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.
