"The more we can bring in post-secondary graduates...the better it is for everyone in Halifax"

Universities have $1.2B impact on Halifax economy

Haligonians experience direct financial benefits from educated population

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It's hard to imagine Halifax without universities, especially for Freeman's restaurant.

"It would affect us greatly if there wasn't a high student population in all of the surrounding areas," says John Bachmann, general manager of Freeman's on Quinpool Road.

He says students, especially from King's College and Dalhousie University, make up a large proportion of his patrons. And when they're not there, he feels their absence.

"We'll notice a drop off for about two weeks until summer sessions begin," he says, referring to the period directly after spring exams.

Nova Scotia education by the numbers

  • Average university tuition: $5,731
  • Average student debt after undergrad: $31,000
  • GDP generated by universities: $1.2 billion
  • Employees at universities: 8,000
  • Studnets enrolled in universities: 30,000
  • Students enrolled in community colleges: 11,000
  • Personal income generated by universities: $860 million
  • Percentage of workforce in Halifax with a university degree: 25%

Universities are a huge driver of economic growth in Halifax.

"Directly from universities in Nova Scotia, it accounts for about $1.2 billion for our GDP," says David Fleming, a junior economist at the Greater Halifax Partnership.

"That's money that spins all through the economy," he adds.

Ripple Effect

More than just stimulating the local economy, creating jobs and training skilled workers, universities do something else: they save taxpayers money.

"Educating more people has benefits not just for the people themselves, but for the wider society on a whole range of dimensions," says Lars Osberg, a social economics professor at Dalhousie University.

He's referring to a study by the Organization for Economic Co-operation and Development that put a monetary value on the benefits a society receives from being populated with university-educated individuals.

It concludes that financial impacts for individuals in society "were of the same order of magnitude as the direct financial benefits to the individual (who earned the degree)."

This means that everyone without a university degree benefits from everyone who gets one.

The study suggests that people with higher education tend to be healthier, less reliant on social assistance programs and volunteer more than those without a university degree. This means they cost society less, which saves everyone else money in lower taxes.

Fleming also agrees that the general population of a city benefits from university education.

"The more we can bring in post-secondary graduates ... the better it is for everyone in Halifax," he says.

All the way to the top

People with university educations also generate more money for the government: they typically earn higher wages so the government receives a higher return on income taxation. However, because university grads benefit financially from their own studies, the argument is often made that they can afford to put money up for their education.

The recent memorandum of understanding, released by the provincial government, calls for a decrease in university funding and an increase in student tuition. Osberg believes that making it more difficult to attend university is short-sighted.

"The government of Nova Scotia helps to subsidize university tuition to make it more accessible ... So, for three or four years they put part of the cost per student of running the university; then for the next 40 years, collect taxes on the incremental earnings that these people make, so they make money big time in the long term."

However, Fleming says giving more money to universities and students isn't as easy as it sounds.

"We have a fairly significant deficit in terms of the amount of tax we take in versus what we spend," he says, which means that taxes can't simply be raised.

He also points to Halifax's disproportionally older population as an obstacle - retiring citizens don't generate much revenue in taxation.

However, Osberg thinks that is exactly why the government should be making university affordable in Nova Scotia.

"We have governments who claim to be worried about demography and the shrinking population of the place - sure is a disincentive to form families and stuff when you have that much debt," he says.

Weighed down

Students in Nova Scotia graduate with an average of $31,000 in debt, the highest in Canada. Osberg says this puts a definite strain on these graduates' abilities to stimulate local economies.

"You can't buy houses, can't buy cars - lots of things you can't do when you have [that] debt sitting around you," he says. 

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