The Size of the Prize
As we look into 2021 and beyond, most corporations are looking for ways to increase revenue and market share. Where are you most likely to succeed? Is it battling against your competitors for one or two share points, or is it in “green fielding” new opportunities with new customers?
If your answer is the latter, then a great place to focus is on Newcomers. Much has been written about the 1.2 million Newcomers who will be arriving in Canada over the next three years. A definite opportunity. But in focusing exclusively on Permanent Residents, corporations are missing out on another Newcomer opportunity, which is International Students.
While the number of Permanent Residents arriving on an annual basis for the next several years will be a minimum of 400,000, the number of International Students in 2019 were 642,480. That number was a 13% increase over 2018 and a 285% increase over the past decade. Despite the pandemic, many International Students chose to continue to enroll in Canadian universities and study virtually, waiting for a time when they would be allowed to come to Canada. My prediction is that the number will likely grow and could surpass 700,000 over the next several years.
Study permit holders by country of citizenship until end 2020
* Source: Immigration, Refugees and Citizenship Canada (IRCC)
Rising in Rankings
There are multiple reasons supporting this prediction and trend. The 2019 number moves Canada up to third place globally as a foreign student destination, after the United States and Australia.
Educations.com ranked Canada as number one in its Top 10 Places in the World to Study Abroad in its 2020 listings. They point out that while the cost of tuition is significantly lower, our universities can rival those in the United States and the United Kingdom. In fact, in their most recent ranking, Canada moved up from the fourth spot in 2019, far ahead of the United States, that placed fifth for the 2020 ranking, and was completely absent from the Top 10 the previous year.
In December 2020, the Migration Policy Group stated that “Among English-speaking countries, Canada is becoming a more attractive and inclusive global destination. Canada, along with New Zealand, is taking the place of previous top-ranking countries such as Australia, the U.K. and the U.S.”
Taking the top spot is Canada for two consecutive years. Known for its untouched natural beauty, friendly and welcoming locals, and a culture of tolerance and diversity, Canada is a clear choice for students looking to study abroad. Canadian universities are known for their technological innovations, especially in the fields of computer and information technologies.
In another survey entitled “Where the World Wants to Work”, the report indicated that Canada was the most sought-after destination in Google searches in the 101 countries surveyed.
Why the Large Numbers are Only Going to Increase
There are many reasons why Canada is a country of choice for International Students. While International Students pay considerably more for tuition than Canadian students, it is still significantly less than many of the top-tier universities in the United States and Britain. Beyond the tuition, the students’ living expenses are dramatically less when expended in Canadian dollars. As well, in Canada, International Students are allowed to work while they are studying, which is invaluable for students who need the extra income, to help with their schooling years, as well as invaluable to those who want Canadian work experience.
But do not think of all International Students as needing to work as baristas at Starbucks – many of them are coming from wealthy families with significant funds. They are buying everything from condos to Porsches. Recognize the diversity within the diversity.
Another key factor is that Canada has very liberal rules as it relates to work permits post-graduation. Britain went in exactly the opposite direction several years ago, making staying in the country post-graduation more difficult. In Canada, there is a clear path for International Students to become Permanent Residents through a number of economic class streams. The Canadian immigration system is based on a points system, and the time spent in Canada as students adds to the International Students’ points. The Government is putting their policies where their mouth is by further making it easier for International Students to transition from educational status to Permanent Resident status. The Government announced that they will allow the virtual time to count up until December 31, 2021.
Making it easier to stay post-graduation should increase the number of students who are both attracted to the country and the number of those who stay. Even before all of these legislative changes, 60% of International Students were staying in the country. Accordingly, International Students have lifetime value. If one focuses in on the largest segment, which is Indians and Chinese, that number climbs to 85+%. Fifty-six percent of all Student Permit Holders are coming from India and China. As of December 31, 2019, there were 218,280 Indian students as well as 141,240 Chinese students in Canada. The Indian student population has quadrupled over the past five years, while the Chinese student numbers have stagnated. Better universities have been built in China, combined with a strong Chinese economy, which has resulted in zero growth of Chinese International Students studying in Canada. Whether the situation in Hong Kong will change things and encourage more students to come to Canada is still unknown. The Canadian Government again has introduced new programs to allow students from Hong Kong to stay in the country and become Permanent Residents.
All of the above leads back to the fact that if you are looking for growth – a great place to look is at International Students. They are large in number and have a likelihood to remain in the country. They are also causing significant shifts in the demographics of the country. This trend is not going to go away. Over the past decade, Canada’s population grew by 11% but if we focus on the 18-24 year old cohort, it grew by only 4%. There are not enough students to populate and fund our existing colleges and universities. International Students spend approximately $22 billion on tuition, accommodation and other expenses. For tuition alone, they contribute approximately $6 billion a year to post-secondary education, which is about half of all the tuition revenues at domestic institutions. Our population needs them, our economy needs them, and our schools need them.
As this influx of International Students continue, so does the macro make-up of our demographics. Are you targeting Millennials? Thirty percent of them are ethnic. Are you targeting the Gen Z segment? Twenty-six percent of them are visible minorities.
The time has come to “study” this opportunity and see the opportunities that it can bring not only to the country but to your company.