Category: One Thought to Start Your Day

  • Education at a Glance 2025, Part 1

    Education at a Glance 2025, Part 1

    The Organization for Economic Co-operation and Development (OECD) released its annual stat fest, Education at a Glance (EAG), two weeks ago and I completely forgot about it. But since not a single Canadian news outlet wrote anything about it (neither it nor the Council of Ministers of Education, Canada saw fit to put together a “Canada” briefing, apparently), this blog – two weeks later than usual – is still technically a scoop.

    Next week, I will review some new data from the Programme for International Assessment of Adult Competencies (PIAAC) that was released in EAG and perhaps – if I have time – some data from EAG’s newly re-designed section on tertiary-secondary. Today, I am going to talk a bit about some of the data on higher education and financing, and specifically, how Canada has underperformed the rest of the developed world – by a lot – over the past few years.

    Now, before I get too deep into the data, a caveat. I am going to be providing you with data on higher education financing as a percentage of Gross Domestic Product. And this is one of those places where OECD really doesn’t like it when people compare data across various issues of EAG. The reason, basically, is that OECD is reliant on member governments to provide data, and what they give is not consistent. On this specific indicator, for instance, the UK data on public financing of higher education are total gibberish, because the government keeps changing its mind on what constitutes “public funding” (this is what happens when you run all your funding through tuition fees and student loans and then can’t decide how to describe loan forgiveness in public statistics). South Korea also seems to have had a re-think about a decade ago with respect to how to count private higher education expenditure as I recounted back here. 

    There’s another reason to be at least a little bit skeptical about the OECD’s numbers, too: it’s not always clear what is and is not included in the numbers. For instance, if I compare what Statistics Canada sends to OECD every year with the data it publishes domestically based on university and college income and on its own GDP figures, I never come up with exactly the same number (specifically, the public spending numbers it provides to OECD are usually higher than what I can derive from what is presumably the same data). I suspect other countries may have some similar issues. So, what I would remind everyone is simply: take these numbers as being broadly indicative of the truth, but don’t take any single number as gospel.

    Got that? OK, let’s look at the numbers. 

    Figure 1: Public and Private Expenditure on Tertiary Institutions as a Percentage of GDP, Select OECD Countries, 2022

    Canada on this measure looks…OK. Public expenditure is a little bit below the OECD average, but thanks to high private expenditure, it’s still significantly above the average. (Note, this data is from before we lost billions of dollars to a loss of international student fees, so presumably the private number is down somewhat since then). We’re not Chile, we’re not the US or the UK, but we’re still better than the median.

    Which is true, if all you’re looking at is the present. Let’s go look at the past. Figure 2, below, shows you two things. First, the amount of money a country spends on its post-secondary education system usually doesn’t change that much. In most countries, in most years, moving up or down one-tenth of a percentage point is a big deal, and odds are even over the course of a decade or so, your spending levels just don’t change that much.

    Figure 2: Total Expenditure on Tertiary Institutions as a Percentage of GDP, Select OECD Countries, 2005-2022

    Second, it shows you that in both Canada and the United States, spending on higher education, as a percentage of the economy, is plummeting. Now, to be fair, this seems like more of a denominator issue than a numerator issue. Actual expenditures aren’t decreasing (much) but the economy is growing, in part due to population growth, which isn’t really happening in the same way in Europe.

    There is a difference between the US and Canada, though. And that is where the decline is coming from. In the US, it is coming (mostly) from lower private-sector contributions, the result of a decade or more of tuition restraint. In Canada, it is coming from much lower public spending. Figure 3 shows change in public spending as a percentage of GDP since 2005.

    Figure 3: Change in Public Expenditure on Tertiary Institutions as a Percentage of GDP since 2005, Select OECD Countries, 2006-2022

    As you can see here, few countries are very far from where they started in terms of spending as a percentage of GDP per capita. Australia and Sweden are both down a couple of tenths of a percentage point. Lucky Netherlands is up a couple of tenths of a percentage point (although note this is before the very large cutbacks imposed by the coalition government last year). But Canada?  Canada is in a class all of its own, down 0.6% of GDP since just 2011. (Again, don’t take these numbers as gospel: on my own calculations I make the cut in public funding a little bit less than that – but still at least twice as big a fall as the next-worst country).

    In sum: Canada’s levels of investment in higher education are going the wrong way, because governments of all stripes at both the federal and provincial level have thought that higher education is easily ignorable or not worth investing in. As a result, even though our population and economy are growing, universities and colleges are being told to keep operating like it’s 2011. The good news is that we have a cushion: we were starting from a pretty high base, and for many years we had international student dollars to keep us afloat. As a result, even after fifteen years of this nonsense, Canada’s levels of higher education investment still look pretty good in comparison to most countries. The bad news: now that the flow of international student dollars has been reduced, the ground is rising up awfully fast.

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  • Turning the Corner | HESA

    Turning the Corner | HESA

    Things have been bleak in higher education the last couple of years, and no doubt they will remain bleak for a while. But it recently became clear to me how we’ll know that we are turning the corner: it will be the moment when provincial governments start allowing significant rises in domestic tuition.

    This became clear to me when I was having a discussion with a senior provincial official (in a province I shall not name) about tuition. I was arguing that with provincial budgets flat and declining international enrolment, domestic tuition needed to increase – and that there was plenty of room to do so given the affordability trends of the last couple of decades.

    What affordability trends, you ask? I’m glad you asked. Affordability is a ratio where the cost of a good or service is the numerator and some measure of ability to pay is the denominator. So, let’s look at what it takes to pay average tuition and fees. Figure 1 shows average tuition as a percentage of the median income of couple families and lone-parent families aged 45-54.  As you can see, for the average two-couple household, average tuition (which – recall last Wednesday’s blog – is an overestimate for most students) has never been more affordable in the twenty-first century. For lone-parent families, current levels of tuition are at a twenty-year low.

    Figure 1: Average Undergraduate Tuition and Fees as a Percentage of Median Family Income, Couple Family and Lone-Parent Families aged 45-54, Canada, 2000-2024

    Ah, you say, but that’s tuition as a function of parental ability-to-pay – what about students? Well, it’s basically the same story – calculated as a percentage of the average student wage, tuition has not been this cheap since the turn of the century, and in Ontario, it has dropped by 27% since 2017. And yes, the national story is to a large degree a function of what’s been going on in Ontario, but over the past decade or so, this ratio has been declining in all provinces except Manitoba, Saskatchewan and Alberta.

    Figure 2: Number of Hours Worked at Median Hourly Income for Canadians Aged 15-24 Required to pay Average Undergraduate Tuition and Fees, Canada and Ontario, 1997-2024

    And that’s before we even touch the issue of student aid, which as you all know is way up this century even after we take student population growth into account. In real dollars, we’ve gone from a $10B/year student aid system to a $20B/year system with the vast majority of growth coming on the non-repayable side, rather than from loans.

    Figure 3: Total Student Financial Assistance by Type, Selected years, 1993-94 to 2023-2024, in Millions, in $2023

    In fact, student aid expenditures are so high nowadays that across both universities and colleges we spend about $3 billion more in student aid than we take in from tuition fees. That’s NEGATIVE NET TUITION, PEOPLE.

    Figure 4: Aggregate Non-Repayable Aid vs Aggregate Domestic Tuition fees, 2007-08 to 2023-24, in Billions, in $2023

    So, yeah, affordability trends. They are much more favorable to students than most people think.

    Anyway, the provincial official seemed a bit nonplussed by my reply: my sense is that they had never been briefed on the degree to which tuition increases have been thrown into reverse these past few years, and he certainly didn’t know about the huge increase in non-repayable aid over the past few decades. They didn’t push back on any of this evidence, BUT, they insisted, tuition fees weren’t going up because doing so is hard and it’s unpopular.

    To which I responded: well, sure. But was raising tuition any easier or less unpopular in 1989 when the Quebec Liberal government more than doubled tuition? Than in the mid-90s when both the NDP and Conservative governments allowed tuition to rise? Than in 2001 when the BC Liberals allowed tuition to increase by 50%? This has been done before. There’s absolutely no reason it can’t be done again. The only thing it will take is the courage to put the requirements of institutions that actually build economies and societies ahead of the cheap, short-term sugar highs of chasing things like “affordability”. 

    Now, to be fair, I don’t for the moment see any provincial governments prepared to do this. If there is one thing that seems to unite provincial governments these days, it is an inability to make hard decisions. But this particular political moment won’t last forever. It might take a serious, long-term recession to knock it into various heads that no matter how much money we sink into them, natural resources and construction alone won’t run this economy. Eventually, we’re going to have to re-build the great college and university system we’re in the middle of trashing. 

    And we’ll know that moment has come when provincial governments agree that domestic tuition should rise again.

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  • Fun with Tuition Data | HESA

    Fun with Tuition Data | HESA

    I want to show you something kind of intriguing about how tuition is changing in Canada.

    By now you might be familiar with a chart that looks like Figure 1, which shows average tuition, exclusive of ancillary fees (which would tack another $900-1000 on to the total), in constant $2024. The story it shows is one of persistent real increases from up until 2017-18, at which point, mainly thanks to policy changes in Ontario, tuition falls sharply and continues to fall as tuition increases across the country failed to keep up with inflation in the COVID years. Result: average tuition today, in real terms, is about where it was in 2012-13.  

    Figure 1: Average Undergraduate Tuition Fee, Canada, in $2024, 2006-07 to 2024-25

    Simple story, right? Boring, even.  

    But then, just for fun, I decided to look at tuition at the level of individual fields of study. And what I found was kind of interesting. Take a look at Figure 2, which shows average tuition in what you might call the university’s three “core” areas: social science, humanities, and physical/life sciences. It’s quite a different story. The pre-2018 rise was never as pronounced as it was for tuition overall, and the drop in tuition post-2018 was more pronounced. As a result, tuition in the humanities is about even with where it was in 2006 and in the sciences is now three percent lower than it was in 2006.

    Figure 2: Average Undergraduate Tuition Fee by Field of Study, Canada, in $2024, 2006-07 to 2024-25

    This got me thinking: how is it possible that the overall average tuition is rising so quickly when so many big disciplines are showing so little change? So I looked at the change in each discipline from 2006-07 to 2024-25. Figures 3 and 4 show the 18-year change in tuition for direct- and second-entry programs (and yes, this is an admittedly English Canadian distinction, since the programs in Figure 4 are also at least partially direct entry in Quebec).

    Figure 3: Change in Real Tuition Levels, direct-entry undergraduate programs, Canada, 2006-07 to 2024-25

    Figure 4: Change in Real Tuition Levels, second-entry undergraduate programs, Canada, 2006-07 to 2024-25

    Two very different pictures, right? Quite clearly, second-entry degrees – which are a tiny fraction of overall enrolments – are nevertheless dragging the overall average up quite a bit. Unfortunately, it’s not easy to work out exactly how much because – inexplicably – Statscan does not use the same field of study boundaries for enrolment and tuition. But, near as I can figure out, there are about 15,000 students in law in Canada, 5,000 in pharmacy, 3,000 in dentistry and 2,000 in veterinary science. So that’s 25,000 students (or 2% of the undergraduate total) in fields with very high tuition increases, and a little back-of-the-envelope math suggests that these increases for just 2% of the student body were responsible for about 15% of all tuition growth.  

    Now, there is one other thing you have to look at and that is what is going on in engineering. This field has the fastest-growing real tuition over the period (26%) but is also the fastest-growing field in terms of domestic student enrolments (up 56% over the same period, compared to 16% for universities as a whole). So, compared with a world where engineering enrolments stayed steady between 2006-07 and 2024-25, an extra 22,000 people voluntarily enrolled in a field of study which was both more expensive (compared to science, average engineering tuition is about $2500 higher) and increasingly so every year. Again, a little back-of-the-envelope math shows that this phenomenon was responsible for between 10 and 11% of the growth in overall average tuition.  

    So, let’s add all that up: about a quarter of all the real growth in tuition over the past 20 years (which, as we noted at the outset wasn’t all that much to begin with) was due to tuition growth in the country’s most expensive programs. These are programs which are either growing rapidly or have long waiting lists, so I think the argument that these tuition increases have deterred enrolment is a bit far-fetched. And it means that the vast majority of students are seeing tuition fees which are well below the “average”. In fact, by my calculations, the actual increase in real dollars for that portion of the student body in first-degree programs – bar engineering – is somewhere around $625 in eighteen years.

    Affordability crisis? Not really.

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  • The Shrinking Research University Business Model

    The Shrinking Research University Business Model

    For most of the past 30 or so years, big Canadian universities have all been working off more or less the same business model: find areas where you can make big profits and use those profits to make yourself more research-intensive.

    That’s it. That’s the whole model.

    International students? Big profit centres. Professional programs? You better believe those are money-makers. Undergraduate studies – well, they might not make that much money in toto but holy moly first-year students are taken advantage of quite hideously to subsidize other activities, most notably research-intensity.

    Just to be clear, when I talk about “research-intensity”, I am not really talking about laboratories or physical infrastructure. I am talking about the entire financial superstructure that allows profs to teach 2 courses per semester and to be paid at rates which are comparable to those at (generally better-funded) large public research universities in the US. It’s about compensation, staffing complements, the whole shebang – everything that allows our institutions to compete internationally for research talent. Governments don’t pay enough, directly, for institutions to do that. So, universities have found ways to offer new products, or re-arrange the products they offer, in such a way as to support these goals of competitive hiring.

    Small universities do not have quite the same imperatives with respect to research, but this business model affects them nonetheless. To the extent that they wish to compete for staff with the research-intensive institutions, they have to pay higher salaries as well. Maybe the most extreme outcome of that arms race occurred at Laurentian, whose financial collapse was at least in part due to the university implicitly trying to align itself to U15 universities’ pay scales rather than, say, the pay scale at Lakehead (unions, which like to write ambitious pay “comparables” into institutional collective agreements, are obviously also a factor here).

    Anyways, the issue is that for one reason or another, governments have been chipping away at these various sources of profit that have been used to cross-subsidize research-intensity. The situation with international students is an obvious one, but this is happening in other ways too. Professional master’s degrees are not generating the returns they used to as private universities, both foreign and domestic, begin to compete, particularly in the business sector. (A non-trivial part of the reason that Queen’s found itself in financial difficulty last year was because its business school didn’t turn a profit for the first time in years. I don’t know the ins and outs of this, but I would be surprised if Northeastern’s aggressive push into Toronto wasn’t eating some of its executive education business). 

    Provincial governments – some of them, anyway – are also setting up colleges to compete with universities in a number of areas for undergraduate students. In Ontario, that has been going on for 20-25 years, but in other places like Nova Scotia it is just beginning. Some on the university side complain about these programs, primarily in polytechnics, being preferred by government because they are “cheap”, but they rarely get into specifics about quality. One reason college programs are often better on a per-dollar measure? The colleges aren’t building in a surplus to pay for research-intensity – this is precisely what allows them to do revolutionary things like not stuffing 300 first-year students in a single classroom.  

    In brief then: the feds have taken away a huge source of cross-subsidy. Provinces, to varying degrees (most prominently in Ontario), have been introducing competition to chip-away at other sources of surplus that allowed universities to cross-subsidize research intensity. Together, these two processes are putting the long-standing business model of big Canadian universities at risk.

    The whole issue of cross-subsidization raises two policy questions which are not often discussed in polite company – in Canada, at least. The first has to do with cross-subsidization and whether it is the correct policy or not. I suspect there is a strong majority among higher education’s interested public that think it probably is a good policy; we just don’t know for sure because the policy emerged, as so many Canadian policies do, through a process of extreme passive-aggressiveness. Institutions were mad at governments for not directly funding what they wanted to do, so they went off and did their own thing. Governments, grateful not to be harassed for money, said nothing, which institutions took for approval whereas in fact it was just (temporary) non-disapproval. 

    (I should add here – precisely because of all the passive-aggressiveness – it is not 100% clear to me the extent to which provincial governments understand the implications of introducing competition. When they allow new private or college degree programs, they likely think “we are improving options for students” not “I wonder how this might degrade the ability of institutions to conduct research”. And, of course, the reason they don’t think that is precisely because Canadians achieve everything through passive-aggression rather than open policy debates which might illuminate choices and trade-offs. Yay, us.)

    The second policy question – which we really never ever raise – is whether or not research-intensity, as it is practiced in Canadian universities, is worth subsidizing in the first place. I know, you’re all reading that in shock and horror because what is a university if it is not about research? Well, that’s a pretty partial view, and historically, a pretty recent one.  Even among the U15, there are several institutions whose commitment to being big research enterprises is less than 40 years old. And, of course, we already have plenty of universities (e.g. the Maple League) where research simply isn’t a focus – what’s to say the current balance of research-intensive to non-research-intensive universities is the correct one?

    Now add the following thought: if the country clearly doesn’t think that university research matters because the knowledge economy doesn’t matter and we should all be out there hewing wood and drawing water, and if the federal government not only chops the budget 2024 promises on research but then also cuts deeply into existing budgets, what compelling policy reason is there to keep arranging our universities the way we do?  Why not get off the cross-subsidization treadmill and think of ways of spending money on actually improving undergraduate education (which the sector always claims to be doing, but isn’t much, really).

    I am not, of course, advocating this as a course of policy. But given the way both the politics of research universities and the economics of their business models are heading, we might need to start discussing this stuff. Maybe even openly, for a change.

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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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  • 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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  • The State of Postsecondary Education in Canada, 2025

    The State of Postsecondary Education in Canada, 2025

    Hi all. Today, HESA is releasing the eighth edition of The State of Postsecondary Education in Canada, co-authored by myself and HESA’s Jiwoo Jeon and Janet Balfour. Many thanks to our partners – Pearson, Studiosity, Duolingo, Capio, Element451 and Riipen – for supporting this year’s edition.

    You probably don’t need to actually read this year’s edition to know that the state of postsecondary education in Canada is a bit perilous. And the reason for this, quite simply, is that public funding for higher education has been stagnant for well over a decade now.

    At one level, of course, it is possible to look at public funding in Canada and proclaim that nothing is wrong. As Figure 1 shows, public spending on higher education has stayed relatively constant over the past fifteen years in inflation-adjusted dollars. Individual provinces may have seen swings up or down in their spending, but collectively the ten provinces have spent a collective $20 billion/year or so on higher education since about 2011-12 (excluding transfer payments from the federal government), and the federal government has spent about $10 billion/year. 

    Figure 1: Federal and Provincial Own-Source Expenditures in Respect of PSE Institutions, Canada, in $2023, 2007-08 to 2023-24, in Billions

    So, at one level it is possible to shrug off the problem.  But that requires eliminating a lot of context.  Let’s see how Canadian funding looks when we put it into various types of contexts.

    If we describe public funding in per-student terms, as in Figure 2, what you see is a mixed picture. Total public funding per full-time equivalent domestic student has dropped by about 6% since 2009, and for university students by about 15%. Complicating this figure is the fact that per-student funding for college students has risen somewhat, however, this is due not to extra funding but rather to a very significant drop in the number of domestic students enrolled in colleges. Whether this is due to a reduction of interest in college programs among Canadians, or a deliberate move away from Canadian to international students on the part of colleges is difficult to answer, but in either event, the rise in funding per college student is a function of fewer students rather than more funding.

    Figure 2: Per-student Spending by Sector, Canada, in $2023, 2007-08 to 2023-24

    If we describe public funding as a percentage of the country’s economy, the picture looks significantly worse. Prior to the recession of 2008-09, public funding on postsecondary education was about 1.3% of GDP, which was substantially above the level seen across other industrialized countries (about 1.0%, according to the OECD). Briefly, that number popped up during the Great Recession, partly because spending increased but also partly because GDP stagnated. Since then, however, spending has stayed constant while GDP has grown. The result is that public spending on postsecondary has fallen to the OECD average of 1% – and the financial advantage our system once held over competitor nations has largely disappeared.

    Figure 3: Public Spending on Postsecondary Education as a Percentage of GDP, in $2023, 2007-08 to 2023-24

    We can also look at these figures in per-inhabitant terms. There was a point in the late 00s where Canada had about 33 million inhabitants and public sources spent $30 billion per year on postsecondary education. Fifteen years and seven million new inhabitants later, we’re still spending $30 billion per year.  That results in a 21% reduction in spending on universities and colleges per inhabitant from public sources, as shown in Figure 4. In Figure 5, we look at postsecondary spending as a percentage of government budgets.  Again, we see a case of spending on postsecondary institutions falling consistently because overall government expenditure is rising quickly. In the past fifteen years, aggregate provincial spending on postsecondary has fallen as a percentage of total provincial expenditures from 5.4% to just 3.3%; for federal spending it has fallen from 1.6% to just 1%.

    Figure 4: Public Spending on Post-Secondary Education Institutions Per Inhabitant, in $2023, 2007-08 to 2023-24

    Figure 5: Public Spending on Postsecondary Education Institutions as a Percentage of Total Government Spending, Federal and Provincial Governments, in $2023, 2007-08 to 2023-24

    In other words: we have been able – just — to keep our public investments in higher education level with inflation.  But we have only been able to do so because our population is larger, and our economy has grown over the last fifteen years, and we can do so with less relative effort.  Had we kept up funding on a domestic per-student level with where it was in the immediate aftermath of the Great Financial crisis, post-secondary education system would have an extra $2.1 billion. If we had kept funding on postsecondary education level with overall population growth we would have invested another $7.3 billion.  If we’d had funding for postsecondary institutions level with GDP growth we would have invested another $13.6 billion. And if we had kept it level with the overall growth in program spending, we would have invested another $19.1 billion. So, depending on the measure chosen, we are anywhere from $2-20 billion short of where we would be had we kept our spending levels of the late 00s/early 10s.

    But, you say, isn’t this true everywhere? And aren’t we at least better than the United States?

    It is certainly true that Canada is in a pattern that would seem familiar both to residents of Australia and the United Kingdom. These three countries have all followed roughly the same path over the past decade and a half, combining stagnant public funding with slightly growing domestic numbers, paid for by an absolute free-for-all with respect to international students paying market tuition rates. All three countries looked like they had made a good deal at least for as long as the international student boom lasted.

    But take a look at our biggest competitor, the United States. During the financial crisis of 2008-9, funding for postsecondary institutions tumbled by over 10%.  But then, in just the eight years between 2012 and 2020, funding for higher education grew by a third – from about $150B (US) per year to over $200B/year. In fact, for all we hear about cuts to funding under Trump (not all of which may come true, as at the time of writing the Senate seems quite intent at least on reversing the billions of proposed cuts to the National Institutes of Health), even if all the proposed cuts were to come through, total US spending on  higher education would be roughly 20% higher than it was in 2008-09, while Canada’s would be more or less unchanged. And of course, in the United States domestic enrolments are falling, meaning that in per- student terms, the gap is even more substantial. 

    Figure 6: Indexed Real Public Spending on Postsecondary Institutions, Canada vs. US, 2011-12 to 2023-24 (2011-12 = 100)

    In sum: Canada is not alone in seeing significant falls in higher education spending, but few countries have seen declines in quite as an across-the-board fashion, for quite as long, as we have. Canada began the 2010s with one of the best-funded tertiary education systems in the world, but, quite simply, governments of every stripe at both the federal and provincial levels have been systematically squandering that advantage for the past 15 years. We had a genuine lead in something, an advantage over the rest of the world. But now it is gone.

    So much for the past: what about the future?  Well, it depends a bit on where you stand.  The federal Liberals came back to power on a platform which was the least science-friendly since 1988. They promised money for postsecondary education, but most of it was either for apprenticeship grant programs which they themselves had deemed poor value for money just last year, or for programs to switch apprenticeship training from public colleges to union-led training centres – as crass a piece of cash-for-union endorsements as one can imagine. (The only saving grace? The losing Conservatives promised the unions even larger bribes). What they promised for science, for direct transfers to public universities and colleges, was a pittance in comparison.

    Moreover, following the election, in the face of a set of tariff threats from the Trump Administration, the federal and provincial governments united in a program of “nation-building” which revolved entirely around the notion that national salvation was to be found in programs which “produced more goods” and “gets them to markets” (i.e. non-US markets, meaning ports) more quickly. The idea that the country might pivot to services, to a more knowledge-intensive economy in which university and college research efforts might be seen as useful, was apparently not even considered. Rather, the country rushed head-first into the familiar – but in the long-term disastrous – role being hewers of wood and drawers of water.

    Now, hewing wood and drawing water has traditionally been Canada’s lot, and one could argue that historically have not fared so very badly by focusing on this core competence. But it is worth remembering the Biblical origin of this phrase, in the book of Joshua. A group of Canaanites known as the Gibeonites had not been entirely truthful when signing a treaty with the returning Israelites; claiming to be a nomadic people rather than a settled one (which would have led to them being exterminated).  When the Israelites discovered the deception, many wanted the Gibeonites killed; instead, Joshua decided that they should hew wood and draw water for the Israelites instead. That is to say, they fell into bondage. The political analogies in today’s Trumpian world should be obvious.

    To return to higher education: things look pretty bleak. Investment is falling. Governments are unwilling either to spend more on higher education, or to permit institutions to generate money on their own through tuition fees. Their idea of economic growth is, at best, out of the 1960s: sell more natural resources to foreigners. The idea of making our way in the world as a knowledge or science powerhouse, a spirit that infused policymaking at both the federal and provincial level in the early 2000s, has simply disappeared. Colleges might see some boosts in funding over the coming years for vocational programming, although it’s likely that they will need to scrap with private-sector unions for the money; the likelihood is that universities will see real decreases in funding. The fate of the promised increase in research spending in the 2024 budget seems especially at-risk.

    The path to a better Canada does not lie in becoming better hewers of wood and drawers of water.  It lies in developing new industries based on cutting-edge knowledge and science. Spending on postsecondary students, on its own, does not guarantee that these new industries will come into existence.  But the absence of spending on postsecondary education certainly guarantees that they will not.

    The country has a choice to make. And right now, we seem to be choosing poorly.

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  • Five Rules for 2025-26 | HESA

    Five Rules for 2025-26 | HESA

    Morning all. 

    It’s been a busy summer at HESA Towers. We’ve been developing Boardwise, our new suite of governance products with our partners at Balsam Advisory, and exploring new ideas on data governance and analytics with our friends at Plaid Analytics. We’ve also been touring the country with the Royal Bank of Canada (RBC) Thought Leadership Office and the Business +  Higher Education Roundtable (BHER) to talk about higher education, economic growth and productivity. The “what we heard” document from those sessions will be out in mid-September, and there are several follow-up events scheduled, including a leaders’ summit hosted by RBC later this month. This event will focus mainly on how higher education and business can work together to tackle some of the country’s most pressing challenges, such as clean energy and technology, artificial intelligence, and defence. Further insights from this work will also be explored at the BHER Executive Summit in February 2026.

    And, of course, our own Re: University conference – where we will be presenting some of the most interesting ideas out there to improve and inspire the quality, effectiveness and experience of postsecondary education in Canada – is coming up in late January in Ottawa. (Tickets are going fast – reserve your spot!)

    A couple of other small programming notes: 

    • The State of Post-Secondary Education in Canada 2025 will be released tomorrow. 
    • The World of Higher Educationpodcast will still come out every Thursday, but we’re back to an audio-only format because editing is a hassle and apparently very few of you are videophiles. 
    • The Fifteen will continue to bring you the top global higher education stories every other week. 
    • Next Friday will mark the debut of a new biweekly webinar series, Friday Focus, to be hosted by Tiffany MacLennan, surfacing the most interesting shifts and innovations in Canadian higher education – from AI & technology, cutting-edge programming, and the everchanging student experience – through the voices of those leading the change. We hope you can join us. 
    • Our University Vice Presidents Network (UVPN) is going strong and is scheduled to convene in Victoria in November, Quebec City in February, and then internationally for a May 2026 Study Tour in Germany. 
    • Finally, we are targeting the first week of December for the launch of the World of Higher Education Annual Review 2025, a new year-in-review publication which tries to document the year’s shifts across the whole of our crazy sector, right around the globe, using statistics, stories and strategic planning documents.

    Now, on to the year ahead.

    In most places, I think the hard part for colleges is over.  2025-26 isn’t going to be an easy year, by any means, but the big decisions have mostly been made, future directions have been set and the floor on institutional income has either been reached or is in sight. 

    Universities, on the other hand, are a different story.  They have – not everywhere, but in the main – been more hesitant to act. It’s a conservative sector that is resistant to change, be it financial, organizational or cultural. And the financial problems the sector faces – again, not everywhere but in the main – are going to drag on for quite awhile mainly because international student numbers aren’t bouncing back the way they might have (more on that next week) and because an imminent recession is the opposite of helpful when it comes to provincial finances.

    So, it’s going to be a tough year ahead.  In my mind, I think there are 5 rules for success.

    Rule 1 – Act like Universities are a Means to an End, not an End in Themselves.  Literally the worst thing universities can say right now is “universities are crucial, give us more money”. It’s an utterly tone-deaf approach, even if you give it an “elbows up” spin.  The sector has been saying it for years and it clearly hasn’t worked, so continuing with this approach is the literal definition of insanity. And the reason it doesn’t work is because Canadians (or at least Canadian politicians) simply don’t believe that universities are crucial because they don’t believe that knowledge and science is useful. Rather, they far prefer a Canada where the construction and natural resources industries continue to call the shots (if there is a Deep State in Canada, it is surely comprised of these two sectors and their watercarriers). The case we need to make is not “spend on universities”, it’s “a knowledge-driven Canada is a better Canada”.  And more importantly, it’s not a case institutions can make on their own – they need to make it with lots of other actors, particularly from industry.  Alliances, people. Form alliances.  Downsize your government relations team, build up your community relations efforts.

    Rule 2 – Stop with the Tri-Council Fundamentalism.  Federal budgets for research are going to get hammered in the coming months. This will make a lot of people argue that we should ditch all research funds except the tri-councils because inquiry-driven research is sacred etc. I understand the instinct here because so many institutions make council success a key part of the tenure/promotion process. But it’s a bad instinct. No one in Ottawa cares about your tenure processes. You can argue all you want about how basic research is more cost-efficient in terms of driving long-term discovery, but i) the public likes some short-term wins mixed in with the long-term ones and b) nobody outside universities is buying that one story about NSERC funding Geoffrey Hinton’s AI research 30 year ago as a business case for science. Like, nobody. Get over it. Understand that if there is to be growth in Canadian research funding in future, it’s going to look a lot more like Horizon Europe or the Biden Administration’s Chips and Science Act, both of which were widely hailed as being good for science despite – or perhaps because – they are largely mission-driven rather than inquiry-driven. If this is the hill the community chooses to die on, God help us all. 

    Rule 3 – Focus on what you can control, not what you can’t. Yes, things are bad.  You can spend time complaining about it – government is short-sighted, we’re always getting shafted by the granting councils, etc. – or you can get busy. Fire up your friend-raising and fund-raising. Ramp up your spend/effort on international recruitment (more on this next week). Make a big bang with some new programs that stand out. Go big on one theme. Stand out. Please.

    Rule 4 – Faster Collegiality is a Must. Part of regaining public confidence is going to involve being able to make changes at the institutional level with much more speed and determination than is historically the case. That means being able to deliver on promises and priority in the immediate term, not in some far-off future, to be able to act as an institution and not just as a sack full of cats fighting over research priorities and teaching schedules. The way this normally happens is to concentrate power in the hands of the upper administration. This is how it works in most of Asia, most of the United States, and increasingly in Europe as well (though crucially, senior admin tends to be elected in Europe). But it doesn’t have to be like that. There’s no obvious reason why collegial governance needs to be slow: it’s just custom and practice. I’ve been saying for a while that better, faster governance is key to institutions in rough times and while too few have heeded that advice, it’s never too late to start.

    Rule 5 – Do less, but do it better. Universities are ridiculously strung out. Many forces are at work here, but I will single out two. At a system level, we have governance systems that are great at approving new programs and initiatives but absolutely rotten at pruning them once they have outlived their purpose. Result: institutions do too much, but do it badly, thus leading to enshittifcation. But it works at the level of individual faculty too, since departments tend to hire the biggest keeners in the system, the kind of people who won’t say no to more research, or extra teaching, or whatever. Result: burnout. In a normal organization, a manager would come along and try to make workloads manageable. But since Canadian academia long ago decided that the main purpose of department chairs is to protect staff from unwanted Decanal or Provostial schemes rather than to manage academics’ workloads, there is no one in the system who can actually make the problem go away (high-sounding talk about “wellness” doesn’t do the trick either). So, seriously, do less.

    It’s going to be a hard year (or let’s face it, a hard few years), but if everyone gets the basics right, we can come out of this better and stronger. 

    Good luck everyone. Back to work!

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