Education and Skills

	Grade		Grade
High-school completion		Students with high-level math skills
College completion		Students with low-level science skills
University completion		Students with high-level science skills
Ph.D. graduates		Students with low-level problem-solving skills
Science, math, computer science, and engineering graduates		Students with high-level problem-solving skills
Students with low-level reading skills		Adult literacy rate—high-level skills
Students with high-level reading skills		Adult literacy rate—low-level skills
Students with low-level math skills

In Canada, education is seen as the most desirable route to earning a decent living and to enhancing personal growth and happiness. Educated people not only earn higher incomes but also contribute disproportionally to business innovation, productivity, and national economic performance. There is a strong and direct relationship between investments in education, educational attainment, and economic growth. A 2003 multi-country study from the European Commission found that if the national average educational attainment level is increased by a single year, aggregate productivity increases by 6.2 per cent on impact, and by a further 3.1 per cent in the long run.¹ Recent evidence also suggests that educated people make decisions that lead to healthier and longer lives.² Education drives success.

Education performance is assessed using 15 indicators across three levels of labour market participation:

• Basic participants
• Mainstream participants
• Advanced participants 

 

1. Basic Participants: These are people who have low literacy and basic skills, are often unemployed, lack coping strategies, and when employed, cannot perform most jobs fully competently. The goal for this group of participants is to prevent social exclusion, minimize the poverty trap, and strengthen the connection to the labour force. This is done by decreasing the proportion of students with low-level reading, math, and problem-solving skills, and decreasing the proportion of adults with low-level literacy skills.
2. Mainstream Participants: These are people who have mid-range literacy and job-specific skills, are usually employed and performing their jobs reasonably competently, but who may be experiencing difficulties in adjusting to workplace change. The goal for this group of participants is to develop entry-level skills for the modern economy and to improve the ability to adapt to changes. This is done by ensuring that people complete high school, gain some college education, and minimize the proportion of students with low-level science skills.
3. Advanced Participants: These people have high literacy and job-specific skills and advanced thinking skills that enable them to adapt to workplace change, innovate, and create new processes, products, services and companies. The goal for this group of participants is to ensure the acquisition of skills that provide intellectual leadership, create new products, companies, and processes, and that benefit other members of society. This is done by focusing on increasing the university and Ph.D. completion rates, increasing the proportion of graduates in science, math, computer science, and engineering disciplines, increasing the proportion of students with high-level reading, math, science, and problem-solving skills, and increasing the proportion of the adult population with high-level literacy skills.

A recent OECD report on education confirms that, with few exceptions, earnings increase with each level of education.³ The earnings benefit of higher education can be seen in the following chart. The chart shows how much a person at each level of education (below high school, college, and university) earns for every $100 earned by a high-school graduate.

The chart tells us that people with a university degree in the U.S. earned $180 for every $100 earned by high-school graduates. Those with a college degree earned $114 for every $100 earned by high-school graduates, and those who did not graduate from high school earned only $65 for every $100 earned by high school graduates.

Several interesting observations can be made about the results shown in the chart:

• The relative earnings benefit of a university education is highest in the U.S. and lowest in Norway.
• The relative earnings benefit of a college degree is higher than the benefits of a university degree in Norway, and almost equal in the Netherlands.
• The relative penalty for not completing high school is lowest in Finland and highest in the United States.

 

When benchmarked against its peers, Canada earns an “A” grade on the Education and Skills report card. It ranks 2nd behind Finland. Canada achieves “A” and “B” grades on 13 of 15 indicators. Only Finland has a better report card.

Canada’s strength is in delivering a high-quality education to people between the ages of 5 and 25 with comparatively modest spending.

To enlarge this report card in a new window, click on the image below.

The radar diagram below is a snapshot of Canadian education and skills performance (and the 17-country average performance) relative to that of the best-performing peer country—the outer ring—for each of the 15 education indicators. The chart has 15 axes—one for each indicator—that radiate out from the centre. A score closer to the centre represents worse performance, while a score closer to the outer circle represents better performance.

Use the pull-down menu to compare Canada’s performance with that of any of its peers.

As the radar diagram shows, Canada’s performance is above average on almost all the education and skills indicators. Canada is the top performer on the college completion rate and is almost at the outer ring (i.e., the top performer) on the high-school completion indicator. Canada’s performance is about average on the two adult literacy indicators, as well as on the indicator measuring the proportion of university graduates in 2007 from science, math, computer science, and engineering disciplines. Canada performs well below average on the indicator measuring the number of Ph.D. graduates per 100,000 population aged 25 to 29.

Yes. Although Canada continues to rank second after Finland, the gap between its performance and Finland’s has narrowed. Indeed, Canada joins Finland this year with an overall “A” grade for Education and Skills. As well, Canada’s ranking stayed above that of other peer countries.

Should we be concerned that Canada is ranked second behind Finland? Not necessarily. When compared with other more populous and geographically close peers, Canada is an exceptional performer. It even outperforms its largest trading partner, the U.S., by a sizable margin.

Over time, Canada’s performance improved significantly⁴ on two indicators—the high-school completion rate and the proportion of graduates from science, math, computer science, and engineering disciplines. This is shown in the next radar diagram, which provides a snapshot of Canada’s performance in the earliest and most recent year—relative to that of the best-performing peer country—on the 15 education indicators. The improvement is shown by the red line (most recent year) being closer to the outer “top performer” ring than the blue line (earliest year).

Canada’s performance deteriorated significantly on only one indicator: Ph.D. graduates. The deterioration is shown by the blue line (earliest year) being closer to the outer “top performer” ring than the red line (most recent year).

Because historical data are not available for the adult literacy rate, student problem-solving skills, and student science skills, the performance results for these indicators in the earliest and most recent year are identical.

Taking Finland out of the reckoning would produce significantly different results. Canada would become the top-performing country. Almost all peer countries would improve their grades.

Depending on one’s view of the “Finnish Threat,” this may be a more realistic assessment of Canada’s performance in the Education and Skills category. It is one that better reflects Canada’s absolute and relative performance both in the last year and over time.

Canada’s strength is in its public system that provides many Canadians with a good education and the basic skills they need to enter the workforce and achieve substantial success. The system’s primary focus is on delivering education to young people, aged 5 to 25. Over the past 15 years, raising the high-school graduation rate has been a major educational priority—a response to the growing consensus that high-school graduation is the prerequisite stepping stone to post-secondary education, now deemed essential to success in the labour market. Canada has one of the highest rates of high-school and college completion in the world. While Canadians are at school, they become well educated, for the most part, in core subjects like mathematics, reading, and science.

Paradoxically, Canada’s strength also contributes to one of two areas requiring improvement. The Canadian system is heavily weighted toward school-acquired skills—more so than in European countries. Thus, it lacks focus on work-based skills training and lifelong education that can be fostered outside traditional academic institutions.

Canada should be concerned about its adult literacy rate. Canadians who have not been fortunate enough to acquire adequate education in school, therefore, are at risk of slipping through the cracks as adults. About 3 million adult Canadians have only Level 1 literacy and a further 4.5 million only achieve Level 2. A person with Level 1 literacy may have difficulty performing simple tasks like reading and understanding medicinal instructions. Many Level 2 adults hide their lack of broader functional literacy by tailoring their lives within narrow and simple work and life parameters.

Therefore, Canada has over 7 million adults who may lack the functional literacy to adjust to changes in the economy. Canada’s economic boom in the last 10 years has so far protected many of these people. Conference Board research shows, however, that people with low literacy skills have weaker attachments to the labour market and generally do not do well in economic downturns.

Canada also underperforms in the highest levels of skills attainment. Canada produces relatively few “high-end” graduates with Ph.D.s (Canada receives a "D" grade), as well as graduates in science, math, computer science, and engineering (Canada receives a "C" grade).

We need more graduates with advanced qualifications and graduates in these fields to enhance innovation and productivity growth—and ultimately to ensure a high and sustainable quality of life for all Canadians.

Some long-term structural issues are not being adequately addressed through Canada’s current approach to education and skills. To maintain its high ranking, Canadians need to have access to education and skills outside the traditional school system. Currently, Canadian employers are notably low investors in workplace training programs. And of what they do invest, only a very small percentage—less than 2 per cent—goes to basic literacy skills. As a result, the Canadian training system does not fill the skills gap for people who, for various reasons, have not acquired skills at school. Much more needs to be done in the workplace in order to improve Canada’s adult literacy rate.

Demographic change in Canada offers an opportunity to shift resources from the formal education system into the skills system. Instead, as the population of school-aged Canadians declined in the 1990s, education spending on youth kept increasing. Canada will need to shift resources into other parts of the education and skills system as demand for traditional schooling continues to decline.

¹ Angel de la Fuente, Human Capital in a Global and Knowledge-Based Economy. Part II: Assessment at the EU Country Level, Final report for the Employment and Social Affairs Directorate General, European Commission. (Luxembourg: European Commission, 2003), p. 4.

² OECD, Education at a Glance 2009 (Paris: OECD, 2009), p. 137.

³ OECD, Education at a Glance 2009 (Paris: OECD, 2009), p. 137.

⁴ More than 10 percentage points difference between the earliest and latest year of data on the normalized values. For more information on the normalization methodology, see the Methodology section on this website.