Four years ago 60,000 international students came to Canada for school now that number stands at 90,000.
Canadian universities used to find it hard to draw attention away from the U.S. when trying to lure foreign students to its business schools. Not anymore. Over the last two years, Canadian full-time MBAs have seen the biggest increase in applications of any region, according to the Graduate Management Admission Council (GMAC), a business school association.
Several things have happened to persuade more overseas students to consider Canada. Firstly, the US, in response to a tough job market, has tightened up its visa policy, making it more difficult for foreigners to stay and work in the country once they graduate. The number of H1-Bs, as the relevant visas are called, is now capped at 65,000. In 2003 it was 195,000. This is a puny number given that in 2011 there were around 723,000 foreign students in the US, according to the Institute of International Education. Furthermore, students are only awarded an H1-B if they already have a job offer. To make matters harder, this must be directly related to their field of study. MBAs have been particularly affected by the clampdown because the raison d’être of many business students is to get a new job at the end of the course.
While America works to keep well-qualified people out, Canada has moved in the opposite direction. As of 2008, all students who complete a two-year Master’s degree automatically have the right to stay in the country and work for three years. They do not need to have a job lined up and are not restricted to working in a particular field.
Jeff Muzzerall, of the University of Toronto’s Rotman School of Management, was one of those who lobbied hard for a relaxing of the rules. The government didn’t take much persuading, he says; in the end they just decided that they wanted to encourage more innovation and “to keep the very successful people in the country”. The change has made Canadian universities much more appealing. Mr Muzzarall says that four years ago 60,000 international students came to the country; this is now stands at 90,000.
Canada has been able to adopt an open-door policy, in part, because it has a less frenzied political climate than many other rich countries. In America, the protectionist lobby persuaded Obama that limiting the number of foreign professionals would safeguard American jobs. In much of Europe, where visa regulations have also been tightened, it has been as a sop to right-wingers worried about immigration.
Charmaine Courtis, executive director of student services at York University’s Schulich School of Business, says that around 80% of foreign MBAs at the school choose to stay and work in Canada immediately after their MBAs. After that, she adds, most tend to return home, taking their newly honed skills with them. It is a similar story at Rotman, says Mr Muzzarall. However, given that the average age of an MBA on its full-time programme is 28, by the time that they have studied for two years and lived in the country for a further three, many have settled down with a mortgage and new family, which can persuade them to stay for good.
It’s the economy, stupid
The visa issue is only half the story of Canada’s success. As the US slumped to financial crisis, Canada’s economy thrived. Of particular interest to foreign MBA students has been the emergence of its financial services sector. Once lambasted as old-fashioned and risk-averse, the country’s banks have proved to be the tortoises to America’s hares. Of the world’s 20 largest banks, measured by market capitalisation, three are now Canadian. None made that list in 2008.
A booming energy sector is also luring students. Schulich recently launched a specialised MBA in mining, which is attracting much interest. The school says that 58% of the world’s mining companies are listed on Canadian exchanges. The industry can be lucrative for MBAs, particularly as rapid growth is likely to lead to a shortfall of knowledgeable managers.
Another boon is the fact that around two-thirds of Canadian full-time MBAs are one-year programmes, according to GMAC (although this does not include those at Rotman or Schulich). These tend to be more popular with students from emerging economies, as shorter, cheaper programmes can dramatically reduce the opportunity cost of study. Furthermore, says Ms Courtis, the fact that Canada is seen as a nice place to live should not be underplayed. Multicultural Toronto—a city Peter Ustinov once said was like New York run by the Swiss—is the big attraction. But others, such as Vancouver and Calgary, also score highly. All three were ranked in the world’s top five most liveable cities by Economist Intelligence Unit, our sister organisation.
There are some downsides. A booming economy might be good for jobs, but it also brings a strong Canadian dollar. This means that the cost of an MBA for a foreign student has risen significantly over the last few years. And when schools focus on luring foreign students, who typically pay higher fees than locals, it can mean that domestic students get squeezed. At Concordia University in Montreal, for example, most MBA students are from outside Canada. When the Quebec’s students recently came out on strike, to protest at the withdrawal of subsidies for locals, its MBAs were notable for their lack of solidarity. One reason may be that, according to the school’s online calculator, the total tuition fee for non-Canadian MBAs is C$41,370, compared with just C$6,821 for Quebecers.
Photo credit: Canadian Access Consulting
Via The Economist