2. Data sources and methodology

RKA’s methodology for the study on the economic impact of international education in Canada included extensive secondary research involving reviewing literature, collecting existing statistical data and information, as well as consulting with representatives from the provincial and territorial education sectors, and representatives from organizations promoting and researching trends in international education in Canada and/or the provinces.

In this section, we describe the different sources of data that are available, the ones we used for the project and any limitation with the data sets. We also point out how the data sources and methodology differ between our estimates and those adopted by Statistics Canada in its estimate of Canada’s trade in education-related personal travel .

Data sources

Enrolment

One of the main purposes of this study was to determine the overall economic impacts of total spending by international students, which required the understanding of the number of international students in each province and territory, and in different levels of study: public or private, in the K-12 system, at the college level, as well as undergraduate and graduate students in the university system. It was also necessary to determine the number of international students studying in language training programs.

We did not find one complete set of data that fit our definition of international students or reported data on all students.

Statistics Canada collects data on enrolment of international students in the publicly funded postsecondary system, but it does not track enrolment of international students in private postsecondary institutions. Some provinces track the number of “fee-paying” international students in the elementary and secondary school system, but not all do.

For this report, we have used the number of study permit holders, as reported by the federal agency Immigration, Refugees and Citizenship Canada (IRCC), as a proxy to represent the number of international students. We also used data from organizations such as Languages Canada to estimate the number of short-term international students studying in Canada.

In the rest of the report, we defined international students as those from the two sets of data available to us, with adjustments. Long-term students refer to the individuals who are represented by the IRCC data, while short-term students are those pursuing language training programs of less than six months in institutions with Languages Canada membership. Detailed adjustments to the IRCC data and the data from Languages Canada are presented in Appendix 1.

Student expenditures

For students in each level of study, we estimated expenditures in the following categories:

Tuition and fees
Additional compulsory fees
Books and other study tools/materials
Living expenses
Transportation costs
Discretionary expenditures

In order to calculate the net economic benefits of international students in the host country, we took into account any financial assistance that international students receive from Canadian governments, as well as from universities or other institutions. Again, the detailed description of adjustments can be found in Appendix 1.

Additional visiting family and friends’ “tourist” activities

Existing literature on international education points to another area of university activity, which is the important role that institutions can play in attracting visitors to the host country^{Footnote 1}.

In this study, we estimated the number of international students’ family and friends visiting Canada based on assumptions used in a 2013 Australian ACPET study on the economic benefits that international students brought to the country.

Analytical framework

To capture the overall impact on the Canadian economy of total spending by international students, the expenditures of international students and their visiting family and friends were applied to Statistics Canada’s interprovincial impact simulation model^{Footnote 2}. The model provides estimates of the overall impact on output, gross domestic product (GDP) and employment in each province and territory’s economy.

A short description of the input-output model is provided below.

An input-output structure of the economy

When a person spends money on a product (goods and/or services), that amount creates a direct demand 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, and the increased production of intermediate goods and services will in turn generate more demand for other goods and services that are needed 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 on more goods and services.

As such, an initial demand for a product creates a chain effect down the production process.

An economic impact analysis is designed to study such interlinkage between industries in order to evaluate how a change in an initial demand for goods or services contributes to changes in other industries’ levels of production and the overall economic activity level within a region.

The input-output model is based on the input-output structure of the Canadian economy^{Footnote 3}, which is essentially a set of tables describing the flows of goods and services among the various sectors of the economy. Such a model is useful in determining how much additional production is generated by a change in the demand for one or more products or by a change in an industry’s output.

Beyond direct expenditures, input-output models can be used to analyze additional benefits to the economy. This includes businesses providing goods and services to entities where direct expenditures occur. In addition, as a result of increased local household income, there may be further increases in overall expenditures. The latter is considered a spun-off (or induced) impact, which is sometimes shown in economic impact studies.

Currently, Statistics Canada uses the 2021 interprovincial input-output model to estimate economic impact, and the results are used for comparative analysis purposes. It should be noted that employment impact estimates from this model are based on the 2021 total compensation per job^{Footnote 4}. As such, it was necessary to deflate the net student expenditures incurred in 2024 to 2021 dollars to get a more accurate estimate of the employment impact.

Footnotes

Footnote 1

Given that spending by international students represents Canada’s exports in educational services, in this report we have used the phrases “spending by international students” and “international education services” interchangeably. It should be noted that the inclusions in “international education services” are quite different from Statistics Canada’s definition, 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 balance of payment, is as follows:

“Education services comprise of services relating to all levels of education whether delivered through correspondence, via TC, 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 payment 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 from programs or individuals on a regional economy and they measure the impacts in terms of macro-economic variables, such as gross domestic product (GDP) and employment. Such an analysis is useful for government decision making when evaluating and comparing impacts from different programs and projects. It should also be noted that, in spite of its usefulness, an economic impact analysis is not a cost-benefit analysis and does not take into account the opportunity cost 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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Footnote 3

Statistics Canada catalogue product 15F0042X – Provincial Input-Output Tables.

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Footnote 4

Data is derived from Statistics Canada Table 36-10-0480-01 Labour productivity and related measures by business sector industry and by non-commercial activity consistent with the industry accounts.

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