Universities in Ontario are in a transition period as the provincial government brings in a new performance based funding formula that ties a substantial portion of the government grant revenue to a set of ten indicators. The new Strategic Mandate Agreement – known as SMA3 - includes performance indicators such as “Research Funding”, “Graduation Rates” and oddly enough “Graduate Employment Earnings”. How a university is expected to acquire information on the latter is a bit of a puzzle to me.
While the previous formula also had a set of performance based indicators, they were more numerous. It remains that a reduction in the number of indicators while increasing the proportion of revenue tied to those indicators makes the prospects of future short-term revenue volatility a greater possibility. The public may be willing to accept a 5 or 10 or 20 percent revenue fluctuation in its local university and the subsequent disruption to programs and enrollment, that it would not tolerate if a similar model were applied to say hospitals or physician services or the provincial drug plan. In these latter examples, people could die in the wake of disruption from sudden funding changes, whereas in the case of universities it would be unlikely.
Lakehead
will of course also be impacted by these changes to the funding formula and one
wonders if in the long-run, Lakehead – not to mention other universities –
should give serious consideration to ending their dependence on provincial
government funding entirely and go completely private. The immediate reaction to this is to cringe
given that provincial grants in Ontario still account for anywhere from 30 to
50 percent of university revenues and their elimination would probably necessitate
as much as a doubling of tuition fees. Lakehead University
is for example closer to 50 percent for its revenue share from grants, while
University of Toronto is closer to 30 percent.
However,
freeing oneself from the clutches of the provincial government might come with some
benefits. Provincial governments in
general have been encroaching on university autonomy for the last 50
years. In Ontario, if one goes back to
the 1960s and 1970s, provincial grant revenues for some universities accounted
for well over 50 percent of their revenue.
Even more interesting is that despite accounting for the lion’s share of
their funding, the provincial government generally left them alone to run their
own affairs. Over time, as the provincial
government has reduced its relative contribution, it has also gradually become more
intrusive by setting performance targets, establishing lengthy bureaucratic
quality assurance reviews and tying more and more funding to short term goals
linked to provincial economic development and employment visions.
At the same
time as grant funding has been reduced, the provincial government has also regulated
and circumscribed the ability of universities to raise tuition because of the
political fall-out. So, universities in
Ontario – like many in the country – have come to have less autonomy from the
provincial government while at the same time having their funding growth
restricted. The government is calling
more and more shots while providing less and less funding value. For its 30 to 50 percent funding share, it
basically wants universities to operate as arms of the provincial training,
education and economic development ministries.
Moreover, its mandated goals end up affecting 100 percent of university
operations and performance while only providing at best half the general grant revenue.