Economic Impact of International Education in Canada – 2016 Update
4. Assessing the Economic Impact of International Students in Canada
The economic impact assessment of international education includes first collecting data and information on the number of international students by level of study, and on the type of student expenditure incurred. These values are adjusted where necessary to arrive at the amount of overall spending by international students on educational fees and living expenditure. Thereafter, these spending values are applied to Statistics Canada’s expenditure model to generate estimates of international education’s impact on Canada’s gross output, GDP, employment, and tax revenues. In this section, we present the resulting estimates and analysis.
4.1. Overall Spending in 2014
In this sub-section, we combine estimated number of international students in Canada by level of study in each province and territory and estimates on educational and living costs to arrive at an estimation of total expenditure by international students while they study in Canada. All student numbers and expenditure values capture the impact in 2014.
Table 1 shows the total number of international students studying in Canada, with provincial and territorial distribution. The numbers have also been broken down to show students that are considered “long-term” and those who are considered “short-term”. [23]
| Long Term Students | Short Term Students | All Students | |
|---|---|---|---|
| Newfoundland and Labrador | 2,261 | 0 | 2,261 |
| Prince Edward Island | 1,086 | 270 | 1,356 |
| Nova Scotia | 9,560 | 2,332 | 11,892 |
| New Brunswick | 4,053 | 101 | 4,154 |
| Quebec | 47,604 | 7,765 | 55,369 |
| Ontario | 141,366 | 46,223 | 187,589 |
| Manitoba | 7,794 | 591 | 8,385 |
| Saskatchewan | 4,904 | 1,504 | 6,408 |
| Alberta | 16,623 | 6,604 | 23,227 |
| British Columbia | 95,387 | 42,059 | 137,446 |
| Yukon | 29 | 0 | 29 |
| Northwest Territories | 35 | 0 | 35 |
| Nunavut | 4 | 0 | 4 |
| Canada [24] | 330,706 | 107,451 | 438,157 |
Source: Immigration, Refugees and Citizenship Canada and Languages Canada, with adjustments by RKA
As can be seen in Figure 2 which shows the distribution of the total number of international students in Canada by province/territory, Ontario has the largest share of the international student population. The next province with the second largest share of international student population is BC, accounting for 31.4% of the total. When compared with BC’s population share in Canada, its share in the international student service market is much higher. Quebec has the third largest market share in the international education market, accounting for 12.6% of the number of students.
Figure 2 - Distribution of the Total Number of International Students in Canada, by Province/Territory, 2014
View accessible version of figure 2
Source: Data from IRCC and Languages Canada with adjustments by RKA
Table 2 shows the annual spending incurred by these international students, including the additional tourism activities associated with visiting family and friends. [25] The data sources and adjustment to raw data to derive estimates of international student expenditure are detailed in Appendix 1.
| Long Term Students | Short Term Students | All Students | |
|---|---|---|---|
| Newfoundland and Labrador | $48.2 | $0.0 | $48.2 |
| Prince Edward Island | $36.4 | $1.1 | $37.5 |
| Nova Scotia | $299.0 | $25.5 | $324.5 |
| New Brunswick | $114.7 | $1.1 | $115.7 |
| Quebec | $1,455.9 | $60.7 | $1,516.6 |
| Ontario | $4,996.9 | $411.3 | $5,408.1 |
| Manitoba | $214.5 | $6.2 | $220.8 |
| Saskatchewan | $136.0 | $15.0 | $151.0 |
| Alberta | $502.6 | $65.2 | $567.7 |
| British Columbia | $2,647.2 | $333.4 | $2,980.6 |
| Yukon | $0.5 | $0.0 | $0.5 |
| Northwest Territories | $0.6 | $0.0 | $0.6 |
| Nunavut | $0.1 | $0.0 | $0.1 |
| Canada | $10,452.6 | $919.4 | $11,371.9 |
Source: detailed data sources as reported in Appendix 1, with adjustments by RKA
In total almost $11.4 billion worth of expenditure was put into the Canadian economy in 2014 from international students across the country.
Figure 3 illustrates the distribution of the total international student expenditure in 2014 by province/territory. In comparison with Figure 2, Ontario again accounts for the largest share of total student expenditure of all provinces and territories in Canada, followed by BC. Data in this Figure also indicates that Ontario accounts for an even higher expenditure share than its student share, which is reflective of the tuition costs of those students studying in university programs. [27]
Figure 3 - Distribution of the Total International Student Expenditure in Canada, by Province/Territory, 2014
View accessible version of figure 3
Source: various data sources detailed in Appendix 1 with adjustments by RKA
The number of students from China accounted for about a third of the total number of the long-term students. Students from the top three source countries (China, India and South Korea) in fact accounted for half of all long-term students.
Brazil and Japan are the two top countries for students studying in short-term language training programs in Canada. Students from the top ten source countries accounted for over 90% of all such students. Detailed information on source countries can be found in Appendix 4.
For long-term students, the average total expenditure per international student (including tuition fees, other fees, books, room and meal, transportation, and discretionary spending, but excluding spending from visiting family and friends) per year in Canada in different levels of study is presented below. This information can be derived from Tables 28 through 32, along with student numbers in Table 22 in Appendix 4. [28]
- K-12: $22,865
- College/Trade/Quebec Programs: $33,105
- University/Other University/Residency & Internship: $33,892
- Other Post-secondary: $32,130
- Other: $15,672
- All Levels of Study: $31,171
For short-term students, average total expenditure per student week was $832.
4.2. Economic Impact
As we pointed out in the methodology section, when a person spends on a product (goods and/or services), that amount of expense creates a direct requirement for the production of that product. The economic impact, however, does not end there. The increased production of this product leads to increased production of all the intermediate goods and services that are used to make this product, which in turn generates more demand for other goods and services that are used to produce these intermediate products. As demand rises, workers are able to earn a higher wage, and they sometimes decide to spend a portion of their extra earnings to purchase more goods and services. As such, an initial demand for a product creates a chain effect down the production process.
Although we present all three types of economic impact values associated with international students spending in this subsection, it should be noted that the report focuses on the direct and indirect impacts as representing a complete picture of economic impacts. It is generally acknowledged that direct impacts alone are incomplete and the total impact may sometime overestimate the impacts of initial spending. The three types of impacts are described briefly here.
- Direct impact measures the increase in industrial output and the increase in an industry’s labour force from the inflow of international students and their spending on a yearly basis.
- Indirect impact measures the change in industrial output and employment demand in sectors that supply goods and services to those directly impacted sectors in the economy.
- Induced impact measures the changes in output and employment demand over all sectors of the economy as a result of an income increase in households impacted both directly and indirectly.
When we compare international education with other sectors in the economy, GDP, employment and export values are the key variables of interest. Other variables that may be of interest to readers include output, labour income and tax revenues. The results are presented for the aggregate of all international students, as well as the long term and short term students separately.
To produce these impact values, we used Statistics Canada’s economic impacts simulation model to estimate international students’ contribution to each province’s GDP and employment. Also reported are the values of output and labour income. [29]
It should be noted that in previous studies on valuation of the economic impact of international student spending in Canada, Statistics Canada’s output multipliers were used. [30] In this study, we used exogenous shock values on final consumption expenditures from Statistics Canada’s Input-Output economic impact simulation model. This is in recognition of the fact that expenditures are measured at purchaser’s prices (meaning they include margins such as transportation, wholesale, retail and taxes) whereas output is measured at basic prices. As well, expenditures may be supplied through imports. As such, all expenditures for goods and services must remove all taxes on products before an output multiplier can be applied.
The following sections present each type of impact (direct, combined direct and indirect, and total impact) first for the aggregate of all students, followed by the analysis for the long term, then short term students.
4.2.1. Direct Economic Impact
In this subsection, we present the values of direct economic impact associated with total annual spending by international students, including spending by their visiting families and friends.
It should be noted that direct economic impact on GDP, employment, and other impact variables is not attributed exclusively to the educational services. In fact, total expenditures in each province and territory have been allocated to most industries, [31] with the majority in universities and government education services; retail trade; transit and ground passenger transportation; finance, insurance, real estate and rental and leasing; food and beverage services; and arts, entertainment and recreation.
4.2.1.1. Aggregate for All Students
Table 3 below presents the results of direct economic impact associated with all students in Canada, by province and territory, in 2014.
| Annual Expenditure | Output | GDP | Labour Income | Employment [32] | |
|---|---|---|---|---|---|
| Newfoundland and Labrador | $48.2 | $42.7 | $26.2 | $15.6 | 382 |
| Prince Edward Island | $37.5 | $31.4 | $19.5 | $11.8 | 273 |
| Nova Scotia | $324.5 | $286.8 | $186.8 | $107.8 | 2,422 |
| New Brunswick | $115.7 | $110.4 | $68.7 | $37.8 | 892 |
| Quebec | $1,516.6 | $1,446.6 | $880.6 | $547.0 | 14,036 |
| Ontario | $5,408.1 | $4,898.1 | $3,261.7 | $1,878.3 | 39,211 |
| Manitoba | $220.8 | $204.4 | $128.9 | $74.1 | 1,717 |
| Saskatchewan | $151.0 | $135.2 | $82.4 | $48.6 | 1,061 |
| Alberta | $567.7 | $620.5 | $389.0 | $240.5 | 4,750 |
| British Columbia | $2,980.6 | $2,503.9 | $1,696.8 | $1,048.6 | 25,112 |
| Yukon | $0.5 | $1.1 | $0.6 | $0.4 | 10 |
| Northwest Territories | $0.6 | $1.5 | $0.7 | $0.4 | 7 |
| Nunavut | $0.1 | $0.6 | $0.3 | $0.2 | 4 |
| Canada | $11,371.9 | $10,283.3 | $6,742.4 | $4,011.0 | 89,877 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
Total GDP contribution of all student expenditures incurred amounted to over $6.7 billion in 2014 in Canada. By comparison, the GDP contribution of the whole Educational Services sector in Canada was $94.829 billion (estimated value in 2014). [33]
The overall educational services sector in Canada employed about 1,236,900 persons in 2014.
4.2.1.2. Long Term Students
In this and the next subsection, we present the economic impact values separately for long-term students and short-term students.
In Table 4 that follows, we provide the estimates of the total expenditure made by international students who stay in Canada for at least six months, and the corresponding contribution to the province / territory’s output, GDP, employment, and labour income.
| Annual Expenditure | Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|---|
| Newfoundland and Labrador | $48.2 | $41.9 | $25.8 | $15.3 | 375 |
| Prince Edward Island | $36.4 | $30.5 | $18.9 | $11.4 | 263 |
| Nova Scotia | $299.0 | $267.3 | $174.1 | $100.0 | 2,232 |
| New Brunswick | $114.7 | $107.7 | $67.2 | $36.8 | 870 |
| Quebec | $1,455.9 | $1,381.7 | $842.3 | $523.9 | 13,445 |
| Ontario | $4,996.9 | $4,550.8 | $3,038.2 | $1,746.4 | 36,292 |
| Manitoba | $214.5 | $196.8 | $124.5 | $71.4 | 1,652 |
| Saskatchewan | $136.0 | $123.5 | $75.2 | $44.0 | 955 |
| Alberta | $502.6 | $558.5 | $350.0 | $216.5 | 4,244 |
| British Columbia | $2,647.2 | $2,249.6 | $1,526.7 | $942.3 | 22,425 |
| Yukon | $0.5 | $1.0 | $0.6 | $0.3 | 9 |
| Northwest Territories | $0.6 | $1.4 | $0.7 | $0.4 | 6 |
| Nunavut | $0.0 | $0.5 | $0.3 | $0.1 | 3 |
| Canada | $10,452.6 | $9,511.1 | $6,244.6 | $3,708.8 | 82,773 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
The values show that total GDP contribution of student expenditure incurred by long-term students amounted to over $6.2 billion in 2014 in Canada. In employment, international education services supported almost 82,800 (equivalent to 68,560 FTE) jobs in Canada.
4.2.1.3. Languages Canada Short Term Students
When we take into account the spending of short-term language students studying with Languages Canada’s private member schools, these international students contributed an additional $919.4 million in 2014 in total spending to the Canadian economy. This is equivalent to about $497.7 million in GDP and supports 7,104 (equivalent to 5,901 FTE) jobs. This is represented in Table 5.
| Annual Expenditure | Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|---|
| Newfoundland and Labrador | $0.0 | $0.7 | $0.4 | $0.3 | 6 |
| Prince Edward Island | $1.1 | $1.0 | $0.6 | $0.3 | 9 |
| Nova Scotia | $25.5 | $19.5 | $12.7 | $7.8 | 190 |
| New Brunswick | $1.1 | $2.7 | $1.5 | $1.0 | 22 |
| Quebec | $60.7 | $64.9 | $38.2 | $23.1 | 592 |
| Ontario | $411.3 | $347.4 | $223.5 | $132.0 | 2,920 |
| Manitoba | $6.2 | $7.6 | $4.4 | $2.8 | 65 |
| Saskatchewan | $15.0 | $11.7 | $7.2 | $4.5 | 106 |
| Alberta | $65.2 | $62.0 | $38.9 | $24.0 | 506 |
| British Columbia | $333.4 | $254.3 | $170.0 | $106.3 | 2,686 |
| Yukon | $0.0 | $0.1 | $0.1 | $0.0 | 1 |
| Northwest Territories | $0.0 | $0.2 | $0.1 | $0.0 | 1 |
| Nunavut | $0.0 | $0.1 | $0.0 | $0.0 | 0 |
| Canada | $919.4 | $772.2 | $497.7 | $302.2 | 7,104 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
It is noted that even though annual student expenditure was zero for the Province of Newfoundland and Labrador and the three Territories as there were no students reported in 2014, there were impact values in output, GDP, labour income and employment because of interprovincial trade.
4.2.2. Direct and Indirect Economic Impact
This section presents both direct and indirect impacts of spending in 2014 by international students in Canada.
4.2.2.1. Aggregate for All Students
Table 6 below presents the results of direct and indirect economic impact associated with all international students and their spending in Canada, by province and territory, in 2014.
| Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|
| Newfoundland and Labrador | $71.1 | $43.5 | $22.3 | 511 |
| Prince Edward Island | $44.4 | $26.4 | $15.8 | 389 |
| Nova Scotia | $396.8 | $241.8 | $142.0 | 3,328 |
| New Brunswick | $180.1 | $97.9 | $55.5 | 1,130 |
| Quebec | $2,301.3 | $1,312.0 | $797.9 | 19,704 |
| Ontario | $7,075.2 | $4,410.8 | $2,625.8 | 54,286 |
| Manitoba | $324.9 | $190.9 | $110.6 | 2,575 |
| Saskatchewan | $250.3 | $136.5 | $71.3 | 1,624 |
| Alberta | $1,192.0 | $670.5 | $386.4 | 7,173 |
| British Columbia | $3,362.3 | $2,180.5 | $1,353.4 | 31,718 |
| Yukon | $2.3 | $1.3 | $0.8 | 18 |
| Northwest Territories | $6.1 | $3.2 | $1.1 | 17 |
| Nunavut | $1.4 | $0.9 | $0.4 | 6 |
| Canada | $15,208.3 | $9,315.6 | $5,583.4 | 122,680 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
Combined direct and indirect GDP contribution of all student expenditures incurred amounted to over $9.3 billion in 2014 in Canada, when we take into account not only the sectors directly impacted due to international student spending, but also the many other industries in the “supply-chain” of those directly impacted. Employment impact became 122,680 jobs (equivalent to 104,050 FTE jobs).
4.2.2.2. Long Term Students
In Table 7 that follows, we provide the estimates of the total expenditure made by international students who stay in Canada for at least six months, and the corresponding direct and indirect impacts on the province / territory’s output, GDP, employment, and labour income.
| Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|
| Newfoundland and Labrador | $69.0 | $42.2 | $21.8 | 500 |
| Prince Edward Island | $42.9 | $25.5 | $15.3 | 375 |
| Nova Scotia | $370.0 | $225.5 | $132.0 | 3,079 |
| New Brunswick | $174.0 | $95.0 | $53.7 | 1,289 |
| Quebec | $2,188.2 | $1,250.0 | $761.0 | 18,806 |
| Ontario | $6,562.5 | $4,100.1 | $2,437.9 | 50,251 |
| Manitoba | $310.0 | $182.1 | $105.7 | 2,461 |
| Saskatchewan | $229.5 | $125.1 | $64.9 | 1,474 |
| Alberta | $1,078.7 | $606.0 | $349.1 | 6,448 |
| British Columbia | $3,021.2 | $1,961.3 | $1,216.4 | 28,371 |
| Yukon | $2.1 | $1.2 | $0.7 | 16 |
| Northwest Territories | $5.5 | $3.0 | $1.0 | 15 |
| Nunavut | $1.3 | $0.8 | $0.4 | 6 |
| Canada | $14,055.1 | $8,617.8 | $5,159.9 | 113,093 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
The values show that combined direct and indirect GDP contribution of student expenditure incurred by long-term students amounted to over $8.6 billion in 2014 in Canada. In employment, international education services and the many in its supply chain supported 113,093 (equivalent to 95,900 FTE) jobs in Canada.
4.2.2.3. Languages Canada Short Term Students
When we take into account the spending of short-term language students studying with Languages Canada’s private member schools, these international students contributed, directly and indirectly, an additional $697.8 million in GDP and supported 8,134 jobs (or equivalent to 5,900 FTE jobs). This is represented in Table 8.
| Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|
| Newfoundland and Labrador | $2.1 | $1.3 | $0.6 | 10 |
| Prince Edward Island | $1.6 | $0.9 | $0.5 | 12 |
| Nova Scotia | $26.8 | $16.4 | $10.0 | 214 |
| New Brunswick | $6.0 | $2.9 | $1.8 | 37 |
| Quebec | $113.1 | $62.0 | $36.9 | 772 |
| Ontario | $512.8 | $310.8 | $187.9 | 3,439 |
| Manitoba | $14.9 | $8.0 | $4.9 | 100 |
| Saskatchewan | $20.7 | $11.5 | $6.4 | 131 |
| Alberta | $113.3 | $64.5 | $37.3 | 618 |
| British Columbia | $341.0 | $219.2 | $137.0 | 2,796 |
| Yukon | $0.2 | $0.1 | $0.1 | 2 |
| Northwest Territories | $0.6 | $0.3 | $0.1 | 1 |
| Nunavut | $0.1 | $0.1 | $0.0 | 1 |
| Canada | $1,153.2 | $697.8 | $423.5 | 8,134 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
4.2.3. Total Economic Impact (Direct, Indirect, and Induced)
In the previous sections we described direct as well as direct and indirect impacts. This section presents the total impact which includes direct, indirect, and induced impacts of expenditure by international students on the Canadian economy.
Induced impact measures the changes in the production of goods and services in response to consumer expenditures induced by households' incomes (i.e., wages) generated by the production of the direct and indirect requirements.
It is generally acknowledged that the total impact model where direct, indirect and induced impacts are combined, can be considered the upper bound of economic impacts because of the assumptions about labour incomes and consumer spending.
4.2.3.1. Aggregate for All Students
In Table 9, we have shown values of combined direct, indirect and induced impact international students bring to the provincial/territorial economy and the aggregate to Canada. The impact values apply to all international students. As expected, all indicators including GDP contribution and the jobs supported are significantly higher than those for the direct or combined direct and indirect impacts.
| Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|
| Newfoundland and Labrador | $92.0 | $57.0 | $27.3 | 628 |
| Prince Edward Island | $55.4 | $33.0 | $18.7 | 480 |
| Nova Scotia | $495.3 | $300.5 | $168.1 | 4,083 |
| New Brunswick | $232.8 | $124.7 | $68.2 | 1,685 |
| Quebec | $3,010.9 | $1,709.6 | $994.7 | 24,720 |
| Ontario | $9,172.1 | $5,624.2 | $3,224.6 | 67,703 |
| Manitoba | $425.5 | $248.5 | $137.8 | 3,302 |
| Saskatchewan | $328.9 | $178.8 | $87.7 | 2,057 |
| Alberta | $1,627.4 | $916.7 | $496.5 | 9,355 |
| British Columbia | $4,318.0 | $2,976.0 | $1,620.4 | 38,585 |
| Yukon | $3.6 | $2.1 | $1.2 | 28 |
| Northwest Territories | $9.3 | $5.1 | $1.7 | 27 |
| Nunavut | $2.3 | $1.4 | $0.7 | 10 |
| Canada | $19,773.5 | $11,997.6 | $6,847.6 | 152,664 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
4.2.3.2. Long Term Students
In Table 10, we have shown values of combined direct, indirect and induced impact international students bring to the provincial/territorial economy and the aggregate to Canada. The impact values apply to long-term international students.
| Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|
| Newfoundland and Labrador | $89.0 | $55.0 | $26.6 | 612 |
| Prince Edward Island | $53.3 | $31.9 | $18.0 | 462 |
| Nova Scotia | $461.5 | $280.0 | $156.2 | 3,781 |
| New Brunswick | $224.1 | $120.6 | $65.8 | 1,627 |
| Quebec | $2,857.9 | $1,625.9 | $946.8 | 23,549 |
| Ontario | $8,507.3 | $5,225.6 | $2,993.3 | 62,699 |
| Manitoba | $404.6 | $237.2 | $131.3 | 3,145 |
| Saskatchewan | $301.6 | $163.8 | $80.0 | 1,871 |
| Alberta | $1,475.4 | $830.1 | $449.4 | 8,434 |
| British Columbia | $3,882.3 | $2,515.5 | $1,457.1 | 34,560 |
| Yukon | $3.3 | $1.9 | $1.0 | 25 |
| Northwest Territories | $8.5 | $4.7 | $1.6 | 24 |
| Nunavut | $2.1 | $1.3 | $0.6 | 9 |
| Canada | $18,271.0 | $11,093.4 | $6,327.5 | 140,798 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
4.2.3.3. Languages Canada Short Term Students
In Table 11, we have shown values of combined direct, indirect and induced impact international students bring to the provincial/territorial economy and the aggregate to Canada. The impact values apply to short-term international students (i.e. students represented by those studying in Languages Canada’s private membership schools for up to six months in a given year).
| Output | GDP | Labour Income | Employment | |
|---|---|---|---|---|
| Newfoundland and Labrador | $3.1 | $1.9 | $0.8 | 16 |
| Prince Edward Island | $2.1 | $1.2 | $0.6 | 18 |
| Nova Scotia | $33.7 | $20.5 | $11.9 | 302 |
| New Brunswick | $8.6 | $4.1 | $2.4 | 58 |
| Quebec | $153.0 | $83.7 | $47.9 | 1,171 |
| Ontario | $664.8 | $398.6 | $231.3 | 5,004 |
| Manitoba | $20.9 | $11.3 | $6.5 | 157 |
| Saskatchewan | $27.3 | $15.0 | $7.8 | 186 |
| Alberta | $152.0 | $86.6 | $47.2 | 921 |
| British Columbia | $435.7 | $280.4 | $163.4 | 4,025 |
| Yukon | $0.3 | $0.2 | $0.1 | 3 |
| Northwest Territories | $0.8 | $0.4 | $0.1 | 2 |
| Nunavut | $0.2 | $0.1 | $0.1 | 1 |
| Canada | $1,502.5 | $904.2 | $520.0 | 11,865 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
4.2.4. Government Tax Revenue
In this sub-section, we further demonstrate the importance of international education with respect to its contribution to government revenue. Government revenue, as reported in Table 12 through Table 17, has also been derived by Statistics Canada’s customized tabulation using the provincial and territorial input-output model by calculating the amount of indirect taxes incurred in the process of producing outputs and services by an industry. It is noted that tax revenue impacts are estimated for the combined direct and indirect impacts and total (direct, indirect, and induced impacts) scenarios only.
Indirect taxes incurred in the process of producing outputs and services include both indirect taxes on production (such as property taxes) as well as indirect taxes on products (such as federal and provincial sales taxes). [34]
In addition to indirect taxes, another type of tax revenue generated is income taxes associated with labour income. [35] These are shown in Table 12 through Table 17 as well.
Direct and Indirect Tax Revenue Impact
| Indirect Taxes | Personal Income Taxes | Total Tax Revenue | |
|---|---|---|---|
| Newfoundland and Labrador | $5.1 | $3.7 | $8.8 |
| Prince Edward Island | $3.2 | $2.6 | $5.8 |
| Nova Scotia | $30.6 | $24.8 | $55.5 |
| New Brunswick | $12.9 | $9.2 | $22.1 |
| Quebec | $186.7 | $153.9 | $340.6 |
| Ontario | $569.0 | $465.9 | $1,034.9 |
| Manitoba | $24.6 | $18.7 | $43.3 |
| Saskatchewan | $13.9 | $11.3 | $25.2 |
| Alberta | $42.7 | $63.6 | $106.4 |
| British Columbia | $235.2 | $217.3 | $452.5 |
| Yukon | $0.1 | $0.1 | $0.2 |
| Northwest Territories | $0.1 | $0.2 | $0.3 |
| Nunavut | $0.0 | $0.1 | $0.1 |
| Canada | $1,124.2 | $971.3 | $2,095.6 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
Total tax revenue that has been contributed to all levels of government as a result of international student expenditure was almost $2.1 billion in Canada in 2014, when direct and indirect impacts are combined.
| Indirect Taxes | Personal Income Taxes | Total Tax Revenue | |
|---|---|---|---|
| Newfoundland and Labrador | $5.1 | $3.6 | $8.7 |
| Prince Edward Island | $3.0 | $2.5 | $5.5 |
| Nova Scotia | $27.7 | $23.1 | $50.8 |
| New Brunswick | $12.6 | $8.9 | $21.6 |
| Quebec | $177.3 | $146.8 | $324.1 |
| Ontario | $516.6 | $432.6 | $949.1 |
| Manitoba | $23.7 | $17.9 | $41.5 |
| Saskatchewan | $12.2 | $10.3 | $22.4 |
| Alberta | $36.6 | $57.5 | $94.1 |
| British Columbia | $200.5 | $195.3 | $395.7 |
| Yukon | $0.1 | $0.1 | $0.2 |
| Northwest Territories | $0.1 | $0.2 | $0.3 |
| Nunavut | $0.0 | $0.1 | $0.1 |
| Canada | $1,015.5 | $898.7 | $1,914.1 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
It is shown that total indirect tax and personal income revenue derived from long-term international students spending (due to direct and indirect economic activities) amounted to $1.9 billion in 2014.
| Indirect Taxes | Personal Income Taxes | Total Tax Revenue | |
|---|---|---|---|
| Newfoundland and Labrador | $0.0 | $0.1 | $0.1 |
| Prince Edward Island | $0.1 | $0.1 | $0.2 |
| Nova Scotia | $2.9 | $1.8 | $4.7 |
| New Brunswick | $0.2 | $0.3 | $0.5 |
| Quebec | $9.4 | $7.1 | $16.5 |
| Ontario | $52.5 | $33.3 | $85.8 |
| Manitoba | $1.0 | $0.8 | $1.8 |
| Saskatchewan | $1.7 | $1.0 | $2.7 |
| Alberta | $6.1 | $6.1 | $12.3 |
| British Columbia | $34.7 | $22.0 | $56.7 |
| Yukon | $0.0 | $0.0 | $0.0 |
| Northwest Territories | $0.0 | $0.0 | $0.0 |
| Nunavut | $0.0 | $0.0 | $0.0 |
| Canada | $108.8 | $72.7 | $181.5 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
Hence, $181.5 million tax revenue was generated, when direct and indirect economic impacts by short term international students were taken into account.
Total (Direct, Indirect, and Induced) Tax Revenue Impact
| Indirect Taxes | Personal Income Taxes | Total Tax Revenue | |
|---|---|---|---|
| Newfoundland and Labrador | $7.7 | $4.5 | $12.2 |
| Prince Edward Island | $4.9 | $3.1 | $8.0 |
| Nova Scotia | $47.2 | $29.4 | $76.5 |
| New Brunswick | $19.6 | $11.3 | $30.9 |
| Quebec | $286.7 | $191.8 | $478.5 |
| Ontario | $853.8 | $572.2 | $1,426.0 |
| Manitoba | $37.5 | $22.3 | $60.8 |
| Saskatchewan | $22.0 | $13.9 | $35.9 |
| Alberta | $75.7 | $81.8 | $157.5 |
| British Columbia | $367.5 | $260.2 | $627.7 |
| Yukon | $0.1 | $0.2 | $0.3 |
| Northwest Territories | $0.3 | $0.3 | $0.6 |
| Nunavut | $0.0 | $0.1 | $0.1 |
| Canada | $1,723.0 | $1,191.9 | $2,914.9 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
Total tax revenue that has been contributed to all levels of government as a result of international student expenditure was over $2.9 billion in Canada in 2014.
Table 16 Total Tax Revenue Impact (Direct, Indirect, and Induced) from Spending of International Students Studying for Longer than Six Months, by Province and Territory, 2014 ($millions)
| Indirect Taxes | Personal Income Taxes | >Total Tax Revenue | |
|---|---|---|---|
| Newfoundland and Labrador | $7.6 | $4.3 | $11.9 |
| Prince Edward Island | $4.7 | $3.0 | $7.7 |
| Nova Scotia | $43.1 | $27.3 | $70.4 |
| New Brunswick | $19.1 | $10.9 | $30.0 |
| Quebec | $272.4 | $182.6 | $455.0 |
| Ontario | $780.9 | $531.1 | $1,312.0 |
| Manitoba | $35.9 | $22.2 | $58.1 |
| Saskatchewan | $19.6 | $12.7 | $32.2 |
| Alberta | $66.5 | $74.0 | $140.5 |
| British Columbia | $319.4 | $233.9 | $553.4 |
| Yukon | $0.1 | $0.1 | $0.3 |
| Northwest Territories | $0.3 | $0.3 | $0.5 |
| Nunavut | $0.0 | $0.1 | $0.1 |
| Canada | $1,569.4 | $1,102.5 | $2,671.9 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
It is shown that total indirect tax and personal income revenue derived from long-term international students spending (due to direct, indirect and induced economic activities) amounted to $2.7 billion in 2014.
| Indirect Taxes | Personal Income Taxes | Total Tax Revenue | |
|---|---|---|---|
| Newfoundland and Labrador | $0.1 | $0.1 | $0.3 |
| Prince Edward Island | $0.2 | $0.1 | $0.3 |
| Nova Scotia | $4.1 | $2.1 | $6.2 |
| New Brunswick | $0.5 | $0.4 | $0.9 |
| Quebec | $14.3 | $9.2 | $23.5 |
| Ontario | $73.0 | $41.0 | $114.0 |
| Manitoba | $1.6 | $1.1 | $2.7 |
| Saskatchewan | $2.4 | $1.2 | $3.7 |
| Alberta | $9.2 | $7.8 | $17.0 |
| British Columbia | $48.1 | $26.2 | $74.3 |
| Yukon | $0.0 | $0.0 | $0.0 |
| Northwest Territories | $0.0 | $0.0 | $0.0 |
| Nunavut | $0.0 | $0.0 | $0.0 |
| Canada | $153.6 | $89.4 | $242.9 |
Source: Customized Statistics Canada Expenditure Model, based on expenditure produced by RKA
Similarly, $242.9 million tax revenue generated from indirect taxes and personal income taxes by spending of short term international students from direct, indirect, and induced economic activities was contributed to municipal, provincial and territorial, and federal governments in 2014.
4.3. International Students and Canada’s Export
Because international student expenditure represents revenue for goods and services from overseas, this representation of international education services is an export from Canada.
In this subsection, we compare the value of total expenditure in international education services in Canada with the total export of services and merchandise from Canada. We also provide a comparison of the total value of international student spending by top ten source countries, with the values of Canada’s exports to these countries.
In 2014, total value of international student spending was almost $11.4 billion. When compared with Canada’s total export of services in 2014, at $95.7 billion, international student expenditure is equivalent to 11% of the total value of Canada’s service exports.
| 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% |
Source: RKA; Statistics Canada Table 376-0036
Canada is known for its exports from resource sectors like oil, natural gas, logging and forestry. Few realize that the contribution of international student spending is also substantial. In 2014, total international student spending surpassed the value of Canada’s export in helicopters, airplanes and spacecraft ($9.012 billion), wheat ($7.951 billion), or lumber (>6mm) ($8.672 billion), and was almost as great as the value of Canada’s export of motor vehicle parts (excluding body, chassis, and engines) ($11.9 billion). In fact, total international student spending in 2014 was equivalent to about 2.2% of the total value of Canada’s merchandise export. This is also shown in Table 18.
For the top 10 source countries, international education services exports represent 13% of the total service exports, and 1.9% of Canada’s merchandise exports, to these countries.
[23] Detailed data pertaining to international students by level of study in each province/territory can be found in Appendix 4.
[24] It is noted that total “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, as we have made a number of adjustments to arrive at these values.
[25] Detailed data calculated for different types of student expenditure, for students in various levels of study, can be found in Appendix 4.
[26] It is noted that there are no short-term international students reported in private Languages Canada membership schools in Newfoundland and Labrador or the three territories.
[27] For a comparison of tuition fees for university undergraduate and graduate programs in different provinces across Canada, see Tables 26 and 27 in Appendix 4.
[28] For example, for K-12 students of 46,566, combined student expenditure in Table 28 was $1.064 billion. Average student expenditure is therefore $22,865 per person in 2014.
[29] Total industrial output refers to the value of outputs produced, whether the products are used as an intermediate product (think of a log cut down from a tree for the purposes of building houses, for example) or used as a final product (think of a beam in a completed house). If we calculate gross domestic product the same way as we calculate the value of outputs, the cost of the log will be counted many times, as it moves from a raw product to its eventual use as a beam, and it is wrong. The value of total industrial output thus includes both the value of intermediate inputs and primary inputs - the latter being the labour and the capital in production. It is the sum of the latter, which is also referred to as the value added, that is equal to gross domestic product at the national or provincial level.
[30] Statistics Canada catalogue product 15F0046X – National and Provincial Multipliers.
[31] The industries are defined according to the NAICS-based Input-Output Industry Classification (IOIC).
[32] It is noted in Statistics Canada’s impact estimation model that two types of jobs impact and multipliers are available: one for the total number of jobs and another which transforms the former into a full-time-equivalent (FTE) number of jobs. The estimate of the total number of jobs covers two main categories: employee jobs and self-employed jobs (including persons working in a family business without pay). The total number of jobs includes full-time, part-time, and temporary jobs. It does not take into account the number of hours worked per employee. FTE jobs include both the employee and self-employed jobs but the FTE transformation only applies to employee jobs. The transformation is based on the overall average full-time hours worked in the business and government sectors.
The impact of labour income includes three components: wages and salaries, supplementary labour income, and labour income of the unincorporated sector. This variable captures the return to labour in the make-up of GDP.
[33] GDP at basic price, in current dollars, for the entire Education Services sector in Canada was valued at $93.705 billion in 2012 (from Statistics Canada CANSIM table 379-0029). At the time this report is prepared, value in 2014 was not available. The value shown here has been estimated by applying the real (net of inflation) percentage increase of GDP in the Education Services between 2012 and 2014 to $93.705 billion.
[34] The types of taxes can be: federal trading profits on lottery and race track, federal gasoline tax, federal excise tax, federal excise duties, federal environment tax, federal air transportation tax, federal sales tax (GST/HST), provincial wine and liquor gallonage tax, provincial trading profits on liquor and lottery, provincial gasoline tax, provincial amusement tax, provincial environment tax, provincial sales tax, provincial harmonized sales tax (HST), local amusement tax, or local retail sales tax.
[35] Personal income tax values have been derived by applying average personal income tax rates in each province/territory to labour income. Average personal tax rates have been derived based on data available from Statistics Canada’s CANSIM table 384-0040 - Current accounts - Households, provincial and territorial, annual.
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