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Canada New funding formula for Ontario universities to include input from employers

People take advantage of their lunch break to sit in the warmth of the sun streaming into the Donnelly Centre at the University of Toronto on Jan 14 2015.

Fred Lum/The Globe and Mail

Employers and industry groups will be included in negotiations leading to a new funding formula for universities in Ontario, the provincial government announced Thursday.

The consultations set to begin in April are the much-awaited next step in the differentiation process that began several years ago. Late last summer, Ontario signed strategic mandate agreements with each of the province's 44 universities and colleges, deals aimed at focusing each school on its strengths and reducing duplication across the system.

Everything, including how tuition is set, will be on the table as part of the funding review, ministry officials said.

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One of the primary goals of the process is to focus more attention on outcomes, such as employment rates, and to allow the government to monitor the quality of education. At the same time, the ministry is aware it must strike a delicate balance between the needs of employers and universities' autonomy.

Only universities and the government were at the table when the strategic mandate agreements were negotiated. Adding employers means universities will no longer be the only ones talking to the government about their programs.

"At the end of the day, whatever emerges as a new formula, it is the presidents of each institution that will be held responsible and accountable for the financial well-being of their institution. By necessity, they need to be at the centre of the conversation," said Bonnie Patterson, the president of the Council of Ontario Universities.

Currently, most of the revenue universities receive from government is based on student enrolment. As a result, government grants have grown in lockstep with rising student numbers. One of the goals of the review is to cushion the impact of the coming drop in enrolments due to demographic changes, particularly for smaller universities whose budgets may be hard hit.

"In Ontario, our largest university has 80,000 students and the smallest, Algoma, has 1,000, with many in between. Using the old formula impacts smaller universities [more]. The new system will put universities on a good footing where quality will be a driver," said Reza Moridi, the Minister of Training, Colleges and Universities.

At the same time, universities such as the University of Toronto or McMaster University have argued that funding must recognize that research mandate.

"We compete for global talent, we conduct research that is to be assessed on a global scale. … The important thing is to be able to use the resources that are available through a formula that is flexible and keeps us competitive," said Patrick Deane, the president of McMaster University.

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Several university presidents have already formed a task force that is examining the impact of changes to how funding is distributed and is hoping to collaborate with the ministry.

Government grants are not the only issue to be discussed. Changes to how tuition levels are decided will be part of the wider conversation on the system's sustainability, ministry officials said. A 3-per-cent cap on tuition increases is now in place, but will expire in 2017-2018.

Other provinces are also grappling with the question of how much of the cost of education students and their families should bear. Alberta Premier Jim Prentice has not denied that the province is discussing the feasibility of allowing tuition to rise above inflation, in light of declining oil revenues.

Any such move in Ontario would risk restricting access, one of the province's student groups said.

"Deregulated tuition cannot even be remotely considered in this province," said Jen Carter, the president of the Ontario Undergraduate Student Alliance.

She pointed in particular to students from aboriginal backgrounds as some of the most reluctant to turn to government for aid.

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"We have a fantastic repayment system and that needs to be communicated better to students, but that is not a complete solution."

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