International education has emerged as a significant driver of economic growth in Canada. Previous studies and existing literature consistently highlight the positive value associated with hosting international students. In this blog post, we explore the economic impact of international students studying in Canada, focusing on the years 2017 and 2018.
Substantial Contribution to the Economy
According to our estimates, international students studying in Canada spent a substantial amount on tuition, accommodation, and discretionary expenses. In 2017, their expenditures reached an impressive $18.4 billion, which increased to $22.3 billion in 2018. These expenditures had significant direct and indirect impacts on the Canadian economy.
Contribution to GDP and Job Creation
The economic impact of international students' spending is best reflected in their contribution to Canada's GDP. In 2017, their expenditures contributed $16.2 billion to the GDP, and this figure rose to $19.7 billion in 2018. These contributions encompass both direct impacts and indirect impacts, considering the firms supplying goods and services to the education and related sectors. The growth in the number of long-term international students in 2018 played a crucial role in driving higher spending and associated economic impacts compared to 2017. Notably, students from India contributed significantly to this growth, with Ontario experiencing the most significant increase in the number of international students.
Regional Distribution of Economic Impact
In 2018, Ontario, with the highest number of international students, made the largest contribution to the GDP, accounting for 55.3% of the total. British Columbia followed with a contribution of 19.8%, and Quebec accounted for 11.9% of the total GDP contribution.
Job Creation and Tax Revenue
International students' annual spending directly and indirectly supported a significant number of jobs in the Canadian economy. In 2017, their expenditures supported approximately 180,041 jobs, and in 2018, this figure increased to 218,577 jobs. The economic impact of international students also extends to tax revenue. In 2017, their expenditures contributed $3.1 billion in tax revenue, and this increased to $3.7 billion in 2018.
International Education Services as Exports
International students' expenditures on education services represent Canadian exports. In 2017, the value of international education services accounted for 15.0% of Canada's total service exports. This value increased to 17.4% in 2018, showcasing the growing significance of international education as an export sector.
Top Source Countries and Expenditures
The top 10 source countries accounted for a substantial portion of international student spending. In 2017, these countries contributed $13.9 billion, which represented 16.9% of the total service exports. In 2018, their expenditures increased to $17.0 billion, accounting for 18.6% of the total service exports.
A Catalyst for Growth
The economic impact of international students studying in Canada cannot be overstated. Their substantial expenditures, job creation, tax contributions, and role as an export sector are clear indicators of their significance. International education serves as a catalyst for economic growth, strengthening Canada's position as a preferred destination for students worldwide. By fostering an inclusive and supportive environment for international students, Canada can continue to reap the economic benefits of international education while further enhancing its reputation as a global education hub.
