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Recently, provincial premiers have taken to talking up the need to improve post-secondary education in Canada. One phrase which has taken particular hold is that of developing “world-class” universities. But what exactly does this mean? What does a world-class university look like and what policies would be required to create them in Canada?

Being world-class is fundamentally a matter of prestige and reputation. Because research is distributed worldwide through disciplinary journals that are read by every serious scholar in the field, a good researcher can be known around the world. While it is possible to gain a reputation for teaching at the undergraduate level, that reputation will always be local; there isn't even a national reputation to be gained from top-flight teaching, let alone global.

That is why world-class universities are those institutions that manage to attract toptier researchers, who in turn attract high-quality graduate students. This doesn't mean that world-class institutions do not do any good undergraduate teaching — they frequently do. But it is often done by graduate students, and to the extent it is done by professors themselves it is incidental to their main job of producing high-quality research and running graduate seminars.

World-class, then, means large, expensive, research-intensive institutions. That rules out the majority of Canada's universities: There are really only about 20 institutions that have the required size to even be considered as having world-class status. This does not mean there are no world-class academics in other institutions, just that they do not collectively have the resources to make their institution world-class.

Even the best institutions are rarely among the best at everything. Most institutions are known for their strengths in particular areas (e.g. physical sciences, health sciences or social sciences). Canada has maybe eight universities that are genuinely world-class (meaning that they are incontrovertibly in the top 100 universities globally) in at least one field. Four of these are in Ontario, two in Quebec and one each in Alberta and British Columbia. Of these, only four institutions — McGill University, University of Montreal, University of Alberta and the University of British Columbia — have any genuine claim to being world-class in more than one broad field of study, and a fifth, the University of Toronto, is the only institution which is genuinely world-class across a wide range of fields.

This may sound like a harsh judgment on Canadian universities, but it is not; in fact, compared to other countries our size we do extraordinarily well at producing quality universities. Where Canada has five institutions that produce large amounts of research across a broad range of fields, Australia has only three and Italy has but a single institution.

Creating and sustaining a world-class university is an immensely expensive exercise. Laboratories do not come cheap, and neither do good libraries. Moreover, top researchers are extremely footloose, following high salaries, engaging colleagues, and challenging graduate students from one congenial appointment to another. Indeed, of all the countries in the world, only the United States is able to support more than a dozen of these kinds of universities.

How do the Americans do it? Money, of course. The U.S. spends a tremendous amount of money on its research universities. Much of it comes from public investing in basic science and research, and big American research universities receive considerably more funding than their Canadian equivalents. This comes at the expense of equality, and second and third-tier American institutions are probably not as well funded as their Canadian equivalents. So it is in part an issue of priorities — Americans are currently diverting more of their funding for purposes of “excellence.”

It's also a matter of tuition fees, since large U.S. research institutions typically charge higher fees than their Canadian counterparts. Fortunately, most of them also have extremely generous need-based student aid packages for undergraduates from lower-income backgrounds.

Finally, it's a matter of private support. Americans donate far more money, both absolutely and per capita, to their universities than Canadians do. Canadian universities are lucky to get $1,000 per student in endowment income each year, while the richest American private institutions can receive in excess of $40,000 per student.

The problem for Canada is that two of these three revenue sources are more or less cut off from our institutions. A majority of provinces have frozen tuition fees, a position which, like tax cuts, is popular with the middle class. As for private donations, while our tax laws have been amended to make giving as attractive here as it is south of the border, we still lack both the large numbers of wealthy potential donors and the culture of philanthropy that Americans possess.

That leaves government support. Canadians are certainly capable of spending more on universities, particularly in support of research. Over the past few years, Ottawa and the provinces have been doing just that, and it has unequivocally been a good thing for Canadian post-secondary education. But because it has been spread across all institutions, this new spending has not done as much as it could to create world-class institutions.

A significant world-class university is a billion- dollar-a-year operation, minimum. That puts it out of reach of the six smaller provinces. Quebec's strategy of maintaining two such institutions (McGill University and University of Montreal) would be challenging even if tuition wasn't frozen at 1994 levels; without new tuition revenue it's completely unsustainable.

Ontario, British Columbia and Alberta can maintain or improve their position, but it will take some tough choices. To really make worldclass universities, they will either need to increase their overall funding by at least 40 per cent, or start focusing their education spending more toward one or two champion institutions. As for the federal government, it could help, but the exigencies of federalism make it an unlikely direct contributor to a project that can involve at most four provinces.

World-class universities are a great benefit to society. They are the wellsprings of the innovative drive that powers modern knowledge economies. But they are also uncompromisingly elitist. They require tremendous amounts of resources to fund a very few supremely talented individuals. It's not yet clear whether Canadians, with their deep egalitarian streak, are prepared to pay that price.

Alex Usher is vice-president of the Educational Policy Institute. EPI has partnered with The Globe and Mail and The Strategic Counsel to produce the University Navigator web-based tool, which can be accessed at globeandmail.com/reportcard.