Category: One Thought to Start Your Day

  • Provincial Budgets 2025-26 | HESA

    Provincial Budgets 2025-26 | HESA

    Ok everyone, all the provincial budgets are in and so it’s time for our annual look at what another round of irresponsible pan-partisan political leadership has wrought for our sector for the next twelve months.

    Figure 1 shows the province-by-province breakdown of this year’s budgets, showing the change in transfers to institutions in real dollars over 1 year and 5 years for each of the ten provinces. In most provinces, collecting this data is pretty easy—you just look at the Main Estimates. In Ontario it is more difficult because due to the Ministry of Finance’s crapulous incompetence, it is the one province in the country where Estimates do not appear on the day of the budget (it takes them several months to put out the detailed data; and while prior to 2018 the Ministry of Colleges and Universities was able to give out actual expenditure data on the day of the Budget, the Government no longer chooses to provide such information because shovel, manure, mushrooms, etc.). So in Ontario what you have to do is collect the previous year’s data, add the announced changes in expenditure, and then make some assumptions about the way funds are phased in (because the communications jackals who have taken over public budgeting in this province insist on phrasing spending as “$750 million over five years” to make numbers as big as possible, rather than explaining how the $750 million will be phased in on an annual basis). Which is all to say, these numbers are all pretty accurate except for Ontario, where there is a bit of a margin of error.

    Figure 1: 1-year and 5-year Changes to Budgeted Provincial Transfers to Institutions, Canada, 2025-26 Budget Year

    The one province that shows big change for 2025-26 is Prince Edward Island, which dropped a lot of money on UPEI this year in order to start a new medical school. Five other provinces (British Columbia, Alberta, Manitoba, Ontario, and Newfoundland and Labrador saw real increases (that is, increases greater than the rate of inflation) this year of between 1 and 4%. Four other provinces (Saskatchewan, Quebec, New Brunswick, and Nova Scotia) saw real declines of between 1% and 3%. Altogether, that combined nationally for real growth in provincial spending of about 0.9%.

    Over a five-year horizon, things are a bit different. The oil provinces—Alberta, Saskatchewan, and Newfoundland and Labrador—have all shown double digit declines in real expenditures (19%, 11%, and 18%, respectively), the “big two” (Quebec and Ontario) are down seven and six per cent respectively, while Nova Scotia and New Brunswick are down eight and two percent respectively. The only provinces that are up are Manitoba, where just before leaving office the Tories reversed a huge portion of their cuts of the previous eight years or so, British Columbia, which build a new med school at Simon Fraser and decided to give hefty wage increases to university and college staff (which did not, in the end, leave universities and college much better off—see Vancouver Island University for evidence), and the afore-mentioned PEI. Nationally, the drop in spending after inflation was 4%, and obviously would have been much higher without that anomalous BC result.

    So what does the overall picture look like nationally? Well, take a look at Figure 2. Basically, the picture is one of long-term stagnation.

    Figure 2: Total Budgeted Provincial Expenditures on Post-Secondary Education, 2006-07 to 2025-2025, in Billions of Constant 2025 dollars

    I suppose I should also update some charts I first made available earlier this year, looking at expenditures on post-secondary education as a percentage of total government expenditures, which I do below in Figure 3. Across the country, these percentages are down a long way over the past fifteen years, particularly in Alberta, which has gone from being by far the biggest spender in 2008 to being below the national average now.

    Figure 3: Budgeted Provincial Expenditures on Post-Secondary Education as a Percentage of Total Budgeted Provincial Expenditures, Canada and selected provinces, 2006-07 to 2025-26.

    Now, your brain might be whirring a bit trying to would out how Figures 2 and 3 can both be true. Overall spending is down only gently, but PSE expenditures as a percentage are crashing? It’s easy to explain, but not intuitive if you believe all the left-wing CBC nonsense about how governments are in austerity mode. This is nonsense: Canadian provincial governments are absolutely NOT in austerity mode. In most provinces, overall spending is wayyy up. It’s just that they are not choosing to spend any of that on postsecondary education. Since COVID, overall government expenditure is up 20% after inflation; since 2008-09, when post-secondary education peaked as a percentage of total expenditures, it’s up 59% after inflation.

    Figure 4: Real Change in Total Provincial Expenditures vs. Provincial Expenditures on Post-Secondary Education 2006-07 to 2025-26 (2006-07 = 100)

    Got it? Provinces are still spending. They just aren’t spending on postsecondary education.

    Anyways, just to finish things off, figure 5 shows changes in overall provincial spending on student assistance programs. It’s up a bit this year mainly because of Ontario. Unclear why there has been a rise, though I suspect it has something to do with the ongoing crappiness in the youth job market (something I will get back to in a blog next week) and the need for student aid to backfill.

    Figure 5: Total Budgeted Provincial Expenditures on Student Financial Assistance, Canada 2006-07 to 2025-26, in Billions of Constant 2025 Dollars

    So that’s your 2025-26 budget round up. Not as bad as some previous years but man, our sector is in a bit of a whole and just can’t get out of it. The message, as always, is: no one is coming to save us.

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  • The End of Participation Growth

    The End of Participation Growth

    One of the things that I find extremely worrying about higher education policy these days is that we’ve simply stopped talking about increasing access to the system. Oh, sure, you will hear lots of talk about affordability, that is, making the system cheaper—and hence arguments about the correct level of tuition fees—but that’s not the same. Even to the extent that these things did meaningfully affect accessibility (and it’s not at all clear that they do), no one phrases their case in terms of access anymore. We don’t care about outcomes. And I do mean no one. Not students, not governments, not institutions. They care about money, cost, all sorts of things—but actual outcomes with respect to participation rates of low-income students? At best, they are a rhetorical excuse to mask regressive spending policies which benefit the rich.

    This is a problem because it now seems as though the process of widening access, a project which began after World War II and has been proceeding for seven decades. And yet, as some recently-released Statistics Canada data shows, participation rates are now actually in decline in Canada. And it’s mainly because growth at the bottom has stalled.

    Below is the chart StatsCan released last month. It shows the post-secondary enrolment rate for 19-year-olds, which I will henceforth refer to as the “part rate” or “participation rate,” both for the entire population (the dotted red line) and by income quintile.

    Now, the first thing you may notice is that there are some pretty big gaps between the participation rates of youth from rich and poor families; the top quintile does not quite attend at double the rate of the lowest quintile, but it’s close. And you might be tempted to say, “Hey, I’ve taken Econ 101—That must be because of tuition fees!” Except, no. These kinds of part-rate disparities are pretty common internationally, regardless of tuition fees. Here are postsecondary enrolment rates by income quintile from the United States, which, on the whole, has higher fees than Canada:

    And here’s a similar chart from Poland, which mostly offers education tuition-free:

    And here’s one from France, where public universities are tuition-free but students are increasingly heading to the fee-paying private sector:

    I could go on, country-by-country, but I will spare you and instead point you to this rather good paper doing a cross-national analysis across over 100 countries by OISE’s Elizabeth Buckner. Trust me, it’s the same story everywhere.

    But let me point out what I think are the two important points in that chart. The first is that the red dotted line, which represents the participation rate of all 19-year-olds, basically plateaued back in about 2014, the first year it broke the 59% and is currently headed downwards. This is a huge change from the previous period, 2000-2014, when overall participation rates rose from 46% to 59%. First growth, now stagnation.

    The second is that during the growth period, the biggest strides were being made at the bottom end of the income scale. The part rate gap between top and bottom quintiles fell from 38 percentage points in the early 2000s to about 32 percentage points in 2014, even as part rates for the wealthiest quintile increased. That is to say, more of our growth came from the bottom than from the top. That’s good! But the growth stopped across all income quintiles and went gently into reverse for the top four income quintiles.

    Now, you might think that it’s not a bad thing that participation rates peaked, that maybe we were in a situation where we were overproducing postsecondary graduates, etc. Who knows, it’s possible. I don’t know of any evidence that would suggest that 57-59% of the youth population is some kind of hard maximum, but if stipulating that such a maximum exists, then it might well be in this range.

    But since it’s quite clear that this overall plateauing of participation is happening entirely by way of freezing educational inequality at substantial levels, being OK with the present situation means being OK with major inequalities, and in any democracy which wishes to remain a democracy, that’s not really OK. It is true that, as I noted earlier, disparities are the global norm, but that doesn’t mean you don’t keep up the struggle against stasis. It might be the case that there is some kind of “natural barrier” to keep the country’s PSE part rate at 57-59%, but in what world does a “natural barrier” keep those rates at 75% for rich kids and 43% for poor kids?

    Increasing access overall and narrowing rich-poor access gaps is incredibly difficult. If it were as simple as making tuition free, we’d have it licked in no time, but countries with free tuition don’t have noticeably narrower part rate gaps than those that charge fees. Achieving these gaps requires a whole suite of policies to narrow educational achievement gaps as well as financial ones, to offer young people a variety of flexible program types rather than an inflexible academic monoculture and to ensure that advice and support exist for students not lucky enough to be able to access the kinds of cultural capital available to the top quintile.

    As I say, achieving success in this area is very difficult: solutions are neither easy nor quick. But what makes the problem even more intractable is ignoring it the way we are doing right now. Are we a country that actually cares about equal opportunity? Or is that just a myth to which we genuflect when we wish to pretend to be more socially progressive than Americans? I lean towards option #2 but would be overjoyed to be proven wrong.

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  • Probably not the next Laurentian, but…..

    Probably not the next Laurentian, but…..

    As I noted yesterday, there are only two institutions in Canada which have run deficits in each of the last five years: St. Thomas University (STU) and Vancouver Island University (VIU). In both instances, these institutions have had deficits averaging between 4 and 5% of their total income over the course of those five years. By any definition, this puts them on some kind of watch list.

    As Figures 1 and 2 show, the root cause of both institutions’ problems is the same—namely, a big two-stage decline in enrolment. The first stage came in the early 10s, when the domestic youth population was shrinking, and the second came during Covid. The numbers are particularly bad at VIU, where the number of international students is down by over 35%. If these institutions could just get their enrolment numbers back to where they were in 2018, then STU’s tuition income would be about $3 million higher, while VIU’s would rise by roughly $20 million. In both cases, that would be enough to put the institutions well into the black. The much larger numbers at VIU are not just because it is a larger institution, but because the recent fall in student numbers is happening disproportionately on the international student side.

    Figure 1: Domestic and International Enrolment, St Thomas University, 2012-12 to 2022-23

    Figure 2: Domestic and International Enrolment, Vancouver Island University, 2012-12 to 2022-23

    At this point, folks, I am going to have to do something which some might find triggering, which is to invoke the L-word, because I am quite certain that everyone remembers the extent to which falling enrolment and a drop in tuition revenue were among the key elements in the collapse at Laurentian. I am not going to do this because I necessarily think either of these institutions is following the Laurentian path exactly. One very big dissimilarity is that neither STU nor VIU has any long-term debt, which was another of the key factors at work at Laurentian. Rather, I am doing it because I think at least some of the same dynamics are at play, particularly at VIU, which just happens to be about the same size as Laurentian in terms of enrolment and budget size, albeit without some of Laurentian’s big ambitions with respect to research. In fact, given the VIU/Laurentian similarity, I will concentrate the rest of this analysis on this west coast institution. I might come back to STU sometime, but for the moment, I will leave it aside.

    Let’s start by looking at budget surpluses over time at VIU and Laurentian. Figure 3 shows the last fifteen years of VIU’s surpluses/deficits and compares them to the fifteen years prior to the insolvency declaration at Laurentian. Based simply on the last five years or so, there is no question that VIU is actually worse than Laurentian. The institution has spent $34 million more than it earned in the last five years; Laurentian, in contrast, was only $9 million in the red over a similar period prior to insolvency. But shift your eyes to the left of that graph for a minute, and you’ll see another difference: Laurentian ran deficits basically for most of the fifteen years prior to its events, whereas VIU was in pretty good shape. What that meant was that when the bad times started five years ago, VIU had a decent accumulated surplus to draw from. That is why the institution has been able to carry on over the past few years, but since it has now drawn down well over half of its accumulated surplus ($30.6 million in 2024, down from $78 million in 2018), that strategy doesn’t really have any more room to run.

    Figure 3: Long-term Record of Surpluses/Deficits, in Millions, Laurentian vs VIU

    There are also significant differences between the two institutions when you look at cash balances, as below in Figure 4. Laurentian was basically out of gas and surviving on fumes for several years prior to the collapse, with cash reserves barely enough to cover a couple of weeks of operating expenditures; VIU has never been anywhere near that point. However, note the big dip in VIU’s cash last year. It reversed itself, but only because the institution sold off a big chunk of portfolio investments precisely (I think) to boost cash reserves. There are warning signs here for sure, albeit nothing like Laurentian’s blaring klaxons.

    Figure 4: Long-term Record of Cash Position at End of Fiscal, in Millions, Laurentian vs VIU

    The final comparison I want to make has to do with what is known as the “working capital ratio.” This is one of the key financial tests that the Government of Ontario uses to identify institutions in financial trouble, and it is the ratio between “current assets” (basically, cash plus accounts receivable) to current liabilities plus deferred contributions for research. Anything below a ratio of 1 puts you in the “high-risk” category.

    (Nota bene: some people think this ratio is not very useful because in a liquid market, institutions can move “long-term” investments to short-term fairly easily—as indeed VIU seems to have done last year when it sold off some of its portfolio investments in order to recharge cash reserves. However, since it’s an official government metric, it’s probably due a little respect, so I am using it here anyway.)

    One challenge in comparing VIU and Laurentian on the working capital metric is that they don’t quite calculate their liabilities identically, mainly because their respective provincial governments don’t ask them to categorize balance sheets in the same way. Specifically, VIU does not break out “current” from long-term liabilities, and also it lists substantial sums of tuition fees owed as “deferred revenue” while Laurentian does not. My read of this is therefore that to make the two sets of data on current liabilities comparable, one has to exclude from VIU’s numbers both “deferred capital contributions” and “deferred revenue”. Which is what I have done below in Figure 5.

    What Figure 5 shows is arguably similar to what Figure 3 shows: a metric in which a) neither institution looks particularly good, but b) Laurentian’s position is on the whole worse, and c) Laurentian’s deterioration is long and gradual while VIU’s is rather sharp.

    Figure 5: Long-term Record of Working Capital Ratios, Laurentian vs VIU

    To be crystal clear: I don’t think VIU is really on the verge of Laurentian-ing. It has no long-term debt. It has had a bigger cushion to fall back on. The province is on the verge of a youth boom, which should help a bit in bringing student numbers and revenues back up. It is working for a provincial government which is far more proactive than the frequently clueless one in Queen’s Park. And in fall 2023, it adopted a fairly aggressive if not especially strategic program of cost-cutting (ten percent for all units over three years), which in theory was supposed to right the ship.

    However:

    1. Even if VIU is not Laurentian, many of its key financial indicators look awfully familiar. From deficits to cash levels, to working cash ratios, it all seems very Mark Twain: history does not repeat, but it rhymes.
    2. That aggressive deficit reduction package didn’t reckon with Marc Miller, whose cuts to visas and policy of publicly crapping on the quality of Canadian institutions is likely to result in further drops in international student numbers and therefore reductions in income in the millions of dollars. There could still be problems ahead (I assume this may be what has been behind this week’s decision to consider suspending and/or cancelling roughly twenty programs at the diploma, undergraduate and graduate levels).
    3. The VIU community appears to be only dimly aware of how bad things are. When VIU President Deborah Saucier recently resigned, it was—according to CBC at least—because the VIU community would not support further cuts because they were not “supported by evidence.” Now, there may have been more to it than that (Lord knows CBC can be pretty crapulous at fact-checking post-secondary stories), but if it is anywhere near the truth, then the VIU community is clearly having some trouble facing a pretty serious reality, and that complicates any revival plan.

    Vancouver Island needs a second, flourishing undergraduate university and that can only be achieved through a strong financial base. Best wishes, therefore, to the folks at VIU as they grapple with these issues.

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  • Post-COVID University Surpluses (Deficits) | HESA

    Post-COVID University Surpluses (Deficits) | HESA

    Ok, everyone, buckle up. For I have been looking at university financial statements for 2023-24 and the previous few years, and I have Some Thoughts.

    In this exercise, I examined the financial statements from 2017-18 onwards for the 66 Canadian universities which are not federated with a larger institution and had income over $20 million. L’Université du Québec was excluded from the analysis below because it has yet to release financial statements for 2023-24.

    Figure 1 shows the average net surplus (that is, total income minus total expenditures as a percentage of total income) across all institutions for the fiscal years 2017-18 to 2023-24. As is evident from the graph, fiscal years 2018 through 2021 were all pretty good, apart from 2020 (the stock market did its COVID tank right at the end of the fiscal year and radically reduced investment returns that year), and overall surpluses were in the 6% range, which is not bad. But post-COVID, things got a bit rough, and the returns dropped to about 4%. Note, though, that there is a significant gap between the “big beasts” of the Canadian university scene and everyone else. In the good years, U15 institutions, which in financial terms represent about 60% of the system, saw surpluses about two percentage points higher than non-U15 institutions. Since 2022, the gap has been about three percentage points.

    Figure 1: Average Surpluses as a Percentage of Total Income, Canadian Universities, Fiscal Years 2018 to 2024

    Why have surpluses shrunk in the past few years? No surprise here: it is simply that costs have increased by about 7% in real terms for the past five years (that is about 1.4% above inflation each year), while revenues have only grown 3.7% (0.75% above inflation each year). Income growth has been pretty similar across U15 and non-U15 institutions, but expenditure growth has been significantly larger at non-U15 institutions.

    Figure 2: 5-year real change in Income and Expenditure, Canadian Universities, 2018-19 to 2023-24

    It is worth pointing out here, though, that all of this data is from before any of the effects of the international student visa cap of 2024 come into play. In eight out of ten provinces, it has been income from students that has driven universities’ revenue growth over the past five years. Only in Quebec and British Columbia has government spending been the main driver (and yes, I know, the idea that revenue from students is declining in British Columbia was a bit shocking to me too, but I triple-checked and its true—this is the one part of the country where international student revenue was falling even before Marc Miller started swinging his axe around).

    Figure 3: 5-year real change in Income by Source and Region, Canadian Universities, 2018-19 to 2023-24

    If you assume that international student numbers overall drop by 40% over three years (which is roughly what the government says it wants to achieve), then what we are likely is a decrease of about 11% in total university revenues between now and 2027 (assuming no other changes in enrolment or tuition fees, and an annual increase in government expenditures of inflation plus 1% which is what we saw in last year’s budget cycle but I wouldn’t necessarily bet on it for the future). Meanwhile, if we keep expenditures increasing at inflation plus 1.5%, we will see an increase in expenditures of about 6% by 2028. The result is what I would call a trulyyawning financial gap over the next four years. And it is precisely this that keeps senior admins up at night.

    Figure 4: Projected changes in Income and Expenditure, Canadian Universities, 2017-18 to 2027-28, Indexed to 2017-18

    Now to be clear, I don’t expect the sector to be posting multi-billion dollar gaps implied by Figure 4 (for clarity: while Figure 4 displays changes in projected income and expenditure in index terms, if the gap that opens up between 2024 and 2028 is as depicted here, the change in net position for universities will be equal to about $7 billion in 2028, which given current surpluses of $2 billion/year implies aggregate deficits of about $5 billion/year or about 11% of total income). The income drop will probably not be quite this bad, both because I expect institutions to raise fees on international students, and because I suspect international student numbers will not fall quite this far because provinces will re-distribute spots going unused by colleges (due to the reduction in enrolments that will ensure from last fall’s changes to the post-graduate work visa program). Similarly, the increase in expenditures won’t be this high either because institutions are going to do all they can to “bend the curve” in anticipation of a fall in revenues. But bottom line: there’s a looming $5 billion income gap that has to be closed just to stay in balance, and larger if we want the system to have at least some surpluses for rainy (rainier?) days in future.

    Anyways, back to the present. We can, of course, drill down to the institutional level, too. At this point in the exercise, I have chosen to exclude two more institutions from my calculations. The first is Concordia because it has a unique (and IMHO really irritating) practice of splitting its financial reporting between the institution and its “Foundation” (don’t ask), with the result that the institution’s financial statements alone tend to show the institution as worse off than it really is. The second is Royal Roads, which uniquely took a stonking great write-down on capital investments in 2024 and so frankly looks a lot worse than I think it should.

    So with our sample now down to just 63 institutions, Table 1 shows that in fact most universities have been doing OK over the past few years. Of the institutions included in this part of the analysis, 39 have been deficit-free since 2021-22, and 28 have not shown a deficit in any of the last five years. However, there are three institutions where it might be time to start worrying: Carleton, which has posted three consecutive deficits, and St. Thomas and Vancouver Island University, which have posted deficits in each of the past five years. Carleton is a little bit less worrisome than the other two because it socked away some huge surpluses in the years prior to 2022 and so has a little bit more runway. I’ll come back to the other two in a moment.

    Years in deficit Since 2019-20 Since 2021-22
    5 2 –
    4 0 n/a
    3 6 3
    2 13 7
    1 16 16
    0 28 39

    Figure 5, below, shows combined net surplus over the past five fiscal years (2019-20 to 2023-24) as a percentage of total revenues. There are eight institutions which have net losses over the past five years, and another eight with surpluses between 0 and 2% of total revenues, which I would characterize as “precarious.” There are another 29 institutions with combined five-year surpluses, which are between 2 and 5% of total revenues, which are not great but not in the immediate danger zone either. Finally, there are 18 institutions with surpluses of 5% or more, which I would characterize as being “safe,” including two (Algoma and Cape Breton) which have five-year surplus rates of over 20% (this is what happens when your student body is 75%+ international)

    Figure 5: Distribution of 5-year aggregate net surpluses, Canadian Institutions, 2019-20 to 2020-24

    But note the right-hand side of that graph. There are two institutions that have five-year deficits equal to more than 4% of their total revenues. And those two are the same two that have posted deficits for each of the past five years: St. Thomas University in New Brunswick and Vancouver Island University in British Columbia. I’ll talk about them in a bit more depth tomorrow.

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  • Check-in on Administrative Bloat, 2025 Edition

    Check-in on Administrative Bloat, 2025 Edition

    Check-in on Administrative Bloat, 2025 Edition

    It’s been a little over five years since I took a serious dive into the question of “administrative bloat,” which apparently exists everywhere but in the statistics. Still, always good to check assumptions every once in a while, and I thought five years was long enough to make a new look at the data worthwhile. So here goes:

    Let’s start by reviewing what we can and cannot know about staffing at Canadian universities. StatsCan tracks the number of permanent ranked faculty pretty accurately through its University and College Academic Staff Survey (UCASS), and in a loosey-goosier fashion through the Labour Force Survey. The latter gives much higher numbers than the former, as shown below in Figure 1, which compares the number of “ranked” academics from UCASS with the number of permanent, full-time academics from the LFS.

    Figure 1 – Full-time Academic Staff Numbers According to LFS and UCASS

    StatsCan also tracks the total number of employees—both salaried and hourly—in the university sector using the Survey of Employment, Payroll and Hours (SEPH). However, in theory, if you subtract the number of FT academic staff from the number of total staff, you should be able to get the total number of non-academic staff, right? Well, unfortunately, this is where the discrepancy between UCASS and LFS runs into some problems. In Figure 2, I show the implied number of non-academics using both methods. The growth rates are different because of the difference in observations in the early period, but the two estimates do both converge on the observation that there are about 130,000 non-academic staff at Canadian universities, or about two and a half times the complement of academic staff.

    Figure 2 – Implied Non-Academic Staff Numbers using SEPH, LFS and UCASS

    So, that’s evidence of bloat, right? Well, maybe. Personally, what I take from Figure 2 is that either (or both) the LFS numbers and the SEPH numbers are probably flaming hot garbage. There’s simply no way that the number of non-academic staff has increased by 170% in the past twenty years, as a combination of the SEPH and LFS data suggests. For reasons that will become apparent shortly, I also have serious doubts that it’s increased by 85% either, as the combination of SPEH and UCASS suggests. Because there is a second set of data available to look at this question, one that shows expenditure on salaries, and it shows a much different picture.

    The annual FIUC survey shows how much money is spent on wages for ranked academics as well as how much is spent on non-academics (it also shows wages for instructional staff without academic rank,” but I exclude this here for ease of analysis). Over the past three years, it is true that non-academic salary mass has risen, and academic ones have not (score for the bloat theory!), but looked at with a 25-year lens, Figure 3 shows that the rate of increase is about the same (score one against).

    Figure 3 – Total Expenditures on Salaries by Employee Group, in millions of $2023

    Basically, the salary data in Figure 3 tells a completely different story than the SEPH/LFS/UCASS data in Figure 2. All you do is divide the spending data by the implied headcounts to see what I mean (which I do below). Figure 4 shows the implied change in average academic pay and average A&S pay, dividing total FIUC pay by the UCASS academic staff numbers and the A&S staff numbers implied by subtracting the UCASS numbers from the SEPH numbers, i.e., the orange line from Figure 2. To believe both sets of data, you have to believe that average academic salaries have increased substantially while average salaries for non-academics have declined substantially.

    Figure 4 – Change in Implied Average Pay, Academic Staff vs. A&S Staff, 2001-02 = 100

    In Figure 4, the blue line representing academic salaries is more or less consistent with the long-term trend in salaries we have seen by looking at salary survey data (which I last did back here): significant growth in the 00s and much slower growth thereafter. There are no staff salary surveys to use for comparison, but let’s put it this way: when people talk about “bloat” in non-academic staff positions, they normally mean it in the sense that the bloat is coming from expensive A&S staff, overpaid A&S staff, etc. For Figure 4 to be true, the growth in staff numbers would need to come almost entirely from more junior, less well-paid staff. It’s not impossible that this is true, but it’s not consistent with the general vibe about bloat, either

    So who knows, really? There’s a lot of contradictory data here, some of which argues strongly in favour of the bloat argument, but quite a bit of which points in the other direction. Better data is needed to answer this question probably isn’t forthcoming.

    Meanwhile, we can take one last look at A&S expenditure data. We can check to see if the pattern of A&S salary expenditures across university operating functions has changed over time. As Figure 5 shows, the answer is “a little bit.” Central Administration now takes up 25% of total A&S salary expenditures, up from 22% 20 years ago. Student services and external relations are up much more sharply in proportional terms, but since they were both starting from a low base, they don’t impact the overall numbers that much. Libraries, physical plant, and non-credit instruction are the categories losing share.

    Figure 5: Share of Total A&S Salary Mass by Function, Canadian University Operating Grants, Select Years

    And there you have it: more data than you probably needed on administrative bloat. See you back here again in 2030.

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  • Fun with Participation Rate Data

    Fun with Participation Rate Data

    Just a quick one today, mostly charts.

    Back in the fall, StatsCan released a mess of data from the Labour Force Survey looking at education participation rates—that is, the percentage of any given age cohort that is attending education—over the past 25 years. So, let’s go see what it says.

    Figure 1 shows total education participation rates, across all levels of education, from age 15 to 29, for selected years over the past quarter century. At the two ends of the graph, the numbers look pretty similar. At age 15, we’ve always had 95%+ of our population enrolled in school (almost exclusively secondary education, and from age 26 and above, we’ve always been in the low-tweens or high single digits. The falling-off in participation is fairly steady: for every age-year above 17, about 10% of the population exits education up until the age of 26. The big increase in education enrolments that we’ve seen over the past couple of decades has really occurred in the 18-24 range, where participation rates (almost exclusively in universities, as we shall see) have increased enormously.

    Figure 1: Participation rates in Education (all institutions) by Age, Canada, select years 1999-00 to 2023-24

    Figure 2 shows current participation rates by age and type of postsecondary institution. People sometimes have the impression that colleges cater to an “older” clientele, but in fact, at any given age under 30, Canadians are much more likely to be enrolled in universities than in colleges. Colleges have a very high base in the teens because of the way the CEGEP system works in Quebec (I’ll come back to regional diversity in a minute), and it is certainly true that there is a very wide gap in favour of universities among Canadians in their mid-20s. But while the part rate gap narrows substantially at about age 25, it is never the case that the college participation rate surpasses the university one.

    Figure 2: Participation Rates by Age and Institution Type, Canada, 2023-24

    Figure 3 shows college participation rates by age over time. What you should take from this is that there has been a slight decline in college participation rates over time in the 19-23 age range, but beyond that not much has changed.

    Figure 3: College Participation Rates by Age, Selected Years, 1999-2000 to 2023-24

    Figure 4 uses the same lens as figure 3 only for universities. And it’s about as different as it can be. In 1999, fewer than one in ten Canadians aged 18 was in university: now it is three in ten. In 1999, only one in four 21 year-olds was in university, now it is four-in-ten. These aren’t purely the effects of increased demand; the elimination of grade 13 in Ontario had a lot to do with the changes for 18-year-olds; Alberta and British Columbia converting a number of their institutions from colleges to universities in the late 00s probably juices these numbers a bit, too. But on the whole, what we’ve seen is a significant increase in the rate at which young people are choosing to attend universities between the ages of 18 and 24. However, beyond those ages the growth is less pronounced. There was certainly growth in older student participation rates between 1999-00 and 20011-12, but since then none at all.

    Figure 4: University Participation Rates by Age, Selected Years, 1999-2000 to 2023-24

    So much for the national numbers: what’s going on at the provincial level? Well, because this is the Labour Force Survey, which unlike administrative data has sample size issues, we can’t quite get the same level of granularity of information. We can’t look at individual ages, but we can see age-ranges, in this case ages 20-24. In figures 5 and 6 (I broke them up so they are a bit easier to read), I show how each province’s university and college participation rates in 2000 vs. 2023.

    Figure 5: University Participation Rates for 20-24 Year-olds, Four Largest Provinces, 2000-01 vs. 2023-24

    Figure 6: University Participation Rates for 20-24 Year-olds, Six Remaining Provinces, 2000-01 vs. 2023-24

    Some key facts emerge from these two graphs:

    • The highest participation rates in the country are in Ontario, Quebec, and British Columbia.
    • In all provinces, the participation rate in universities is higher than it is for colleges, ranging from 2.5x in Quebec for over 4x in Saskatchewan.
    • Over the past quarter century, overall postsecondary participation rates and university participation rates have gone up in all provinces; Alberta and British Columbia alone have seen a decline in college participation rates, due to the aforementioned decision to convert certain colleges to university status in the 00s.
    • Growth in participation rates since 2000 has been universal but has been more significant in the country’s four largest provinces, where the average gain has been nine percentage points, and the country’s six smaller provinces, where the gain has been just under five percent.
    • Over twenty-five years, British Columbia has gone from ninth to second in the country in terms of university participation rates, while Nova Scotia has gone second to ninth.
    • New Brunswick has consistently been in last place for overall participation rates for the entire century.

    Just think: three minutes ago, you probably knew very little about participation rates in Canada by age and geography, now you know almost everything there is to know about participation rates in Canada by age and geography. Is this a great way to start your day or what?

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