My Thoughts on the Throne Speech (Part One)

Right — I’ve milked the headlines and the mail bag for as long as possible.  Now the tough work of presenting my own conclusion.   Let me start with a recap:

1. As reported in the Globe, “The classroom is the centrepiece of Premier Dalton McGuinty’s five-year plan to return Canada’s one-time economic engine to prosperity”.

2. McGuinty proposes to accomplish this return through “[the formation of] a new online university, 20,000 new post-secondary spots”, as well as the recruitment of an additional 18,500 international students into those same schools (in addition to the current 35,000+ international students).

3. The proposed benefits of the increase in international students would be twofold: a) On the one hand, McGuinty claims that the additional tuition income paid by international students could be used “to help expand our schools for our kids and create jobs”.  b) On the other hand, 18,500 international students would benefit the province at large, since “a study for the Department of Foreign Affairs and International Trade said 178,000 international students spent over $6.5-billion in Canada in 2008″.

In short, the Ontario government sees an increase in the number of international students as a means of increasing postsecondary revenues, at little or no cost to Ontario students or taxpayers.  The system would be essentially self-funding, with international student tuition providing seed capital for the later expansion of colleges and universities, ultimately benefiting Ontario students.  The Ontario postsecondary system (and, by extension, the province’s economy) could be revitalized, with somebody else picking up the tab.

I’ll start by saying that I’m not going to debate ideology or the potential impact of increasing the number of foreign students upon our college and university programs.  I’m simply going to try to respond very precisely to the validity of the premises above.

Following the Money: A Statistics Canada report from December 2009 reported that the average tuition for an in-province student pursuing a degree at an Ontario college or University was $5,951 for the school year.  To put that into context, page 9 of a September 2009 report by the Ontario Confederation of University Faculty Associations claimed that, in 2008, the tuition of undergraduate university students represented a total of 58% of total postsecondary education funding.  More specifically, the Ontario Ministry of Training, Colleges, and Universities reported that per-student funding from the province in 2008-9 amounted to about $8,458/year for a University student and about $6,637/year for a College student.

To overgeneralize, an Ontario University student pays about $5,951/year for her education, and the provincial government kicks in roughly $8,458; her College counterpart may pay the same (particularly in a degree program), in which case the government would contribute on $6,637 on average.

Total cost to deliver her education (again, overgeneralizing — correct me if you have better guesses)? $14,409 for the University student; $12,588 for the college student.  Not counting Operating costs for the institution, I believe.

Why does this matter?  Because the premier claims to be basing the renewal of Ontario’s postsecondary system (and, indirectly, the province’s economic recovery) to a significant degree on the additional income provided by an additional 18,500 international students.  

So let’s try to be honest about how much money those additional students would contribute to Ontario’s postsecondary education system.

Looking at Some Concrete Examples

To start, let’s quote the Ontario Government’s promotional material, which informs prospective international students that tuition is approximately $14,000-$18,000/year for Ontario Universities and $11,000/year at Ontario colleges.  If you look up three paragraphs, you’ll note that those sums would not represent any significant new income into the colleges and universities.  The postsecondary institutions would not get additional money; but the government would save money (since the province doesn’t provide per-student funding for international students).

But let’s try to look at some specific examples. I’ll start by taking some sample tuition rates, aiming to find programs where the in-province tuition approximates the $5,951 average mentioned above:

York University:

Domestic student tuition + fees: $5,761 (“for most non-professional programs”)

International student tuition + fees: $15,761 (“for most non-professional programs”)

The difference between the two (i.e., the amount of additional tuition income that the University receives from an international student instead of a domestic one): $10,000.

Minus the $8,458 of per-student provincial funding that the University does not receive for international students: $1,542.

Total benefit: York University gets a total of $1,542 profit for having an international student instead of a domestic one; the Government of Ontario saves an average of $8,458.

Sheridan College (Diploma program: Business accounting)

Domestic student tuition + fees: $3,161

International student tuition + fees: $12,677

The difference between the two (i.e., the amount of additional tuition income that the College receives from an international student instead of a domestic one): $9,516.

Minus the $6,637 of per-student provincial funding that the College does not receive for international students: $2,879.

Total benefit: Sheridan College nets a total of $2,879 profit for having an international student instead of a domestic one; the Government of Ontario saves an average of $6,637.

Centennial College (applied degree program; tuition for first year of program)

Domestic student tuition + fees: $7,583.16 ($1,500 higher than York’s, for what it’s worth)

International student tuition + fees: $16,877.16 ($1,000 higher than York’s)

The difference between the two (i.e., the amount of additional tuition income that the College receives from an international student instead of a domestic one): $9,064.

Minus the $6,637 of per-student provincial funding that the College does not receive for international students: $2,427.

Total benefit: Centennial College nets a total of $2,427 profit for having an international student instead of a domestic one; the Government of Ontario saves an average of $6,637.

Bringing it home…

So, let’s say that of our 18,500 new international students, 4/6 opt to go to universities, 1/6 to college diploma programs, and 1/6 to college degree programs.  And let’s say that the numbers above are representative.  Were that the case, then:

Average profit for the the postsecondary institution, per international student: $1,912

Average savings to the government, per international student: $7,851

Of course talking about governmental savings is a bit misleading — they never paid for international students in the first place; they could also “save” money by reducing number of postsecondary students.  The government’s job is to fund Ontario students, so the international students are less to do with savings then they are simply outside of the government’s responsibility.  Unless international students replace domestic ones, the government’s cost of funding students on the whole will not be reduced by the additional of international students.

Which leaves us with precisely what McGuinty identified as the potential benefit for the postsecondary system: the funds generated by international students.  Of course, it costs money to teach them — just as much money as it costs to teach domestic students.

But even so, let’s just tally it all up, the $1,912 average profit + $7,851 average savings per student x 18,500 additional students equals…

$180,615,500.

$180 million, by my guesstimate.  Per year.  Quite a bit, really.  Money that could certainly be used for operating costs, expanding the residences (to accommodate the international students) and campuses, expanding the language centres (to accommodate the international students), and starting up that online university.

But would it be enough to revitalize Ontario’s postsecondary system (and thus, as envisioned, its economy)?  What percentage of the budget would this sum represent?

Well, let’s go to the 2009 Ontario Budget, which predicts that:

Total postsecondary education and training sector spending [in Ontario], including the net expense of the Province’s 24 colleges of applied arts and technology, will grow . . . to $6.6 billion in 2009–10 and 2010–11.

So the expansion of international students will potentially introduce $180 million of new funding in a $6.6 billion budget.  It will represent an infusion of 2.73% of the budget.

To cap off this section, then, if indeed “Ontario stakes its recovery on education“, as the headlines tell us, I’m simply not convinced that a 2.73% influx from outside sources will be enough to turn the province around, especially not if the additional students require additional faculty or resources.

I’ll leave the last word for the day to Prof. David Johnson at Wilfrid Laurier University, who responded to the proposal, saying:  “You can have higher average revenue per student if more international students are here and if they are charged more. However, to create jobs you must expand the overall system”.

Submit corrections to my facts, figures, and analysis at ontariocollegeprof@yahoo.com

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