Tag: HESA

  • Retrenchment Watch Newsletter | HESA

    Retrenchment Watch Newsletter | HESA

    This is the first edition of Retrenchment Watch, a new initiative tracking how Canadian post-secondary institutions are reacting to current financial challenges. The Retrenchment Watch monitors the most recent developments, highlighting key trends and institutional responses across the country. Future editions will provide ongoing updates, analysis, and institutional case studies to help sector leaders navigate this challenging period. Updates to the website will be made weekly with summary emails flowing in a biweekly schedule.

    The Impact of Declining International Enrollments

    International students have played a critical role in the financial stability of Canadian post-secondary institutions. Over the past decade, many universities and colleges have relied heavily on international tuition revenue, amidst rising costs, frozen domestic tuition, and stagnant funding from provincial governments. 

    The federal immigration policy changes of 2024—including caps on the number of applications for international study permits that will be processed by IRCC—have caused a steep drop in new international student enrollments across the country.

    Comparison of Study Permit Applications Processed by IRCC, by Month (2023 vs. 2024)

    Source: IRCC Data, “Source Countries – Applications Processed by IRCC for New Study Permit Applications (in Persons) by Month, from January 2022 to December 2024”

    However, the impact of the government’s announcements has reduced the numbers of international students who are actually being enrolled much further than the caps themselves would imply. ApplyBoard is projecting that only 280,000 study permits were approved in 2024, as opposed to 515,880 in 2023, a 45% drop in international student numbers.

    This matches what we are hearing about dramatic falls in international student numbers across the country. However, the drops are much greater at certain institutions. For example, Okanagan College has seen a 50% decline in new international student enrollment, with expectations of a further 70% in the winter term. Thompson Rivers University reported a 50% drop in new undergraduate international enrollments and a 75% drop in post-baccalaureate diploma students. These declines are forcing institutions to make difficult financial decisions to remain operational.

    Budget Deficits

    The enrollment shortfall has translated into substantial budget deficits at many institutions. Universities and colleges across Canada are now facing difficult financial realities, with some implementing drastic cost-cutting measures.

    • York University has the largest projected deficit, at $142 million, and is implementing cost-cutting measures to reduce spending by $130 million over three years.
    • Sheridan College is projecting a $112 million loss in revenue due to falling international student numbers. 
    • University of Waterloo estimates a $75 million deficit.
    • Algonquin College is projecting a $32 million deficit for 2024-25, which is expected to rise to nearly $100 million by 2026-27.
    • Carleton University is projecting a $38 million deficit for 2024-25, expected to reach $70 million by 2025-26.
    • Memorial University reported a $9.5 million revenue loss.

    While these numbers may seem alarming, they don’t tell the full story. Public details on institutional budgets and cuts remain limited and inconsistent. Some institutions report projected deficits, others focus on lost revenue, and many omit details on where cuts will actually fall. Job loss estimates vary widely, and program cuts are often announced without specifying which programs are affected.

    In the coming weeks, we’ll be diving deeper into institutional budgets to provide a clearer picture of what these figures really mean and how they will shape the sector in the years ahead.

    Program Suspensions and Faculty/Staff Layoffs

    To manage financial constraints, many institutions are suspending programs and reducing staff. The impact is particularly severe for smaller colleges and those heavily reliant on international students.

    • Sheridan College is suspending 40 programs and reviewing 27 others, with an estimated 700 layoffs.
    • Fleming College has suspended 29 programs, possibly increasing to 42, due to a $38 million revenue shortfall.
    • Centennial College is suspending 49 programs after experiencing a 43% drop in international student enrollment.
    • St. Lawrence College is cutting 55 programs—approximately 40% of its offerings.
    • Seneca Polytechnic has temporarily closed its Markham campus, which primarily served international students.
    • Fanshawe College is cutting 18 programs this semester.
    • Public-private partnership campuses, set up primarily by Ontario colleges in the Greater Toronto Area, are being wound down.

    Hiring freezes have become common, with institutions like McGill University, Dalhousie University, the University of Waterloo and the University of Alberta pausing recruitment efforts to manage budget shortfalls. A number of institutions, such as Conestoga College and Carleton University, have introduced programs to incentivize voluntary retirement, in the hope that they can reduce salary expenditures without widespread compulsory layoffs.

    However, layoffs are occurring across the sector. Mohawk College has cut 65 full-time administrative staff, amounting to 20% of its administrative workforce. Simon Fraser University has eliminated 85 staff and faculty positions. University of Windsor has already issued layoff notices to 15 employees and is warning of further cuts.

    We know that large, but so far uncounted, numbers of contract instructors are not being rehired as their contracts expire. For example, Okanagan College has canceled 11 part-time term faculty contracts, with up to 80 more positions at risk. Western University is introducing enrollment thresholds to determine whether a course will be offered, with minimum class sizes ranging from 50 for first-year courses to 15 for fourth-year courses. These thresholds imply that contract instructors teaching courses which do not meet the cap are unlikely to have their contracts renewed.

    We will be updating a list of institutional responses on the Retrenchment Watch as they are announced.

    The Recovery Project 

    In response to the widespread retrenchment across Canadian higher education, HESA has launched the Recovery Project. 

    The financial challenges facing Canadian higher education are unprecedented, but they are not insurmountable. Most institutions have survived similar experiences in the past. The HESA Recovery Project helps Canadian colleges, polytechnics, and universities navigate financial challenges by providing insights and facilitating peer learning and collaborative action. Through monthly reports and virtual meetings, leaders gain evidence-based strategies on budget decisions, maintaining morale, and academic redesign. Drawing from interviews with veterans of past periods of retrenchment and case studies of institutions that have successfully come through major cuts, the project delivers actionable guidance. Reports and discussions begin this month, with future topics shaped by member needs to ensure timely, relevant support for institutions adapting to financial pressures. For more information, contact Tiffany MacLennan at [email protected].

    Looking Ahead

    The Retrenchment Watch will continue to monitor and analyze developments across the sector, providing timely updates and insights. The next editions will cover new announcements, policy shifts, and institutional adaptations that arise in response to ongoing financial pressures. 

    For more details, you can visit the Retrenchment Watch webpage. Have something you want to share with us about cuts at your institution? Reach out to us. 

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  • Ontario in 2029 | HESA

    Ontario in 2029 | HESA

    Back in 2022, just after the last provincial election, I wrote a piece looking forward a few years and predicted that the years 2023-25 were going to be chaos for Ontario postsecondary institutions. And I was right, although I can’t claim to have anticipated any of the specifics. Given that we are now going back into an election, I thought I would try to look into a crystal ball and look at what the province’s postsecondary system will look like financially if our glorious premier is re-elected for another four years.

    To do this, of course, requires making a few assumptions, not just about what will happen in the future but, given the inevitable Canadian delays in producing data, what’s been happening in the past two years as well. Hard data on the student numbers which drive aggregate tuition income does not exist beyond 2022 because the provincial government is deliberately suppressing data on this subject. Yes, really. Until last year, Ontario had one of the best records in the country when it came to openness on enrolment stats, usually publishing quite detailed data within six months of end of the calendar year. As of today, it has now been twenty-one months since the last update. By complete coincidence, the data that has not been updated covers the exact period where provincial government was asleep at the wheel in terms of oversight of international student intake. Can’t have that data going out before an election, I guess.

    Anyways, that means the following projections require a bit more educated guess work than usual. For transparency, here are my assumptions:

    • I have based student number projections for 2023-24 and 2024-25 on data I could find from the Ontario Universities Application Centre (OUAC) and from federal open data on student visas issued up to fall 2024.
    • I am assuming that international student enrolment will bottom out in 2025-26 and resume 10% annual growth thereafter, and that domestic enrolment will grow 2% per year, in line with projected increases in the 18-21 population. The assumptions on international students might be too generous, in which case all my projections will be too optimistic. Keep that in mind as you read this.
    • I am assuming that the provincial government will not add any new funding to the system beyond what was announced in the run-up to the 2024 budget, but that the extra funding announced as a response to the Blue-Ribbon Panel will be maintained past 2027.
    • I am assuming the freeze on tuition will be maintained, but a gentle (but below-inflation) rise in average tuition will continue due to students switching from cheaper humanities courses to more expensive STEM ones.
    • I am going to focus on the main sources of institutional operating income, which are tuition fees and provincial operating government. I am excluding from this analysis anything to do with income from federal or private non-student sources.

    Let’s start with public expenditures on postsecondary education. The problem of falling real public expenditures began well before Ford took power, but this trend has worsened under Ford. Until last year, he consistently allowed inflation to erode funding. The only time he increased institutional funding was in 2024, after the report of the blue-ribbon panel, and even then the three-year package he announced barely allows funding to keep up with inflation. When this new funding evaporates in 2027, the prospects for any new funding are uncertain: I think it is more likely that the government will revert to its previous practice of holding funding constant in nominal dollars but fail to provide any help to offset inflation. Assuming this is true, the path of government funding for Ontario postsecondary institutions will be as shown below in Figure 1.

    Figure 1: Ontario Government Transfers to Post-Secondary Education, 2001-02 to 2028-29 (projected) in Billions of $2023

    Now of course, public funding only makes up about a third of total funding in Ontario postsecondary education. What happens when you include tuition fees? Well, it looks like the graph below, Figure 2. Again, as you can see, the “take-off” point for the system we have today clearly lies in the McGuinty/ Wynne period, but boy howdy did the Ford team double-down on the model it inherited.

    Figure 2: Total Operating Income by Source and Sector, Ontario Public Postsecondary Institutions, 2001-02 to 2028-29 (projected) in Billions of $2023

    Now, this is one of those cases where it helps to disaggregate what is going on in the system and look separately at what’s going on in the universities and colleges. Let’s start with colleges in Figure 3.

    Figure 3: Total Operating Income by Source, Ontario Colleges, 2001-02 to 2028-29 (projected) in Billions of $2023

    I’ve been writing about the big fall in college revenues for a few months now, but even I find this graph shocking. Total operating income to the college system is going to crash by about a third between 2023-24 and 2024-25 and then probably will start to recover thereafter. Basically, you should consider the period 2015-2025 as a huge fever dream that is now breaking and sending the system back to exactly where it was a decade ago, minus about 15% of its public funding and a similar drop in the number of students (domestic enrolment really crashed over the past decade).

    Figure 4 repeats the exercise for universities. This one might seem puzzling for many, because it appears to show very little drop in funding in the 2020s. I mean, yes, there’s a teeny dip in 2024, but absolutely nothing like what we see in the colleges—so why are universities screaming about their untenable financial positions?

    Figure 4: Total Operating Income by Source, Ontario Universities, 2001-02 to 2028-29 (projected) in Billions of $2023

    Well, the answer is that universities don’t have a revenue challenge so much as a cost challenge. Colleges have an enormous amount of freedom to rearrange or reduce staff. Universities, to put it mildly, do not, partly because of tenure and partly because collective agreements between universities and faculty contain clauses about layoffs and financial exigency which impose very high barriers and costs to any institution that tries to reduce academic headcount. This forces institutions to force as many cuts as possible on non-academic staff and services, but there are limits to how much you can do before students start turning away.

    Plus, of course, universities simply got in the habit of getting ever larger. Looke at what happened in the 18 years before the Ford government took power: 17 straight years where the average annual income growth after inflation was 5%. The internal political economy of Ontario universities simply evolved so that growth less than 5% was believed to be “austerity.” Since Ford came to power, annual growth has been effectively zero, even as institutions are dealing with the costs of accommodating the major shift in students from humanities to STEM. The gears inside universities are grinding to a halt and even going in reverse this year and next. And universities are—by design—poorly engineered to deal with a lack of growth.

    So, what can be done? Well, in the world we all wished we lived in, this situation would be attracting serious political attention. But it’s not. Ontarians quite like having world-class universities and colleges; they just don’t feel like paying for it. Had the cuts started a few weeks earlier, or had the election been called a few weeks later, the current Program Apocalypse (which seems more than on course to deliver the closure of over 1000 programs across the province) might have become what political animals call “a kitchen-table issue,” that is an issue so important than voters talk about it at the kitchen table. Kids not being able to get into the programs they want to get into because they have been shut due to budget cuts? Yeah, that’s a kitchen table issue. One that might yet have some impact on the election, though probably not a decisive one.

    Could institutions do more to make this a kitchen table issue? Yes, they could. At the university level, institutions could be more overt in saying they will no longer be able to support as many spots in expensive, high-demand programs. At the college level, institutions could be more aggressive about closing programs in the skilled trades. So far, they have been very reluctant to do this even though their high cost-per-student should probably lead a lot more of them to be on the chopping block if financial sustainability were a major issue. But institutions are reluctant to do this because it’s hard to play chicken with the government without seeming to play chicken with the general public. And the only way things could get worse for institutions right now is if they lose what’s left of the public sympathy they have. Which is to say: yes, they could be doing more, but it’s easy enough to explain their hesitation in doing so.

    Anyways, sorry to readers in the rest of the country for all the Ontario-centricity. If you’d like to know more about how the mess in Ontario—partly due to inept oversight by the Ford team and partly due to an inept response by federal immigration minister Marc Miller—affects the rest of the country (and it does), have a listen to my guest appearance on the Missing Middle podcast last week. Good fun.

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  • HESA Spring 2025: staff | Wonkhe

    HESA Spring 2025: staff | Wonkhe

    HESA Spring 2025 kicks off in earnest with a full release of the staff data for 2023-24.

    Unlike in previous years, there’s been no early release of the headlines – the statistics release (which provides an overview at sector level) and the full data release (which offers detail at provider level) have both turned up on the same day.

    Staff data has, in previous years, generally been less volatile than student data. Whereas recruitment can and does lurch alarmingly around based on strategic priorities, government vacillation about student visas, and the vagaries of the student market – staff employment tends to be something with a merciful degree of permanency. Even if it isn’t the same staff working under the same terms and conditions, it does tend to need broadly the same number of people.

    With the increasing financial pressures felt by universities you would expect 2023-24 to be a deviation from this norm.

    Starters and leavers

    We’ll start by looking at the numbers of starters and leavers from each provider. This chart shows the change in academic staff numbers year on year between your chosen year and the year before (as the thick bars) and the total number of full and part time staff in the year of your choice (as the thin bars). Over on the other side of the visualisation under the controls you can see total staff numbers, broken down into full and part time as a time series – mouse over a provider on the main chart to change the provider focus here. You can filter by year, and (for the main chart) mode of employment.

    [Full screen]

    What’s apparent is that across quite a lot of the sector academic staff numbers didn’t change that much. There were some outliers at both end – Coventry University had 585 less academic staff in 2023-24 than 2022-23, while Cardiff University has 565 more (yes, the same Cardiff University that confirmed plans for 400 full time redundancies yesterday).

    If you’ve been following sector news this may surprise you – last year saw many providers announce voluntary or compulsory redundancies. The Queen Mary University of London UCU branch has been tracking these announcements over time.

    Schemes like this take time for a university to run – there is a mandatory consultation period, followed (hopefully) by some finessing of the scheme and then negotiations with individual staff members. It is not a way to make a quick, in year, saving. Oftentimes the original announcement is of a far higher number of staff redundancies than actually end up happening.

    Subject level

    If you work in a university or other higher education provider, you’ll know that stuff like this very often happens across particular departments and faculties rather than the whole university. I can’t offer you faculty level from public data, but there is data available by cost centre.

    [Full screen]

    Cost centres are usually used in financial data, and do not cleanly map to visible structures within universities. Here you can select a provider and choose between cost centre groups and cost centres as two levels of detail. I’ve added an option to select contract type – in the main I suggest you leave this as academic (excluding atypical).

    Zero hours

    I’m sure I say this every year, but not all providers return data for non-academic staff (in England they are not required to), and an “atypical” contract usually refers to a very short period of work (a single guest lecture or suchlike). There is a pervasive myth that these are “zero hours” contracts – even though HESA publishes data on these separately:

    Here’s a chart showing the terms of employment and pay arrangements related to zero hours contracts for 2023-24. You can see the majority of these are academic in nature, with a roughly even split between fixed term and open-ended terms. The majority (around 4,075) are paid by the hour.

    [Full screen]

    This represents a small year-on-year growth in the use of this kind of contract – in 2022-23, there were 3,915 academic staff on a zero hour contract

    Subject, age, and pay

    I often wonder about the conditions of academic staff across subject areas, and how this pertains to the age of the academics involved and how much they are paid. This visualisation allows use to view age against salary (relating to groups of spine points on the standard New JNCHES pay scale used in most larger providers).

    [Full screen]

    As you’d expect, overall there is a positive correlation between age and salary – if you are an older academic you are likely to be paid more. This is particularly pronounced in design, creative, and performing arts: where staff are likely to be older and better paid on average. Compare the physical sciences, where more staff are younger and spine points are lower.

    This chart allows you to select a cost centre (either a group or individual cost centre), and filter by academic employment function (teaching, research, both…) and contract level (senior academics and professors, others…). There’s a range of years on offer as well.

    Ethnicity

    The main news stories that tend to come out of this release relate to academic staff characteristics, and specifically the low number of Black professors. There is some positive movement on that front this year, though the sector at that level is in no way representative of staff as a whole, the student body, or wider society.

    [Full screen]

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  • Student Debt by Ethnicity | HESA

    Student Debt by Ethnicity | HESA

    Hi all. Just a quick one today, this time on some data I recently got from StatsCan.

    We know a fair a bit about student debt in Canada, especially with respect to distribution by gender, type of institution, province, etc. (Chapter 6 of The State of Postsecondary Education in Canada is just chock full of this kind of data if you’re minded to take a deeper dive). But to my knowledge no one has ever pulled and published the data on debt by ethnicity, even though this data has been collected for quite some time through the National Graduates Survey (NGS). So I ordered the data, and here’s what I discovered.

    Figure 1 shows incidence of borrowing for the graduating class of 2020, combined for all graduates of universities and graduates, for the eight largest ethnicities covered by the NGS (and before anyone asks, “indigeneity” is not considered an ethnicity so anyone indicating an indigenous ethnicity is unfortunately excluded from this data… there’s more below on the challenges of getting additional data). And the picture it shows is…a bit complex.

    Figure 1: Incidence of Borrowing, College and University Graduates Combined, Class of 2020

    If you just look at the data on government loan programs (the orange bars), we see that only Arab students have borrowing rates in excess of 1 in 2. But for certain ethnicities, the borrowing rate is much lower. For Latin American and Chinese students, the borrowing rate is below 1 in 3, and among South Asian students the borrowing rate is barely 1 in 5. Evidence of big differences in attitudes towards borrowing!

    Except…well when you add in borrowing from private sources (e.g. from banks and family) so as to take a look at overall rates of borrowing incidence, the differences in borrowing rates are a lot narrower. Briefly, Asian and Latin American students borrow a lot more money from private sources (mainly family) than do Arab students, whites, and Blacks. These probably come with slightly easier repayment terms, but it’s hard to know for sure. An area almost certainly worthy of further research.

    There is a similarly nuanced picture when we look at median levels of indebtedness among graduates who had debt. This is shown below in Figure 2.

    Figure 2: Median Borrowing, College and University Graduates Combined, Class of 2020

    Now, there isn’t a huge amount of difference in exiting debt levels by ethnicity: the gap is only about $6,000 between the lowest total debt levels (Filipinos) and the highest (Chinese). But part of the problem here is that we can’t distinguish the reason for the various debt levels. Based on what we know about ethnic patterns of postsecondary education, we can probably guess that Filipino students have low debt levels not because they are especially wealthy and can afford to go to post-secondary without financial assistance. But rather because they are more likely to go to college and this spend less time, on average, in school paying fees and accumulating debt. Similarly, Chinese students don’t have the highest debt because they have low incomes; they have higher debt because they are the ethnic group the most likely to attend university and spend more time paying (higher) fees.

    (Could we get the data separately for universities and colleges to clear up the confound? Yes, we could. But it cost me $3K just to get this data. Drilling down a level adds costs, as would getting data based on indigenous identity, and this is a free email, and so for the moment what we have above will have to do. If anyone wants to pitch in a couple of grand to do more drilling-down, let me know and I would be happy to coordinate some data liberation).

    It is also possible to use NGS data to look at post-graduate income by debt. I obtained the data by in fairly large ranges (e.g. $0-20K, $20-60K, etc.), but it’s possible on the basis of that to estimate roughly what median incomes are (put it this way: the exact numbers are not exactly right, but the ordinal rank of income of the various ethnicities are probably accurate). My estimations of median 2023 income of 2020 graduates—which includes those graduates who are not in the labour market full-time, if you’re wondering why the numbers look a little low—are shown below in Figure 3.

    Figure 3: Estimate Median 2023 Income, College and University Graduates Combined, Class of 2020

    Are there differences in income here? Yes, but they aren’t huge. Most ethnic groups have median post-graduate incomes between $44 and $46,000. The two lowest-earning groups (Latin Americans and Filipinos) re both disproportionately enrolled in community colleges, which is part of what is going on in this data (if you want disaggregated data, see above).

    Now, the data from the previous graphs can be combined to look at debt-to-income ratios, both for students with debt, and all students (that is, including those that do not borrow). This is shown below in Figure 4.

    Figure 4: Estimated Median 2023 Debt-to-Income Ratios, College and University Graduates Combined, Class of 2020

    If you’re just dividing indebtedness by income (the blue bars), you get a picture that looks a lot like Figure 2 in debt, because differences in income are pretty small. But if you are looking at debt-to-income ratios across all students (including those that do not borrow) you get a very different picture because as we saw in Figure 1, there are some pretty significant differences in overall borrowing rates. So, for instance, Chinese students go from having the worst debt-to-income ratio on one measure to being middle of the pack on another because they have relatively low incidence of borrowing; similarly, students of Latin American origin go from being middle-of-the-pack to nearly the lowest debt-to-income ratios because they are a lot less likely to borrow than others. Black students end up having among the highest debt-to-income ratios not because they earn significantly less than other graduates, but because both the incidence and amount of their borrowing is relatively high.

    But I think the story to go with here is that while there are differences between ethnic groups in terms of borrowing, debt, and repayment ratios, and that it’s worth trying to do something to narrow them, the difference in these rates is not enormous. Overall, it appears that as a country we are achieving reasonably good things here, with the caveat that if this data were disaggregated by university/ college, the story might not be quite as promising.

    And so ends the first-ever analysis of student debt and repayment by ethnic background. Hope you found it moderately enlightening.

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  • Re-capturing the early 80s | HESA

    Re-capturing the early 80s | HESA

    Most of the time when I talk about the history of university financing, I show a chart that looks like this, showing that since 1980 government funding to the sector is up by a factor of about 2.3 after inflation over the last 40-odd years, while total funding is up by a factor of 3.6.

    Figure 1: Canadian University Income by source, 1979-80 to 2022-23, in billions of constant $2022

    That’s just a straight up expression of how universities get their money. But what it doesn’t take account of are changes in enrolment, which as Figure 2 shows, were a pretty big deal. Universities have admitted a *lot* more students over time. The university system has nearly doubled since the end of the 1990s and nearly tripled since the start of the 1990s.

    Figure 2: Full-time Equivalent Enrolment, Canada, Universities, 1978-79 to 2022-23

    So, the question is, really, how have funding pattern changes interacted with changes in enrolment? Well, folks, wonder no more, because I have toiled through some unbelievably badly-organized excel data to bring you funding data on this that goes back to the 1980s (I did a version of this back here, but I only captured national-level data—the toil here involved getting data granular enough to look at individual provinces). Buckle up for a better understanding of how we got to our present state!

    Figure 3 is what I would call the headline graph: University income per student by source, from 1980-81 to the present, in constant $2022. Naturally, it looks a bit like Figure 1, but more muted because it takes enrolment growth into account.

    Figure 3: University income per student by source, from 1980-81 to the present, in constant $2022

    There’s nothing revolutionary here, but it shows a couple of things quite clearly. First, government funding per-student has been falling for most of the past 40 years.; the brief period from about 1999 to 2009 stands out as the exception rather than the norm. Second, despite that, total funding per student is still quite high compared with the 1990s. Institutions have found ways to replace government income with income from other sources. That doesn’t mean the quality of the money is the same. As I have said before, hustling for money incurs costs that don’t occur if governments are just writing cheques.

    As usual, though, looking at the national picture often disguises variation at the provincial level. Let’s drill one level down and see what happened to government spending at the sub-national level. A quick note here: “government spending” means *all* government spending, not just provincial government spending. So, Ontario and Quebec probably look better than they otherwise would because they receive an outsized chunk of federal government research spending, while the Atlantic provinces probably look worse. I doubt the numbers are affected much because overall revenues from federal sources are pretty small compared to provincial ones, but it’s worth keeping in mind as you read the following.

    Figure 4 looks at government spending per student in the “big three” provinces which make up over 75% of the Canadian post-secondary system. Nationally, per-student spending fell from $22,800 per year to $17,600 per year. But there are differences here: Ontario spent the entire 42-year period below that average, while BC and Quebec spent nearly all that period above it. Quebec has notably seen very little in terms of per-student fluctuations, while BC has been more volatile. Ontario saw a recovery in spending during the McGuinty years, but then has experienced a drop of about 35%. Of note, perhaps is that most of this decline happened before the arrival of the current Ford government.

    Figure 4: Per-Student Income from Government Sources, in thousands of constant $2022, Canada and the “Big Three” provinces, 1980-81 to 2022-23

    Figure 5 shows that spending volatility was much higher in the three oil provinces of Alberta, Saskatchewan, and Newfoundland & Labrador. All three provinces spent virtually the entirety of our period with above-average spending levels but the gap between these provinces and the national average was quite large both in the early 1980s and from about 2005 onwards: i.e. when oil prices were at their highest. Alberta of course has seen per-student funding drop by about 50% in the last fifteen years, but at the same time, it is close to where it was 25 years ago. So, was it the dramatic fall or the precipitous rise that was the outlier?

    Figure 5: Per-Student Income from Government Sources, in thousands of constant $2022, Canada and the “Oil provinces”, 1980-81 to 2022-23

    Figure 6 shows the other four provinces for the sake of completeness. New Brunswick and Nova Scotia were the lowest spenders in the country for most of the period we’re looking at, only catching up to the national average in the mid-aughts. Interestingly, the two provinces took two different paths to raise per-student spending: Nova Scotia did it almost entirely by raising spending, while in New Brunswick this feat was to a considerable extent “achieved” by a significant fall in student numbers (this is a ratio, folks, both the numerator and the denominator matter!).

    Figure 6: Per-Student Income from Government Sources, in thousands of constant $2022, Canada and selected provinces, 1980-81 to 2022-23

    An interesting question, of course, is what it would have cost to have kept public spending at 1980 per-student levels. And it’s an interesting question, because remember, total spending did in fact rise quite substantially (see Figure 1): it just didn’t rise as fast as student numbers. So, in Figure 7, I show what it would have cost to keep per-student expenditures stable at 1980-81 levels both if student numbers had stayed constant, and what it would have meant in practice given actual student numbers.

    Figure 7: Funds required to return to 1980-81 levels of per-student government investment in universities, Canada, in millions of constant $2022

    Weird-looking graph, right? But here’s how to interpret it. Per-student public funding did fall in the 80s and early 90s. But it rose again in the early aughts, to the point where per-student funding went back to where it was in 1980, even though the number of students in the system had doubled in the meanwhile. From about 2008 onwards, though, public investment started falling off again in per-student terms, going back to mid/late-90s levels even as overall student numbers continued to rise. We are now at the point where getting back to the levels of 1980-81, or even just 2007-08, would require a rise of between $6 and $6.5 billion dollars.

    Anyways, that’s enough sunshine for one morning. Have a great day.

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  • The Trudeau Legacy | HESA

    The Trudeau Legacy | HESA

    I don’t know about you, but I find all the writing about the Trudeau legacy pretty goddamn annoying. Weeks and weeks of columnists yelling “resign!” followed by weeks and weeks of the same columnists yelling “he didn’t do it fast enough!” All true; all deeply boring. But since this is basically the blog of record for the sector, it would be weird to let the man leave without an assessment of his effect.

    So here goes:

    The early years

    A lot of people were probably more excited about Trudeau’s win in 2015 than they should have been. The Chretien/Martin regime of the late 1990s and early 2000s was the most pro-science /education in Canadian history. In comparison, the Conservative government of Harper government seemed pretty bad, even though its record on funding postsecondary education was much better than it usually got credit for (its attitude towards government scientists was a different matter entirely). A lot of people assumed that a new Liberal government was just going to reset to the status quo ante, even if that was never really very likely.

    It is worth recalling that , in the 2015 election, the Liberals were the party that promised the least, financially in terms of postsecondary education. Sure, in opposition, Trudeau mused about higher education a fair bit, which made him seem progressive without actually requiring him to do anything (remember his idea of targeting a rise in postsecondary attainment rates from 50% to 70%? Me neither until I started going through my files—it was never going to happen). But basically, he was coasting on the reputation of the previous Liberal administration.

    There was one great move early on, with respect to phasing out (untargeted) education tax credits and investing the proceeds in income-targeted student grants, a measure which allowed some provinces (like Ontario and New Brunswick) to at least temporarily (until vindictive Conservative governments came to power) re-arrange their aid programs to deliver targeted free-tuition programs for lower-income students. This saved the government money over the course of the Liberals’ first term (it was meant to be revenue-neutral, but that depended on an increase in spending in the 2019 budget which didn’t happen until the COVID emergency—see below).

    The Liberals did a lot of other stuff in that first Trudeau term; just not much that was either coherent or lasting. On research funding, the government asked former U of T President David Naylor to advise them on how to run research councils, and when he did they proceeded to take about two-thirds of his advice on the actual amount of funding and well under a quarter of what he recommended in terms of how to manage that funding (it totally ignored the bit about giving up its boutique funding programs, for instance). On its prime innovation strategy—the so-called “superclusters,” which still exist, now devoid of any regional dimension—which the deeply problematic techbro-loving Minister of the era, Navdeep Bains, would create a set of “made-in-Canada silicon valleys”, well…you can read about them here, but they are so embarrassing it’s probably better to pass over them in silence.

    There was a lot of money thrown at Skills Training in Budget 2017 and most of it seemed reasonably sensible, but it’s hard to work out how much good any of it did. This government—unlike the Martin/Chretien Liberals—really doesn’t like evaluating its own spending. And certainly the government never really followed this up or turned it into something coherent. An attempt to create a national training benefit in Budget 2019 which seemed like a promising idea at the time but has basically dissolved into thin air because there has been little attempt to promote the program(s). Steps were taken towards better funding for indigenous postsecondary education, but that effort subsequently got bogged in the details.

    And this is pretty much the story of Liberal policymaking in general in postsecondary education (and arguably a lot of other policy fields, too): lots of good ideas, not very good at sustaining the attention necessary to execute them properly and make them work. This is what happens when you govern according to the 24-hour news cycle and not the long-term success of the nation.

    The COVID Years (Second term)

    Less than six months after being narrowly re-elected in 2019, COVID arrived. Broadly speaking, the government’s initial instincts were pretty good: do anything to keep the economy going while we figured out how to live with the virus and waited for the vaccines to arrive. In higher education, that meant pouring a ton of money into an emergency student aid benefit (the Canada Emergency Student Benefit) than turned out to be actually necessary (see my take on what really happened during covid and emergency benefits). I’m not particularly inclined to see this as a failure: hindsight is easy, but given how crazy everything was in spring 2020 I’m inclined to give them a pass on one-time cash handouts. Same with the backstopping of university research expenditures in this period.

    What was less forgivable was the tendency to view the brief shift of the Overton Window towards government intervention either as something semi-permanent or as an invitation to extreme hubris. The decision to double the Canada Education Student Grant from $3000 per year to $6000 per year for 2020-21 was probably justifiable: extending it for another two years and then abruptly cancelling it in the 2023 budget was probably not. And then of course there was the WE Charity/Canada Student Summer Grant fiasco. Hubris combined with a lack of execution will kill you every time.

    Post-COVID (Third term)

    The Liberals narrowly won the 2021 election and then basically went to sleep until the summer of 2023 when it suddenly dawned on them that they were hated by pretty much the entire country, mainly because of inflation but especially housing inflation which was blamed (with some justification) on a rapid influx of international students, particularly (but not exclusively) to Ontario Community Colleges. The influx was not the Liberals’ fault in the least—for this you can blame some combination of a decade or more of provincial underfunding and some truly wild-ass empire-building by a handful of college Presidents—but they were somewhat slow to react. Somehow, they got tagged with responsibility for the problem, and so their Immigration Minister, Marc Miller, set out to solve it.

    And so in January 2024, with all of the wit and wisdom that comes from occupying the strategic intersection between arrogance and ignorance in which official Ottawa perpetually resides, by gum, the Trudeau introduced a solution (actually two: there was a second policy package in September which was designed specifically to screw with the college sector). It was a national solution to an essentially regional (southern Ontario) problem, and it hammered postsecondary finances across the country. Some of it was necessary; much of it was not. My estimate of the changes are in the range of $3-4 billion range, with job losses in the tens of thousands. And to a considerable extent, it was the violent, sudden change in international policy combined, deliberately adopted in a manner which was contemptuous of the sector, which is how this Government will be remembered by the sector.

    Meanwhile, the feds went on an epic bout of fumbling the research and innovation files. In election 2021, Trudeau promised a Canadian version of DARPA. Budget 2022 turned that into a new Canada Innovation Corporation, which was then basically punted into the long grass because, well, Trudeau couldn’t focus long enough to figure out how to make it work. Then, Inflation ate away the entire value of the big Naylor-induced research package of 2018. That led to a new research package in Budget 2024 worth $1.8 billion (88% of which does not come online until after the next election, it’s so anyone’s guess how much of it ever materializes), accompanied by a raft of new ideas from a panel chaired by Frédéric Bouchard about how to manage curiosity-driven research. The money has now been allocated (in theory), but the feds are not close to working out changes to management. All was supposed to be revealed in the 100% unlamented Fall Economic Statement, but again the Liberals punted. Couldn’t make a decision.

    (Simultaneously, the government utterly botched the roll out of the Strategic Science Fund. No one has ever written about this and I’m not going to tell tales out of school—at least not today—but trust me, this was a time-wasting fiasco of enormous proportions.)

    The Verdict

    At the end of the first term, I compared the Trudeau record with that of the Harper government, and noted that the difference wasn’t as big as you’d think—probably more about vibes than about money (I got some snotty “how dare you” comments from Liberal partisans on that one). And I think that’s still my verdict. The Trudeau government wanted to be known as “pro-Science” and “pro-education.” It just didn’t want to put in the money or the sustained policy attention required to actually be effective. Sometimes the casual inattention to policy details just made spending ineffective; sometimes (as in the case of international student visas) it hurt institutions.

    Either way, the cavalier attitude to substance began to wear thin a long time ago. I don’t think many in the post-secondary sector will view the Trudeau era with much fondness.

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  • College Financials 2022-23 | HESA

    College Financials 2022-23 | HESA

    StatsCan dropped some college financial data over the XMAS holidays.  I know you guys are probably sick of this subject, but it’s still good to have some national data—even if it is eighteen months out of date and doesn’t really count the last frenzied months of the international student gold rush (aka “doing the Conestoga”).  But it does cover the year in which everyone now agrees student visa numbers “got out of control,” so there are some interesting things to be learned here nonetheless.

    To start, let’s look quickly at college income by source.  Figure 1, below, shows that college income did rise somewhat in 2022-23, due mainly to an increase in tuition income (up 35% between the nadir COVID year of 20-21 and 22-23).  But overall, once inflation is taken into account, the increase in college income really wasn’t all that big: about a billion dollars in 2021-22 and about the same again in 2022-23, or about 6-7% per year after inflation.  Good?  Definitely.  Way above what universities were managing, and well above most sectors internationally?  But it’s not exactly the banditry that some communicators (including the unofficial national minister of higher education, Marc Miller) like to imply.

    Figure 1: College Income by Source, Canada, 2017-18 to 2022-23, in Billions of $2022

    Now I know a few of you are looking at this and scratching your heads, asking what the hell is going on in Figure 1.  After all, haven’t I (among others) made the point about record surpluses in the college sector?  Well, yes.  But I’ve only ever really been talking about Ontario, which is the only province where international tuition fees have really taken flight.  In Figure 2, I put the results for Ontario and for the other nine provinces side-by-side.  And you can see how different the two are.  Ontario has seen quite large increases in income, mainly through tuition fees and by ancillary income bouncing back to where it was pre-COVID, while in the other nine provinces income growth is basically non-existent in any of the three categories.

    Figure 2a/b.  College Income by Source, Ontario vs Other Nine Provinces, 2017-18 to 2022-23, in Billions of $2022

    (As an aside, just note here that over 70% of all college tuition income is collected in the province of Ontario, which is kind of wild.  At the national level, Canada’s college sector is not really a sector at all…their aims, goals, tools, and income patterns all diverge enormously.)

    Figure 3 drills down a little bit on the issue of tuition fee income to show where they have been growing and where they have not.  One might look at this and think its irreconcilable with Figure 2, since tuition fees in the seven smaller provinces seem to be increasing at a rate similar to Ontario.  What that should tell you, though, is that the base tuition from which these figures are rising are pretty meagre in the seven smallest provinces, and quite significant in Ontario.  (Also, remember that in Ontario, domestic tuition fees fell by over 20% or so after inflation between 2019-20 and 2022-23, so this chart is actually underplaying the growth in international fees in that province a bit.)

    Figure 3: Change in Real Aggregate Tuition Income by Province, 2017-18 to 2022-23, (2017-18 = 100)

    Now I want to look specifically at some of the data with respect to expenditures and to try to ask the question: where did that extra $2.2 billion that the sector acquired in 21-22 and 22-23 (of which, recall, over 70% went to Ontario alone) go?

    Figure 4 answers this question in precise detail, and once again the answer depends on whether you are talking about Ontario or the rest of the country.  The biggest jump in expenditures by far is “contracted services” in Ontario—an increase of over $500M in just two years.  This is probably as close a look as we will ever get at the economics of those PPP colleges that were set up around the GTA since most of this sum is almost certainly made up of public college payments to those institutions for paying the new students had arrived in those two years.  If you assume the increase in international students at those colleges was about 40,000 (for a variety of reasons, an exact count on this is difficult), then that implies that colleges were paying their PPP partners about $12,500 per student on average and pocketing the difference, which would have been anywhere between about $2,500 and $10,000, depending on the campus and program.  And of course, most of the funds spent on PPP were spent one way or another on teaching expenses for these students.

    Figure 4: Change in Expenditures/Surplus, Canadian Colleges 2022-23 vs 2020-21, Ontario vs. Other 9 Provinces, in millions of 2022

    On top of that, Ontario colleges threw an extra $300 million into new construction (this is a bit of an exaggeration because 2020-21 was a COVID year and building expenses were abnormally low), and an extra $260 million (half a billion in total) thrown into reserve funds for future years.  This last is money that probably would have ended up as capital expenditures in future years if the feds hadn’t come crashing in and destroying the whole system last year but will now probably get used to cover losses over the next year or two instead.  Meanwhile, in the rest of Canada, surpluses decreased between 2020-21 and 2022-23, and such spending increases as occurred came mostly under the categories “miscellaneous” and “ancillary enterprises.”

    2022-23 of course was not quite “peak international student” so this analysis can’t quite tell the full story of how international students affected colleges.  We’ll need to wait another 11 months for that data to show up.  But I doubt that the story I have outlined based on the data available to date will not change too much.  In short, the financials show that:

    • Colleges outside Ontario were really not making bank on international students.
    • Within Ontario, over a third of the additional revenue from international students generated in the 2020-21 to 2022-23 period was paid out to PPP partners, who would have spent most of that on instruction.
    • Of the remaining billion or so, about a third went into new construction and another 20% was “surplus,” which probably meant it was intended for future capital expenditure.
    • The increase in core college salary mass was miniscule—in fact only about 3% after inflation. 

    If there was “empire building” going on, it was in the form of constructing new buildings, not in terms of massive salary rises or hiring sprees. 

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  • Deafening Silence on PIAAC | HESA

    Deafening Silence on PIAAC | HESA

    Last month, right around the time the blog was shutting down, the OECD released its report on the second iteration of the Programme for International Assessment for Adult Competencies (PIAAC), titled “Do Adults Have the Skills They Need to Thrive in a Changing World?”. Think of it perhaps as PISA for grown-ups, providing a broadly useful cross-national comparison of basic cognitive skills which are key to labour market success and overall productivity. You are forgiven if you didn’t hear about it: its news impact was equivalent to the proverbial tree falling in a forest. Today, I will skim briefly over the results, but more importantly, ponder why this kind of data does not generate much news.

    First administered in 2011, PIAAC consists of three parts: a test for literacy, numeracy, and what they call “adaptive problem solving” (this last one has changed a bit—in the previous iteration it was something called “problem-solving in technology-rich environments). The test scale for is from 0 to 500, and individuals are categorized as being in one of six “bands” (1 through 5, with 5 being the highest, and a “below 1,” which is the lowest). National scores across all three of these areas are highly correlated, which is to say that if country is at the top or bottom, or even in the middle on literacy, it’s almost certainly pretty close to the same rank order for numeracy and problem solving as well. National scores all cluster in the 200 to 300 range.

    One of the interesting—and frankly somewhat terrifying—discoveries of PIAAC 2 is that literacy and numeracy scores are down in most of the OECD outside of northern Europe. Across all participating countries, literacy is down fifteen points, and numeracy by seven. Canada is about even in literacy and up slightly in numeracy—this is one trend it’s good to buck. The reason for this is somewhat mysterious—an aging population probably has something to do with it, because literacy and numeracy do start to fall off with age (scores peak in the 25-34 age bracket)—but I would be interested to see more work on the role of smart phones. Maybe it isn’t just teenagers whose brains are getting wrecked?

    The overall findings actually aren’t that interesting. The OECD hasn’t repeated some of the analyses that made the first report so fascinating (results were a little too interesting, I guess), so what we get are some fairly broad banalities—scores rise with education levels, but also with parents’ education levels; employment rates and income rise with skills levels; there is broadly a lot of skill mis-match across all economies, and this is a Bad Thing (I am not sure it is anywhere near as bad as OECD assumes, but whatever). What remains interesting, once you read over all the report, are the subtle differences one picks up in the results from one country to another.

    So, how does Canada do, you ask? Well, as Figure 1 shows, we are considered to be ahead of the OECD average, which is good so far as it goes. However, we’re not at the top. The head of the class across all measures are Finland, Japan, and Sweden, followed reasonably closely by the Netherlands and Norway. Canada is in a peloton behind that with a group including Denmark, Germany, Switzerland, Estonia, the Flemish region of Belgium, and maybe England. This is basically Canada’s sweet spot in everything when it comes to education, skills, and research: good but not great, and it looks worse if you adjust for the amount of money we spend on this stuff.

    Figure 1: Key PIAAC scores, Canada vs OECD, 2022-23

    Canadian results can also be broken down by province, as in Figure 2, below. Results do not vary much across most of the country. Nova Scotia, Ontario, Saskatchewan, Manitoba, Prince Edward Island, and Quebec all cluster pretty tightly around the national average. British Columbia and Alberta are significantly above that average, while New Brunswick and Newfoundland are significantly below it. Partly, of course, this has to do with things you’d expect like provincial income, school policies, etc. But remember that this is across entire populations, not school leavers, and so internal immigration plays a role here too. Broadly speaking, New Brunswick and Newfoundland lose a lot of skills to places further west, while British Columbia and Alberta are big recipients of immigration from places further east (international migration tends to reduce average scores: language skills matter and taking the test in a non-native tongue tends to result in lower overall results).

    Figure 2: Average PIAAC scores by province, 2022-23

    Anyways, none of this is particularly surprising or perhaps even all that interesting. What I think is interesting is how differently this data release was handled from the one ten years ago. When the first PIAAC was released a decade ago, Statistics Canada and the Council of Ministers of Education, Canada (CMEC) published a 110-page analysis of the results (which I analyzed in two posts, one on Indigenous and immigrant populations, and another on Canadian results more broadly) and an additional 300(!)-page report lining up the PIAAC data with data on formal and informal adult learning. It was, all in all, pretty impressive. This time, CMEC published a one-pager which linked to a Statscan page which contains all of three charts and two infographics (fortunately, the OECD itself put out a 10-pager that is significantly better than anything domestic analysis). But I think all of this points to something pretty important, which is this:

    Canadian governments no longer care about skills. At least not in the sense that PIAAC (or PISA for that matter) measures them.

    What they care about instead are shortages of very particular types of skilled workers, specifically health professions and the construction trades (which together make up about 20% of the workforce). Provincial governments will throw any amount of money at training in these two sets of occupations because they are seen as bottlenecks in a couple of key sectors of the economy. They won’t think about the quality of the training being given or the organization of work in the sector (maybe we wouldn’t need to train as many people if the labour produced by such training was more productive?). God forbid. I mean that would be difficult. Complex. Requiring sustained expert dialogue between multiple stakeholders/partners. No, far easier just to crank out more graduates, by lowering standards if necessary (a truly North Korean strategy).

    But actual transversal skills? The kind that make the whole economy (not just a politically sensitive 20%) more productive? I can’t name a single government in Canada that gives a rat’s hairy behind. They used to, twenty or thirty years ago. But then we started eating the future. Now, policy capacity around this kind of thing has atrophied to the point where literally no one cares when a big study like PIAAC comes out.

    I don’t know why we bother, to be honest. If provincial governments and their ministries of education in particular (personified in this case by CMEC) can’t be arsed to care about something as basic as the skill level of the population, why spend millions collecting the data? Maybe just admit our profound mediocrity and move on.

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  • More Eating the Future | HESA

    More Eating the Future | HESA

    Morning everyone. Welcome back. Some statistical wonkery today, with respect to the analysis of government expenditures on postsecondary education.

    Many of you will recognize Figures 1 and 2 from earlier blogs or the State of Postsecondary Education 2024. They represent the two most-common ways to look at commitments to postsecondary education: the first in per-student terms, and the second in per-GDP terms.

    Figure 1: Provincial Expenditures per FTE Student by Sector, 2022-23

    Figure 2: Provincial PSE Expenditures, by Sector, as a Percentage of Provincial GDP, 2022-23

    These two approaches have their respective strengths and weaknesses, and not surprisingly they generate slightly different conclusions about how strong each jurisdiction’s efforts are writ to postsecondary education, one focused on the “recipients” of funding (students) and the other focused on the source of the funding (the local economy). Neither is definitive, both are useful.

    But there is another way to look at this funding, and that is not to look at how much institutions receive as a proportion of local jurisdictional output, but to look at what percentage of government spending is devoted to educational institutions. Examined over time, this figure tells you the changing status of postsecondary education compared to other policy priorities; examined across provinces, it can tell you which provinces put more emphasis on postsecondary education. Of course, no one tracks this in Canada, because it involves a lot of tedious mucking around in government documents, but what is this blog for if not precisely that? I wasn’t doing anything on my holidays anyways.

    So I decided to pair my long-term data series on provincial budgets (the most recent one posted back in April), with a new data series on total provincial spending which I derived simply by looking at consolidated expenditures in each province since 2006 and expressed in these same budgets. Usual disclaimers apply: provincial spending definitions aren’t entirely parallel (or at least they use different words to describe what they are doing) particularly with respect to capital, so inter-provincial comparisons are probably a tiny bit apples-to-oranges even if each province’s data is consistent over time. Take the exact numbers with a grain of salt but I think they will mostly stand up to scrutiny.

    Figure 3 shows provincial transfers on postsecondary institutions across all ten provinces as a percentage of total provincial spending. And it’s…well, it’s not good. As recently as 2011-12, provinces spent five percent of their budgets on postsecondary education. Now it’s three and a half percent. Or to put it another way, as a proportion of total spending, it’s down by about thirty percent.

    Figure 3: Provincial Spending on PSE as a Percentage of Total Provincial Spending, Canada, 2006-07 to 2024-25

    Is this due to particular events in particular provinces? Not really. Let’s just take a look at the four big provinces (which make up 85% of the postsecondary system. The provinces all started in different places (Alberta, famously, spent a heck of a lot more than other provinces back in the day) and the slope of decline is gentler in Quebec than elsewhere, but the basic path of decline and the eventual destination is similar everywhere. Notable by its absence in any of the four provinces are any clear break-lines which coincide with a change in administration—these declines are pretty consistent regardless of whether governments are left, right, or centre. It’s not a partisan thing.

    Figure 4: Provincial Spending on PSE as a Percentage of Total Provincial Spending, Selected Provinces, 2006-07 to 2024-25

    Figure 5 shows each province’s performance both in 2006-07 and 2024-25. As can clearly be seen, every province saw a decline over the 18-year period. This was not especially driven by one or two provinces: all provinces seem to have come to an identical conclusion that postsecondary institutions are not worth investing in. The size of whatever drop was in most cases inversely proportionate to how high spending was back in the initial period. The biggest drops were in Alberta and Newfoundland, which back in the day were the two highest spenders, riding high as they were on oil revenues. The smallest drop was New Brunswick, which was the weakest performer back in 2006-07. Ontario…is Ontario. But basically, the entire country is converging on the idea that investments in postsecondary need to be in the 2.5%-4.5% range rather than in the 4-7.5% range as they did 20 years ago.

    Figure 5: Provincial Spending on PSE as a Percentage of Total Provincial Spending, by Province, 2006-07 vs 2024-25

    Now, the obvious conclusion you might draw from this is “hey! Huge declines in public support for public postsecondary education!” But this is not quite correct. Remember: these are ratios we are looking at. Some of the delta will be due to changes in the numerator, some will be due to changes in the denominator. Figure 6 shows changes in both postsecondary spending and total provincial spending. And what’s clear is that the changes we have been examining in Figures 3 and 6 have more to do with the expansion of total spending rather than a decline in PSE spending.

    Figure 6: Real Change Provincial Spending on PSE Institutions vs Real Change Total Provincial Spending, Canada, 2006-07 to 2024-25 (2006-07 = 100)

    That increase in provincial spending in the last decade—30% over and above inflation—is wild. And deeply inconvenient for anyone who wants to build a narrative around generalized “austerity.” But what is clear here is:

    1. transfers to universities and colleges have trailed provincial spending everywhere and without reference to ideology of the governments in question, and
    2. ii) if transfers had not trailed general spending, they would be roughly $9.5 billion better off than they are today.

    And by a simply *amazing* coincidence, $9.5 billion–in real dollars—is almost identical to the increase in income  postsecondary institutions have seen in revenue from international students over the same period (it’s about a $9.2 increase from 2007-08 to 2022-23, the last year for which we have useful data—the 2024-25 is likely somewhat higher but we don’t know by how much).

    There a number of conclusions one could draw from this, but the ones I draw are:

    • Governments are spending more. A lot more. They just aren’t spending on PSE. Instead, they are spending it on an ageing population and other things that juice consumption. Eating the future, basically.
    • The drop in government support for PSE relative to overall spending increases is universal. No government provides any evidence of contrarian thinking. None of them think PSE is worth greater investment.
    • Changes of government are also almost irrelevant. They may change the “vibe” around postsecondary education, but they don’t change financial facts on the ground.
    • There is a really basic argument about the value of postsecondary education which somehow, postsecondary institutions are losing with governments and, I think by implication, the public. That, and nothing else, needs to be the focus of institutional efforts on external relations.

    Provincial governments are eating the future. But the data above, showing that the trend transcends geography and political ideology suggests that at base, the problem is that the Canadian public does not think postsecondary education is worth investing in. Working out how to reverse this view really needs to be job one for the whole sector.

    (Or, to be a bit cuter: the sector needs to do a lot less Government Relations and a lot more Community Relations.)

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  • Fall and Rise | HESA

    Fall and Rise | HESA

    Fall and Rise

    The question I am getting more often than any other these days is: “what are you hearing about cuts at colleges and universities?” And my answer for the most part has been: “damned if I know.”

    The reason for my confusion is that publicly available details are few and far between. The HESA Towers team has been scouring the public record for details on institutional budget announcements; by our count, only 34 universities or colleges have so far announced anything concrete about their 25-26 budget plans and/or any planned cuts as a result of changing international student numbers. It’s possible more have been announced internally but just not caught the notice of the local press; we’ll be doing a lot more digging over the next couple of weeks. My guess is that many institutions are trying to avoid bad headlines by simply not going public about any plans to cut…but of course in the process, they are making it harder to convey to the public the magnitude of the downsizing being forced on the sector.

    (This is a really interesting version of the Tragedy of the Commons!).

    Some additional problems with the data: such information as one can glean from public sources is often skimpy and inconsistent: sometimes you get a figure for “loss of anticipated revenue,” sometimes you get a “projected deficit” (which sometimes is for 24-25, and other times for 25-26, and whether the figure is for operating budget or total budget take a bit of digging). Sometimes the numbers of programs being cut are announced but the identity of the programs is secret. Often you see that there will be budget cuts of $X million but there is no clarity about where those cuts will come from or the timeframe for the return to budget balance. In terms of job “cuts” as near as we can tell only five institutions have announced specific numbers for layoffs which have actually so far occurred, for a total of 214 lost jobs. You may have seen higher estimates from other sources, but these seem to include data on jobs which “will be affected” and it’s not 100% clear how many of these are permanent jobs which will be eliminated vs. permanent posts which will not be filled, or contract jobs which will not be renewed. All of these nuances may sound petty, but it’s really hard to get meaningful numbers unless you get this stuff right.

    The story of how universities and colleges deal with the sudden loss of international student income (and the long-term consequences of provincial disinvestment) is the biggest and most consequential story in Canadian postsecondary education this century. How we deal with this collectively will shape the sector for over a decade, maybe even out to 2050. The HESA Towers team is working hard to document what is happening and help the sector make sense of fast-moving events and respond appropriately. So today I want to tell you about two initiatives we’re launching.

    The first is a Retrenchment Watch, which will follow developments in institutional cutbacks not just in Canada, but around the world (albeit with a particular focus on the anglosphere). Higher education probably hit peak public funding around the globe over a decade ago, but what we’re now seeing is an actual contraction of the sector as a whole, happening via an un-coordinated set of decisions made by individual institutions according to local imperatives. Understanding how this is happening is of great importance, not just for posterity but for present-day decision makers. And we’ll be making this information freely available to all via Retrenchment Watch.

    For the moment, the Retrenchment Watch is extremely bare bones, but we’ll be filling it out very quickly over the next few weeks, with the Canadian institutions first. If you want regular updates on who is cutting what as well as some basic pattern analysis, please fill out this form, and we’ll get you signed up to our newsletter so you’re always up-to-date.

    The second is what we are calling “The Recovery Project.” We know that institutional leaders aren’t just thinking about surviving cuts, they’re also thinking about how to position their organizations to thrive in the aftermath. To help them, we’re launching a subscription research project looking at universities and colleges around the world who have faced serious financial sustainability problems over the past three decades and examining how they turned their fortunes around. In a crisis, there’s no time to re-invent the wheel: with this research institutions can understand better what works, when and why. By spreading the cost of research collectively across many institutions, we can offer this premium product—which involves monthly reports and webinar sessions for all members—at a huge discount to individual schools (and if your school is a member of the University Vice-President’s Network, we’ll be offering an even bigger discount).

    If you’re interested in joining this project, my colleague Tiffany MacLennan has been working to bring this information together. Email her at [email protected] and we’ll get back to you ASAP with a prospectus.

    There’s no disguising how the sector is taking a beating right now. It will recover. The only question is how quickly, and which institutions will be at the forefront.

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