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 services.

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. In its Postsecondary‑ Student Information System, Statistics Canada collects data on international student enrolment at the college and university levels (including a breakdown of undergraduate and graduate levels) by field of study or by program level. However, the colleges and universities that are covered in the Statistics Canada survey are essentially all in the public system and therefore the data does not yield information on international students in the private post-secondary system.

In terms of the number of international students in the K-12 system, no data is readily available from Statistics Canada for each of the provinces and territories, or from each provincial or territorial ministry of education.

When no consistent data was available for international students, the alternative was to use the data on foreign students available from Immigration, Refugees and Citizenship Canada (IRCC). As international students need to obtain a study permit before arriving in Canada to pursue education and training for a period longer than six months, IRCC’s data told us how many study permits holders were in each of the provinces and territories at a given time.

IRCC defines international students as follows:

“Temporary residents who entered Canada mainly to study and have been issued a study permit (with or without other types of permits). A study permit is an official document issued by an officer that allows someone who is not a Canadian citizen or a permanent resident to study in Canada. In general, a study permit is not needed for any program of study that is six months or less. For statistical purposes, a temporary resident is designated as a foreign student on the basis of IRCC’s determination of his or her “yearly status” – the main reason for which the person has been authorized to enter and stay temporarily in Canada during the year of observation. Foreign students exclude temporary residents who have been issued a study permit but who entered Canada mainly for reasons other than study.”

There are three broad levels of study for foreign students.

1. Secondary or less: secondary school and elementary school
2. Post-secondary: colleges and universities
3. Other studies

The IRCC data therefore allowed us to use the number of study permit holders as a proxy for the number of international students at a given time in a year. It also allowed for a distinction to be made between broad levels of study. For all these reasons, we relied on IRCC’s data for analytical purposes.

One limitation of using the IRCC’s data set to represent the number of international students was that the actual number of permit holders registered at a Canadian institution may be smaller than the number of permits issued due to the fact that some permit holders may not be able to, or have chosen not to, enroll in an education program. Another limitation of this data set was that since the term “foreign student” is defined by citizenship, it also includes permit holders who are the children or spouses of attending students, but these children are not considered fee-paying international students for the purposes of our analysis.^[1]

Finally, another important source of international students that was not fully covered in the IRCC data is the number of students who study in Canada for periods of less than six months, as they do not require a study permit to enter the country. We approached organizations whose members provide short-term vocational training to the public. It should be noted, however, that only Languages Canada collects comprehensive data that is useful for our purposes.

Languages Canada is Canada’s premier language organization representing its two official languages, English and French. Membership is limited to schools that meet the association’s rigorous standards and are committed to upholding them. Currently, there are over 210 member programs across the country, including at universities, colleges and private institutions. The association is not-for-profit and sector driven. Quality assurance is a critical element of Languages Canada and all member schools are required to be accredited under one internationally recognized and comprehensive scheme.

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.^[2]

In this study, we estimated the number of international students’ family and friends visiting Canada based on assumptions used in the 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.^[3] The model provides estimates of the overall impact on output, gross domestic product (GDP) and employment in each province/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,^[4] 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 2019 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 2019 total compensation per job.^[5] As such, it was necessary to deflate the net student expenditures incurred in 2022 to 2019 dollars to get a more accurate estimate of the employment impact.