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A pedestrian walks to St. George St. through a walkway at the University of Toronto's Sir Daniel Wilson Residence on May 20, 2020.

Fred Lum/the Globe and Mail

The Ontario government is moving ahead with performance-based funding for postsecondary institutions but will delay its implementation for another two years as schools deal with the impacts of the pandemic.

The government said its goal is to make postsecondary institutions more responsive to labour-market needs. It aims to do so by making a substantial portion of provincial funding for universities and colleges dependent on outcomes for students, rather than enrolments.

Institutions will be assessed on a total of 10 metrics, divided into what the government calls skills and job outcomes and economic and community impact. The measures include graduation rates, employment rates and the institution’s engagement with the community, as well as research funding, experiential learning opportunities and graduate earnings, among others.

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They will be phased in gradually and will mean that by 2025, up to 60 per cent of government funding will be dependent on performance measures. The policy is fiscally neutral and will not save the government money, according to the Ministry of Colleges and Universities.

“Our government believes in making institutions accountable for student success,” Ross Romano, Minister of Colleges and Universities, said in a statement.

“Placing a greater emphasis on outcomes will encourage colleges and universities to be more efficient and specialized, and to focus on what they do best.”

The move to performance-based funding was first announced in January, 2019. It was temporarily shelved this spring as the province and postsecondary schools scrambled to adjust to the disruptions caused by the COVID-19 pandemic. It will not be fully implemented until 2022.

Alberta had also announced plans to introduce a performance-based funding model in 2020 but announced earlier this year that those plans have been paused.

Ontario’s 24 colleges and 21 publicly assisted universities have now signed new five-year strategic mandate agreements with the government that lay out their institutional focus and contain historical data for some performance measures.

Institutions that do not meet their performance targets will have their funding “scaled to the degree of underachievement,” according to the Ministry of Colleges and Universities. Funding that is not spent as a result of failure to hit a target will be reallocated to other institutions, the ministry added.

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“This reallocation is for the year in question only, and all institutions will again be eligible for their entire notional allocations in subsequent years,” the ministry said.

Separately, the government also announced that institutions will be required by 2022 to post aggregated data about faculty compensation and faculty work activity on their websites. The details of those requirements will be discussed with institutions over the coming year.

Ontario’s Opposition NDP said the move to performance-based funding will hurt students and damage the reputation of Ontario’s postsecondary schools.

“Tying 60 per cent of all funding for colleges and universities to outcomes and political directives set by the Doug Ford government is wrong. It destabilizes institutions and makes it impossible for them to budget,” NDP critic Chris Glover said in a statement.

The policy has also been criticized by faculty associations and student groups, particularly as measures such as employment rates could fluctuate more than usual owing to the lingering impact of the pandemic.

Ontario spends about $5.2-billion on funding postsecondary institutions, but that provides only a portion of institutional operating revenue. Colleges and universities also derive significant funding from student fees and ancillary services such as catering, residences and facilities rentals.

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