University and Politician claims of economic benefits of foreign students are unsubstantiated

Some of the main arguments made for and against foreign students

By Martin Collacott,
Retired Canadian ambassador

POINT A : There is little doubt that universities not only in Canada but in other Western countries regard foreign students largely as cash cows because of the considerably higher fees they have to pay compared to local students. Media reports indicate that foreign students in various recent years benefited Canada by $8 billion a year, Australia by $12 billion, UK by £8 billion and USA by $14.5 billion.

The problem with such figures, however, is that the universities imply that, if they themselves benefit in this way, the whole country benefits accordingly. However, the cost of foreign students’ education, at least in the United States, is substantially underwritten by public money – and the cost to taxpayers is considerable.

I am not aware of any similar research that has been undertaken in Canada and it is unlikely that any will be in the foreseeable future (at least by non-governmental organizations) since most is done either directly or indirectly (through the Metropolis Project, for example) by universities –who are hardly likely to want to look too closely at something that might affect their financial benefits.

It should not be a major job, however, for someone with a research capacity to figure out how much of the costs of foreign students are paid for by Canadian taxpayers.


POINT B : A somewhat contentious issue related to the enrollment of large numbers of international students at Canadian universities is whether they take up spaces that would otherwise go to qualified Canadians. Stephen Toope, a former President of UBC, and a strong advocate of bringing in more foreign students, is quoted as stating categorically that not a single B.C. student has been displaced by international students at UBC. While this is possibly true, I would be interested in knowing how he can be so sure.(Toope, by the way, has not been reluctant about coming to firm conclusions on issues where the evidence, in my view, leaves something to be desired. You may recall that he was the person who concluded on behalf of the O’Connor Commission that Canadian citizen Maher Arar had been tortured by the Syrians while in their custody. I found the evidence on which he based his conclusions far less than convincing, as did others -such as Kevin Steel in the February 26, 2012 edition of the now-defunct Western Standard. Maher at any rate wasn’t complaining about the outcome since he received an award of more than $10 million from the Canadian government based on Toope’s conclusions).

One of the main arguments used by Toope and others in favour of increasing the enrollment of international students is that the extra revenue this brings in provides funding for more places for Canadians. While there may be at least some truth in this, I remain somewhat skeptical about claims that no Canadians are displaced by the influx.

Some research has been done in the United States on this issue by Professor George Borjas of Harvard University who concludes that, while the impact enrollment of international students on locals in U.S. educational institutions varies with different groups, there does seem be a “crowd out effect” on American-born white males. Borjas, incidentally, is considered one of the leading experts on immigration and labour markets in the United States and in 2007 co-authored a study for Statistics Canada. Borjas published a major paper on international student programs in the U.S. for the Center for Immigration Studies in 2002. While not all of the issues he raises are as relevant in Canada as they are in the U.S., overall the paper provides a pretty good overview of the problems with foreign student programs that exist in both countries.

Also David North on the CIS blog site has written of a more clear-cut case of displacement of local students in California by foreign and out-of-state students – who both have to pay higher fees than Californians and are therefore given priority by local universities.

While there is little solid evidence available as to whether qualified Canadian students are frequently displaced at Canadian universities by foreign students, there is certainly a fairly widespread perception that this is the case.