Andrew Drinkwater
It’s not too often that the federal government makes a policy that so directly benefits one province over most others (technically two provinces will have large growth: Alberta and Quebec, but we think the latter will struggle to hit their higher target near term). Canada has decided to both cut the overall number of international study permits it issues and distribute those that remain according to population. For institutions across Canada, this policy change is an opportunity to test if the lessons learned and strategies implemented to address the 2021 COVID-19 classroom closures remain. Those which maintained their collaborative approach, continued to develop their data products and improve data literacy since then, will be better able to respond to this change.
As mentioned in our previous blog post on national trends on national trends that Alberta is one of the provinces that will likely be able to grow its international student enrolment, while British Columbia (BC) is one of the provinces that will have to cut back. The two neighboring provinces, and the disparate impacts to them, are a good reminder that strategic enrolment management (SEM) is always relevant, not just because SEM creates resiliency in times of emergency, but also because it enables an institution to quickly identify and make the most of a growth opportunity.
With the changes to Canada’s student visa regime now two weeks old, what changes can Alberta and British Columbia institutions expect?
BC’s loss is Alberta’s gain. It is expected that BC will drop from 87,500 study permits issued in 2023 to 50,100 in 2024 (a decrease of -37,400 study permits). Conversely, Alberta, conversely, will grow from 24,900 to 42,700 (an increase of +17,800 study permits). Alberta, theoretically, can provide learning opportunities to about approximately half of the students that BC will no longer be able to accept.
This net gain of 17,800 students could represent a boost in tuition revenue of about approximately $680 million for Alberta in a single year of study (17,800 students x $38,266 as the 2024 a projected average international tuition fee in 2024). Even if assuming we assume no lift from 2023's average tuition, the potential net gain is at least it's still $640 million.
Looking at 2024 only tells part of the story. Students tend to stick around longer than one year. In colleges, students tend to be around for 2-3 years; in universities, 4-6 years. Of course, there’s variation there – it depends on program length, number of courses completed per year, retention rates, and many other factors. I’d argue the biggest factor for Alberta institutions long-term gains is how prepared they are to recruit, support, and retain additional international students for the upcoming intake. Projecting different enrolment scenarios provides critical metrics for aligning the growth opportunity with the capacity potential of an institutions, in the short and long-term. When an institution responds to a growth opportunity by focusing on what they can sustain in the long-term, both the students and institution benefit.
We modelled out four scenarios previously.
- Scenario A: 2021 -> 2022 -> 2023 Compound Growth Rates Continue (No Change in Policy or Demand)
- Scenario B: Intakes Capped at 2023 Levels
- Scenario C: Allotment Undergrad + Compound Growth Grad: the federal plan
- Scenario D: Realistic Undergrad + Compound Growth Grad
Looking at these numbers, we can see that over the next 5 years, Alberta could triple their university international enrolment if they filled their new study permit allotment, according to our projections. Had the status quo remained in place and growth continued (Scenario A), we’d be looking at a doubling of international enrolment, not a tripling. Across universities and colleges, Scenario C shows a potential net gain of approximately 41,000 students in Alberta compared to 2023 levels, which is approximately $1.5 billion over 5 years (41,000 students x $38,266 as the 2024 projected average international tuition fee) over 5 years of study.
Comparatively, BC will lose approximately 15,000 students over this period. Universities will continue to grow, largely due to graduate programs. Colleges, especially private ones, will shrink. That means BC revenue will decline by at least $550 million (15,000 students x $38,266 as the 2024 projected average international tuition fee) compared to 2023. Colleges with strategic enrolment management already in place can pivot to recruiting in other identified key markets, and double-down on their retention and persistence initiatives.
Alberta really is calling.