It is another academic year, and recent reports have helped kick off its start with analysis and introspection regarding the state of university and college education in Canada. There is the OECD international compendium of indicators titled Education at a Glance 2025 which covers all aspects of education including post-secondary or tertiary education. Then there is Alex Usher’s Higher Education Strategy Associates compilation The State of Postsecondary Education in Canada 2025. And last but certainly not least there is the Royal Bank’s ominously titled Testing Times Fending off a crisis in Canadian postsecondary education. There is indeed quite a bit of reading here geared towards understanding the current situation with respect to postsecondary education in Canada and other parts of the world.
Canada boasts a highly skilled and well-educated population with 63 percent of population aged 15 to 64 holding some type of post-secondary or tertiary degree attainment. However, in terms of the distribution of those degrees, Canada ranks 26th out of 41 OECD countries, in the share of 25–34-year-olds with master’s degrees. Meanwhile, Canada is unique in that it boasts the largest proportion in the OECD – one quarter – of degrees being what they term short-cycle degrees. These are programmes usually offered by community colleges and similar educational institutions, of at least two years duration, and are vocationally oriented. While there is often a lament that Canada needs more skills and career-based training, it appears that a large proportion of the system is indeed geared that way.
On the surface, the demand for post-secondary education in Canada should grow in coming years based on demographic projections showing the total number of individuals aged 15 to 19 and 20 to 24 growing until at least the mid 2030s, then levelling off or declining for a few years before resuming substantial growth. Recall that the 15-19 population pool was shrinking during the 2010 to 2020 period though increases in participation rates combined with the flow of international students helped grow university enrolment.
However, when it comes to public sector spending on tertiary education, Canada is below the OECD average n USD per capita. Government expenditure on post-secondary in Canada amounts to USD 13,684 per tertiary student compared to the OECD average of USD 15,102. And, as noted by Alex Usher, spending on higher education as a share of the economy in Canada has been dropping pretty steadily since 2011.
So, there are challenges facing Canadian postsecondary education spanning financial, technological and social levels. The financial challenge to post-secondary institutions in Canada is quite serious and has been aggravated by provincial and federal policies. In Ontario, for example, university tuition for domestic students was cut by 10 percent in 2018 by the Ford government and has been frozen at that nominal level ever since. Indeed, the RBC Testing Times report notes that most undergraduates in Canada are paying approximately what they would have paid a decade ago. Universities made up a lot of the revenue by admitting more international students, but that tap has been cut off too by changes in federal immigration policies. Going forward universities will face tighter revenue circumstances accompanied by rising costs. After all, inflation has not just hit individuals, but institutions also.
The RBC report notes that post-secondary education and skills they impart are vital to the dealing with the economic changes facing Canada but add that: “Without a new financial arrangement, institutions are forced to make decisions with their viability in mind, rather than the country’s prosperity. These decisions will have important implications for education quality and access, especially in rural communities where workforce shortages are already acute, as well as the country’s ability to retain top talent”. They suggest boosting government funding to the post-secondary sector tied to specific criteria or outcomes. As well, they think student fees – that is – tuition could play a greater role.
However, the financial challenge is only the tip of the iceberg given that there are more serious existential challenges: technological and social which are both intertwined with AI. The rise of AI in the short term is posing challenges to how classes are taught and students graded and assessed but in the longer run will affect the demand for university and college education as well as its role in shaping society. As an article by Ryan Craig in Forbes argued, AI will likely shrink the university given its potential for personalized learning and independent tutoring.
More optimistic but not any less transformative, Nick Ladny (also in Forbes) makes the case for the end of college as we know it with AI facilitating customized corporate education, transforming the role of faculty into mentors facilitating human interaction rather than purveyors of knowledge, more decentralized neighborhood campuses, and smartphone provision of education. Those institutions that adapt quickly to the new reality will survive while others will simply close. Nimbleness is key to dealing with change and universities in general tend to move slowly.
However, universities and colleges have faced the onslaught of change before and yet here they still are. I think the next decade will see a major sorting of universities into those that successfully adopt and transition to the world of AI education and those that do not. There will likely be changes in the types of courses and programs taught given that AI can do much more so much more quickly and effectively. There will need to be new skill sets that involve the application of technology and AI tools to analyzing, interpreting and solving human problems. Some jobs that right now are performed by skilled professionals such as accountants, lawyers and even physicians, can be automated by AI. On the other hand, asking the right questions and interpreting the answers will be a skill that AI with its tendency to essentially compile and regurgitate what exists or apply set algorithms to data will not be able to perform as effectively as a creative and intelligent human. This suggests that the teaching roles and administrative functioning of the university are likely to see the biggest changes from AI while the research function can be transformed in more positive ways.
When I think of my own discipline of Economics, I think posing interesting research questions and devising approaches to their solution via theory will remain a human endeavor, but the compilation of facts and rudimentary processing of data will be largely automated by AI. A well-trained economist with a wealth of theoretical and empirical knowledge will be able to harness AI to do creative things whether it is modelling long-term business cycle fluctuations or assessing the full quantitative impact of economic and social variables in economic history.
On the other hand, AI can do more mundane things like model the economic impact of a construction project or a value of life calculation resulting to a significant drop in the demand for many economic consulting services. In the long run, this will likely make the economics profession and indeed many others smaller and more elitist in their structure. Economists will set directions and design the questions and validate the results with much of the menial mental and data grind done by AI.
In the end, universities will not disappear. They will evolve into on and off ramps on the information highway rather than destinations in and of themselves. They will also retain valuable social functions in terms of providing a human social environment for the young to learn how to function in this new economy and to develop human relation and networking skills. Faculty will still be required to mentor and guide and set directions but there will be fewer of them. And, as AI is very good at automating routine things, most university administrations will likely see significant downsizing as human resources, payroll and even basic academic advising and student services can be automated. It will indeed be a new age, but successful universities will seize opportunity, evolve, and persevere rooted as they are in the depths of the past but continuing to the end of the human age.
