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Declining enrolment has Ontario colleges facing an uphill battle: PwC report

Ontario colleges will have to cut staff, increase tuition, deliver more education online and receive more government funding if they are to survive a decade of declining enrolment, says a report by consultants PricewaterhouseCoopers.


Ontario colleges will have to cut staff, increase tuition, deliver more education online and receive more government funding if they are to survive a decade of declining enrolment, says a comprehensive report by consultants PricewaterhouseCoopers obtained by The Globe and Mail.

If colleges and the province take no action, in eight years, the sector will be facing a cumulative debt of $1.9-billion which would be added to the province's budget, the PwC report says. Smaller colleges in remote areas where the number of younger people is on the decline are in a worse position than schools in urban centres. Cuts to programs in those regions could lead to lack of training opportunities and a shortage of workers in the skilled trades, the report says. If schools want to avoid program closures and "negative impacts on the provincial economy," they will have to aggressively manage their costs.

"[In] the absence of creative actions on the part of colleges and policy makers to address the future fiscal sustainability of the Ontario college sector, the core mandate of colleges appears to be in jeopardy," the report states.

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Colleges Ontario, the advocacy group representing all public colleges in the province, commissioned the report as part of its efforts to lobby for more funds. It was completed in late November but has not been publicly released.

"The conclusions are pretty stark and the situation can't be fixed with little pots of money," said Linda Franklin, the president of the group.

Colleges have to run balanced budgets, Ms. Franklin said, but the province has in the past stepped in with one-time grants to cover smaller shortfalls. The size of the projected budget gaps means a longer-term solution must be found, she added.

The province will not bail the colleges out, said Deb Matthews, deputy Premier and Minister of Advanced Education and Skills Development. Changes to the Ontario Student Assistance Program that extends student grants and loans to mature students will encourage more people to go to college, making up for smaller numbers of young people attending, she said.

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"The issue of demographic change is real," she said. But "the changes to [financial aid] mean there is a huge potential … for more participation from indigenous students, from mature students."

Ontario has already announced that postsecondary institutions cannot raise undergraduate university and college fees beyond 3 per cent a year for the next two years. That is 1 per cent to 2 per cent below the level the PwC report says is required if the colleges are to have any hope of balancing their books.

"Four or 5 per cent sounds like a big number but it's less than $200 a year [a student]; we already have the lowest tuition and the lowest per student funding in the country," Ms. Franklin said.

Sources say one of the reasons for the delay in the report's release has been the public spat between colleges and the province over proposals by the sector that could see massive pay hikes for senior staff. College governing boards will be considering a new compensation framework that would replace a provincial wage freeze.

The PwC report, however, makes clear there is no room for hefty salary increases. It foresees only modest raises for faculty and administrators, as well as continued reliance on part-time faculty to control salary costs.

Full-time college professors make up only a third of teaching staff at colleges, said RM Kennedy, chair of the college academic division of the Ontario Public Service Employees Union, which represents 12,000 college professors.

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"We will see a decline in the quality of education if we continue to rely on contingent faculty," he said.

Colleges are in a particularly difficult position, the report says, because drops in government grants and limited tuition hikes over the last several years mean their costs are already higher than their revenues.

In fact, to make up the gap, colleges have relied on explosive growth in the number of international students. Enrolment of students from abroad has gone up 258 per cent since 2008.

But as the number of students between 18 and 24 shrinks, competition between colleges – and between colleges and universities – will heat up. By 2024, northern colleges such as Boreal, Cambrian and Confederation will be dealing with decreases of 10 per cent from current enrolment levels.

Closing such schools would destroy communities, colleges said.

"We are a major employer in the region," said George Burton, the president of Canadore College in North Bay, who said economic studies have found the school's 3,500 students account for $11-million of annual spending in the region.

Mr. Burton spent Wednesday afternoon with Premier Kathleen Wynne who is on a tour of postsecondary campuses this week. His campus cannot solve its budgetary issues by enrolling more students, he said. "Encouraging access is the best thing to do, but it's only half the solution," he said.

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