HESA

Higher Education Strategy Associates

How International Tuition Fees Keep Canadian Universities Afloat

Everyone knows that international student numbers have been going up over the past decade or so. What you might not know is what kind of effect that’s having on university budgets. So, today, a few brief tables and charts.

First, tuition fees for international undergraduate students. Nationally, these have been growing at a rate of inflation +4% over the past decade, which is substantially faster than the rise in domestic tuition (roughly, inflation +1.5%). Nationally, the average international tuition is $23,589, but both this figure and the recent run-up in tuition is due almost entirely to what is going on in Ontario. Ten years ago, international student tuition in Ontario was barely different from the national average; now, after a decade of annual increases of inflation +6%, it lies a full $6,000 above it.

Figure 1: International Undergraduate Student Tuition, Canada and Selected Provinces, 2006-07 to 2016-17, in constant $2016

unnamed

Now of course, if you have increasing numbers of international students paying increased fees, it stands to reason that their financial contribution is also increasing. Now, no institution actually publishes data on the amount of money they receive from international students, so no one has ever looked at the extent to which Canadian universities are dependent on that type of revenue with any degree of specificity. But if one simply multiplies out student numbers (using data from Statscan’s Post-secondary Student Information System) by average fees (from Statscan’s Tuition and Living Accommodation Costs Survey), one can get a rough sense of the magnitude of their contribution (some quirks in the way Statscan deals with business students means we can’t quite capture data on MBA students accurately, so we are probably undercounting a bit). What we find when we do this (see Figure 2) is that nationally, roughly 23% of all fees paid come from international students.

Figure 2: International Students’ Fees Paid as a Percentage of all Fees Paid, Canada and Selected Provinces, 2008-09 to 2013-14

unnamed-1

Now a careful examination of Figure 2 reveals some interesting facts. The proportion of fees coming from international students is highest in Quebec (44%) not just because fees are high, but because tuition for domestic students is so low. Conversely, the proportion in Ontario is relatively low even though international tuition is high because domestic fees are also high.

We can move on from this to show what percentage of all operating revenues are accounted for from international fees, which I show below in figure 3.

Figure 3: International Tuition Fees as a Percentage of Operating Income, Canada and Selected Provinces, 2008-09 to 2013-14

unnamed-2

Nationally, income from international students at Canadian universities was equal to a little over 7% of operating income in 2013-14 (also true in Ontario, which you probably can’t see on the chart because the lines are almost entirely parallel); however, the averages by province vary enormously, from 12% in British Columbia to 4% in Alberta to even lower in Prince Edward Island and Saskatchewan.

(In the preceding graphs I stuck to only showing the largest four provinces, because including all ten makes for a gory visual mess; but for all the other provinces, information for 2013-14 is shown below in table 1. And for those who might be kvetching because I am not presenting college data – we asked colleges for data to do precisely this kind of analysis, and by and large they refused.)

Table 1: Data on International Fees, Canada and Provinces, 2013-14

unnamed-3

A final point here: at most Canadian universities, total operating income plus capital expenditure per student is in the range of $25,000 a head. What that suggests is that in most provinces, international students, despite paying what is allegedly “market” tuition, are in fact still not paying the full cost of their education and are in fact being subsidized. Only in Ontario is this clearly not the case; elsewhere, it would appear that foreign students – far from being “cash cows” – are in fact being subsidized by Canadian taxpayers.

More thoughts on this tomorrow.

This entry was posted in Budgets, Canada, Institutions, Tuition, Universities and tagged . Bookmark the permalink.

4 Responses to How International Tuition Fees Keep Canadian Universities Afloat

  1. Jon Driver says:

    Hi Alex,
    you state that no institution publishes data on their revenues from international students. SFU does report these data. See p. 19 of http://www.sfu.ca/content/dam/sfu/finance/Publication/FinancialReport/SFU%20Annual%20Financial%20Report%20March%2031,%202016.pdf
    All the best for Christmas and the New Year
    Jon

  2. Alex Beaupré says:

    Hi,

    I might be wrong, but in Quebec, international tuition is made up of three parts: the standard tuition fees, a surcharge, and an additional fee of no more than 10% the value of the surcharge. The university gets to keep the standard tuition fee and the 10% additional fee; the surcharge for international students is « récupéré par le Ministère » (according to the province’s Règles budgétaires des universités 15-16, p.13). http://www.education.gouv.qc.ca/fileadmin/contenu/documents_soutien/Ens_Sup/Universite/Calculs_subventions/Regles_budgetaires_universites_2015-2016.pdf

    That’s 112M$, just in 2015-2016 (p. 61), including 37,5M$ for McGill alone.

    Just my two cents.

    • Alex Usher says:

      Almost. “Récupéré par le Ministère” means the institution keeps the cash but sees its grant reduced by an equivalent amount (in regulated prorams – in unregrulated ones it just keeps the cash). So all the numbers here are true; institutions keep that $112M and it forms a major part of their income. They just don’t benefit from it.

Leave a Reply

Your email address will not be published. Required fields are marked *

We encourage constructive debate. Therefore, all comments are moderated. While anonymous or pseudonymous comments are permitted, those that are inflammatory or disrespectful may be blocked.