International students are funding Canada’s universities and colleges

The source of funds for Canada’s universities and colleges today are its students and not its provincial governments, a new analysis has found.

Over the last decade in Canada’s universities and vocational colleges, many achievements have been made. Enrolments have soared, as have both basic and applied research output. Demand for IT equipment, student services and STEM programmes grew along with their steep costs. But institutions managed to cope with this despite declines in provincial government funding.

“The most important new reality is that for the first time since the 1950s, public sources are no longer the dominant source of income for Canada’s postsecondary system,” the report, titled The State of Postsecondary Education in Canada 2019, by Toronto-based consulting service Higher Education Strategy Associates said.

“In other words, for the first time since the Second World War, more than half of university and college revenues do not come from the government.”

At the University of Toronto, International students make up 22.5 percent of the undergraduate population and 16.8 percent of the graduate population. Source: Shutterstock

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

The strategy recognised the CA$21 billion contributions made by the international student cohort, a figure that, according to HESA’s report, almost matches the amount provincial government gave at its peak in 2010/11, which was about CA$22 billion.

This has since declined to about CA$21 billion. The cuts in funding have been small and undramatic, but the report noted that they add up over the course of a decade.

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

In the years after 2007/08, institutions tried to seek funds to close this gap by increasing domestic recruitment. But the then government frowned upon tuition increases beyond inflation rate and in any event, fees collected from these students didn’t amount to much.

Institutions then turned to the “cash cows” of the country’s postsecondary education system: international students.

“What that left was international students, who were an increasingly tempting source of revenue. By
2016/17, the number of international students had risen 123 percent over 2007-08 levels, but their fee revenue rose by over 218 percent, leaving institutions roughly CA$3.25 billion richer than they had been nine years earlier (domestic fee revenue rose by a more modest CA$2.34 billion, or 35 percent).”

Today, many universities get a significant portion of their funds from international students over domestic, or from their provincial governments, notes the report.

There are advantages to this shift. such as providing a “market-oriented” form of discipline to universities which tend to be introspective. But, as the report states:

“The question is whether this student market is primarily the one that will also pay taxes to maintain
the institution, or one which resides across distant oceans and which has few reasons to care about the health of the communities in which institutions are situated. What is at stake is the public, local mission of universities and colleges.”

The University of British Columbia is facing faculty discontent over its considerable increase in enrolments – of which international students comprise more than a quarter – which has not been matched with increasing staff recruitment. Source: Shutterstock

Speaking to Times Higher Education, Alex Usher, President of Higher Education Strategy Associates, warned that one danger from an over-reliance on international students would eventually leave colleges and communities with large numbers of alumni without connections to the area and would not be sustainable.

“I personally wouldn’t predict imminent trouble,”Usher said. “But eventually, yes, there needs to be a reckoning and a rebalancing.”

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