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ROI of Higher Education: November 26, 2025

Education & Skills

By: Boxi Yang

    

Key Insights 

Cost of higher education 

  • Tuition for domestic students is not always aligned with program costs, and in all cases falls short of covering per-student costs. Institutions must rely heavily on other revenue sources, including government transfers or international student tuition fees, to close the gap.  Federal government policies restricting international students therefore present major challenges for institutional budgets. 
  • Operating costs per student vary by program and institution. At the college level, agriculture and natural resource programs are the most expensive to operate. Business, management, and public administration programs are the least costly. 
  • Provinces are responsible for the majority of transfers for operating expenses to universities and colleges, while federal transfers account for only about 1 per cent of the total. 

Income premiums and tax revenues 

  • Post-secondary graduates earn substantial income premiums over non-PSE workers, with the largest gains concentrated in STEM, health, and skilled trades programs. 
  • Income premiums show strong regional variation: resource-driven provinces such as Alberta and Saskatchewan lead in engineering and trades, while Atlantic provinces post some of the highest returns in health 

ROI of higher education and labour gaps 

  • Across all primary fields of study, both colleges and universities deliver a positive return on investment when looking at combined federal and provincial tax revenues. 
  • Programs in STEM, health, and trades reliably deliver the strongest returns across jurisdictions, while education and humanities tend to yield weaker fiscal returns, particularly at the university level. 
  • Labour shortages are most pronounced in the same fields that deliver the strongest ROI, such as health care, information technology, and technicians and trades. These shortages indicate structural skills gaps that constrain productivity and economic growth. 

Building a sustainable system for high-value education 

Post-secondary institutions operate with tight finances. However, high-cost programs in STEM, health, and trades are exactly the ones that generate the strongest income premiums, tax returns, and labour-market benefits. A sustainable path forward points to stronger provincial support for expensive but high-return fields, and targeted growth in areas where fiscal returns and labour gaps overlap. 

Explore the full report to uncover deeper insights on the ROI of higher education in Canada.

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