Universities are more apt at teaching the law of supply and demand than following it. Ignoring the long-term impacts of declining fertility, universities in Canada have been busy building capacity only to realise that they may have overbuilt and over-hired in the past decade. International students are needed in large numbers to protect some Canadian universities from the impending financial ruin.

The recent issue of University Affairs, a trade publication of the Association of Universities and Colleges of Canada, ran a cover story about the enrolment challenges resulting from changing demographics in Canada.

The percentage of Canadians aged between 18 and 21, who make up more than 60 per cent of the undergraduate enrolment in Canada, is going to decline by 10 per cent by 2020, noted Peggy Berkowitz, the editor. Canadian universities, on the other hand, have expanded their capacity by hiring additional faculty and constructing new buildings. This disconnect in supply and demand should be a major source of concern for university administrators.

The enrolment crisis, a likely scenario if the doomsday forecasts by Canada’s leading demographer, Dr. David Foot, materialise, will require new ways to improve the declining demand for higher education. A less preferred option will be to lower admission standards to fill the gap with domestic students who would not have secured admissions with higher standards. A more preferred option is to attract talented international students to Canada to pursue undergraduate education. Aspiring students from Pakistan, India, and China could be the likely beneficiaries, provided their governments act fast to seize the opportunity.

All across Canada school boards are grappling with the falling enrolments in secondary education. Many school boards are closing schools because of lack of demand that is likely to cycle through the system and soon reach universities. Dr. Foot warns,

Overall, the 18-to-24 age group that grew almost 20 per cent between 1996 and 2013 should contract about 10 per cent over the next decade.

The falling enrolment will be even a bigger challenge for the Atlantic Provinces in Canada, because of their rapidly aging population.

Source: University Affairs, May 2014

The Cape Breton University in Sydney, Nova Scotia, is one such institution that is facing the enrolment crunch where the student enrolment has declined by 6 per cent. The reasons for this decline have been known for years in Atlantic Canada where scarce job opportunities forced many young workers to migrate to the booming Alberta. The youth from all across Canada are converging in Alberta to join the job fest brought about by the Oil Sands. A recent report by Statistics Canada revealed that in 2013 Alberta alone generated 87 per cent of the net new jobs in Canada.

Cape Breton University has turned to international students to balance its books. Whereas international students in Canada account for fewer than 10 per cent of the enrolment in tertiary education, at Cape Breton they account for 29 per cent of the student body. If the forecasts for even more drastic enrolment crunch continue, universities in Atlantic Canada may have to increase their international enrolment radically to unprecedented levels. An opportunity exists for international students who in the past may have been turned away by the same schools that now face the enrolment crunch.

The enrolment crunch is likely to spread to the rest of Canada because of the significantly lower size of the cohort that demands tertiary education. In Ontario, Canada’s most populace province, early signs of an enrolment crunch have started to appear. In January, the Council of Ontario Universities reported “a slight dip” in the number of students applying to universities. University administrators in Ontario hope that the decline in applications in 2013-14 is a one-off event. The demographics and the skewed employment markets in Canada, however, suggest otherwise.

Canada, unlike the United States, Australia, and the United Kingdom, is not one of the preferred destinations for the internationally mobile students. A report from UNESCO reported that in 2011, 3.8 million students were enrolled in tertiary education in a country different from their own. Almost one in five international students was enrolled in the United States followed by UK, Australia, France, and Germany. At the same time China, India, and South Korea provided the largest number of international students.

Students from China (26,298), the US (7,578), France (7,269), and India (5,868) constituted the largest cohorts of international students in Canada. International students from Pakistan number 1,827 in Canada. Even Iran (2,958) and Saudi Arabia (2,361) sent more students to Canada than Pakistan. The most frequent destinations of international students from Pakistan included UK (10,122), the US (4,949), Sweden (3,165), and Australia (3,104). Most international students from Pakistan are enrolled in graduate programs. The enrolment crunch though impacts the undergraduate student population in Canada.

Source: UNESCO, 2011

According to a report by Statistics Canada, the total number of international students from Pakistan attending a university in Canada’s Atlantic Provinces stood at 72 in 2009. Another 243 students from India were enrolled in the same universities. Given the enrolment crunch, hundreds, if not thousands, more from Pakistan and India can enroll in Canadian universities, whose quality, without exception, exceeds that of higher-ed institutions elsewhere.

Governments in countries like Pakistan and India can help applicants in securing admissions abroad. Universities in Canada and the United States admit students from high schools after they have completed grade 12, which is known as intermediate in India and Pakistan. Not much is known abroad about the quality of institutions and Boards that award grade 12 certificates in India and Pakistan. Governments can set up agencies to develop and report quality metrics for students who clear Grade 12. Such standardised reporting will help Canadian and other western universities evaluate credentials of international applicants.

Commercial banks in India and Pakistan also have the opportunity to tap into their future elite clientele by extending loans for higher education to those who would like to study abroad. These loans could be secured against land assets and other collateral put up by parents. There is an untapped niche market for cultural training of those who would like to move abroad. Language training, cultural assimilation, etiquettes, and other nuances of foreign cultures could be offered by commercial firms to those who are ready to spend considerable amounts to move abroad and would not hesitate in investing in training that will improve their odds for success.

Whereas Canada may have a tough time filling seats in the universities, South Asian universities will continue to struggle to meet the demand for higher education. It is not hard to see how excess demand for higher education in South Asia could help serve the excess supply in Canada.