The United States made it to the top of the list of 48 countries, followed by Sweden. Finland, Denmark and Switzerland scored fourth, fifth and sixth, respectively. India came in last.
The study was conducted by researchers at the University of Melbourne and was sponsored by Universitas 21, a global network of universities whose Canadian members are the University of British Columbia and McGill University.
A country's success was determined by things like the number of research articles published, the percentage of residents partaking in higher schooling and the national employment figures. Each country's population was also taken into account for the study.
"What is important is a policy and regulatory environment in which universities are given a good deal of internal freedom, but there are external quality checks," said lead investigator Ross Williams.
Universitas 21 said the ranking was created to show the importance of higher education in a country's economy and place in the world. Having a well-connected education system can foster new ideas and good trade relationships with other countries, the report said.
An Ontario student organization said the rankings reflect the perspectives of governments and universities more than those of students.
Sean Madden, president of the Ontario Undergraduate Student Alliance, said that while he's happy Canada did so well, he's a little concerned that our high ranking in the resources category may cause misperceptions.
"I'm a little concerned about the message being sent about resources," said Madden. "At first blush it looks like our universities are being exceptionally well-funded. While we're pleased with the government commitment to education, it's important to throw light on the fact that half of that money is coming from students."
The report found that government funding of post-secondary education as a percentage of GDP was highest in Finland, Norway and Denmark. But when private expenditure — such as tuition — was taken into account, the picture changed drastically; funding was highest in the U.S., South Korea, and Canada.
Madden said that in Ontario, about 45 per cent of the cost of higher education is paid for by tuition.
"Students are becoming increasingly concerned that we're investing so heavily," said Madden. "It's great that we have world-class researchers who have a high degree of output, but we're concerned about the amount of time we're actually spending in the classroom with them, or their effectiveness as teachers in relating this world-class research."
Madden would have liked to see rankings consider student feedback on quality of teaching, or satisfaction with student support services.
"What gets inspected tends to get perfected," he said.
Greg Fergus, director of public affairs for the Association of Universities and Colleges of Canada, said the organization doesn't comment on rankings.
"Rankings are just that; rankings," said Fergus. "We believe we are providing students with a research-enriched, globally engaged educational experience."