need to determine the number of international students studying in professional and language training programs.
We have not found data that was consistently defined or reported data on all students. Statistics Canada, in its Post-Secondary Information System, collects data on international student enrollment at the college and university levels (including breakdown of undergraduate and graduate levels) by field of study or by program level. However, the colleges and universities that are covered in the Statistics Canada survey are essentially all in the public system, and as such we did not use enrollment numbers from this source as we were not able to gather information on those international students in the private post-secondary system. Also, university level data is available for up to 2008/09, while college data is available for up to 2005 only.
On the number of international students in the K-12 system, no data is readily available from Statistics Canada for each of the provinces and territories.
Another way of getting information on the number of international students in the country is from data published by Citizenship and Immigration Canada (CIC). As international students need to obtain a study permit before arriving in Canada to pursue education and training for a period longer than six months, CIC’s data allows us to know how many holders of study permits are in each of the provinces and territories at a given time.
CIC defines foreign students as “Temporary residents who entered Canada mainly to study and have been issued a study permit (with or without other types of permits). A study permit is an official document issued by an officer that allows someone who is not a Canadian citizen or a permanent resident to study in Canada. In general, a study permit is not needed for any program of study that is six months or less. For statistical purposes, a temporary resident is designated as a foreign student on the basis of our determination of his or her “yearly status” – the main reason for which the person has been authorized to enter and stay temporarily in Canada during the year of observation. Foreign students exclude temporary residents who have been issued a study permit but who entered Canada mainly for reasons other than study.”
Five levels of study are shown for foreign students.
- Secondary or less: primary or secondary educational institutions in Canada.
- Trade: vocational trade at non-university educational institutions in Canada (such as technical and vocational institutions, CEGEPs and colleges).
- University: undergraduate, postgraduate (master's and doctoral) and other studies at universities in Canada.
- Other post-secondary: post-secondary level of study, not at the university or trade level, including language institutions, private institutions and university qualifying programs.
- Other: foreign students not classified in any of the above levels of study.
The CIC data will therefore allow us to use the number of study permit holders as a proxy for the number of international students at a given time in a year. It also allows for distinction between broad level of study. For all these reasons, we have relied upon CIC data for analytical purposes.
One limitation of using the CIC data set to represent the number of international students is that the actual number of permit holders registering in a Canadian institution may be smaller than the number of permits issued, due to the fact that some permit holders may not be able to, or have chosen not to, enroll in an education program.
Another limitation of this data set is that we would have assumed that all study permit holders have in fact registered in a program on a full time basis, which may not be necessarily correct. In Appendix 2, we assess a scenario in which not all CIC study permit holders are actively pursuing formal training in order to evaluate how this assumption affects our economic impact estimates.
Finally, another important source of international students that is not covered in the CIC data is the number of such students who study in Canada for periods shorter than six months, as they do not require a study permit to enter the country. We have approached organizations whose members are in the business of providing short-term vocational training to the public, yet, as we mentioned earlier in this section, only Languages Canada collects the data that is useful for our purposes.
Languages Canada is Canada’s premier language organization representing its two official languages, English and French. Membership is limited to schools which meet the rigorous standards of the association and who are committed to upholding them. Currently there are over 165 member programs across the country, including universities, colleges, and private institutions. The association is not-for-profit and sector driven. Quality assurance is a critical element of Languages Canada and all member schools are required to be accredited under one internationally recognized and comprehensive scheme.
In the rest of the report, we will define international students as those from the two sets of data available to us. Long-term students refer to the ones that are represented by the CIC data, while short-term students refer to the ones that are students pursuing language training programs of shorter than six-month duration in institutions with Languages Canada membership.
Comparison of RKA's Data Sources and Methodology and Statistics Canada's Data Sources and Methodology in Estimation of Canada's Trade in International Education Services
Statistics Canada also provides an annual estimate of the value of Canada's trade in international education services, and the description of its data sources and methodology is found in Statistics Canada's Balance of International Payments and International Investment Position: Concepts, Sources, Methods and Products (Statistics Canada 2000). In principal, both our current study and Statistics Canada's valuation of Canada's international education services go beyond capturing tuition and fees expenditure incurred by international students, by including estimates of goods and services purchased by international students while they stay in Canada.
However, the results from our current study and Statistics Canada's valuation are different, as the data sources and methodology in evaluation are different. In the discussion that follows, we outline these differences.
The difference between Statistics Canada’s estimates of education services exports - $3.51 billion – and our estimate of the expenditures of international students in Canada - $7.71 billion – is substantial. Appendix 1 lays out the trajectory explaining the differences between the two evaluations, starting from the Statistics Canada figure and arriving at our estimate.
Data Sources and Methodology on Number of International Students
While Statistics Canada’s valuation of international education services includes full time university and college students in the public system, the scope of students included in our current study is much broader. We have included international students in public and private colleges and universities who pursue either full-time or part-time study. In addition, we have included international students studying in the K-12 system, as well as those who pursue short-term language training.
Because our inclusion of the type of international students is broader than that in Statistics Canada’s valuation, we have resorted to data sources different from those adopted by Statistics Canada. Specifically, given that international students pursuing study in Canada for longer than six months are required to hold a valid Study Permit before they enter the country, and are required to do so every year during their stay in Canada, we have used data pertaining to the number of study permit holders by level of study to represent the number of international students in Canada in five levels of study: secondary or less, trade, university, other post-secondary, and other. For students pursuing short-term language training (those who do not require a study permit), we have relied upon enrollment data provided by Languages Canada, which is Canada’s premium language training organization and whose member schools are required to be accredited under one internationally recognized and comprehensive scheme. For these reasons, we believe that our scope of the type of international students is more comprehensive and provides a more complete representation of the number of international students in Canada.
Data Sources and Methodology on Student Expenditure
On tuition and fees applicable to university international students, both Statistics Canada and our study rely on data from the Tuition and Living Accommodation Costs (TLAC) survey pertaining to the weighted average tuition and fees. Tuition and fees applicable to other post-secondary international students in our study have been derived based on TLAC (see Section 5.1.1 for details). While tuition and fees from the TLAC is based on an eight-month period, we have adjusted these tuition and fees to account for the amount incurred in a 12-month period as some students take credit courses in summer months.
On living expenses such as accommodation, food, and transportation applicable to international students at the post-secondary level, both Statistics Canada’s and our estimates are based on the TLAC survey and the Survey of Household Spending (SHS). Although the TLAC survey reports expenses for an eight-month period, we have adjusted the amount to account for a 12-month period given that international students are less likely to leave the country even in summer months.
For tuition and fees related to students in the K-12 system, we have relied upon information we have gathered from provincial education ministries, as well as various websites publishing information for potential international students studying in specific provinces in Canada. Tuition and fees for K-12 students have been calculated for ten months in a year. Similarly, we have used information from these sources to calculate average costs for accommodation and food for international students in the K-12 system for 10 months in a year. We have not included transportation costs for K-12 students assuming that their host families are responsible for transporting them to school.
For tuition and fees, as well as living expenses, applicable to international students pursuing short-term language training in Canada, we have relied upon Languages Canada’s survey of its own membership schools in each province (or groups of provinces) on their students’ average weekly expenses in these categories. We have applied these average weekly expense amounts in different provinces to average number of student weeks by province to arrive at the total of student expenditure in short-term language training.
One category of living expenses which we have included in our study, but not in Statistics Canada’s valuation of international education services, is discretional spending. We have made an allowance of $2,500 per year for post-secondary students, and $1,500 per year for K-12 students, for activities such as recreation and entertainment and any other miscellaneous discretional spending. While this is not based on any survey of international students, we have included such an amount based on student budgeting information gathered from websites.
In summary, our study covers a broader student population and therefore more expense categories. We have taken care to avoid double counting, and have used data sources that are reliable and creditable, and therefore meaningful, to provide a comprehensive and complete picture of the level of expenditure brought by international students while they are in Canada.
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