Well, the news for universities in Ontario this last week was that the provincial government was freezing tuition fees for another year. Moving into the 2022-23 academic year, this is now the third year in a row coming on top of a ten percent reduction for the 2019-20 academic year when the freezes began. The Ontario government is heading to an election in June and this move is ostensibly being sold as “ensuring that student have access to affordable, high-quality postsecondary education, and reducing the financial strain on families” (as stated by the Ontario Minister of Colleges and Universities). No doubt, the current government wants to demonstrate it has a heart, is working hard and has big big dreams. However, the goal of decreasing the financial strain on Ontario families is being accompanied by an increase in the financial strain facing Ontario universities as was noted by McMaster. My own university seems to have remained silent with respect to public pronouncements on the matter but then as a small university its approach is probably wise and akin to being a small furry mammal that lets the larger Bronto and T-Rex universities take the asteroid impact.
In the wake of the debacle involving Laurentian which saw Ontario as the only province with a university going into receivership, one would think the provincial government would be more aware of the burdens facing universities during the pandemic. Along with the program delivery, cost, and revenue disruption caused by the pandemic, universities in Ontario – which on average rely on tuition for anywhere from 40 to 60 percent of their revenues – have also been deliberately financially constrained. They are not allowed to raise tuition fees, nor are they being provided with increases in provincial government grant funding and are being subjected to increasing oversight in terms of their programs designed to make them more business-like and attuned to market conditions. And while restraining universities financially, the provincial government at the same time has increased competition in the provincial university sector by creating more universities.
One would have thought that central planning had gone the way of the Berlin Wall but, just as autocracy has resurfaced in the world, so has central planning in Ontario. The provincial government thinks it can have its cake and eat it too probably because under Bill 124, the province is limiting salary increases to one percent in certain parts of the public sector. The thinking is undoubtedly that universities do not need to raise tuition if salary increases are limited to one percent. Oddly enough, the provincial government exempted municipalities from Bill 124 under the argument that they have substantial own source revenues but not universities. Universities really are not so much publicly funded these days as they are publicly assisted but apparently are not allowed to consider tuition as own source revenues. There you have it.
The result has been that universities, being the resourceful entities that they can be, have coped by increasingly relying on international students as a source of revenue because the tuition freeze only applies to domestic students. International students are paying what the market will bear and the difference is an illuminating shot of what tuition fees might look like if Ontario students were paying a larger share of the costs of university education.
At McMaster for example, tuition for Canadian undergraduates in 2021-22 ranged from $5,955 to $6,043 depending on program of study. For international undergraduates, the range was $31,470 to $37,237. At my own university, the undergraduate domestic tuition ranged from $5,398 to $5,985 while the international counterpart was $25,750 to $26,500. Universities in Ontario for the time being have seen increasing enrollments – even with the pandemic – and rising tuition revenues from international students making the provincial government’s strategy seemingly a success - except for Laurentian of course. However, with international enrollment approaching 20 percent even at smaller Ontario universities and an even larger share at some of the bigger ones, the question about access may shift to whether more international students are being accepted at the expense of domestic ones.
True, one could argue that should not happen as international students are essentially subsidizing domestic ones and increasing resources – a win-win situation except perhaps for international students who are paying more. However, the real issue is that universities in Ontario are becoming increasingly dependent on international students and subject to potential major fluctuations in enrollment which makes their financial stability somewhat more precarious. Accompany that with the large amounts of debt most universities have acquired to finance expansions of classrooms and residences pre-pandemic which then sat largely empty during much of the pandemic, and you can see that finances can quickly become unpredictable.
With the return to in person learning at Ontario universities this fall, the financial challenges that have been provided by the Ontario government will be augmented by the transition to full in person learning which not all students welcome with open arms. (And to be frank, not all faculty welcome it either. If you were living in the GTA, no 2 hour commutes over the last two years would have generated a lot of time for research). Many students have welcomed the flexibility of in person learning given it has enabled them to schedule their education around employment. There may be a slip in enrollment as students decide to not return to finish programs that are fully in person given what seems to be a robust labour market now.
The solution to this could be to allow universities to charge substantially different tuition fees for domestic students for in person and online classes. If universities are really trying to fill their in-person classrooms and some students really want the flexibility of online learning, then many courses need an in-person section and a separate online section. Hybrid – unless properly done with substantial classroom investments – ultimately becomes voluntary in person classroom attendance with fully online evaluation and the attendant issues that involves. Those students who want online should pay for the flexibility it provides with a much higher tuition fee.
How will the Ontario government deal with these challenges? Given their approach to date, they are unlikely to give universities the flexibility and autonomy they need to implement such changes as differential pricing for in-person and online courses dependent on university needs and decision making. Given their tendency to disrupt the university sector, they are more likely to mandate that universities only offer in-person classes and set up a separate provincial on-line university to compete with them. You heard it here first.
