Economic Impact of International Education in Canada – 2016 Update
Table of Contents
- Executive Summary
- 1. Introduction
- 2. Recent Trends in International Student Mobility and Economic Impact
- 3. Data Sources and Methodology
- 4. Assessing the Economic Impact of International Students in Canada
- 4.1. Overall Spending in 2014
- 4.2. Economic Impact
- 4.2.1. Direct Economic Impact
- 4.2.2. Direct and Indirect Economic Impact
- 4.2.3. Total Economic Impact (Direct, Indirect, and Induced)
- 4.2.4. Government Tax Revenue
- 4.3. International Students and Canada’s Export
- 5. Conclusions and Recommendations
- Appendix 1 – Detailed Explanation of Data Sources and Adjustments
- Appendix 2 – Scenario Analysis: Assuming Lower Student Expenditure
- Appendix 3 – Scenario Analysis: Assuming Higher Student Expenditure
- Appendix 4 – Data Tables
- Appendix 5 – Reconciliation of the Study Estimates with Valuation by Statistics Canada
Appendix 1 - Detailed Explanation of Data Sources and Adjustments
As noted in Section 3, Data Sources and Methodology, a comprehensive data set representing “internationally mobile students” in Canada cannot be found in existing data sources. Therefore, we sought an alternate data set, the number of “foreign students” as a proxy to represent international students in Canada.
IRCC 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 IRCC’s 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 in IRCC’s dataset.
- Secondary or less: includes equivalent of High school/Secondary, elementary – grade, CEGEP.
- Post-Secondary: which is further divided into
- College Education
- University Education
- Unspecified Post-Secondary - the level of study in this case was not mentioned
- Quebec Programs: this includes PTC/TCST/DVS/AVS (Pre-work Training Certificates/Training Certificate for a Semi-skilled Trade/Diploma of Vocational Studies/Attestation of Vocational Specialization.
- Residents and Interns: unique to medical profession.
- Other Studies: these set of data could not be defined based on the available data. Other Studies, amongst other levels, could include the spouses and children of international students should they also hold a study permit themselves.
The IRCC data therefore allows 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 levels of study.
One limitation of using the IRCC 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.
One of the adjustments we have made includes excluding a portion of student permit holders in the “secondary or less” category which is assumed to be children whose parents are enrolled in some post-secondary education program. The adjustment is based on industry information as reported in the 2015 ICG report for CAPS-I.
Then these students have been further allocated to studying in the public or independent K-12 system based on industry intelligence.
The allocation of student permit holders in the post-secondary system into finer categories of trade, college, under-graduate, master’s, PhD’s, and other type of programs is based on IRCC information.
Further allocation of registration status by full-time and part-time study for each type of students has been based on Statistics Canada’s CANSIM data series (Table 477-0019).
Finally, another important source of international students that is not covered in the IRCC 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. In this regard, Languages Canada collects the data that is useful for our purposes.
Languages Canada administers an annual survey with its member schools to collect data on topics such as the source of students, immigration status, the length of study, average weekly spending incurred by students, and other variables. At the advice of Languages Canada, we have sought data related to international students studying in its private membership schools only, as the number of those studying in its public membership schools would have been represented in IRCC’s dataset.
We have made further adjustments to calculate average number of student-weeks for students studying for up to six months, in each province/territory. This is summarized as follows:
|Short term students||Number of Students||Number of Student Weeks||Average Number of Weeks|
|Newfoundland and Labrador||0||0||0|
|Prince Edward Island||270||1,417||5.2|
Source: Languages Canada with adjustments by RKA
Tuition and Fees
For tuition and other fees at the K-12 level, we will rely upon information published in the CAPS-I report. Note that these are based on tuition and fees in a school year (10 months). Tuition and fees in private schools can be substantially higher. In this regard we have also used information available from the CAPS-I report to calculate average annual tuition and fees for private school international students.
Detailed tuition and fees for full-time university level international students for each of the provinces are available from Statistics Canada’s annual Tuition and Living Accommodation Costs (TLAC) survey. Note that no data is available from the TLAC for the Territories.
In deriving student tuition and fees in the four levels of study other than “secondary or less” (i.e., Post-Secondary which is further divided into trade/college, university, other post-secondary; Quebec programs; Residents and Interns; and other), we make the following assumptions:
- University - We have applied separate undergraduate and graduate tuition values from the TLAC to full-time undergraduate students and students in master’s/PhD programs.
Part-time students are assumed to take a 50% course load for the purposes of calculation.
In addition to tuition, we have included “Additional Fees” which represent compulsory fees universities imposed on both domestic and international students, such as facility fees, society fees, health and dental (for international students only) fees, student pass fees in some cases, and others. We also make an allowance of $1,200 per academic year for books/tools/materials.
Tuition and fees are for an academic year (i.e., eight months).
- Trade/College, Quebec Programs and Other Post-Secondary - For full-time tuition, we apply a factor of 75% to the average university undergraduate tuition in each province. The factor of 75% is an approximation, and based on web research conducted for selected college programs in each province to see how they compare to full-time tuition of an undergraduate program.
For part time students, we have assumed a 50% course load.
We also assume that international students in “Trade”, “College”, “Quebec Programs” and “Other Post-Secondary” levels of study pay on average the same percentage (75%) of “Additional Fees” as university level international students. We also make the same allowance for books/equipment requirement ($1,200) in a year.
For college international students in the Territories, tuition and fees information has been derived from colleges’ websites.
- Residents and Interns – since these are students in medical programs, we have applied the average of the tuition at undergrad and graduate level of medicine studies across all provinces.
- Other - since we don’t have any detailed information on the nature of their study, we assume that these students may pay no or little tuition and fees. However, students in this category will still incur living expenses.
For short-term international students, estimates of tuition and fees on a weekly basis have been derived from information provided by Languages Canada.
- Secondary or Less - we have assumed that a student in the public school system pays an average home-stay cost of $750 per month for a 10-month period. Essentially we are assuming that students return to their home countries for summer vacation. For those in the private independent school system, we have assumed that ¾ of these students pay an average home-stay cost of $750 per month, and ¼ of these students are on full board with the school they attend.
- University – for full time students, we use Statistics Canada’s annual Tuition and Living Accommodation Costs (TLAC) survey data (to calculate the average costs of on-campus room and meal expenses for an eight months period for students in the undergraduate, master’s and PhD programs). Then, values have been scaled up to full year (12 months) values. That is, we assume that international students in the university category stay in the country for 12 months, even though they may only take two semesters of courses.
For part-time students, we have assumed a monthly home-stay cost of $750, for 12 months in a year.
We also make allowances for transportation costs for students staying in different provinces and territories. We have applied data from Statistics Canada’s Survey of Household Spending (SHS), detailing household spending on public transportation, by province and territory, in 2013. The values we use refer to the average expenditure per household using public transportation (households with or without using public transit). Values in 2013 dollars are adjusted for inflation between 2013 and 2014.
- For students in other levels of study (trade/college, other post-secondary, Quebec programs, residents and interns, and other), we have assumed that they spend the equivalent of what university students have to pay in an academic year (average room and meal and transportation costs).
Average costs of meals and accommodation for colleges in the Territories have been derived in the same way as in provinces. Estimate of transportation cost has been calculated as the average of provincial transportation cost.
In addition to basic living costs as presented above, we make an allowance of $2,500 per student per year ($1,500 for K-12 students) for discretionary expenses (such as eating out, recreational activities, and entertaining).
For each province and territory, in each level of study, the formula to calculate gross expenditure is as follows:
Estimated number of students in that level of study x sum of (average tuition and additional fees, books, average room and meals, average transportation cost, average discretionary spending) per year = Gross Expenditure in one year for International Students in the level of study
Scholarships and Awards
In this study, in order to calculate net economic benefits brought by international students in the host country, we take into account any financial assistance international students received from the Canadian federal or provincial governments, as well as from institutions.
We have conducted extensive web research of financial statements of universities and colleges across all provinces in order to find such information, but to little avail. We estimate that the support from universities/colleges themselves to international students is probably no more than 1% of the student tuition collected. We have also been informed that annually the federal government grants $27 million to support international students. As such we have used a factor equivalent to 1% of international student tuition and fees plus $27 million to represent the deduction. This factor is applied to students in the trade/college, undergraduate, master’s, PhD, and the medical residents programs only.
Additional Tourism Benefits from Visiting Friends and Family Members
One additional benefit of international education to the host country is the increased tourism activities due to family and friends visiting the host country while students remain in the country.
Unfortunately, this area still remains to be a challenge with respect to data availability. We don’t have a good handle on the number of family and friends visiting international students during their stay in Canada. For the purposes of this estimation, we have applied a similar methodology to the one used in an Australian study to derive the estimated number of family and friends of international students who participate in tourism activities.
The methodology in Australian Council for Private Education and Training (ACPET) 2013 study was based on research work conducted by Tourism Research Australia. The study shows that for every 10 formal visiting student (defined as those whose main purpose of visiting Australia is education), there are an additional five family and friend visitors to the country. For those informal visiting students (defined as those whose main purpose of visiting Australia was not education but still studied a course while on the trip), every 10 bring an additional 2 visitors.
We have assumed, in our current study, that for every 10 long-term international students, there would have been five family and/or friends visiting Canada during the year, and that for every 10 short-term international students, there would have been two family and/or friends visiting Canada during the year.
- Date Modified: