International Students Are Funding Canada’s Universities And Colleges

The major source of fundings for Canada’s universities and colleges today are its international students and not its provincial governments, according to a recent analysis.

Over the last ten years in Canada’s universities and colleges, many improvements have been made. Enrolments have increased, as have both basic and applied research output. Demand for information technology equipment, student services and STEM programmes soared along with their steep costs. But Canadian institutions managed to cope with this despite the reduction in fundings from the provincial government.

“The most vital new reality is that for the first time since the 1950s, government sources are no longer the dominant source of revenue for Canada’s institution system,” the report, titled The State of Postsecondary Education in Canada 2019, by Toronto-based consulting service Higher Education Strategy senior staff said.

“In other words, for the first time since the Second World War, more than fifty (50) per cent of university and college fundings do not come from the government.”

The analysis follows a new international education plan released last week by the Canadian government. The nearly CAD$150 million plan has three main objectives, one of which is to diversify the countries from which foreign students comes from, citing an over-reliance of recruiting from India and China. The new five-year plan seeks to change the international student ratio by shifting recruitment efforts to countries like Colombia, Mexico, Brazil, Vietnam, the Philippines,  France and Turkey, Indonesia, Ukraine, according to the Vancouver Sun.

The plan recognised the CAD$21 billion contributions made by the international student group, a figure that, according to HESA’s analysis, almost surpass the amount provincial government gave at its climax in 2010/11, which was about CAD$22 billion.

This, however, has since dropped to about CA$21 billion. The cuts in revenue have been small and undramatic, but the report shows that they increased over the course of a decade.

In 2007/08, the margin between provincial grants and institutional operating expenditures were CAD$6.1 billion. By 2016/17, this had increased to CAD$12 billion. Canadian universities and colleges filled the CA$5.9 billion margin with increases in tuition revenues, which moved from CAD$8.1 billion to CAD$13.7 billion over the same period.

In the years after 2007/08, institutions tried to seek more revenue to close this margin by increasing domestic recruitment. But the then government was oppsosed to tuition increases beyond inflation rate and in any event, fees received from these students didn’t amount to anything.

Academic Institutions then turned to the “cash cows” of the country’s post-secondary education system: international students.

“What that left was foreigm]’ students, who were an increasingly tempting source of funding. By
2016/17, the figure of international students saw drop of 123 per cent over 2007-08 levels, but their tuition fee increase rose by over 218 per cent, leaving Canadian institutions roughly CAD$3.25 billion richer than they had been nine years ago (domestic fee revenue increased by a more modest CAD$2.34 billion, or 35 percent).”

Today, many universities and colleges receive a good portion of their revenue from international students over domestic students, or from their provincial governments, the report noted.

There are positives to this shift. such as offering a “market-oriented” form of discipline to post-secondary instititutions which tend to be introspective. But, as the report says:

“The question is whether this student market is mainly the one that will also pay taxes to maintain
the higher institution, or one which live overseas and which has few or no reasons to care about the health of the communities in which his/her university is located. What is at stake is the local mission, public universities and colleges.”

According to Alex Usher, from Times Higher Education, one danger from an over-dependence on foreign students would eventually leave higher institutions and communities with large numbers of alumni without ties to the area, which would not be sustainable.