1. Introduction

International education, owing to its impact on Canada’s ability to develop and retain the necessary knowledge and skills, plays an important role in the globalization of its economy allowing it to thrive in a fast-changing and competitive environment.

Global Affairs Canada commissioned Roslyn Kunin and Associates (RKA) to conduct this study to determine the value of the impact that international students’ spending in Canada has on the Canadian economy. This study is an update to the 2022 impact assessment and uses the same estimation approach, although some minor adjustments to assumptions have been made.

As in the previous study, the analytical approach used in this study included the estimation of total spending by international students (including tuition and fees, books, accommodation, transportation and discretionary spending), and the estimation of the economic impact on the Canadian economy in 2024 in terms of exports^{Footnote 1} , GDP, employment and government revenue. The study also provides the economic impact by province and territory and by level of studies, as well as the impact by the top 10 source countries.

This study covers long-term students at schools, colleges and universities, as well as short-term students. For the number of long-term international students (those pursuing education and training for periods longer than six months and requiring study permits), we relied on Immigration, Refugees and Citizenship Canada (IRCC) data. For short-term students (less than six months’ duration), we relied on Languages Canada’s data. To calculate student expenditures, we relied on data from various sources, including Statistics Canada’s annual Tuition and Living Accommodation Costs survey. To fill gaps in the data, several assumptions were made, including those related to scholarships and bursaries provided by governments (federal, provincial and territorial), as well as expenditures by friends and family members visiting international students. As a result, adjustments were made to the original datasets. These adjustments are detailed in Appendix 1.

To capture the overall impact of total spending by international students on the Canadian economy, we used Statistics Canada’s interprovincial expenditure impact model. In this study, we not only quantified the direct economic impact associated with international student spending but also took a total impact approach to quantify indirect and induced impacts. These include the activities of businesses providing goods and services to entities where direct expenditures occur (direct and indirect impacts). In addition, as a result of increased local household income, there may be further increases in overall expenditures. This was considered a spun-off (or induced) impact. Total impact includes all three components: direct, indirect and induced impacts of initial spending. The total impact can be considered the upper band of economic impacts, whereas the sum of direct and indirect impacts provides a relatively conservative level of impacts on the economy. In this updated study, the focus is on the direct and indirect economic impact on the Canadian economy in 2024^{Footnote 2}. Direct impacts, along with total impacts, are shown in Appendix 2.

In the main body of the report, we present estimates of the number of international students in Canada by province and territory and by long-term and short-term study status. We then present estimates of their annual total spending and the resulting combined direct and indirect economic contribution to the Canadian economy, as well as the importance of international education services to Canada’s trade with the rest of the world. Historical comparisons of the value and impacts of international education are also provided to highlight its growing contribution to Canada’s economy. In addition, the study includes a comparison of economic impacts by the top 10 source countries.

New in this study is the assessment of the economic impacts of francophone students studying in Canada outside the province of Quebec.

An explanation of the differences between the estimates presented in this report and those released by Statistics Canada is provided in Appendix 3.

Footnotes

Footnote 1

Given that spending by international students represents Canada’s exports in educational services, this report uses the phrases “spending by international students” and “international education services” interchangeably. It should be noted that the inclusions in “international education services” differ from Statistics Canada’s definition, which is based on the Manual on Statistics of International Trade in Services 2010 (published by the United Nations). Statistics Canada’s definition of education services, in the context of the balance of payments, is as follows:

“Education services comprise services relating to all levels of education, whether delivered through correspondence, via telecommunications, satellite or the internet, or by teachers, among others, who supply services directly in host economies. Excluded are the services provided to non-residents who are present in the territory of the service supplier (as this is included in the travel category).”

Therefore, the comparable value in Statistics Canada’s balance of payments data is that associated with education-related personal travel.

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Footnote 2

Economic impact studies evaluate the impacts of increased economic activities due to an increase in spending fromprograms or individuals on a regional economy. They measure the impacts in terms of macro-economic variables, such as gross domestic product (GDP) and employment. This type of analysis is useful for government decision making when evaluating and comparing impacts from different programs and projects.

It should also be noted that, despite its usefulness, an economic impact analysis is not a cost–benefit analysis and does not take into account the opportunity costs associated with program expenditures. The evaluation of costs associated with providing education to international students is beyond the scope of this study.

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1. Introduction