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Ontario's universities are feeling a measure of relief after the McGuinty government's budget plans detailed somewhat gentler spending cutbacks for higher education compared with the rest of the public sector.

But there is concern over proposals to pool the 25 pension plans at Ontario's 20 universities under one structure, and to drive change in contribution levels to the plans over the next five years. The government says larger plans have proven to be more successful, but universities fear Queen's Park trying to take too much control.

And the government's indication that it would go so far as to legislate the pension changes is cause for alarm, said Constance Adamson, president of the Ontario Confederation of University Faculty Associations.

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"I think there would be a number of concerns. Some of the plans are actually doing quite well – they have a good history of very solid management and good results," Ms. Adamson said. "Big is not necessarily better."

The government is convinced that to prevent struggling university pension plans from draining schools' other resources, they must force them into a more efficient administrative structure whose size would bring access to better investment options, while also getting professors and staff contributing the same amounts to the plan as the universities do.

"I would hope they would realize this is in their best interest," Finance Minister Dwight Duncan said on Thursday.

Schools are "willing to come to the table" to listen to options, and have already formed their own pension working group, said Bonnie Patterson, president of the Council of Ontario Universities. But she also said the government's proposals go farther than expected, and added that they should also be exempting universities from some pension-related payments they say aren't necessary.

For all that, universities feel "some sense of relief," she said.

The province's promise of 1.9-per-cent average funding increases for higher education over the next three years is a modest improvement on last month's recommendations from economist Don Drummond, two university presidents said. And while it likely won't come close to covering their overall costs, which have been rising by upwards of 5 per cent annually at many schools, they hope it will at least pay for continued enrolment expansions the government is expecting.

"For postsecondary education to get that level of attention in such a tough budget, … I'm fairly pleased and grateful," said Mamdouh Shoukri, president of York University.

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And while the budget also points to other smaller cuts, such as to capital funding and study-abroad scholarships, there is cautious optimism that universities can find enough new ways to spend less without cutting into the bone of their services – especially given the government's calls to discuss ways to achieve better innovation and productivity in the coming months.

"Most certainly, I'm worried about getting into [cutting from]areas where it would be difficult to gain further efficiencies," Dr. Shoukri said. "But we will work with government closely to gain the efficiencies that are needed to move forward."

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