Why are our schools addicted to foreign student tuition? Because government was the pusher

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If you want to understand why the number of visa students at Canada’s universities and colleges – particularly in Ontario, and particularly at colleges – has risen so sharply in recent years, follow the money.

One trail leads to an unexpected place: my car.

In the spring of 2022, Ontario sent me a cheque for $440. The Ford government had just made it free to renew your vehicle registration – it used to cost $120 a year – and the move was retroactive to 2020. I had paid my fees in advance to the end of 2023, so I was refunded back to the start of the decade.

There’s more. Each time I fill up my tank, I save about $3, thanks to Ontario’s 5.7-cent-a-litre cut to the gasoline tax. The cut went into effect in the summer of 2022. It was only supposed to last six months but it’s been extended and extended again, and is now scheduled to run until (at least) the summer of 2024.

Axing vehicle registration fees costs the Ontario government $1.1-billion a year. The cut to gas and diesel taxes costs the treasury $1.2-billion a year.

These moves may be popular – did I miss the demonstrations against them? – but they don’t come free. They represent $2.3-billion a year Queen’s Park can’t spend on other things. Like, say, postsecondary education.

According to the expert panel Ontario formed to advise it on the financial sustainability of public universities and colleges, and which delivered its report last week, the province’s taxpayer support for higher education is the lowest in the country.

In 2021-2022, per-student public support for universities in the rest of Canada was $20,772. Ontario’s figure was barely more than half that, at $11,471 a student. Public funding per Ontario college student was $6,891, or just 44 per cent of the average in other provinces.

The other major source of higher-education funding is tuition, and the Ford government put a squeeze on there, too. In 2019, it cut tuition fees by 10 per cent and then froze them, which is where they remain. According to Ontario’s 2022 budget, that’s saving Ontario students – and costing universities and colleges – $450-million a year.

But necessity is the mother of financial invention. Which is how public universities, and especially colleges, discovered a new source of funds: foreign students. Their numbers are potentially unlimited and their tuitions are uncapped.

Provincial governments, led by Ontario, encouraged the institutions to move in that direction. And all were enabled by the federal government’s student visa system. It makes no distinctions among public institutions or programs, has no controls over quality, and puts no caps on the number of visas on offer.

What’s more, the student visa system is now a feeder for both the temporary foreign worker stream and the permanent immigration stream. And for many foreign students, a shot at Canadian citizenship is what their tuition is really buying.

Visa students are allowed to work while enrolled. Even low-wage work, combined with Canadian educational credentials – including those of dubious economic value – significantly boosts a foreign student’s odds of securing one of the world’s most valuable prizes: Canadian citizenship.

That’s what many Canadian educational institutions are effectively selling. It helps explain why the number of foreign students in Ontario rose to 412,000 in 2022, from 46,000 in 2000.

In the case of visa students in high-end programs with high economic returns – from advanced degrees in computer science and engineering to apprenticeships in the best-paid skilled trades – encouraging foreigners to study in Canada, and offering them a postgraduation path to citizenship, is an excellent idea. Let’s leverage the educational system to recruit the best and the brightest, which will boost our GDP per capita.

Unfortunately, a large part of the visa system has been diverted to other purposes. We’re basically selling citizenship on the cheap, with the funds backfilling for provincial governments’ underfunding of higher education.

Ontario’s public colleges have led the dash for foreign cash, with several setting up Toronto-area satellite “campuses” – usually rooms in a strip mall or office building – in partnership with a private operator. The public college credentials are key, because they open that path to citizenship by conferring a right to remain in Canada for work after graduation, even for non-degree programs.

The Ontario expert panel offers two small, first steps that can start to rein in this state of affairs.

It recommends that tuition at Ontario universities and colleges be increased by 5 per cent immediately, and allowed to increase by the rate of inflation thereafter, with much of the new money directed to financial aid for lower-income domestic students.

The panel also wants the government to provide a one-time, 10-per-cent top-up to university and college funding, with future increases in per-student funding tied to inflation.

Both moves would mean (slightly) less dependence on foreign tuition.

In the most recent fiscal year, the Ontario government spent $11.6-billion on postsecondary education. Upping that by 10 per cent, as the panel proposes, would cost roughly $1.2-billion a year.

That’s the same cost as free vehicle registrations. That’s the price of the gas-tax cut.

As the old saying goes, to govern is to choose.