September 24, 2004
Exporting Manitoba Schools
Enlightened public services embrace goals common to private-sector enterprises: they will thrive if they are allowed to innovate and deliver a quality product. That perspective could mean good news for Canada’s education industry. Global demand for quality education is rising, and the growing provision of school services to international students represents an important new export industry. A set of Frontier Centre backgrounders (see below) explores how Manitoba schools could capitalize on it.
The “business” of education is a big one. Although a relatively new term, the “world education market” describes a trillion-dollar industry. Capturing a share of it requires a more sophisticated view of our public schools, one that moves beyond the narrow idea of a core public service with an internal focus. It mean opening traditional schools up to non-traditional activities, including, recruitment of foreign students, distance learning, contracting out of education services and vouchers. The factors that limit access to this burgeoning market are government regulations and public school resources.
The number of international students attending Canadian schools is rising. Globalization and rising levels of wealth allow discerning parents around the world the information and the means to place their children overseas. Canadian schools are well-positioned to capitalize on their excellent reputation around the world – they score high in academic measurement and are perceived to favour creative thinking. These qualities are especially attractive to Asian customers who have problems with their local, more regimented “rote” education systems. A final attraction relates to the dominance of the English language. The flat accents of Canadian English are viewed as more “neutral” than its American and British counterparts.
How big an opportunity is this for Canada, and particularly Manitoba?
We are not talking about chicken feed. School boards in Vancouver charge international students $12,500 per academic year, Ontario about $11,500. Manitoba comes in at the low end of the scale, around $10,000. While our schools come in at the high end of the cost scale -- at $8,400 per student compared to the national average of $7.946 -- the difference still permits some profit from each foreign customer. These “earnings” can be appropriately used to offset other expenditures and to defer rising taxes.
Last year, the federal government issued 14,321 one-year study permits for international students to attend Canadian public schools. Only about 2.5% of those, 361 foreign students, found their way to Manitoba. They are sprinkled throughout 15 of Manitoba’s 38 school divisions. These numbers are triflingly small compared to the size of the market and the surplus school capacity. that exists in different provinces, particularly those places with entrenched slow growth policy models like Manitoba. In the early 1970s, Manitoba’s schools held 245,000 students. Today we have 60,000 less, about 186,000. Falling birth rates and rural depopulation dictate more school closures, unless we can fill those spaces with foreign students.
In other words, we have plenty of room to ramp up a better share of this market. In the last five years alone, Manitoba’s 27 school divisions have experienced a total enrolment decline of 8,619 students. If we replaced just those vacant seats with international students, the additional revenue would represent about $86 million, or about 6% of recent public school spending. That represents just the minimum opportunity under current conditions.
Because Manitoba’s public schools are middling performers in the broader Canadian context, there is much scope to raise the net benefit by improving the product. In recent years, we have curtailed performance measurement by ending standardized testing and creating ever more unwieldy school divisions through the false economies of amalgamation. These policies are a consequence of inward-looking thought and excessive influence from orthodox teachers’ unions. A higher performing school system with quality instruction would permit higher prices in a sophisticated world market seeking excellence.
Since exploding healthcare budgets are squeezing funding for schools in provincial budgets and since there seems to be no early prospect for substantive healthcare reform the education industry must look to other funding sources. It needs therefore to innovate and aggressively pursue the international revenue streams available with proper marketing and a solid product.
Other provinces see the opportunity and are moving aggressively forward. British Columbia recently passed Bill 34, The Schools Amendment Act, whose major purpose is to attract international students and reduce reliance on provincial funding by developing business opportunities and revenues via the international school market. It allows divisions to operate schools with the B.C. curriculum in other countries. It permits them to register separate companies, distinct from the boards themselves, for these purposes. Eight school boards have done this and more are in the process of registering.
The idea that our education and health services are potentially lucrative export opportunities is not a common one in Manitoba. With a supportive policy framework that encourages excellence and customer service, both these areas could become major drivers of our economy by generating revenues, creating jobs and strengthening our feeble tax base.
This vision will not suit the “have-not” thinkers in our province. It’s for the bold and confident, who believe public service does not have to be an oxymoron. We can and should pursue it aggressively.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."