Economic Impact of International Education in Canada – 2016 Update
Global Affairs Canada - Roslyn Kunin & Associates, Inc. - July 2016
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
Existing literature clearly indicates that there is positive value associated with international students coming and studying in Canada. Roslyn Kunin and Associates (RKA) was commissioned by the Department of Foreign Affairs, Trade and Development Canada (currently Global Affairs Canada) to conduct this study to assess the economic impact of international students studying in Canada in 2014 on the Canadian economy. The current study updates the 2012 study of the same purpose with more recent data and an improved estimation approach.
The economic benefit of international students studying in Canada is substantial. We estimate that in 2014, international students in Canada spent around $11.4 billion on tuition, accommodation, and discretionary spending.
The results of the study are summarized below.
- After accounting for the Canadian scholarships and bursaries, total annual expenditure of international students including their visiting families and friends, contributed almost $11.4 billion to economic activities in Canada in 2014. This translates to $9.3 billion in GDP contribution to the Canadian economy. This $9.3 billion figure includes $6.7 billion contribution to GDP in direct value-added associated with tuition, food, and accommodation, and $2.6 billion in indirect value-added associated with firms supplying goods and services to the education services and other sectors.
- The amount of overall annual spending by international students translates to 122,700 jobs (equivalent to 104,100 FTE) supported in the Canadian economy.
- Because international student expenditure represents revenue for goods and services from overseas, this representation of international education services is an export from Canada. Canada’s international education services ($11.4 billion) amount to 11% of Canada’s total service exports to the world, are equivalent to 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 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.
- Sensitivity analysis provides the upper and lower bands of economic impacts resulting from different levels of student spending.
- Sensitivity analysis with respect to 10% higher student expenditure: a 10% increase in spending by international students in 2014 translates into $12.5 billion student expenditure, $10.2 billion contribution to GDP, and support for 134,950 jobs.
- Sensitivity analysis with respect to 14% lower student expenditure: This scenario looks at a decrease of 14% in spending by the international students in Canada as a result of a much higher value for the scholarships and bursaries offered by the governments and institutions in Canada, as well as a much lower value for spending by visiting family and friends. A decrease in total student expenditure to $9.8 billion brings down the GDP contribution of $8.1 billion, and the number of jobs supported in the range of 106,000.
Key results of the study are summarized in the following tables.
|All Students||Total Annual Spending($millions)|
|Newfoundland and Labrador||2,261||$48.2|
|Prince Edward Island||1,356||$37.5|
|Output||GDP at basic price||Labour Income||Employment (jobs)|
|Newfoundland and Labrador||$71.1||$43.5||$22.3||511|
|Prince Edward Island||$44.4||$26.4||$15.8||389|
|Direct||Direct and Indirect||Direct, indirect & Induced|
|Jobs - FTE||74,500||104,100||129,400|
|Jobs (incl. f/t, p/t, temporary)||89,900||122,700||152,700|
|14% Lower Expenditure||Base Case||10% Higher Expenditure|
|Jobs (incl. f/t, p/t, temporary)||106,000||122,700||134,950|
|Total Annual Spending – All International Students||$11.372 billion||Students from Top Ten Source Countries||$8.429 billion|
|Canada’s Export in Services||$95.744 billion||To Top Ten Source Countries||$62.652 billion|
|International Student Spending as % of All Export in Services||11%||Students from Top Ten Source Countries||13%|
|Canada’s Export in Merchandise||$525.0 billion||To Top Ten Source Countries||$453.424 billion|
|International Student Spending as % of All Export in Merchandise||2.2%||Students from Top Ten Source Countries||1.9%|
View/download the complete report “Economic Impact of International Education in Canada - 2016 Update”
 It is noted that Statistics Canada reports that the export value of Canada’s education related travel services was $4.971 billion in 2014. The analysis in this report builds on this number by exploring and adding other areas of export revenues, such as inclusion of K-12 students and Languages Canada short term students.
 Total number of students includes 330,706 “long-term” and 107,451 “short-term” students. It is noted that total number of long-term students reported here does not correspond to the figure reported in IRCC’s website pertaining to the number of international students with a valid permit on December 31st, 2014 (336,000), as we have made a number of adjustments to arrive at these values.
- Date Modified: