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September 16, 2010

International Students Contribute Significantly to the Atlantic Economy

International students contributed $565 million to the Atlantic Canadian economy, in 2009-10, according to a new study, The Economic Impact of Post-Secondary International Students in Atlantic Canada , released today by the Council of Atlantic Ministers of Education and Training (CAMET). In addition to their significant contributions to the region's economy, the study highlights that international students are a major source of potential immigrants for Atlantic Canada.

International students provide an immediate economic impact and return on investment in Atlantic Canada. The study determined that international students contributed $175 million of new money to the region's economy in 2009-10. Furthermore, international students spent $2.68 of new money in Atlantic Canada for every dollar spent by the four Atlantic governments.

"The findings of this study support Newfoundland and Labrador's commitment to international education," said the Honourable Darin King, Minister of Education. "The study also provides useful information for future consultations and decision-making among governments and stakeholders on attracting and retaining international graduates."

Working together and individually, the four Atlantic provinces are implementing strategic initiatives aimed at attracting and retaining more immigrants to the region to address demographic challenges associated with an aging population. The study highlights they are ideal candidates for immigration as international students think highly of Atlantic Canada, and are young, skilled, language proficient, and already integrated into local communities.

"We value the economic contribution of international students to our province," said Education Minister Marilyn More. "The province's new immigration strategy will identify recruitment of international graduates as a great way to tap into younger, well educated professionals who are already in Nova Scotia."

"International students provide a significant boost to Atlantic Canada's economy and generate millions in revenue," said the Honourable Donald Arseneault, Minister of Post-Secondary Education, Training and Labour.

The study underlines the cultural contributions of international students, strengthening and enhancing Atlantic Canada's profile and ties to the world. It also indicates that the market for international students is becoming more competitive since students make choices based on costs and institutional reputation. Since 2006, the price competitiveness of Atlantic Canadian universities has improved and the number of international students in the region has increased steadily by approximately a third, with forty per cent of students coming from China, the United States, and India.

"Prince Edward Island's post-secondary institutions are world-class and our cost of living and quality of education and life are attractive to international students," said the Honourable Allan Campbell, Minister of Innovation and Advanced Learning. "We are well positioned to attract more international students to our province and Atlantic Canada."

The Economic Impact of Post-Secondary International Students in Atlantic Canada study was commissioned by CAMET, in partnership with the Association of Atlantic Universities, the Atlantic Provinces Community College Consortium, and EduNova, and was undertaken by researchers at Dalhousie University's School of Public Administration. Fazley Siddiq was the principal investigator for the study and Warren C.E. Nethercote was the project manager.

During the winter term of 2009-10, the study utilized an on-line survey of international students registered and attending classes at Atlantic Canada's universities and community colleges. The survey addressed five main themes, including academic and living expenditures by international students, demographics and employment status, as well as future intentions to remain in Atlantic Canada.

The summary report of key findings is attached below. To view the full report, please visit the CAMET website, www.camet-camef.ca.

CAMET is an agency of the Council of Atlantic Premiers (CAP), and its purpose is to enhance cooperation in public (Entry—12) and post-secondary education in Atlantic Canada by working together to improve learning, optimize efficiencies and bring added value to provincial initiatives.

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Media contacts:

Tara Power
NL Department of Education
709-729-0048
tarapower@gov.nl.ca
Lori-Jean Wallace
NB Department of Post-Secondary Education, Training & Labour
506-453-3465
Peter McLaughlin
NS Department of Education
902-424-8307
Ron Ryder
PEI Department of Innovation and Advanced Learning
902-620-3774

BACKGROUNDER
Summary Report of the The Economic Impact of Post-Secondary International Students in Atlantic Canada

Background: Atlantic Canada faces a serious demographic challenge. The region's population is aging and the proportion of younger people is in decline. Atlantic Canada's dependency ratio will rise in the future with negative consequences, such as increased costs of social services. Over the next 15 years, Atlantic Canada's labour force is expected to decrease (Martel et al., 2007; Everenden, 2008); this is not encouraging in the face of increasing social services costs.

Sustained economic growth will be required to offset the cost of providing social services to an aging population. Barring a significant change in the nature of Atlantic Canada's economy, growth in the labour force will be required to support economic growth. Alternatively, change in the nature of Atlantic Canada's economy to a greater proportion of knowledge-based activities will require increasing numbers of the very demographic group, the young, that is in decline. In both of these scenarios, immigration would be a key contributor to an effective labour force.

Citizenship and Immigration Canada (2008) credits immigration with avoiding population shrinkage in Atlantic Canada. This observation belies the true situation in Atlantic Canada, where immigrants make up less than 4 per cent of the population, compared to about 18 per cent for Canada as a whole (Akbari, 2008).

The Council of Atlantic Ministers of Education and Training (CAMET) contracted Dalhousie University to analyse the economic impact of post-secondary international students in Atlantic Canada by means of an expenditure analysis. The study used a survey of international students and a combination of the literature, government and information from post-secondary institutions.

Results: A cross-jurisdictional review revealed a competitive international market for international students, in which Canada is ranked seventh as an academic destination and attracts only a four per cent share of international students. Across the globe, international students are valued, both as economic assets and as potential future immigrants who will be well-prepared to contribute to knowledge-based economies. Australia, Belgium, Canada, and the United Kingdom are the only nations charging differential tuition fees to international students. All others treat international and native students equally, in recognition of their benefit culturally and economically, and to maximize opportunities to attract future immigrants. Immigrants augment the stock of human capital which is diminishing in some jurisdictions due to demographic trends.

The initial economic impact of international students in Atlantic Canada was found to be $376 million in 2009-2010, including an initial injection of $175 million of new money to Atlantic Canada. The total economic impact of international students was $565 million in 2009-2010 after application of the spending multiplier. Direct spending by international students averaged $29,000 during the same period.

International students spent 1.3 times the amount spent for their benefit by governments, universities and private sources. International students spend over $1.91 of new money in Atlantic Canada for every dollar spent by Provincial Governments on their education and health care. This "return on investment" varies from province to province in Atlantic Canada, from $1.78 in New Brunswick to $4.04 in Nova Scotia. This province-to-province variation is due both to variations in spending from province-to-province by students and variations in spending from province-to-province by governments.

International students in Atlantic Canada are generally satisfied with Atlantic Canada and its educational institutions and 40 per cent of the respondents to the survey expressed interest in applying for permanent residence in Canada. Citizenship and Immigration Canada (2008) indicates that 39.5 per cent of foreign students transition to foreign worker status nationally, but that only 15.6 per cent transition to permanent resident status. There appear to be opportunities to improve the retention rate for those international students who choose to work in Canada after completing their education, to the benefit of Atlantic Canada's labour force.

Significance: International students think highly of Atlantic Canada and its educational institutions, and are acclimatized to Atlantic Canada; therefore, they are ideal candidates for immigration, to help address Atlantic Canada's demographic challenges. International students alone cannot address demographic issues in their entirety, even if they immigrated as a cohort, but improving the retention rate for international students can contribute to offsetting the negative effects of an aging society.

International students also have an important, immediate economic impact on Atlantic Canada. For example, most international students live in rental accommodations, to the benefit of local rental markets. The study estimates that the overall economic impact of international students on Atlantic Canada's economy is $565 million in 2009-2010, or almost 0.6 per cent of GDP. International students inject more new money into the economy than governments spend for their benefit; therefore, international students represent an important, profitable export market for Atlantic Canada.

Provincial Governments in Atlantic Canada should view international students positively, whether as potential immigrants to address future labour force problems, or as ongoing contributors to Atlantic Canada's economy.

2010 09 16                                                    12:15 p.m.
 


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