Funding universities in a deficit future

Feb 17 2012 in News by Divyesh Mistry, News Editor

Commission on public service reform advocates deep cuts to spending

From the Commission on the Reform of Ontario’s Public Services: “Tuition freezes are not in students’ interests.”

In an attempt to tackle a large provincial deficit, the provincial government had a report  comissioned by Don Drummond (Chair of the Commission on the Reform of Ontario’s Public Services), and others on the commission with some interesting points on Ontario post-secondary institutions.

While none of these points are to be instituted automatically, these recommendations could have  impacts on students everywhere in the province, including at UW. The repeated mantra was that with continuing growth and enrolment, government funding for universities at the status quo is unsustainable. At UW, where enrolment grows every year, this could mean that the current funding from the government could be insufficient.

The remark on tuition freezes and a point that “research efforts should not trump the teaching experience” were the focal points of the post-secondary education report. The report elaborates on the latter notion, suggesting that in pursuing the dream of being world-class research centres, universities have failed in their teaching duties, diverting tuition revenues to trying to reach their research goal.

A point that might interest UW students is on new capital projects, namely buildings. The report suggests that for buildings, alternative measures should be explored. This could open the way for universities to explore private-public partnership on creating new buildings, like residences, which normally don’t get public funding.

Transfer credits, a pressing issue for students who want to transfer in and out of UW and other institutions, either for colleges or universities, need to have a better system in place so that students can bring a bulk of their existing courses with them.

The report calls for universities to reward high quality teachers, in the same way they reward high quality researchers and to refocus government efforts on rewarding teaching excellence.

UW announced they were ahead on this measure, with the creation of new teaching chairs, whose roles are to spread better teaching practices at UW.

Going back to tuition freezes and potential increases, the report calls for the framework surrounding tuition increases to become easier, where universities can increase fees in different ways, without surpassing the five per cent limit.

The commission suggests to further increase financial aid, focusing more of it on lower-income students.The report also says that the new 30 per cent tuition grant could be killed if more money isn’t pumped into post-secondary sector.

The last recommendation may have a bigger impact on UW, where the university regularly conducts recruitment trips and deals with other countries to establish satellite campuses and 2+2 programs.

The report suggests that universities and colleges stop that activity and combine it with existing trade missions, instead of doing their own missions.

While all of these are suggestions, they are applicable to UW, which currently has a narrow $3,216 profit over expenses (as reported in the Feb. 7, 2012 board of governors meeting), with a growing student population that requires more services and more financial aid. UW may need to heed these recommendations in order to sustain future growth.

Commission facts

Chaired by Don Drummond, who is currently Matthews Fellow in Global Public Policy, Queen’s University. From 2000 to 2010, Mr. Drummond served as Senior Vice President and Chief Economist, TD Bank.

  • The commission reports to the Ontario Minister of Finance
  • Commission cost capped at $420,000
  • Drummond earned $1,500 per day
  • Commission mandate:
    • Advise to balance budget earlier than the 2017–18.
    • Ensure sustainable fiscal environment
    • Ensure the government is getting value for money in all its activities
    • Do not recommend privatization of health care or education
    • Do not recommend tax increases
  • 543 page report
  • 20 chapters
  • 362 budget recommendations
  • Projected $30.2 billion deficit by 2017
  • Recommended annual changes in program spending out to 2017–18:
    • Health care: plus 2.5 per cent
    • Education (primary & secondary): plus 1.0 per cent
    • Post-secondary education (excluding training): plus 1.5 per cent
    • Social services: plus 0.5 per cent
    • Other programs: minus 2.4 per cent

Chapter 7: Post-Secondary Education

Main recommendations (30 in total)

7-1: Grow government funding for the post-secondary education sector by 1.5 per cent per year until 2017–18.

7-3: If capital budgets are constrained, post-secondary institutions should consider using alternative financing and procurement, especially for buildings that do not qualify for government funding, such as residences.

7-7: Create a comprehensive, enforceable credit recognition system between and among universities and colleges. This is an absolutely essential feature of differentiation.

7-10: Have post-secondary institutions redesign incentive systems to reward excellent teachers, as is currently done for researchers.

7-11: Link further provincial funding allocations to quality objectives, which will encourage post-secondary institutions to be more responsive. In addition, the province should alter the funding model to also reward degrees awarded, rather than just enrolment levels.

7-16: Evaluate the research funding system of post-secondary institutions and research hospitals as a whole, including how it is affecting university and hospital budgeting practices.

7-18: Maintain the existing tuition framework, which allows annual tuition increases of five per cent. However, simplify the design to maintain the overall ceiling but allow institutions greater flexibility to adjust tuition fees at the program level, within the ceiling.

7-29: Compel post-secondary institutions to examine whether they can compress some four-year degrees into three years by continuing throughout the summer.

7-30: Cease funding for international marketing of Ontario’s universities and integrate it into existing trade mission activities. Universities, colleges and the federal government already invest in these activities.