Canada's post-secondary education system generated $61 billion in economic output in 2025—more than the entire oil sands extraction industry and nearly twice as much as mining or transportation manufacturing—according to a new report published April 23, 2026, by the Canadian Centre for Policy Alternatives. The analysis compares universities and colleges to industries typically considered strategic priorities, like fossil fuels, housing construction, and mining, and concludes that post-secondary education should be treated as the vital economic sector it is, deserving more robust government support as the system faces a funding crisis.

Universities and colleges accounted for 2.1 per cent of Canada's total GDP in 2025, just $5 billion behind residential building construction and well ahead of oil sands extraction at $49 billion. The sector employed 488,000 people in 2024—about 2.3 per cent of total Canadian employment—which was twice as many as transport manufacturing, nearly four times more than oil and gas extraction, and almost six times more than mining. In 2024, universities and colleges paid $39 billion to employees, representing about 2.4 per cent of total compensation paid across Canada, compared to the oil and gas industry's 1.7 per cent contribution to the total pay pie. In 2022, the sector spent $16.5 billion on purchases from other industries, including $1.4 billion on gasoline, $1 billion on repair construction, $895 million on building services, $560 million on electricity, $481 million on IT services, and $388 million on prepared meals. Post-secondary institutions paid $1.1 billion in taxes on products in 2022—mostly federal and provincial sales taxes—plus $683 million in taxes on production such as payroll and property taxes, not including income taxes paid by employees.

The report finds that "for every $100 in economic growth produced by universities, $117 was generated in other industries across the economy," while colleges generated $125 elsewhere for every $100 in growth—comparing favourably to $99 for residential construction and conventional oil and gas extraction, and $93 for oil sands extraction. The analysis notes that over $18 billion was spent on research and development activities in Canada's post-secondary education sector in 2023, and despite making up only about two per cent of Canada's economy, the post-secondary education sector represents over 34 per cent of all research and development, much higher than Canada's peer countries. According to the report, "any way you look at it, this sector returns to us an outsized bang for the buck."

The report explains that the sector's large economic footprint exists because universities and colleges are major employers that pay competitive wages to produce high-value services, and they're often the heart and soul of many communities. Unlike capital-intensive industries like mining or oil and gas—which employ fewer workers relative to their investment in machinery and technology—post-secondary education is labour-intensive, meaning job creation has a bigger local impact. The report notes that academic salaries represented only 52 per cent of university staff spending and 56 per cent at colleges, with the rest going to administrative staff, librarians, technicians, IT specialists, food service workers, caretakers, maintenance jobs, and skilled tradespeople. The analysis warns that "increased reliance by institutions on precariously employed and lower-paid contract workers as a cost-saving strategy not only exacerbates inequality across the sector, it makes bad local business sense because those workers have less money to spend in their community." When governments spend money to support post-secondary education, the report explains, much of it ends up in workers' paycheques, which they then spend throughout local economies—especially in university and college towns, supporting small businesses and local arts and culture.

The report describes Canada's post-secondary education system as being "in crisis, due to provincial and federal government underfunding," worsened by the sudden federal cutoff of international student enrolment that has created a financial crisis never seen before. Across the country, universities and colleges face massive funding shortfalls as administrators engage in drastic budget cuts, mass layoffs, and eliminate entire programs, even campuses. According to the report, "the crisis in post-secondary education is self-imposed and completely avoidable," and the solution isn't complicated: both federal and provincial governments must provide enough funding for universities and colleges to operate without excessive reliance on student fees. The bottom line: if this were any other highly touted industry—like oil and gas or housing—governments would be rushing to the rescue.