Category: government

  • That Alberta Post-Secondary Review, Again

    That Alberta Post-Secondary Review, Again

    Just before I headed out on a work/vacation trip (I’m in Costa Rica today), the Government of Alberta dropped the report of the Expert Panel on Post-Secondary Institution Funding and Alberta’s Competitiveness, which I had previewed back here when the panel was formed about a year ago. So, on the way to the airport, I dashed off this blog to give you all the skinny. 

    First: it’s a good report! Might be the most sensible report on PSE that’s come out in Canada for quite some time, not least for the ways the Panel went beyond its mandate and actually addressed the elephant in the room, which was “how is Alberta going to educate this huge wave of students heading its way?” – a point which the government pointedly omitted from the Panel’s terms of reference. There are a few things in here which I think are a bit under-thought, which I will address below. But in the main, this is a report which you could apply in almost every province and we’d have a much better system than we have now.

    The report starts by laying out what it calls a “framework” for policy, which should:

    • Provide a space for every qualified Alberta student who wants to pursue post-secondary education (though, this could be quite expensive…I think it was a deliberate political choice to not include any costing in this document)
    • Focus on outcomes, providing incentives and rewarding performance in three key areas: teaching and student experience, research, and the impact institutions have on the communities they serve.
    • Set tuition in a manner that balances the importance of certainty for students with the reality of increasing costs in institutions.
    • Encourage government to reconsider the extent of controls it exercises over institutions, and reduce unnecessary red tape, so as to provide institutions with the autonomy and flexibility they need.

    See? All eminently sensible. But, of course, the devil is in the details, which the panel outlines in eleven specific recommendations. Seven of these are so sensible that they barely require comment. These include recommendation 3 (improve funding and administration of apprenticeship programs), recommendation 4 (fund IT infrastructure on a long-term basis rather than via ongoing operating funding), recommendation 6 (bring back student grants!), recommendation 7 (more international students!), recommendation 8 (government to back off, provide institutions with more autonomy), recommendation 9 (less red tape for institutions), and recommendation 10 (faster government approval of new programs).

    So far, so good. The remaining four recommendations present some complications, though. I’ll go through them one by one.

    Recommendation 1 suggests that Alberta should adopt an actual funding formula to divide public spending between institutions (it is currently one of the largest jurisdictions in the world without one; to my knowledge only BC is bigger). It further suggests that the formula consists of three components: weighted enrolment, (i.e. weighted to recognize that clinical education costs more than laboratory education which costs more than classroom education), performance (assuming the indicators are smart and measurable, which the panel suggests might not be the case for all the indicators in the current performance-based funding arrangement), and a “base” funding component. 

    All fine in principle, but two points. First, when you have institutions as disparate in size as Alberta does (50K at University of Alberta to 1300 at the Alberta University of the Arts), a “base” component is hard to design properly. The idea is to recognize that institutions have fixed costs that probably won’t get covered properly under an enrolment-weighted formula alone but that’s hard to do in a way that actually works but doesn’t wildly subvert any normal principles of equity  (I know, I tried sketching one for the Manitoba College system a decade ago, and it’s hard). Second – and somewhat relatedly – the Panel skips over the bit where a previous government within the last decade tried to do develop a formula much like this one and discovered that any sensible enrolment-weighted system would probably eviscerate two or three of the smaller regional colleges, which was seen as impractical from a political POV (the Minister of the Day trashed the report without publishing it, which is why you may not have heard this story). The math and politics won’t have changed, so getting this idea up and running might be easier said than done.

    Onwards to recommendation 2, which asks the government to introduce targeted, time-limited funding initiatives to a) attract top research talent, b) support innovation and developing technology, and c) provide incentives and support for collaboration among institutions. The ideas are fine, but the logic for time-limiting the measure seems obscure to me.

    Now to recommendation 5, on tuition fees. This is where the report is at its hand-waviest, and I think there is a lot of subtext here which is not fully explained. Currently, there is a 2% cap on all tuition increases. The panel wants that to be maintained for students once they have begun their studies, so as to give them “price stability”. But they also think that institutions should be given “discretion” to raise tuition for first-year students more radically year-by-year, because institutions need money.

    Here’s where it gets handwave-y. The panel does not advocate for de-regulation; whether out of conviction or political realism I can’t say. Rather, it suggests that the Alberta government should set “maximum allowable tuition” every year, on a field of study basis, and institutions should have the freedom to set tuition fees up to that maximum. I think the logic at work here is the same as that seen in the UK in both the 2006 and 2012 fee reforms, which was that if the government set a maximum, institutions would have space to “compete on price” and the big prestigious universities would be able to charge a quality premium.  As we saw in the UK, though, this is a naïve assumption: since price tends to act as a proxy for quality in the public mind (because God forbid anyone actually try to measure quality), what happens in these situations is that all institutions will quickly drive to the max, meaning that in effect, it’s still government setting the fees, with all the politics that entails (decent chance the maximum will be $0 if/when the NDP return to power). I am not sure this has been well thought-through.

    Anyways, on to the final recommendation, which is that on Equity, Diversity and Inclusion (which, it should be noted, was also not part of the Panel’s mandate). In the discussion section, it cites mostly American examples, argues for “institutional neutrality” with respect to political issues (this means no boycotts, apparently, although I suspect if the panel told Alberta’s Ukrainian community that U of A was going to be forced to maintain relations with Russian universities on grounds of institutional neutrality, there would be riots). It also makes veiled references to “federal research grant requirements, which require explicit commitments to equity, diversity and inclusion as part of their selection and approval process…[which] can limit academic freedom and direct the focus of research”. So far, so Alberta.

    But then if you look at the actual recommendation, there are two points to make. The first is that the panel chooses to place “Indigenization” as a separate category from the rest of EDI (they don’t quite say Indigenization = good, EDI = bad, but you’d be forgiven for thinking that this is in fact the panel’s view). And the second is that the actual recommendation is pretty anodyne. It’s written in such a way that allows the anti-woke to claim that we need constant vigilance and for institutions to be able to hit the snooze button and go back to sleep because they already do what is being recommended. Not quite a nothing burger, but pretty close.

    In any event: it’s a solid report and while I think there will be one or two twists and complications in implementation, the direction in which it points is a promising one. Hopefully the government will accept the report and get to work on it as soon as possible.

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  • Undoing Bologna: Russia’s Conservative Turn in Higher Education with Dmitry Dubrovsky

    Undoing Bologna: Russia’s Conservative Turn in Higher Education with Dmitry Dubrovsky

    One of the consequences of Vladimir Putin’s invasion of Ukraine has been a vast reconfiguring of Russia’s academic and intellectual life. Universities, thought of as a potential hotbed of opposition since the White Ribbon movement of 2011, came under intense control and its personnel placed under even greater scrutiny.

    Many faculty fled. Connections with international partners in the West were severed. And then to top it off, the Russian government announced that it would abandon the three degree bachelor’s, master’s doctoral system introduced when the country joined the Bologna Process 20 years earlier.

    All this has combined to create what some have called a slow motion collapse in Russian higher education. But to understand what’s been happening in Russian Universities since February 2022, you really need to go back to the dawn of the Putin era in January 2000, and understand how ideological control of institutions has come to rest squarely inside the Kremlin.

    Joining the podcast today is Dmitry Dubrovsky. He’s a scholar at the Institute for International Studies at Charles University in Prague, where he has taught ever since being designated as a foreign agent by the Putin regime in early 2022. And he writes primarily about the politics of academic freedom and civil society in Russia.

    He’s with us today to talk about this slow motion collapse, the internal governance of Russian institutions, and how the country might one day be put back on a track to integration with European academia. Over to Dmitry.

    The World of Higher Education Podcast
    Episode 4.5 | Undoing Bologna: Russia’s Conservative Turn in Higher Education with Dmitry Dubrovsky

    Transcript

    Alex Usher (AU): Dmitry, I want to take us back to the year 2000. Vladimir Putin is the new president of the Russian Federation. What was the state of the higher education sector at the time, and how did Putin approach it? How did he view higher education as an instrument of state policy?

    Dmitry Dubrovsky (DD): Well, the legacy of the 1990s left Putin with a serious challenge. The system faced underfunding and fragmentation. At the same time, scholars were eager to join the European system. There had been attempts in the 1990s, but the biggest problems were the lack of financing and the absence of international mechanisms or tools to fully integrate into the European system of higher education and science.

    Putin saw higher education and science, first and foremost, as a tool to join Europe—to become part of the European family and a prominent member of the global market of ideas. That’s why Russia joined the Bologna Process in 2003 and actively pushed for internationalization.

    AU: So in that sense, it’s probably not that different from most other countries in the former socialist bloc, like Poland or Romania—the idea that internationalization would bring about an improvement in higher education. Is that about right?

    DD: It is right, with one very important difference. At first it might seem small, but it became a very serious issue. In higher education and science, everywhere in the world, there are always people who believe that their own system is highly advanced—at the very top.

    The problem in the late Soviet Union and the Russian Federation was that a substantial number of people survived the collapse of the USSR still believing that Russian and Soviet science was the most advanced in the world. In some cases, for certain disciplines, that might have been true. But in most areas—especially the humanities and social sciences—it wasn’t.

    By the late 1990s, there was a substantial group of people who were deeply disappointed in the results of democratic reforms and in what democracy had brought, both to the country overall and to higher education and science in particular.

    AU: Okay, now, Putin was president until 2008, and then he switched places for four years with Prime Minister Medvedev. He returns to power as president in 2012. And as you say, it’s a different Putin—a much more authoritarian Putin. How did his approach to higher education change? If we think of “Putin 1.0” around 2000, what does “Putin 2.0” look like after 2012? How does he try to exert greater control over the system?

    DD: It’s important to note that before Putin came back to power, there was a very significant period of reform in Russian higher education. Especially around 2007–2008, reforms were focused on improving quality and gaining international recognition. This was the era of what we call “managerialist modernization.”

    The idea was to select flagship universities that would drive the rest of the system forward into a brighter future.

    AU: And eventually that becomes the 5–100 Project.

    DD: Yes, the 5–100, or “5–2020” project. The goal was that at least five Russian universities should appear in the world rankings. It was a very interesting period because it marked a serious transformation in the sociocultural landscape of Russian higher education.

    For the first time, the so-called “effective managers” entered the system. From the mid-2000s onward, higher education began receiving serious investment from the state, making it appealing to a new managerial class and their approaches. Internationalization advanced, but it went hand in hand with growing managerial control over universities.

    Even before Putin returned in 2012, higher education was already being used as a tool to demonstrate the effectiveness of Russian policy and as an instrument of soft power, particularly through supporting Russian universities in former Soviet countries like Armenia, Azerbaijan, and Tajikistan.

    When Putin came back, however, the situation changed dramatically. What I call the “conservative shift” began—not just in politics broadly, but within higher education and science.

    AU: And some of that has to do with the broader crackdown at the time. I remember there was a lot of pressure on foreign organizations, which made international cooperation more difficult. For example, the government targeted the Open Society Foundations, George Soros’ network that had been active in supporting the social sciences and humanities. There was also a crackdown on things like gender studies and spaces for LGBTQ students.

    Masha Gessen wrote about this in her book The Future is History. Why did that happen at that moment? What was it about Putin that made him say, “This is an area I want to control and push in a more conservative direction”?

    DD: First and foremost, we have to remember the protests of 2011–2012. That was the time of the so-called “white ribbon” movement. It came very close to a revolution, though in the end it never happened—we failed. I was a member of that movement myself.

    The significant participation of scholars and students in those protests put higher education under special scrutiny from the security services and the political apparatus. They believed that control over the education system could restore their legitimacy and symbolic power in society.

    And remember, these leaders were, in many ways, Soviet people. They genuinely believed, “This is how the Soviet Union ruled—through control, especially in education and ideology.” And to some extent, that was true. The Soviet Union consolidated its power in part through universities.

    Putin believed the same could work for him—that restoring control over higher education would allow him to strengthen his government, which had been undermined by the events of 2011–2012.

    AU: We’ve been talking about the relationship between institutions and the government, but the government also changed the way institutions were run a couple of times, right? How has the exercise of power within Russian universities changed? I’m pretty sure there’s been a change in the process of selecting university leaders. How has that affected Putin’s ability to control universities?

    DD: The specificity of Russian universities in the 1990s was that there was an enormous amount of democracy. There was absolutely no money in the system, so it was extremely poor—but at the same time, it was a kind of “poor democracy.” There were numerous elections, and the whole system of university governance was very active in self-governance.

    There were real political struggles. People fought for the position of dean, they competed for the position of rector. Even department chairs could be elected. Almost every administrative position within a Russian university could be filled through an election.

    When Putin consolidated power, especially during the managerial reforms, there was pressure—particularly on the flagship universities in the 5–100 Project—to amend their charters and replace elections with government appointments.

    The official explanation was simple: if the state was providing so much budget support, then the state should also assign the rector rather than leave it to an election.

    Even now, some Russian rectors are still technically elected. But in Putin’s Russia, an “election” is not an election in the normal sense. The ministry proposes the candidate, people watch the process, and it ends up looking very much like the way Putin himself is “elected.”

    AU: Dmitry, in the early days of the 2022 invasion of Ukraine, one thing that surprised a lot of people in the West—it seemed to come out of the blue—was a letter in support of the invasion signed by several hundred university rectors. Why did they do that? I mean, presumably they were ordered to by Putin, but why did Putin think that would be legitimizing?

    DD: In post-Soviet societies there is a very high level of trust in higher education and science. The leaders of higher education were expected to officially support the so-called “hard decision” about the war.

    But it’s important to remember—something some of our colleagues abroad seem to forget—that most of these rectors were never democratically chosen. They do not represent the voices of Russian scholars, lecturers, or faculty members. They mostly represent the vision of the presidential administration. Their role was to collect names for a list of support and then sign this shameful document.

    And of course, this didn’t start in 2022. Under the “foreign agent” law of 2015, the government began a long anti-Western campaign—searching for “un-American” groups of influence, cutting connections with international centers, and declaring institutions like Central European University or Bard College in New York to be “undesirable organizations.”

    This created a climate of fear and anxiety among the leaders of higher education. And there was direct blackmail: if you decided not to sign, that was your choice—but you had to think about your faculty, your team, your colleagues. They would probably be fired soon.

    AU: What changed on university campuses after the invasion? Obviously, if I were in Putin’s position, I’d be worried about student unrest. So what happened in terms of surveillance on campus, and how did faculty react? I mean, you were a faculty member at the time, and you’re one of many who left fairly quickly after the invasion. How big a brain drain was there?

    DD: Not as big as you might think, for different reasons. Academics can’t move as easily as other people—they need to be sure they’ll have a way to continue working, and for many there simply wasn’t anywhere to settle quickly.

    My personal story was different. By coincidence, I had an invitation for a fellowship. Long story short, I relocated quickly from my home city of St. Petersburg to Prague. But for many others, leaving was far more difficult.

    As for institutional surveillance—yes, it was there. It looks like Russia had been preparing for war for about two years beforehand. Around two years before the invasion, they started introducing special vice rectors responsible for “youth” whose actual role was to monitor and control loyalty.

    At the same time, they established special departments within Russian universities with very long titles—things like “Promoting Civic Consciousness, Preventing Extremism, and Managing Interethnic Relations.” In practice, these were institutions embedded in higher education to control and discipline students and scholars.

    Their real work was searching social networks, looking for so-called “betrayal” behaviors among students and faculty, and reporting them to the security services and police. Today, almost every region of the Russian Federation has one of these departments to oversee and report on improper behavior.

    AU: After that rectors’ letter, Russia was suspended from the Bologna Process, and in retaliation Putin announced a return to the pre-Bologna system. So, getting rid of the bachelor’s, master’s, PhD framework and bringing back the old Russian model with the second PhD. How is this process unfolding? How easy is it to undo Bologna?

    DD: That’s a good question. I don’t think Russia is really going to undo Bologna. They’re not planning a full reversal or trying to recreate the Soviet path.

    From one side, there’s direct pressure on the Ministry of Higher Education and its bureaucrats to dramatically change a system that has been built over twenty years. But this system cannot simply be reversed. Legally, if students have already been admitted to a particular program, the state can’t just stop it midstream. At the very least, it would take four or five years to change. It can’t happen overnight.

    Secondly, to me this feels like an exercise in mimicry or emulation from the old Soviet-style bureaucratic circles in higher education. I follow what’s happening closely—the statements from the Minister of Education—and they always try to explain what will be different, but they can’t. They have no clear idea what they’re trying to create.

    Officially, they say, “This is not Bologna anymore. It has proved to be ineffective. Now we will collect the best achievements of the Russian system of education.” But what does that even mean? It’s absolutely impossible to understand. From my perspective, they are trying more to sabotage the process than to implement something substantial.

    AU: Looking ahead, what do you think a post-Putin higher education system in Russia might look like? Is there a path back into the European higher education space, and what would it take to undo the damage that’s been done since 2012?

    DD: That’s a good question. Currently, I would describe the situation as a “fourth deglobalization.” We’ve essentially gone back to the conditions of 2003, before joining the Bologna Process.

    That doesn’t mean there’s no capacity—many faculty members still working in Russia earned their degrees in Western institutions. There is still substantial expertise within the system. But the fate of Russian higher education is very difficult to predict because it is so closely tied to the political fate of the Russian Federation itself.

    If sanctions were to decrease and the war were to end, perhaps things could return to something like “normalcy.” But even that is debatable—what would “normalcy” mean in this context? At best, it might look like the Cold War era, perhaps similar to the late 1970s.

    There are already serious restrictions in place: academic sanctions, boycotts, and bans on cooperation imposed by many institutions and countries. These severely limit Russia’s ability to develop visible academic exchanges with Europe. Instead, Russia is turning elsewhere—towards an “alternative globalization,” aligning more closely with countries like China, Iran, South Africa, and Brazil within the BRICS framework, [a political and economic bloc of major emerging economies that positions itself as an alternative to Western-led alliances].

    AU: Dmitry, thank you so much for being with us today. It just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our listeners, for joining us. If you have any questions or comments on this week’s episode, or suggestions for future ones, please don’t hesitate to get in touch at [email protected].

    Join us next week when our guest will be Joshua Travis Brown from Johns Hopkins University’s School of Education. He’ll be joining us to talk about his fascinating new book from Oxford University Press, Capitalizing on College: How Higher Education Went from Mission-Driven to Margin Obsessed. Bye for now.

    *This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.

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  • Born on Third Base | HESA

    Born on Third Base | HESA

    Cast your minds back to January of 2024, when the federal government suddenly decided that housing was an issue, international students were the problem and implemented a complicated and irritating-to-implement set of caps that were 35% lower nationally than for 2023 (and in Ontario significantly more than that). Then, in 2025 came another set of changes including a 10% cut in the national limit. And then, on top of that, a set of new conditions on post-graduate work visas were imposed which were specifically designed to depress demand for certain types of education.

    To the extent that the world outside post-secondary education absorbed this news and didn’t dismiss it outright because Ontario colleges in particular “deserved it” for pouring gasoline onto a housing shortage bonfire, the reaction to all this was: “boy, losing nearly half your international students is really going to lead to a financial pinch”. But this reaction was wrong in two ways. First, that 50-percent was an average – in most cases, institutions either saw drops that were either significantly higher or significantly lower than that. Partly, this was because the federal government designed the cap drop to hit provinces unequally (Ontario to the max and Quebec not at all, for instance) and part of it had to do with the fact that some provinces distributed the cap hit in some peculiar ways (see back here for an earlier blog on this).

    But second, and most importantly, not many institutions actually even met these significantly-lowered quotas. Talk to folks in institutions these days and they will tell you that it’s not that the caps are too low, but that demand for Canadian post-secondary has simply dried up: no one wants to come to Canada anymore. I believe this. Former Immigration Minister Marc Miller did a serious number on the reputation of Canada’s post-secondary. If you go around accusing institutions of fraud and deceit and imposing clampdowns on student visas (it wasn’t just the caps – visa processing times are up and visa refusal rates are rising too), foreign students might get the idea that the country doesn’t want them, and so they never apply in the first place. I am sure Marc Miller would deny ever wanting to dry up demand, but it is exactly what his ham-fisted, Attila-the-Hun in a China shop approach to student visas managed to achieve.

    (And still, so many bien-pensant people think Liberals are the good guys on higher education. Or think more federal involvement in the higher education file would be a good thing. God Save Us All.)

    Anyways, as a result of this, universities and colleges are in a funk and wondering if and when international students will come back and (partially) save their bacon, financially speaking. But what is shocking, to me at least, is how unbelievably passive the sector is. They are waiting for students to come. Just waiting. ‘Why don’t they come?’ people ask. ‘It’s that darn Marc Miller! Nothing we can do about it’.

    You see the problem with the international student industry in Canada is that institutions themselves never grew an overseas recruitment game the way UK and Australian institutions did. By the time Canadian institutions started thinking about the whole international-students-as-revenue thing, the feds had already created the student-to-permanent immigration pathway via our post-graduate work visas and the like. And then, when things got hotter, aggregators like ApplyBoard came along and made it so easy to attract students that a lot of Canadian institutions just never upped their ground game on student recruitment.

    You see, despite Canadian institutions’ tendency to congratulate themselves on their “international outlook” and their ability to attract international students, very few of them ever bothered to go deep either on recruitment tactics (spending time abroad, juicing the recruitment pipeline) or on paying attention to the international student experience on campus. Some did, of course, but I can count the number who would be considered on par with the top institutions in the anglosphere on one hand.

    When it comes to internationalization, Canada is the kid who was born on third base and thinks they hit a triple. So many unearned advantages. And so, when Attila-the-Minister came along and took away most of those unearned advantages, people did not know what to do. The simple answer – UP YOUR GROUND GAME IN A FEW KEY TARGET MARKETS FOR GOD’S SAKE – seems not to have been considered very widely.

    I suspect one of the reasons for this is a deeply unsexy one: internal funding formulas for non-academic units. You see, under the enshittification model that is widely prevalent in Canadian institutions (more so in universities than colleges, but the latter aren’t immune from it), when a budget crunch happens, everyone needs to cut back. And so, international units, far from being given more money to go fight for students in overseas markets, sometimes have to scale back their activities (or at least not increase them as they should). The idea that it takes money to make money does not fit easily with a budget model that bases this year’s budget on what you got last year plus or minus a percentage point or two.

    This is bananas, of course. Self-destructive, even. But even if you gave international offices more money, they wouldn’t necessarily know how to spend it. The born-on-third-base thing meant we never needed to fight that hard for international students – they just kind of showed up. The situation Canadian institutions are in right now requires a lot more bodies on the ground overseas, understanding individual city markets, developing relationships with schools and agents, and attending more fairs, in more cities and more countries. This is how Australia and the UK developed their international markets. We managed to skip a lot of that in the ‘10s. We are going to have to learn it now.

    The shock, pain and impact of both the visa caps and Marc Miller setting fire to the country’s reputation are all real. Never forgive, never forget (but also: never again wish for the federal government to be more active in post-secondary education). But institutions are not without agency here. My feeling is that in too many cases they are just throwing up their hands, either because they prefer not to spend on recruitment or are insufficiently skilled at doing so in the absence of a cuddly national image or an absurdly favorable visa system.  

    You want markets? Invest in them. Fight for them. If Canadian post-secondary education is as good as everyone claims it is, students will come. Passiveness helps no one.

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  • Higher Ed at the Ballot Box: Australia’s Election and the Accord with Andrew Norton

    Higher Ed at the Ballot Box: Australia’s Election and the Accord with Andrew Norton

    It’s been about eighteen months since this podcast last visited Australia. The story at the time was about something called “the Universities Accord”, an oddly-named expert panel report which was supposed to give the Labor government a roadmap for re-structuring a higher education system widely believed to be under enormous stress. 

    Since then, lots has happened. There’s been an international student visa controversy, a whole ton of cutbacks at institutions (including a quite wild polycrisis at Australian National Universities) and a general election which saw the Labor Party unexpectedly returned to power with an increased majority. 

    So, what’s on the agenda now? To answer that question, we called up long-time podcast friend Andrew Norton, currently Research Fellow at the Centre for Independent Studies, and Policy and Government Relations Adviser at the University of Melbourne, and as usual he’s here to give us the straight dope down under. Our discussion ranges pretty widely over developments in the last 18 months: to me the most interesting question is why the government has been so slow to move on key aspects of the Universities Accord. Andrew’s answer to that question is, I think, pretty revealing, and should resonate both in Canada and the UK – quite simply, left-wing governments aren’t as different from right-wing ones as you might think when it comes to delivering change in higher education.

    But enough from me, let’s listen to Andrew.

    The World of Higher Education Podcast
    Episode 4.2 | Higher Ed at the Ballot Box: Australia’s Election and the Accord with Andrew Norton

    Transcript

    Alex Usher: Andrew, welcome back. Last time we talked was about 18 months ago, and the Universities Accord report had just dropped. There were a whole bunch of recommendations about funding, job-ready graduates, access, system regulation, and even something odd about a national regional university. Labor had about a year and a half between the time the report came out and the election this past May. What did they do with that time? What aspects did they move on most quickly?

    Andrew Norton: It was a bit of an odds-and-ends approach. The big, expensive changes to the way students and institutions are funded have really been postponed. But they’ve done a range of things.

    They’ve introduced a national student ombudsman—the first national complaints organization for students. They’ve created a new system for funding people in preparatory courses. They’ve increased regulations on universities to support students who are struggling or at risk of failing.

    Mostly, they’ve done things aimed at helping students, while the big structural work is still to come.

    Alex Usher: So, they did the cheap stuff?

    Andrew Norton: Essentially. They did the things that were cheap for the government but shifted costs onto the universities.

    Alex Usher: And with the other elements, did they say no to any of them? Or did they just leave it quiet—maybe we’ll do it, maybe we won’t?

    Andrew Norton: The thing they’re attracting the most criticism for is the Job-Ready Graduate student contribution. Back in 2021, the previous government radically redesigned how students pay for their education. The idea was to encourage people into courses the government wanted, like teaching or nursing, by discounting student fees, and to discourage others by raising fees in areas the government regarded as “not job-ready,” like humanities and social sciences.

    The Accord’s final report said the system should change—go back to something closer to what we had before, where there’s a rough relationship between fees and likely future earnings. But the government has deferred this to the Australian Tertiary Education Commission (ATEC), which currently exists as a website but doesn’t yet have legislation. That legislation will probably come early next year.

    So, the earliest possible date for changes is 2027, and quite possibly later. The government is getting a lot of criticism because, while fees were being increased, they said it was a bad thing and that they’d fix it. Yet first they sent it off to the Accord review, then to ATEC, and now who knows when it will actually happen.

    Alex Usher: So, there’s a lot of kicking the can down the road at a time when institutions are having financial trouble?

    Andrew Norton: That’s true. A lot of institutions are reducing staff and cutting courses. Exactly why varies—some are still struggling with international student numbers, some with domestic enrolment. But the key problem is that costs are rising faster than revenues.

    They’ve signed wage deals that are well above inflation, while government grants are only indexed to inflation. So they’re in a situation where they have to control costs, and staff numbers and courses are one of the few levers they have left.

    Alex Usher: You mentioned international students. One of the things we noticed here in Canada—because we went through the same thing a few months before you—was this whole notion of international student caps. The idea was similar: there was a perception, I’m not sure how true it was, that international students were affecting the housing market. Both Labor and the opposition supported caps; they just disagreed on how severe they should be. What actually happened on that front? Are there caps, and how are they regulated?

    Andrew Norton: I think the answer is: sort of.

    The background is that in the second half of 2023, the government started to believe that international student numbers were contributing to housing shortages and rising rents. Many in the sector agree there’s some truth to that. If you add up all the students, ex-students on temporary graduate visas, and people on bridging visas—often students waiting on another visa—you’re probably looking at around a million people in a population of about 27 million. It’s hard to argue that it has no impact on the housing market.

    The government introduced a range of migration measures: making visas more expensive and making it harder to get a student visa in the first place. But this wasn’t really affecting Chinese students, who remain the largest single group in Australia. So in May last year, they introduced legislation that would have put formal caps on the number of students each university and education provider could take. Everyone thought this was certain to pass, since the opposition also supported caps.

    But in a big surprise last November, the opposition changed course and didn’t support the bill. Combined with the Greens’ opposition, it couldn’t get through the Senate and didn’t become law.

    Instead, the government recycled the caps idea at the “national planning” level. The main feature was that once an institution hit 80% of its allocated number, further visa applications would go into a “go-slow” lane. The implied threat was that if an institution went over in future, there could be penalties. But so far, that hasn’t happened.

    So now we’re essentially back to a migration-driven set of restrictions on international numbers.

    Alex Usher: Before we get to the election, there was an interesting article—I think it was in Times Higher—about the idea that universities had nobody in their corner going into the election, that they’d lost some of the social license they once had.

    Part of it was about the very large vice-chancellors’ salary packages, which have been an issue for a long time—many presidents earning over a million dollars. But there have also been persistent stories about wage theft, with universities systematically underpaying employees. Then there are the narratives about “management gone mad” and cuts—particularly at the Australian National University.

    Is it true? Are universities more friendless in Australia than they used to be? Or is there something different this time?

    Andrew Norton: I think there is something different this time. It’s not just that there have been a lot of issues.

    On wage theft—as the union calls it—this has mostly resulted from universities relying heavily on casual or sessional employees. Payroll systems are complex, with different rates for different activities. It is genuinely hard to get right, but it seems almost every university has failed to align payroll systems with how people are actually employed.

    As a result, about half the institutions have had to repay staff or correct wages they didn’t pay the first time. Roughly half a dozen universities are now facing high-level enforcement by workplace authorities, putting them in the same category as traditional rogue employers like those in retail.

    The optics are terrible: people on very low wages aren’t being paid correctly, while vice-chancellors are earning over a million dollars a year. That contrast doesn’t look good.

    The real big change, though, is political. The Liberal Party opposition has long been skeptical of universities, but what shocked institutions was that the governing Labor Party took the Accord review and, if anything, has been even harsher with universities than the previous government.

    That’s why universities are reeling. They expected that after the change of government in 2022, life would get easier. It certainly hasn’t.

    Alex Usher: Let’s talk about the election. Your election was only about a week after ours in Canada, and it seemed like a very similar story: a weak center-left government on course to be crushed by a right-wing party. But then that right-wing party suddenly didn’t seem so cuddly once Trump had been in office for two or three months. I think the difference, though, is that higher education actually played some role in the Australian election. What promises did the different parties make?

    Andrew Norton: That was quite unusual. Higher education usually isn’t an election issue in Australia. But this time Labor picked up on discontent over student debt in its first term.

    The issue was that we index student debt to inflation. And like in many other countries, there was a post-COVID inflationary period. At one point, indexation was around 7% in a single year.

    I think that triggered what I’d call a latent issue. Over the 2010s, there was a big increase in student numbers and, correspondingly, in debt. We ended up with about 3 million people holding student debt, totaling over 80 billion Australian dollars. That’s a very large constituency. Labor realized that while this hurt them in their first term, maybe they could turn it into a positive.

    They did something similar to what’s been discussed in the U.S.—or in some cases done in the U.S.—which was to promise cutting all debts by 20%. They announced this in November last year. During the campaign they didn’t push it hard until the final week, when they really started to focus on it.

    There was a late surge in support for the government, which gave them a very large majority. My theory is that the 20% cut—which was worth more than $5,000 to the average person with student debt—was enough to swing people over the line and deliver Labor its big win.

    Alex Usher: What I found odd about this is that debt doesn’t actually affect your payments in Australia, because you’ve got one of the purest and original income-contingent systems in the world. Cutting debt by $5,000 only reduces the length of time you’ll be paying—for example, my debt is paid off in 2050 instead of 2055. I’m amazed that would move the needle so much, because next year what everybody pays is still a function of their income, not the size of their debt. So how did that work?

    Andrew Norton: I think it’s because the debt issue had become so salient in people’s minds. The strange thing is that, at the same time, Labor also promised to change the repayment system in ways that would actually reduce how much people repay this year, under laws already operating now. But that got almost no airtime.

    When journalists called me, I’d ask, “Do you want me to talk about this too?” And they’d say, “What’s that?” There was zero recognition. It just wasn’t being highlighted.

    One reason might be that the repayment change isn’t straightforward. While the average person will repay less, everyone will now face a marginal repayment rate of 47%—that’s including income tax plus the 15% of income they have to repay once they’re over $67,000 Australian.

    As this comes into operation, I think there could be political problems. But during the campaign, the overwhelming focus—99%—was simply on the debt cut.

    Alex Usher: Let’s be clear about that, because it’s interesting. Australia has always had an income-contingent system where, if you were below a threshold, you paid nothing. But as soon as you went over that threshold, you paid a percentage of your total income, not just the marginal income above the threshold.

    Andrew Norton: The change is that it’s now a marginal system. And the threshold for starting repayment has moved from $56,000 Australian to $67,000. So a whole lot of people are now out of the repayment system as a result.

    But there’s a downside: more people will see their debt keep rising through indexation, because they’re not making repayments—or their repayments are smaller than the amount added by indexation. I think that’s going to be a problem.

    Alex Usher: What’s the marginal rate above that?

    Andrew Norton: It’s 15% above $67,000, and then it goes up to 17% at $125,000 a year. Those are high numbers. Once you set a high threshold, you’ve got to set high repayment rates to bring in a reasonable amount of revenue for the government.

    Alex Usher: Now that Labor has been reelected, what do you think their agenda looks like for the next three years? Which parts of the Universities Accord that they passed on last year are they actually going to move on? You’ve mentioned the Job-Ready Graduate program and the regulator. Anything else?

    Andrew Norton: One thing they’ve already done, consistent with some of their earlier moves, is new legislation on what they call gender-based violence. That’s going to be quite complex regulation for the sector to manage.

    The big issue ahead is how they’ll distribute student places in the future. Their general mantra is “managed growth.” What they’re aiming for is a system with much more government control over the number of student places at each university, and likely also more control over which courses those places are allocated to.

    At the moment, universities have a maximum grant, but aside from niche areas like medicine, there’s effectively no control over how those places are distributed internally. And even though universities eventually use up all their public funding, they can still enroll more students if they’re willing to accept only the student contribution. Some universities have been quite happy to do that.

    Alex Usher: Similar to what we have in Ontario.

    Andrew Norton: Exactly. The universities that are currently what we call “over-enrolled”—taking more students than they’re being fully funded for—are feeling vulnerable. Some of them will find this shift very difficult to manage.

    Alex Usher: So, the government wants to control domestic student numbers through this mechanism, and they’re effectively going to do something similar for international students through a system of caps, perhaps. Are they going to move on caps again, and will it be in line with this whole notion of managed growth?

    Andrew Norton: I think so, yes. The Australian Tertiary Education Commission has said it will regulate international student numbers in the future—at least in the university sector. Presumably there will be some coordination between the domestic and international totals.

    In the past, there’s been discussion of saying international students should make up no more than a certain percentage of total enrollments. Some universities already do this voluntarily, so I wouldn’t be surprised if a maximum percentage is formally set.

    Alex Usher: It’s interesting you mention growth, because we’ve just been talking about how difficult it is for universities to balance their budgets. If there’s no new money—either from domestic sources or international students—how are they going to grow? I just saw, I think it was today, that the University of Melbourne is giving up on building a second campus.

    Andrew Norton: That’s partly due to problems with the particular site they had chosen.

    To backtrack a little—when they say “managed growth,” that doesn’t necessarily mean actual growth. They used the same phrase for international students even when the goal was clearly to reduce numbers. So in that case, it was really managed degrowth rather than growth.

    What they do want in the long run, as recommended in the Accord, is for a higher percentage of people—particularly from disadvantaged backgrounds—to acquire a university degree. That’s the growth they want to achieve.

    The challenge is the student market. The school-leaver market, in my analysis, is probably recovering after being flatter than usual. Universities that rely on school leavers are likely the ones that have managed to over-enroll.

    But the mature-age market is in a long slump, apart from a brief spike during COVID. I don’t think that market will fully recover, because many in that cohort have already earned their bachelor’s degrees at a younger age and aren’t returning in the same numbers as before.

    Alex Usher: With all these restrictions—fewer international students, slumping domestic enrollments, and declining government funding—what do you think the system looks like five years from now? By 2030, is this a sector that’s found its mojo again, or are we looking at long-term decline?

    Andrew Norton: I don’t think it’s as bad as it looks in some other countries, where demographics are worse than in Australia. But I do think the 2020s will continue to be a difficult period.

    We’ve been talking about potential structural changes in the labor market and the impact of AI, which could devalue a degree. That could cause shocks in the system we haven’t yet seen.

    Higher education has survived numerous ups and downs in the labor market over the decades. Usually, any drop-offs are short-term, and then growth returns. But maybe this time is different—I’m not sure. Right now, we’re not seeing huge effects of AI in either international or domestic enrollment numbers. But it’s definitely possible that, once we start seeing negative labor market signals—like new graduates struggling to find work—that could hit demand.

    Alex Usher: Andrew, thanks for joining us on the show.

    Andrew Norton: Thanks, Alex.

    Alex Usher: And thanks as always to our excellent producers, Sam Pufek and Tiffany MacLennan, and to you—our listeners and readers—for joining us. If you have any questions or comments about today’s episode, or suggestions for future ones, please don’t hesitate to get in touch at [email protected].

    Join us next week when Marcelo Rabossi from the Universidad Torcuato Di Tella returns to talk about new developments in Argentina’s university financial crisis, and the showdown between Congress and President Javier Milei over a new higher education law. Bye for now.

    *This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.

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  • The Coming Federal Cuts – Part 3: ISED

    The Coming Federal Cuts – Part 3: ISED

    Monday, we looked at the country’s overall financial situation (dire), and yesterday we looked at how cuts of a magnitude of 15% might affect key programs like the Canada Education Savings Program and the Canada Student Financial Assistance Program. Today, we’re going to look at how a 15% cut might affect the Government of Canada’s research subsidies, which in the main are run through the Ministry of innovation, Science and Economic Development (ISED). 

    (I will be speaking about “the tri-councils” as a single funding line; I am aware that the Canadian Institute for Health Research (CIHR) is funded through Health Canada but for this exercise it is easier just to lump them together).

    Let’s start by acknowledging that ISED is a sprawling mess of a department with small programs with very little political protection littered all over the place. I wouldn’t bet the farm on the $12 million “Futurpreneur Canada” making it out of this budget round alive. I also doubt the Universal Broadband Fund is going to continue at $900 million per year. Computers for Schools (sounded great in the 90s, less so now) and Computers for Schools Interns would also be on my endangered list. I suspect that the various regional development funds might be in for an outsized hit as well. All of which is to say that it is possible that the research enterprise – that is, the tri-Councils, the National Research Council (NRC), the Canada Foundation for Innovation (CFI) and all those organizations that get part or all their money through the Strategic Science Fund – might not get hit with a 15% cut. It’s quite possible all these other areas might take an outsized hit and allow the actual science stuff to get off with a lighter cut.

    That said, remember this key point: the budget exercise is not about cutting 15% of funding from where it should theoretically be in three years’ time (the government has a fiscal framework that extends out four or five years). It is about cutting expenditures from a 2024-25 baseline. That means that to get through any previously planned increase in spending, the cuts to existing programs must be more than 15%. 

    This matters for two reasons. First, it is because the government runs its subsidies to electric vehicles manufacturers through ISED. Those subsidies were worth $39M in 2024-25; they were planned to cost $2.1 billion this year and $4.2 billion in 2027-28 (i.e. it’s about half the department’s direct budget spend come two years from now, and about a third of total sci/tech spend if you include the tri-councils). To accommodate that increase while following the letter of the budget reduction request would basically mean requiring the entire department to shut down. That’s probably not happening (though one presumes that Carney’s announcement last week releasing Canadian auto manufacturers from their 20% EV sales target in 2026 might also lead to a reduction in EV subsidies to manufacturers). 

    Second, remember budget 2024? The one where the Liberals promised $1.8 billion in new spending on research and the whole sector cheered with relief? Yeah, well only $75 million went into the budget framework for 2024-25; 87% of that 1.8 billion is backloaded until after spring 2026. So, basically none of it is protected, and it’s all at risk. I wouldn’t be surprised in the least if they just cancelled the whole thing. And then, on top of that, we must worry about what happens to existing programs, and whether they take a 15% hit.

    CIHR transfers about $1.2 billion to Canadian post-secondary institutes each year, while the National Science and Engineering Research Council (NSERC) transfers about $1 billion, and the Social Sciences and Humanities Research Council (SSHRC) transfers about $440 million (although a fair bit of that last one includes combined tri-council projects which administratively run through SSHRC, including – if I am not mistaken – funding for the Canada First Research Excellence Fund). CFI is another $550 million a year or so. NRC is about $1.7 billion per year. The Strategic Science Fund is another $900 million or so, closer to a billion if you include base funding for Genome Canada. Canada Research Chairs are another $300 million. Call it $6.2 billion in total. Required savings to get to a 15% cut is therefore just under $1 billion.

    Where to start?

    Ask most researchers at universities what they would prefer, and the answer is likely that they would eliminate everything except the tri-council funding. Ditch CFI, significantly cut NRC, definitely obliterate the Strategic Science Fund – anything, anything, anything but touch tri-Council grants. I understand the preference, but as I noted last week, this is a monumentally detrimental position for the sector to take. Yes, basic research and the existing grant system are the basis of the existing tenure and promotion system, and as such is naturally dear to those in the system, but almost no one in Ottawa thinks that’s what these systems are for. If we’re going to keep research funding afloat, it’s probably going to be through more spending on things like the Strategic Science Fund.

    I have very little insight into the state of official Ottawa’s current thinking on the relative value of these various programs, but I could imagine three basic scenarios that get us to $1 billion in savings.

    Option 1 is a straight 15% cut across the board. Take out $400 million or so from the granting councils, $80 million from CFI, $250 million from NRC, cut the Strategic Science Fund and Genome Canada to the tune of $150 million or so, and lose about 350 Canada Research Chairs. 

    Option 2 would be the spare the professors approach. Now, you probably can’t spare them entirely, because they are such a big proportion of the overall expenditure, but if you jacked up the cuts to CFI, NRC and Strategic Science to say 25%, you could hold the losses to CRCs and the tri-councils to under $100M. I think this is unlikely, but it is a possible scenario.

    Option 3 would be the hammer the tri-councils approach. Because, as I said, I don’t think they are particularly well-liked at Finance/PMO. This is close to the inverse of option 2; zero cuts to NRC and Strategic Science, keep the CFI cut at 15% and take the rest of the necessary money out of the tri-councils. That would mean a cut of about $800 million or about 30% to council funding.

    And remember, all of this is on top of walking back the measures announced in the 2024 Budget. Ugly doesn’t even begin to cover it.

    To be clear: I suspect it is unlikely that the research area will get a cut of 15%, in part because officials will feel bad about doing serious damage to existing budgets after, I suspect, already taking away the Budget 2024 measures. If I had to guess, I would say that the department will probably come down hardest on regional development subsidies. Nevertheless, the scenarios above are possible even if not probable. Universities should start thinking about what they might mean and how they might cope. 

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  • The Coming Federal Cuts – Part 2: ESDC

    The Coming Federal Cuts – Part 2: ESDC

    Yesterday, I explained why the federal government now finds itself in a position where it has to cut program budgets by at least 15% just to keep the budget deficit to $50 billion by 2028. Today, I am going to explain how this will play out at Employment and Social Development Canada (ESDC), which plays a major role in funding for skills and education in Canada, mainly through the Canada Education Savings Program (CESP) and the Canada Student Financial Assistance Program (CSFAP).

    Now, just a note at the start. It is vanishingly unlikely that the feds will actually look for 15% savings in every program. The 15% rule is for the Department as a whole, and ESDC is one big mother of a department. It includes all sorts of programs including EI (which in theory is exempt from cuts), and child care.

    So, let’s start with CESP, which delivers about a billion dollars a year via matching grants to parents saving for their kids’ education via Registered Education Savings Plans (RESPs). This program doesn’t allow for a lot of nuance in cutting. The program gives out about $1.1 billion a year in Canada Education Savings Grants (CESGs), roughly 85% of which goes on a basic 20 cent-to the dollar match rate and about 15% of which goes to “additional” (i.e. higher) matching rates for lower-income Canadians (A-CESGs). It also runs the Canada Learning Bond Program, which is another roughly $150 million per year which is a non-matching grant of up to $2000 to children from low-income backgrounds to start their educational savings.

    There are basically four options here:

    1) The government could cut program spending across the board by 15%. That is, it could lower the base CESG matching rate from 20% to 17%, and A-CESG payment rates for lower income contributors to 26.5% and 34% from the current 30% and 40%. That would save about $150 million/year. It could also reduce the CLB payout to $1700.  

    2) The government could eliminate the A-CESG pieces entirely and go with a flat 20% coverage. That’s a pretty quick way to a 15% reduction.

    3) The government could axe the CLB. Again, a very quick way to get close to 15% reduction.

    4) The government could hold the A-CESG and CLB harmless and reduce the CESG base rate even further, to about 15%.  

    Now, personally, I think CESG probably comes out of this unscathed – that is, a 0% cut – because it’s one of the most popular government programs in existence. But these options give you a sense of what cuts might be, if applied uniformly across the department.

    (Yes, there are also presumably some savings to be made on the personnel side, but it’s a pretty simple and lean program – if you could get savings equal to even 0.5% of total expenditures from that, I’d be shocked).

    Let’s now head over to CSFAP spending and see how that might fare. It’s a bit more complex than CESG so it’s worth looking at its basic cost-structure. Using data from the CSFAP’s 2023 Actuarial report, it’s possible to look at overall direct program costs, as shown below in Figure 1. Technically, this is not a full state of program costs because there’s another billion or so in “alternative payments” to jurisdictions that do not participate in the CSFAP (i.e. Quebec, Nunavut and the NWT). But since this sum is calculated as a fraction of direct programs, we can more or less ignore them here – a 15% cut of the direct costs automatically translates through to a 15% cut in alternative payments as well. And our target number – given that CSFAP direct expenses are about $4.2 billion – would be about $628 million.

    Figure 1: Major areas of CSFAP spending, in millions, 2023-24

    So where do you carve out that much money from CSLP? Well for starters we could and should get rid of the $429 million we spent eliminating interest on loans after graduation. These subsidies do nothing for access; rather, they boost the incomes of middle-class 20–30-year-olds who have already finished school. And it is not a long-standing program. It is, in fact, a quite recent thing, announced by then-finance minister Chrystia Freeland in 2023 when the Liberals were desperately trying to throw a bone to house-poor urban twenty-somethings who at the time were threatening to vote not-Liberal. Now cutting this wouldn’t be a straight $429 million savings – loss of that subsidy would likely lead to increases in bad debt and Repayment Assistance program (RAP) charges somewhat. So, let’s call that a $350M win.  

    Where to find the other $275 million? Not administration: most of the admin money is tied up in payments to provinces for running the front end of the program or to the National Student Loans Service Centre (an outsourced agency which resides over by Square One in Mississauga for running the back end), neither of which can easily be changed in the short term. Maybe you could lose a couple of million in staff costs but not much more. Very little you can do about bad debts either.  RAP and interest subsidies before consolidation could be made less generous. In particular, the income threshold for access to RAP could be brought back down from the current $45K (roughly – it depends on family size) to say $38K, and interest during school could be brought up from zero to the current inflation rate or the government rate of borrowing (i.e. somewhere between 2 and 2.5%). I don’t have access to detailed financial figures on this, but my guess is that the RAP measure might save $50M or so; in-school interest might get you $100M.

    That still doesn’t quite get us to the required $625 million, so the only option left here is to start hacking away at grants. A straight cut in the maximum grant would be the easiest way to cut costs; bringing that down from $4200/year to, say, $3500/year would reduce spending by something along the lines of $400M/year. Another and more likely option would be for the feds to copy what Doug Ford did when he wanted to contain student aid costs – change grant eligibility criteria in such a way as to make grants harder to obtain. The obvious way to do this, I think, would be to change the rules for dependent/independent student status (i.e. the point at which students are considered to no longer get money from their parents) so that it took students five years to reach such independent status instead of four. I am not exactly sure how much that would save, but I’d wager it would be a minimum of a quarter-billion. 

    So, your menu of cut options for cutting CSFAP is, essentially:

    Bring back interest after graduation $350 million
    Admin $3-5 million
    Reduce RAP threshold to $38K $50 million
    Introduce in-school interest of 2.5% $100 million
    Cut maximum grants by $700/year $400/million
    Change definition of independent student $250 million

    (To be clear here, I am guessing a bit on some of these numbers. Intelligently, I hope, but they are guesses. Don’t take the numbers here as gospel. And if any friends at CSLP want to correct me, please do!)

    If it were me, to get to (roughly) the required $625 million I’d bring back interest after graduation – or introduce an equal-to-government-rate-of-borrowing interest rate for the entire life of the loan, which probably ends up with similar savings – and change the definition of independent students. Neither are pleasant but these are the ones that would probably affect access the least.  

    (Again, the Liberals may choose not to cut anything in CSFAP, because hey this is an income security program of a sort, and if we’re obsessing about “affordability” – but that just means cuts elsewhere in the portfolio will be larger).

    Of course, ESDC is much more than these two programs. Take a gander at the full list of programs the programs the Ministry runs (I make it about fifty if you include everything). A lot of those are scattered skills initiatives like Youth Employment and Skills, Indigenous Skills and Employment Training, the Skills and Partnership Fund, Skills for Success Program, the Innovative Work-integrated Learning Initiative. I have no idea what most of these do exactly, nor is it easy to access any budget data about them. But let’s put it this way – few of these programs have a particularly large policy constituency to back them up. My guess is that cuts across these programs will be significantly higher than 15% and some of them may cease to exist altogether.  

    Enough for today.  Tomorrow we’ll do research funding.

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  • The Coming Federal Cuts – Part 1

    The Coming Federal Cuts – Part 1

    The biggest thing everyone is going to be talking about this year – barring another university doing a surprise Laurentian – is the set of federal cuts coming down the pike. They are big. And they are nasty. So, it’s worth understanding exactly the scale of what is heading in our direction. This is going to be a three-parter. Today, I will talk about the overall size of the cuts to come, and on Tuesday and Wednesday I will talk about how this will affect the two ministries that have the most to do with post-secondary education: Employment and Skills Development Canada (ESDC, tomorrow) and Innovation, Science and Economic Development Canada (ISED, Wednesday).

    So: we don’t know the exact scope of the budget cuts the government is contemplating. What we do know is the following:

    Preliminary budget figures for Fiscal 2024-25 show that the government of Canada posted a budget deficit of $43.2 billion on revenues of $495B, program expenses of $480B, debt charges (that is, interest on existing debt) of $54B and actuarial losses of $4B. We didn’t have a budget this spring, but spending projections for 25-26 from the 2024-25 budget show a projected deficit of $39 billion on revenues of $515B, program expenses of $496B, debt charges of $55B and actuarial losses of $2B.

    The Liberal Manifesto for election 2025 planned deficits of $60 billion or so right through to 2028-29. Its fiscal plan was basically i) existing spending commitments, ii) 30-odd billion in new spending and tax cuts and iii) tiny revenue changes, plus $20 Billion or so in counter-tariffs for 2025-26. (Yes, they also promised “savings from increased productivity” – otherwise known as “frantic handwaving” – of $6B, $9B and $13B in fiscal years ’27, ’28 and ’29. I am excluding them here but will return to them in a sec).

    Figure 1: Government of Canada fiscal picture according to the Liberal manifesto, minus the handwaving, in Billions.

    (The foregoing might all sound strange to those of you who recall Carney making pledges about balanced budgets. But, of course, as I pointed out back here, he never actually promised that. He promised balanced operating budgets, that is budgets with an only vaguely defined “capital spending” netted out. By a complete coincidence, the Liberal platform claimed the government spent roughly $50 billion in capital, so basically the government is already basically in balance.  Neat trick, but not sure bondholders will see it that way. I digress.)

    Since the election, a few things have happened. Counter-tariffs are not collecting anything like the $20 billion forecast, we ditched the Digital Services Tax in a futile attempt to get the Americans to be nicer to us, and, most importantly of all, the prime minister promised to up defense spending by about $18 billion over the next four years in order to reach 2% of GDP by 2028. That means the actual fiscal picture, before any handwaving about savings, looks like this:

    Figure 2: Government of Canada fiscal picture, according to the Liberal Manifesto, minus the handwaving, including proposed spending and tariffs since April 28, in Billions.

    As you can see, we are a lot further away today from “operating balance” (i.e. a $50B deficit) than we were when Carney was elected. And this is where the handwaving/cuts come into play. So, let’s start thinking about how much money it would take to keep us at “operating balance”. In Figure 3, we see that by 2028-29, we are looking at about $32 Billion in cuts. The handwaving “efficiencies” in the Liberal manifesto were meant to cover just $13 billion of that, leaving another $19.2 billion or so to be made up, somewhere, somehow.

    Figure 3: Cuts Required Just to Keep the Government of Canada at Operating Balance (i.e. a $50B deficit), By Source, in Billions.

    I said “somewhere”, but there isn’t much mystery here. As Figure 4 shows, you divide government spending into four categories: debt charges (which the government has to pay regardless), transfers to provinces (which Carney has promised he won’t touch), transfers to individuals (ditto) and then “program spending”. As Figure 4 shows, the first three areas make up 58% of total spending. That means that the last area, program spending, is going to take up the entirety of these cuts. In 2025-26, program spending is estimated at $227 billion; a $32 billion cut to that equals an overall reduction in program spending of 14% by 2028. (Coincidentally, this was more or less exactly the size of the program cuts in the “savage” 1995 budget – $7 billion phased in over three years on a base budget of about $52 billion. Government grew back, as you can see.)  

    Figure 4: Government of Canada Expenditures by Category, 2025-26

    It’s worth being careful here. Overall program spending is $227 billion, but $46 billion of that is currently being spent on defense and housing, two areas that are almost certainly immune to cuts given the government’s overall priorities. Excluding these two fields from cuts means that the field of “cuttable” programs shrinks to $181 billion, and the size of the cuts required to meet the $50 billion target balloons to 17.7%.  

    This brings us to the program review that has been going on in Ottawa since July. Recall that Minsters were asked to bring forward scenarios that involved cuts of 7.5% for next year, 10% the year after that and 15% the year after that. Many thought initially that these numbers were deliberately overdone so that big cuts could be made in some departments so as to shield other departments from having to do the same. Now I am not so sure. That 15% target is awfully close to the 17% overall target the Liberals need to hit just to keep the deficit at $50 billion, and so I am starting to think that in fact the cuts might not be dispersed unequally between departments. They might really need 15% from everybody – and then some.

    There are a couple of alternatives of course that could lessen the blow. For instance, while Carney promised not to cut transfers to provinces, to my knowledge he never ruled out cutting the rate of growth of transfer payments (currently about 5% per year, across CHT, CST and equalization combined). Slash that in half and you’ve got yourself another $8 billion to play with by 2028, thereby reducing by a quarter the required amount of program cuts. Something similar could be achieved by de-indexing pensions for a couple of years. Or, unlikely as it seems, the Government could actually increase taxes (elbows up requires some sacrifices, no?). But, absent those measures, I think we need to seriously brace for impact. These cuts are real, they are huge, and even if they don’t hit this fall (it’s not impossible that the alleged fall budget might actually just be the usual fall economic statement under another name), they are for sure going to hit in early 2026.

    The question, really, is, what needs to be saved? What should the sectors’ priorities be? I’ll discuss that over the next two days.

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  • From Funding Formulas to AI: Pedro Teixeira on Higher Education’s Next Challenges

    From Funding Formulas to AI: Pedro Teixeira on Higher Education’s Next Challenges

    Welcome back to our fourth season. Time Flies. We’ve gone back to an audio only format ’cause apparently y’all are audio and bibliophiles and not videophiles, so we decided to chuck the extra editing burden. Other than that, though, it’s the same show. Bring you stories on higher education from all around the world. So, let’s get to it.

    Today’s guest is Pedro Teixeira. He’s a higher education scholar from the University of Porto in Portugal, focusing to a large extent on the economics of education, but he also just finished a term as that country’s Secretary of State for higher education. That’s a position closer to a junior minister rather than a deputy minister, but it has elements of both.

    I first met Pedro about 20 years ago, and I ran into him again this summer in Boston at the Center for International Higher Education’s biannual shindig, where he was giving the Philip Altbach lecture. And let me tell you, this was the best lecture I have listened to in a long time.

    Two reasons for this. First, Pedro spoke about his experiences as a Secretary of State trying to negotiate a new funding formula with universities in that country. I won’t spoil the details, but one big highlight for me was that he was in the rare position of being a politician, trying to convince universities not to have a performance-based element in their funding formula. And second, he talked about the future of higher education in the face of possible falling returns to education due to wider adoption of artificial intelligence.

    It was such a good talk, I knew my World of Higher Education podcast listeners would think it was great too. And while I couldn’t record it, I did do the next best thing. I invited Pedro to be our lead off guest for this season’s podcast. Let’s listen to what he has to say.

    The World of Higher Education Podcast
    Episode 4.1 | From Funding Formulas to AI: Pedro Teixeira on Higher Education’s Next Challenges

    Transcript

    Alex Usher: Okay, so Pedro, you were an academic at CIPES (Centre of Research on Higher Education Policy) at the University of Porto, and you went from that to being a minister of state. That’s not an unfamiliar path in Portuguese higher education—Alberto Amal, I think, did something similar. But that move from academia to government, how big a shift was that? What did you learn, and what were you not expecting when becoming a minister of state?

    Pedro Teixeira: I think you’re right in the sense that there are quite a few people who have done this, not only in Portugal but also in other parts of Europe, in different areas. And I think it’s always a bit of a challenge, because there’s this expectation that, since you’re an academic—and especially if you’re an expert on the topic—people expect you to have a solution for all the problems. And it’s not exactly like that.

    At the same time, I think one is worried that what you do in office will be coherent with what you had advocated as an academic and with what you had written about specific topics. That’s challenging.

    In some respects, I wasn’t very surprised by what I faced, because I had been involved in advisory roles and I knew people who had been in that kind of policy role. So I think I wasn’t—I mean, there were the things you expect, like the amount of work and the long days. But I never felt that was really the most difficult part. Of course, going through these things and living them is a little different than knowing them in the abstract.

    But I think the main concern for me was the permanent pressures. You are always concerned with something, always worried either about the problems you have to deal with or the problems that will emerge.

    What I was not so happy with was the lack of a sense of urgency in some of the actors, both on the government side and on the side of stakeholders in the sector. Because if you feel the problems are significant, you need to move forward—of course not rushing, but you do need to move forward.

    On the positive side, I think the quality and dedication of staff was very important. Civil service is often criticized, but I found that very important. And the other thing that was also very important was the role of data and evidence, while at the same time you also need to develop arguments and persuade people about the points you’re trying to make.

    Alex Usher: So what were those urgent issues? I know one of the big things you dealt with was a funding formula—and we’ll come to that later—but what, to your mind, were the other big urgent issues in Portuguese higher education at that time?

    Pedro Teixeira: As we know, most people in their higher education system always think their system is very specific, very different from everyone else. But in fact, we know there are a lot of commonalities across education sectors.

    In many ways, the challenges were the same ones that people describe as belonging to mass systems, or what others might call mature systems. One significant issue, of course, was the adverse demographic trends.

    Another was the tension between, on the one hand, wanting to broaden access and enhance equity in the system, and on the other, facing enormous pressures toward stratification and elitism, with the system tending to reproduce socioeconomic inequalities.

    There were also issues related to diversity versus isomorphism. On the one hand, people agree that in order for a mass system to function, it needs to be diverse. But there are pressures in the system that tend to push institutions toward mimicking or emulating the more prestigious ones.

    The balance between missions is another challenge. This relates to that issue of isomorphism, because research has become so dominant in defining what higher education institutions do and how they see their mission.

    And, of course, there were issues of cost and relevance: who should pay for higher education, and how can we persuade society to put more resources into a sector that, because it is a mass system, is already absorbing a significant amount of public funding?

    Alex Usher: All right. On that point about demographics, I saw a story in one of the Portuguese newspapers this week saying that applications were down 15% this year. Is that a rapidly evolving situation? That seems like a lot.

    Pedro Teixeira: No. There’s been a downward trend over the last three or four years, but because the number of applicants was bigger than the number of places, it didn’t disturb things much. Most of what we’re seeing now is actually due to the fact that in 2020, with the pandemic, exams for the conclusion of secondary education were suspended.

    They were only reintroduced this year. That decision was taken at the end—actually by the government I was part of—at the beginning of 2023. But in order to give students and schools time to adjust, the change only applied to the students who were starting secondary education then. Those are the students who applied this year for higher education.

    Basically, when you look at the data—we don’t yet have the numbers on how many graduated from secondary education—but the number of applicants is very much in line with what we had in 2019, which was the last year we had exams for the conclusion of secondary education.

    And in fact, if you take into account the declining trend of the last three or four years, I would say it’s not a bad result. It actually means the system managed to compensate for those losses.

    Alex Usher: Managed to absorb.

    Pedro Teixeira: Yeah, yeah. But it’s also a signal for the sector in that respect.

    Alex Usher: So let’s go back to the funding formula issue, because I know that was a big part of your tenure as Secretary of State for Higher Education. What was wrong with the old formula, and what did you hope to achieve with a new one?

    Pedro Teixeira: There are two things. I think there were some issues with the old formula. It was designed in 2006, so 15 years had passed. The sector was very different by then—the situation, the challenges, everything had changed.

    Also, like many formulas of that time, it was quite complicated, with many indicators and many categories for fields of study. That didn’t make the system very transparent. If you introduce too many indicators and variables, in many ways the message you want to convey is lost. A funding formula is supposed to be an instrument to steer the system.

    But the larger problem was that this old formula hadn’t been applied for the last 12 years. When the Great Recession started around 2005–2010, the government suspended its application. Since then, the budgets of all institutions have evolved in the same way—same amount, same direction—regardless of their number of students or their performance.

    So when we came into government in 2022, the situation was, in many cases, very unbalanced. Some institutions that had grown significantly didn’t have funding to match that growth. Others that had declined hadn’t seen any adjustments either.

    The idea of having a new formula was preceded by an OECD review commissioned by the previous government, which we took over. Our idea was to design a simpler and more transparent formula that would form part of the funding system. In addition to the formula, we introduced funding contracts, focused mainly on institutions located in more peripheral regions of the country.

    The idea was also to have a four-year period of gradual implementation of the new model and funding system. At the same time, this would correct some of the imbalances caused by not having applied any formula for 12 years.

    Alex Usher: And how did institutions respond to those proposals? Were they on your side? Were there things they liked, and things they didn’t like? Universities don’t like change, after all.

    Pedro Teixeira: On the other hand, I think a significant part of the sector was very keen to finally have some kind of formula—some set of rules that would be applied to the whole sector. Of course, some institutions were afraid that by reintroducing a formula, given their recent evolution, they might end up on the losing side.

    But one of the key aspects of the process was that this was always seen as a formula, or a new system, that would be introduced within a pattern of growth in funding for the sector—not as a way of redistributing funds from some institutions to others. That made the process easier. It would have been much more difficult if we had been taking money from some institutions to give to others.

    This required political commitment from the government, and it was very important to have the backing of the Prime Minister and the Minister of Finance. That meant we could correct imbalances without creating disruption for institutions.

    I would say the main critical points were, first, the differentiation between sectors. We have a diverse education system with universities and vocational institutions. Then there was the question of whether to differentiate between regions. Our decision was to have a formula that applied in the same way to all regions, and then use funding contracts as additional resources targeted for strategic purposes—mainly for institutions located in more deprived or less populated regions.

    Another point raised in discussions was fields of study. Everyone wants their own fields—or the ones in which they are strongest—to be better funded. But we really wanted to simplify the mechanism, and I think that helped.

    Finally, there was the issue of performance indicators. We didn’t propose to introduce them from the start. Because we had gone so many years without a formula, we didn’t have consistent data, and moreover we wanted performance indicators to be developed collaboratively with institutions. The idea was that institutions themselves would decide which areas they wanted to focus on, which areas they wanted to contribute to, and therefore which indicators they wanted to be assessed by.

    Because we decided that performance indicators would come in a second step, some institutions wanted them introduced earlier. That was also a point of discussion.

    Alex Usher: I find that fascinating, because I don’t think I’ve ever heard of universities—maybe “demanding” is the wrong word—but being disappointed that there wasn’t enough performance-based funding in a system. Why do you think that was?

    Pedro Teixeira: I’m not sure I was surprised, but it was significant that some institutions were pressing for it. In some ways, it could have been a strategic approach by certain institutions because they thought they would be on the winning side.

    But I think it also has to do with the fact that this competitive, performance ethos has so deeply permeated higher education. At some point, I even said to some institutions: be careful what you wish for. Because in some cases, this could curtail your autonomy and increase the possibility of government interference in your ability to devise your own strategy.

    Actually, I think that was, in many ways, the only real public criticism that came up. And that was quite interesting, to say the least.

    Alex Usher: I want to shift the ground a little bit from Portugal to Boston. Two months ago, you gave the Philip B. Altbach Lecture at Boston College’s Center for International Higher Education. You devoted a lot of your talk to artificial intelligence and how it’s likely to change higher education. Could you tell us a little bit about your views on this?

    Pedro Teixeira: That’s a fascinating topic. Of course, it’s an important issue for many people around the world and for many education institutions.

    It’s fascinating because, to a certain extent, we’ve been nurtured by a view that has dominated over the last decades—that progress has been skill-biased. In previous waves of technological progress, the labor market tended to favor those with higher skills. Education was often seen as contributing to that, helping people be on the winning side, and the returns to more education and more skills seemed to confirm it.

    My concern is that this wave may be slightly different. I’m not saying it will destroy a lot of jobs, but I am concerned that it may affect skilled and experienced workers in ways that previous waves did not.

    We’ve already seen, and many of us have already experienced in our own jobs, that AI is performing certain tasks we no longer have to do. It’s also changing the way we perform other tasks, because it works as a collaborative tool.

    So I think there is a serious possibility that AI—especially generative AI—will change the tasks associated with many jobs that today require a higher education degree. We need to pay attention to that and respond to it.

    I worry that because education has been such a success story over the last half-century in many countries, there is a degree of complacency. People take a relaxed attitude, saying: “We’ve seen previous changes, and we didn’t experience so many problems, so we’ll be fine this time as well.”

    I think there are quite a few aspects we need to change in our approach.

    Alex Usher: And what might those areas be? Because I have to say, whenever I hear people discussing AI and radical change in the labor market, I think: that’s the stuff that’s actually hardest for higher education to deal with—or for any kind of education to deal with.

    Education is often about teaching a corpus of knowledge, and there is no corpus of knowledge about AI. We’re all flailing blindly here—it’s totally new.

    I think a lot about James Bessen and his book Learning by Doing. He was talking about how education worked during the Industrial Revolution in Manchester, and in other parts of England that were industrializing. Basically, when there’s a totally new technology, who are you going to get to teach new people? There’s no settled corpus of knowledge about it.

    What do you think higher education institutions should be doing in that context?

    Pedro Teixeira: One of the major concerns I have is that we tend to focus so much on the impact of digitalization and technology on science and technology fields. But we should be much more attentive to how it’s changing non-technical fields—health professions, the humanities, and the social sciences. These make up a very large part of higher education, and a very large part of the qualified workforce in many of our countries.

    I think there are several things we need to do. The first is to rethink the balance between the different missions of higher education. At the moment, so much of the pressure and so many of the rewards are focused on missions other than education, teaching, and learning. We need to rebalance that. If institutions don’t commit themselves to education, it will be much more difficult for anything significant to happen at the basic level—among professors, programs, and so on.

    If AI does affect more experienced workers, that means many people will need more support in terms of lifelong learning. They will need support in reskilling, and in some cases, in changing their professional trajectories. This is an area where many higher education institutions preach much more than they practice.

    So I think we need to rethink how we allocate our efforts in education portfolios, moving more attention toward lifelong learning. So far, the focus has been overwhelmingly on initial training, which has been the core of the sector in many systems.

    Finally, we would need to rethink—or at least introduce—changes at the level of initial training: the way we teach, the way we assess students, the way we train and retrain academic staff. None of this will be obvious. But in the end, it will all come down to how much institutions are committed to education as the prime mission of higher education.

    Alex Usher: So even if AI is not a mass job killer—either now or in the future—we are seeing declining rates of return on higher education around the world. There’s massive graduate unemployment in China, quite a bit in India, and in the United States, for the first time, young graduates are less likely to be employed than non-graduates of the same age.

    What does it mean for the higher education sector globally if rates of return decline? Are we heading for a smaller global higher education sector?

    Pedro Teixeira: I tend to be cautious with some of these conclusions. We may be extracting too much from what could be transitional situations. We’ve seen in the past moments where there were problems adjusting supply and demand for graduates, and those didn’t necessarily lead to a permanent or structural situation where education became less relevant.

    In countries like China and India, higher education systems have expanded tremendously in recent years. In some ways, what we’re seeing now is similar to what other countries experienced when they went through massive expansions and the economy couldn’t absorb the rising number of graduates as quickly as the education system was producing them.

    It’s also not surprising that in many countries we’re seeing lower relevance of initial training—bachelor’s or first-cycle degrees. That’s a supply-and-demand issue. As systems move from elite to mass, that’s normal. But in many cases, we’ve seen a growing premium for postgraduate degrees and for continuing education. So I’d be cautious about concluding that education will become less and less relevant.

    That said, I would repeat my concern about complacency. I don’t necessarily expect a decline in the sector, but perhaps a slower pattern of growth. That will be a challenge, because we’re coming out of decades of relentless growth in many education systems.

    I also think we’ll see a broader scope in how we approach education and differences in higher education portfolios. It’s not that there aren’t many things we can do, but it will probably require us to rethink what we expect from professors and where institutions should focus their attention.

    Alex Usher: Right. Pedro, thank you so much for being with us today.

    Pedro Teixeira: My pleasure.

    Alex Usher: And it just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our listeners and readers, for joining us. If you have any questions or comments about today’s episode, or suggestions for future episodes, don’t hesitate to get in touch with us at [email protected].

    Join us next week when our guest will be the University of Melbourne’s Andrew Norton. He’ll be talking about what lies ahead for Australian higher education under a second Labor government. Bye for now.

    *This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.

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  • Cut, Coerce, Control: What Trump Is Doing to U.S. Universities

    Cut, Coerce, Control: What Trump Is Doing to U.S. Universities

    The single biggest story in higher education for the first six months of this year, without a doubt, has been the Trump administration’s remarkable assault on science and universities. Arguably it’s the largest state-led assault on higher education institutions anywhere in the world since Mao and the cultural revolution.

    Billions of dollars already legally allocated to institutions have been stripped from them mainly, but not exclusively through the National Science Foundation and the National Institutes of Health. Billions more are going to be cut permanently through the budget process. Individual institutions in particular, Harvard, have been threatened with a variety of punishments if they do not obey the administration’s wishes on DEI and the curriculum. International students are being deported and the government has mooted a variety of policies that would see international numbers decline sharply. Low income students are looking at major cuts to both loans and grants. And we’re only, as of this recording, 134 days into this administration’s term, still 1,327 less to go.

    With me today is a returning guest, Brendan Cantwell, from Michigan State University. He joined our show last fall to talk about what, based on his reading of the now notorious Project 2025, a Trump administration might do to higher education. And he was mostly right. Certainly he was more perspicacious than most actual higher education leaders, and so we thought just before we break for the summer, we’d invite him back on, not just to say, I told you so, but to help us understand both the strategies and tactics that the Trump administration is using and where the conflict might be headed next.

    Just one note, we recorded this on Wednesday, the 28th of May. Some things such as the state of the Trump Harvard battle have changed since then, so keep that in mind as you listen.

    And now, over to Brendan.

    The World of Higher Education Podcast
    Episode 3.34 | Cut, Coerce, Control: What Trump Is Doing to U.S. Universities

    Transcript

    Alex Usher (AU): Brendan, let’s start with the big picture. We’re four months—and a week—into Trump’s presidency, with just over three and a half years to go. Let me see if I’ve got this right.

    He’s attacked the major granting agencies—NIH and NSF—and reduced direct funding to individual investigators, often on DEI grounds. He’s also cut overhead payments to universities. On top of that, he’s gone after specific institutions—Columbia, Harvard, and others—trying to pull their funding in ways that, frankly, seem completely illegal. The justification has ranged from their support for EDI to questionable claims of antisemitism or collaboration with the Chinese Communist Party.

    We’ve now got a budget moving through Congress that, as I understand it, takes an axe to the student loan and grant system. And just this week, the government appears to be targeting international students—starting with Harvard, and more broadly by ordering embassies to conduct social media checks before issuing student visas. Am I missing anything?

    Brendan Cantwell (BC): I’m not sure—there’s just been so much. It’s hard to keep up. There have been several executive orders, including ones targeting what we call Diversity, Equity, and Inclusion programs. Others have touched on accreditation and a range of other topics.

    The thing about this administration is that so much is happening so quickly, and these actions are in various stages of implementation. Some are being held up in court, and with others, it’s not even clear how they’re supposed to be implemented. The president makes a proclamation, but then there’s this uncertainty: what does it actually mean in practice?

    Even for someone who spends a lot of time tracking this, it’s really difficult to stay on top of everything. But the overall thrust seems clear: the administration is using every mechanism it believes it controls—and some it probably doesn’t, legally—to pressure universities to align with the president’s agenda.

    That’s not just my interpretation. It’s actually a common talking point from the administration: if universities want funding, they ought to support the president’s goals. More broadly, there’s a clear effort to weaken the sector—to undermine its role as an independent political and cultural force that could challenge the president or the party.

    AU: I think Linda McMahon actually said exactly that earlier today—that universities are fine as long as they’re aligned with the president and the administration. So, I think you’ve done a good job explaining the through line across these various actions. But how coherent are those actions, really?

    Is this a well-oiled plan, where they expected to be at this point by month three or four? Or is it more like the tariff policies, where the president just thinks of something new each day and rolls it out on a whim?

    BC: I almost want to push back on the either/or framing. It’s definitely true that the president—and to some extent his top policy people and enforcers—are just throwing things at the wall. A lot of it is reactionary: this university defied me, so now I’m mad and I’m going to do something outrageous to show how much authority I have over them.

    So yes, there’s an erratic, incoherent aspect to it. The rationale for their actions shifts constantly: one day it’s antisemitism, the next it’s about violating a Supreme Court ruling on affirmative action, then it’s about foreign collaboration. The justification just keeps changing.

    But if you take a step back and look at the cumulative effect of what the administration is doing—getting universities to be more compliant, weakening their financial position, causing faculty and staff to lose their jobs—that broader objective is being advanced. And that’s exactly the kind of outcome that people like Chris Rufo, who claim to speak for the administration’s education policy, seem to be aiming for.

    So no, it’s not tactically precise—it’s not some kind of meticulously calibrated battle plan. But the overall strategy of flooding the sector with challenges is definitely happening.

    AU: I’ll come back to the strategy in a second, but let’s talk tactics. Do you get the sense that the Trump team is getting smarter in how it’s operating? That maybe they’ve been caught off guard a few times and are starting to adapt?

    I’m just thinking about what’s happened in the last week. First, they attacked Harvard—saying, essentially, “we’re getting rid of all your international students.” Then the court pushes back. But right away, the administration has a response: the court says, “No, you can’t do that,” and they immediately pivot to pulling individual scholarships or research grants for international students—ones that hadn’t already been cut.

    Then they go a step further, announcing cuts that apply not just to Harvard, but to all international students. Are they getting smarter, or not? I never had the sense this group was particularly good at learning, but maybe that’s changing?

    BC: Are they getting smarter? I’m not sure. Are they more determined? Yes. And I think the voices inside the administration that might have constrained the president’s impulses back in 2016 to 2020—those are gone now. He’s unconstrained. He’s persistent. And he and his senior policy advisors genuinely believe in what they’re doing. They’re committed to the project and they’re looking for ways to push it forward.

    Take the example you just mentioned: there’s an injunction—you can’t bar Harvard from enrolling international students, at least not before the courts weigh in. And the administration responds, “Fine. We’ll just create a new process to vet all international student visas.” So suddenly, they’re grinding the whole system to a halt.

    They’re absolutely more willing now to use tactics that are difficult to block—tactics that escalate the situation every time someone pushes back. And they’re building out those tactics in a way that moves them closer to their goals.

    That said, I don’t think their objectives are ever really precise or coherent. It’s more of a generalized impulse: they don’t like foreigners, they don’t like foreign students, they don’t like Harvard, they don’t like universities. So, they hit where it hurts—and this is one way to do it.

    Now, is that smart? Maybe more effective, yes. I’m not sure it serves the country, or even the president’s long-term agenda, in any meaningful way. But it’s definitely happening.

    AU: So let me turn to the Trump administration’s broader strategy. Last time you were on, we talked about Project 2025 and its implications for higher education. How closely do you think the White House’s actions over the past four months align with what was outlined in Project 2025? And by the way, this is your chance to say “I told you so.”

    BC: Yeah, I love to say “I told you so”—it’s one of my character flaws.

    A lot of what was in Project 2025 has now been implemented—or at least, versions of it have. Take the cap on indirect costs, for example. They’ve implemented a 15% cap, rather than the negotiated rates that were often quite a bit higher for individual campuses. Those rates sometimes raised eyebrows, especially among people unfamiliar with how the U.S. system works.

    And even the rhetoric is the same. They’ve said, essentially, “Marxist foundations only pay 15%, so why should we subsidize Marxist stuff?” That language comes directly from Project 2025.

    There are other examples, too. Many of the student loan reforms currently working their way through Congress have Project 2025 fingerprints on them. The executive order on DEI? Same thing. So yes, there are a lot of specific elements from the plan that are now showing up in policy.

    And beyond the specifics, the overall spirit of Project 2025 is clearly visible in the administration’s posture toward higher education.

    That said, there’s one key difference: Project 2025 envisioned a more active role for Congress and a more deliberative policymaking process than what we’re actually seeing. It assumed, at least implicitly, more checks on presidential power than the president has been willing to accept.

    So, while many of Project 2025’s ideas have been implemented—some fully, some partially—how long they last is still an open question. And ironically, the actual execution by the administration is in many ways less constrained, and possibly less lawful, than what Project 2025 originally proposed. That’s my impression, at least—as a non-lawyer.

    AU: We’ve been talking about the Trump administration. I want to shift now to the higher education sector. For most of February and part of March, the sector seemed… bewildered. Almost unable to process what was happening. It was like, “This must be a mistake—they can’t possibly mean that.”

    And as a result, I think the response was pretty slow. When the administration went after Columbia, which was the first institutional target, many universities seemed to instinctively say, “Let’s stay quiet. Maybe we’ll be spared.”

    You, and a few others, were pretty clear-eyed from the beginning about how this would unfold. Why didn’t university leaders see it coming? This feels like a colossal failure of imagination. What happened?

    BC: Let me start by offering a partial defense of university leaders.

    There are people like me—and others—who are pretty knowledgeable but also pessimistic. We say bad things are going to happen a lot, and often they don’t. During Trump’s first term, there was concern that a lot of his anti-higher-ed rhetoric would turn into policy. And in some ways, it did. But in many ways, it didn’t. Congress constrained him. The courts constrained him. Even people inside his administration held him back. And he also lost focus on higher ed.

    So, I think university leaders had some reason to believe that the best strategy was to remain quiet, lobby Congress, and let the courts do their work. That approach worked last time, so it wasn’t irrational to assume it might work again. It just took them some time to adjust to the new reality.

    Some of that delay is about individual cognitive response, which I’m not really qualified to speak to. But some of it is structural—university bureaucracies and associations take time to pivot. Shifting strategies isn’t easy.

    So yes, it’s fair to say the sector was caught flat-footed. And yes, leaders should have had a better sense of what was coming. That’s a valid critique. But once they figured out what was happening, I think the sector showed a fair amount of agility. Associations started taking a more aggressive posture. ACE, for instance, became part of the resistance—which I wouldn’t have predicted would happen so quickly.

    Universities are still trying to find their footing. And then you have Red State universities, which are really hemmed in by state legislatures. They’re facing a whole different set of challenges, apart from what’s coming out of the federal administration. Those institutions are in a very tough spot.

    AU: What does it say about American higher education that Harvard has become ground zero for the resistance?

    BC: Full credit to Harvard—absolutely.

    Here’s my hedge: they had the benefit of seeing what happened to Columbia. That experience showed there was no good-faith negotiation to be had with this administration.

    In some ways, it makes strategic sense for Trump to pick on Harvard. It’s not the most lovable institution. It’s a big, juicy target.

    But at the same time, it’s also kind of foolish. Harvard has enormous resources—financial, social, institutional. They have more capacity to fight back than almost any other institution in the country.

    I think they recognized what Columbia’s experience revealed: if you give in to this administration, institutional autonomy is gone—possibly for a long time.

    If Harvard wants to preserve the American establishment—which it’s often accused of doing, by reproducing elite institutions and elite classes—then it has to resist Trump. That resistance is a condition of preserving the pre-Trump order.

    So yes, it’s good and necessary that Harvard is doing this. But I wouldn’t interpret this as Harvard becoming some scrappy underdog street fighter. It’s simply one of the few institutions with the resources and standing to try to defend the old order.

    AU: What about going forward, though? I mean, I hear more institutions—maybe not acting, but at least sounding like they understand they all have to hang together, or they’ll hang separately. But will they?

    I mean, take the University of Michigan on DEI—they folded like Superman on laundry day. Part of that was probably about Santa Ono’s personal ambitions. But there are a lot of institutions, both public and private, that have already bent the knee at least once.

    How do you come back from that? And can it really be done through the courts alone? Because right now, it’s all being held up by temporary restraining orders. And as you’ve said, that doesn’t provide clarity. Eventually, these cases are going to have to go up to the Supreme Court—where, incidentally, four or five justices are Harvard alums. Whatever else they believe, they might have some interest in preserving these institutions.

    How do you see the resistance evolving over the next few months?

    BC: I’d be disingenuous if I told you I know exactly how this is going to play out.

    AU: Best guess.

    BC: I think the strategy for the sector is to try to win where it can in the courts, and hope the administration abides by those rulings—which, honestly, is a real concern at this point.

    And then also to behave like a school of fish: move together, so it becomes difficult to single out and take down any one institution.

    The hope is that they can wait the president out—that the administration will shift its focus to something else, burn through its energy on attacks, and that most of the sector will remain intact enough to keep operating.

    And then, when that moment comes, institutions can manage the fallout: the indirect consequences like how states deal with a recession if healthcare or food assistance burdens shift onto them, or the winding down of research operations as the pool of available grant funding shrinks.

    I think the approach is: keep your head down, don’t explicitly cave, and hope the administration moves on. It’s probably the best available strategy right now.

    But I don’t know if it will work. If the administration manages to keep its attention fixed on higher education and maintains this pace of attacks and cuts, then it’s going to be very difficult for large parts of the sector to emerge unscathed.

    AU: You mentioned at the beginning of the interview an executive order related to accreditation. We haven’t talked about that yet, and I think some people see that as the sleeper issue—not necessarily for the big, wealthy private institutions, but for the vast majority of colleges and universities.

    Changes to the U.S. accreditation system could have huge implications. What’s been happening on that front so far? What’s actually in that executive order, and what could these changes mean for institutional autonomy and academic freedom?

    BC: Most of the executive orders from this administration, it’s not exactly clear what it does. It directs the Secretary of Education—who, by the way, has also been tasked with dismantling the Department of Education, so there’s that contradiction to hold in your mind.

    AU: But she’s still the Secretary. I saw her today.

    BC: Yes, she’s still there.

    So, this order directs her to collaborate with new accreditors and to open up competition in accreditation. The stated goal is to “foster innovation” and “rein in the accreditation cartel”—that’s the language they use. They frame current accreditors as promoters of Marxist, DEI, anti-Semitic, or otherwise ideologically objectionable agendas. It’s a jumble of terms, but it signals their intent.

    There are really two key elements here. First, increasing competition among accreditors. That means recognizing accreditors that wouldn’t have been approved under a Democratic administration—and maybe not even under many Republican ones. These would be organizations willing to give the stamp of approval to short-term or for-profit programs that don’t meet U.S. or international best practices for educational quality. If I were being snarky, I’d call them scammer programs.

    Second, they could use accreditation as a way to impose standards that align with the president’s political agenda. For example, they might require changes to how campuses regulate student conduct, admissions policies, or even faculty hiring practices. They could try to use accreditation to reach into curriculum—mandating, say, a general education requirement focused on Western Civilization or other ideologically favored content.

    Accreditation is the clearest vehicle they have to influence what’s taught and how institutions operate. But these kinds of changes take time and require more methodical planning—something this administration has been less consistent about, as we’ve discussed.

    So, we’ll see what happens. But it’s definitely something to keep an eye on over the next couple of years. If universities are already weakened by all the other pressures—funding cuts, legal battles, political attacks—they may be less able to resist a fundamental restructuring of the accreditation system.

    AU: The sector’s had a lot thrown at it over the last four months. But looking ahead—have we seen the end of all this sabotage innovation, so to speak? Is there more coming? We talked about Project 2025 a little earlier. Is there anything in there that hasn’t been used against the sector yet? What should we be even more worried about?

    BC: I’m not sure there’s any one Project 2025 policy I’d point to and say, “watch out for that specifically.” But a couple of things are worth keeping an eye on.

    One would be if the administration attempts to block institutions—or even groups of institutions, or the entire country—from accessing federal student financial aid. That’s Title IV under the Higher Education Act. If they were to go after Title IV the same way they’ve unilaterally blocked access to research grants or are now targeting international students, that would be hugely disruptive. It’s a big, coercive lever. They could do a lot of damage with it.

    The other thing to watch is the relationship between federal and state policy. We’re already seeing red states passing legislation that mirrors or reinforces the Trump administration’s higher ed agenda. Utah, for example, just passed a bill where institutions face a big cut to their appropriations—unless they agree to evaluate and cut programs the state deems nonessential.

    And even individual boards of governors, particularly in Republican-dominated states, are taking it upon themselves to implement Trump-aligned policies. I think we might be seeing that at the University of North Carolina, for instance, where no one outside of the health sciences has received tenure in the past year. We don’t know exactly what’s going on, but it certainly looks like the board is using its technical authority to enact the administration’s broader political agenda. So those are the kinds of developments to watch.

    AU: Brendan, best of luck—and thanks for joining us.

    BC: Thanks very much, Alex. Always a pleasure to be here.

    AU: That just leaves me to thank our excellent producers—Tiffany MacLennan and Sam Pufek—and you, our viewers, listeners, and readers, for joining us. If you have any questions or comments about today’s podcast, or suggestions for future episodes, don’t hesitate to reach out at [email protected]. Run—don’t walk—to our YouTube page and subscribe. That way, you’ll never miss an episode of The World of Higher Education Podcast. Join us next week for what will be our final episode before the summer break. Our special guest? Me. Tiffany will be turning the tables and peppering me with questions about higher education in Canada and internationally during the first half of 2025. I’ll do my best to make it all sound coherent. Bye for now.

    *This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.

    This episode is sponsored by KnowMeQ. ArchieCPL is the first AI-enabled tool that massively streamlines credit for prior learning evaluation. Toronto based KnowMeQ makes ethical AI tools that boost and bottom line, achieving new efficiencies in higher ed and workforce upskilling. 

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  • Last Week in Parliament: Three Takeaways

    Last Week in Parliament: Three Takeaways

    It was a busy week in Parliament last week.  The King came to Ottawa to deliver a Speech From the Throne.  His speech – almost exclusively a re-hash of Liberal promises from the April election – was deeply depressing for anyone who thinks the words “knowledge economy” have any meaning.   

    The main feature of the Speech from the Throne was that it spelled out, in excruciating detail, how the Liberals intend to double down on re-creating the Canadian economy of the 1960s.  Oh sure, the King uttered a line in there early on about how his government is committed to “building a new economy.”  But read the document: that sentiment was in no way followed up by anything resembling a commitment to any kind of new economy.  Instead, here are the major economic elements to which the government is committed:

    • Speeding up permits for major construction projects like roads and pipelines and whatnot: because natural resources have to get to the coasts somehow!
    • Building a lot of houses
    • Spending more on defense
    • Breaking down internal trade barriers
    • Er…
    • That’s it.

    Whatever you think of the merits of the various proposals here, this is not a new economy.  It is barely even a warmed-over version of the old economy.  At best, it is about finding new markets for old products, not developing any new products.  I am unsure if it is more that the Liberals have no sweet clue about how to create a new economy, or that they are uninterested in doing so.  But it’s one of those two.

    Now some might argue otherwise because look!  Evan Solomon!  Minister of Artificial Intelligence and Digital Innovation!  How New Economy is that?  All I can say is: please try not to be that person.  Solomon is a Minster without a department with a mandate which is completely undefined.  Is it an internally-facing ministry meant to diffuse digital innovation and AI throughout government?  Or an externally-facing ministry meant to diffuse these things across the economy?  Two weeks after Solomon was named Minister, we still have no clue.   And the Liberal Manifesto and the cabinet’s One Big Mandate Letter give conflicting impressions about the extent to which the Government sees its AI/digital strategy is about skill expansion/diffusion vs. handing money to techbros (the mandate letter reads like the former, the manifesto the latter). One would be forgiven for suspecting the Carney government is making things up as it goes along.

    Anyways, the point here is still: despite Carney’s globe-trotting central banker/Goldman Sachs reputation, this government seems to be staying as far away from a Davos/future industry agenda as humanly possible.  The Liberal “new economy” is all pretty much all construction and primary industries.  This is not a world which requires a lot of higher education.

    Scared yet?  We’re just getting started.  Back on Thursday our new Prime Minister was seen to tweet:

    In other words, this government seems determined to continue in the tradition of both the former government – and the opposition parties for that matter – in framing the country’s ills as problems of costs to be solved by tax cuts and giveaways rather than problems of growth and the institutional investments required to generate it.  This way lies Peronism and perpetual stagnation. 

    And this is from our allegedly “serious” party.

    So, takeaway number one.  Universities need to throw away EVERYTHING in their playbooks for Government Relations.  Selling yourself as “the future” to a government that is desperately trying to reverse our economy into the 1960s is pointless.  This government and this Prime Minster Do. Not. Care.   Until they do, arguing for universities as “crucial” investments is a waste of time.  The real fight is over the shape of the Canadian economy.

    On to a more abstract point about budgeting.  One of the reasons we aren’t getting a budget before fall, despite the government just having been elected with a pretty detailed budget-ready manifesto and the Department of Finance being perfectly capable of putting together a set of Main Estimates for the House of Commons (as it showed on Thursday), is that Carney is trying to introduce a new set of rules with respect to public budgeting.  He spent part of this week insisting that he would balance the “operating budget” within three years, which sparked a lot of incredulity given that i) the economy is about to be in the tank and ii) the Liberals have ring-fenced most of the federal budget by saying they won’t touch transfers to provinces or transfers to institutions.  In theory, that means very significant cuts to program spending.  Like, say, research budgets.

    Except: there is currently no such thing as an “operating budget”.  What Carney wants to do is to exempt from the budget balance requirement anything that can be seen as “capital investment”, which means basically that the main game in Ottawa over the next few years is going to be how to get your favourite piece of spending classed as “capital” instead of “operating”.  And that’s a live issue because the definition the Liberals touted in the election campaign, to wit…

    …anything that builds an asset, held directly on the government’s own balance sheet, a company’s or another order of government’s.  This will include direct investments the government makes in machinery, equipment, land and buildings, as well as new incentives that support the formation of private capital (e.g. patents, plan and technology) or which meaningful raise private sector productivity.

    …is so loose you could drive a truck through it.  Will CFI spending count as capital?  Probably, but not necessarily since universities (in most provinces anyway) are neither a government nor a company.  Will tri-council spending?  Probably not, but that’s not going to stop folks claiming it supports capital formation/raises productivity, so who knows?  So, takeaway number two: get used to arguing distinctions between capital and operating because this might be the only place the sector gets traction in the next little while.

    A final point of importance is something that is not exactly new but has been given fresh salience by being in the Throne Speech, and that is the government’s commitment to limit temporary immigration – that is Temporary Foreign Workers (TFWs) plus international students – to below five percent of the population by 2027.  Or, to put it another way: every extra TFW is one international student less.  What the government has done here is set up a zero-sum game between institutions of higher education and people like the manager of the Kincardine Tim Horton’s whose business model simply cannot work if they are not allowed to employ foreign nationals at below-market rates. 

    This, my friends, is the fight post-secondary education needs to pick and needs to win.  It won’t be easy, because the captains of Canadian industry are largely clueless about competing on anything other than price, meaning low-wage labour is pretty dear to their hearts and they will fight hard for TFWs.  But it is the dilemma this country faces in a nutshell: should we use our scarce temporary immigration spots to make things cheaper in the short-term?  Or should we use them to develop a skilled workforce and build our scientific and technological talent base for the long term? 

    So, I know this won’t come easy to institutions but: screw Bay Street.  Light the torches.  Find the pitchforks.  Pick up anything you have handy and smash the windows of your local Tim Horton’s.  Fight for international students and against TFWs.  This is an existential contest: it decides whether Canada is going to be a country that gets wealthier based on investments in skills, education and science, or a country that bathes in mediocrity because we go mental if the price of a cruller goes up twenty-five cents. 

    And if the sector ducks this fight because direct confrontation with business is icky and makes some Board members uncomfortable?  Well, then the sector deserves everything it gets.  That’s the third, and most important takeaway of the last week.

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