ARCHIVED -International Education: A Key Driver of Canada’s Future Prosperity

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Annex A: Research that Informed Our Recommendations

The following research pieces were commissioned by DFAIT in order to support our deliberations. We wish to acknowledge the work done by Roslyn Kunin & Associates, Inc. and the Illuminate Consulting Group to produce this research.

Economic impact of international education in Canada—an update

Roslyn Kunin & Associates, Inc.

This report suggests that, in 2010, international students in Canada spent in excess of $7.7 billion on tuition, accommodation and discretionary spending (up from $6.5 billion in 2008). More than $6.9 billion of this revenue was generated by the 218,200 long-term international students in Canada, of which 37 percent came from China and South Korea. In addition, short-term language students contributed $788 million to the Canadian economy. When accounting for additional tourism benefits from international students, the report finds that the expenditure resulting from international students in 2010 was $8.0 billion, which translates to 86,570 jobs and $455 million in government tax revenue. The full report is available on the International Education and Youth website.

Canada’s capacity for international student enrollment

Illuminate Consulting Group

Overall, this report found that Canada displays no notable capacity issues regarding international post-secondary education students at a national level. According to 2009 data, international students comprise 7.5 percent of post-secondary enrollment at the national level (compared to 23.2 percent in Australia) and only 0.7 percent of K-12 enrollment. These enrollment ratios vary only slightly across provinces. In some smaller provinces (population-wise), the ratio is very low in international comparison (and relative to larger provinces), allowing for sustainable growth opportunities. Projecting a high-growth scenario (if domestic enrollment were to grow at its average rate over the last five years and international enrollment were to grow at 10.0 percent year-over-year), international students would account for 17.3 percent of total post-secondary enrollment in Canada by 2020. The report concludes that given the strong international student growth dynamics since 2008, the issue to be faced is not capacity itself, but how capacity is being managed to maintain Canada’s reputation for quality. The full report is available on the International Education and Youth website.

We also wish to recognize the findings of previous panels who advised the Government of Canada in recent years on the areas of commercialization, economic competitiveness, and R & D. The thrust of our recommendations, that talent and innovation are key drivers of Canada’s prosperity, are shared in the themes identified by these panels.

Review of federal support to research and development

In Budget 2010, Leading the Way on Jobs and Growth, the Government of Canada announced a comprehensive review of support for R & D in order to optimize its contributions to innovation and related economic opportunities for business. An expert panel was appointed by the Minister of State (Science and technology) to conduct this review. In its report, Innovation Canada: A Call to Action, the panel notes the necessity of talent to stimulate innovation in Canada.

(Excerpt from Innovation Canada: A Call to Action)

Innovation input: Talented, educated and entrepreneurial people

Canada’s future as an innovation-based economy depends on ensuring there are sufficient numbers of talented, educated and entrepreneurial people. The primary source of such talent is our public post-secondary education institutions: the universities, polytechnics and community colleges (including Cegeps in Quebec) that produce the innovators and those who support innovative activity. These institutions are primarily funded through the provinces, although the federal government plays a role through transfer payments, student financial assistance and direct support for research training and innovation skills enhancement. The diversity of higher-education institutions with varying missions and mandates provides Canada with the highly qualified and skilled people who are the bedrock of innovation. Each of these post-secondary education institutions has a unique role to play, producing workers for different components of the innovation ecosystem. Our university graduate programs produce the advanced Master’s and PhD degree holders who can contribute breakthrough ideas that can ensure companies stay at the cutting edge of R & D; our universities and colleges produce Bachelor’s degree holders who are often the front-line innovation performers; and our colleges produce technicians and technologists to facilitate the commercialization efforts of the firm.

It is the interplay among these complementary types of talent that builds an innovation economy. Since Canada’s innovation gap is partly an education gap, improving our global performance will require the right mix in both the quantity and quality of talent. This demands a collaborative approach that brings together our post-secondary institutions, federal and provincial agencies as well as industry and other partners to ensure appropriate recruitment, training and deployment for industrial innovation needs. While Canada ranks first in the OECD for the percentage of its population with post-secondary attainment, it is middle of the pack in baccalaureate output and near the bottom for the number of doctoral graduates per capita. It is nevertheless encouraging that the growth in the number of doctoral degrees granted in Canada has been stronger—particularly in science and engineering—than in most comparable countries over the 2005–08 period, helping to improve our relative position.

The earnings advantage of individuals with advanced degrees (relative to high-school graduates) is less pronounced in Canada than in the United States. This is one indicator of relatively weaker demand by businesses in Canada for people with advanced degrees, and a situation consistent with a weaker commitment to innovation-based strategies by Canadian businesses. Statistics Canada has found that up to one fifth of doctoral graduates intend to leave Canada following completion of their degrees. When they go, these graduates take with them knowledge and skills that could contribute to a more innovative and prosperous future for Canada.

Students learn not only through traditional classroom experiences, but also through hands-on research experience that exposes them to the realities of the business world and teaches the professional and entrepreneurship skills needed to fully contribute to their eventual workplaces. Employers see programs that encourage post-secondary student participation in research projects with business as having a number of benefits, including (i) the chance to identify the best recruits, (ii) the ability to influence curricula to be more industry-relevant, (iii) exposure to new ideas and specialized equipment in educational institutions and (iv) access to a flexible workforce.

While domestic production of innovation workers is an imperative, demographic realities dictate that this is not sufficient to meet the expected industry demand. By some estimates, within 20 years there could be almost two million vacancies for skilled knowledge workers in Ontario alone. An immigration system that targets necessary skill sets presents Canada with an opportunity to leverage the skills, insights and entrepreneurial talents of those born in other countries who come to Canada.

Competition Policy Review Panel

The Competition Policy Review Panel was named by the ministers of Industry and Finance in July 2007. The panel was mandated to review Canada’s competition and foreign investment policies and to make recommendations to the government for making Canada more competitive in the global marketplace. Among the many recommendations made in its 2008 report, Compete to Win, the panel recognizes the importance of promoting the two-way flow of talent, as seen in the recommendations excerpted below.

(Excerpt from Compete to Win)

Attracting and developing talent

The Panel recommends that:

24. Post-secondary education institutions should pursue global excellence through greater specialization, focusing on strategies to cultivate and attract top international talent, especially in the fields of math, science and business.

25. Governments should use all the mechanisms at their disposal to encourage post-secondary education institutions to collaborate more closely with the business community, cultivating partnerships and exchanges in order to enhance institutional governance, curriculum development and community engagement.

[...]

27. Governments should provide incentives and undertake measures to both attract more international students to Canada’s post-secondary institutions and send more Canadian students on international study exchanges.

28. Governments should strive to increase Canada’s global share of foreign students, and set a goal of doubling Canada’s number of international students within a decade.

29. Governments, post-secondary education institutions and national post-secondary education associations should undertake regular evaluations, measure progress and report publicly on improvements in business–academic collaboration, participation in coop programs, and the attraction and retention of international talent.

Expert Panel on Commercialization

The Expert Panel on Commercialization was named by the Minister of Industry in May 2005, with the mandate to identify how the Government of Canada could help ensure continuous improvement in Canada’s commercialization performance. The panel’s recommendations focused on three areas: talent, research and capital. The following is an excerpt on talent from its 2006 report, People and Excellence: The Heart of Successful Commercialization.

(Excerpted from People and Excellence: The Heart of Successful Commercialization)

Recommendation

Develop and Retain talent for Success in a Global Marketplace

Proposal

We recommend that the federal government take action to attract skilled and talented individuals to Canada to support commercialization and to link Canadian students, businesses and researchers to global activity that is expanding knowledge.

Create a talent and research fund for international study

This fund will:

• create a set of Maple leaf Graduate Scholarships to compete with the prestige of The Fulbright and Rhodes scholarships and attract more of the world’s finest minds to this country’s campuses;
• bring foreign research and teaching collaborators to Canada to serve as distinguished visiting chairs in disciplines that are strategic priorities for Canada and support its commercialization goals;
• provide matching grants for collaborative research projects with researchers in centres of excellence in other countries;
• support short-term exchanges of researchers between Canadian and foreign universities; and
• significantly increase the number of Canadian students conducting studies and research at foreign universities, thereby gaining exposure to other cultures and markets.

This fund should be administered by the Government of Canada’s granting councils.

Encourage international students to stay in Canada

Like other countries, Canada should change its immigration policies to make it easier for international students, particularly those in advanced studies, to work while they are studying here and to remain in Canada after graduation. We are pleased to see that pilot projects to address this need have been announced, and look forward to their full availability across Canada. That said, we feel that more aggressive action is required to ensure that international students with advanced degrees from Canadian universities can stay and work in Canada.

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