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Ontario’s new performance-based funding model for colleges and universities will focus on 10 metrics that include employment and graduation rates, the amount of research and industry funding the institutions receive and the demonstrated skills of their students.

The province’s universities and colleges were given the first details of these metrics via conference call on Tuesday afternoon.

By 2025, up to 60 per cent of operating grant funding from the Ministry of Training, Colleges and Universities will be linked to performance measures, although a number of details remain unclear, such as whether, or by how much, institutions could see their funding cut for failing to reach their targets.

In an interview, Minister Merrilee Fullerton said the funding metrics align with the government’s priorities and will encourage institutions to be more transparent and to focus on areas where they perform best.

“We really need to have performance-based funding and outcomes funding in order to keep the economy going the way it needs to go, allowing students to find jobs,” Ms. Fullerton said.

“It’s not about pitting one institution against another. It’s about an institution using their strengths and improving on what they know through the metrics.”

The list of metrics includes six described as skills and jobs outcomes: graduate earnings, experiential learning, skills and competencies, graduation rate, graduate employment, and one related to a particular institutional strength or focus.

Four metrics are related to economic and community impact: funding from industry, funding for research or apprenticeship (research for universities, apprenticeship for colleges), and then an institution-specific measure for economic impact and another for community impact.

Ms. Fullerton said the ministry is still consulting with institutions on many of the details. The metrics will be phased in over a three-year period.

The Council of Ontario Universities declined to comment Tuesday as it awaited further details.

Linda Franklin, president of Colleges Ontario, applauded the government’s move to tie a greater proportion of funding to student outcomes.

“We’re excited by this initiative to transform higher education. This is a tremendous opportunity to ensure more people acquire the professional and technical expertise that is essential to success in the new economy,” Ms. Franklin said.

Peter Gooch, a consultant in higher education, said one of the important questions about performance-based funding models is whether universities will be competing against themselves, or competing against each other for a greater share of the funding pool.

“The real key is how much funding is really at risk,” Mr. Gooch said.

And how will these metrics be measured? What incentives will those measurements create? Mr. Gooch said there will be a number of difficult questions to work through.

“If it were easy to figure out how to tie funding to outcomes, it would have been done generations ago,” Mr. Gooch said. “This is an accountability tool.”

One of the most interesting items on the government’s list is skills and competencies, which can be difficult to measure. There have been studies that use forms of standardized testing on literacy, numeracy and problem solving, but there are still questions about how to ensure the results are meaningful for a given course of study and based on a test for which students have an incentive to excel, Mr. Gooch said.

“Some faculty will dismiss it as the latest fad, but there are things you can do,” Mr. Gooch said. “It helps faculty think through the question of skills and it helps students explain what skills they’re getting.”

Ms. Fullerton said one of the aims of this initiative is “allowing institutions to play to their strengths.” She said the metrics will be evaluated every year, which should “allow an institution that has not done as well in one area to re-address their issue."

New Strategic Mandate Agreements that will describe these metrics and how they will be used at the 45 colleges and universities across the province remain to be negotiated over the coming months.

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