Hot! Drummond promises less money, reduced flexibility for cash-strapped Ontario universities – opinion/editorialopinion
Published On Thu Feb 23 2012.    Patrick J. Monahan

As Don Drummond’s landmark report on the reform of Ontario’s public services bluntly notes, universities in Ontario are on a financially unsustainable path.

Costs have been rising at a rate of about 5 per cent per cent annually, mainly driven by compensation increases, but government funding on a per student basis has not risen in more than a decade. Even with tuition increasing at around 5 per cent a year, universities are faced each year with a 2-3 per cent gap between expenditures and revenues. Most universities have attempted to close this gap by cutting budgets and taking in more students, resulting in larger class sizes and increasing reliance on part-time faculty.

What is disappointing about Drummond’s report is that having clearly identified the pressing fiscal challenges facing universities, he fails to propose a strategy for successfully addressing them.

First, while Drummond proposes that government funding to post-secondary institutions increase at an annual rate of 1.5 per cent, he projects enrolment growth of 1.7 per cent annually. Thus, Drummond is actually proposing to reduce government grants on a per student basis, despite the fact that, as he acknowledges, government grants to universities in Ontario are the lowest in Canada. Even if tuition were to continue to increase at 5 per cent (as Drummond recommends), the annual shortfall between expenditures and revenues would widen to the point where universities would be forced to make drastic cuts that would undermine quality.

Drummond does propose a reduction in bargained compensation increases in the university sector in order to “align them with trends in more recent settlements in the broader public sector.” But he offers no mechanism or framework that might produce this result, other than to suggest that government should “work with the sector,” an approach that has been tried many times in the past with minimal concrete results.

He also proposes that universities refocus resources and rewards towards teaching. This kind of refocusing might be possible in an environment where resources were expanding, but seems totally unrealistic in a context where overall resources available to universities are shrinking.

At the same time as Drummond proposes less money for universities, he also recommends reducing the flexibility of institutions through negotiation of “mandate agreements”. In theory, these mandate agreements would set out clear expectations and roles for each university and encourage differentiation within the sector. In practice, however, this kind of framework would likely privilege the status quo, make innovation and change more difficult, and limit the ability of universities to respond to changing circumstances.

For example, my home institution, York University, is planning a major expansion in our summer semester offerings in 2012, in light of the fact that the government grant of $800 will be available to students who may be attending university elsewhere during the academic year but are residing in the GTA in the summer. But if we had negotiated a mandate agreement that failed to envisage this possibility, we would likely be required to obtain the approval of the government before proceeding. This could lead to delay and effectively block initiative, thereby depriving students of the opportunity to access the government tuition grant this summer.

In short, Drummond’s report clearly identifies the urgent problems facing Ontario universities. The danger is that the government will see the report as justifying a simple cost-cutting exercise, which will only exacerbate the universities’ unsustainable fiscal position without giving them the tools they need to attempt to deal with the challenges they face.

Patrick J. Monahan is Vice President Academic and Provost of York University.

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