Penny Wise but Pound Foolish? A Response to the Ontario Government’s Blue-Ribbon Panel Report

Summary

Ontario’s Blue-Ribbon Panel on Postsecondary Financial Sustainability provided thoughtful, utilitarian advice to the government for shoring up university and college finances in the near-term. But with postsecondary education in the midst of profound and longer-term changes, did this moment actually call for a more fundamental, radical and future-focused reassessment of higher education in Ontario? The paper offers some alternative priorities, and provocative proposals, for policymakers and postsecondary leaders to consider.

Introduction

In mid-November, the Ontario government released the report of the Blue-Ribbon Panel on Postsecondary Education Financial Sustainability.1 The Panel was convened with the focused task of providing the Minister of Colleges and Universities (MCU) with advice and recommendations to ensure the long-term financial sustainability of Ontario’s publicly-assisted postsecondary institutions (24 colleges and 23 universities).2 The establishment of the Blue-Ribbon Panel (BRP) was in response to acute events such as the shocking bankruptcy of Laurentian University, chronic factors such as the erosion of real operating grants and capped tuition funding for institutions, and perceived risks including the growing dependence on international student revenues.

Responding to its mandate, the Panel’s report was thoughtful and thorough, clearly outlining the nature of the financial sustainability challenges faced by Ontario’s postsecondary institutions, and presenting reasonable, fiscally manageable recommendations to the Minister of Colleges and Universities and the government. Notable among them were a one-time, ten percent increase to provincial grant funding and technical adjustments to corridor and performance funding mechanisms; a new tuition framework allowing a one-time five percent increase and ongoing indexing; and additional flexibility for financially vulnerable institutions. In sum, the BRP equipped the government with expert advice, and political cover, to move ahead with a set of modest reforms that could help put postsecondary finances back onto a sustainable track.

But was the government’s mandate for the BRP penny wise but pound foolish? The package of proposed reforms offers a utilitarian, ‘nip-and-tuck’ approach to shoring up university and college finances in the near-term, while postsecondary education is in the midst of profound and longer-term changes: to the profile and expectations of learners, digitization of the economy, the competitive landscape, and public perceptions. Now a generation removed from the 2005 Rae Review, the last comprehensive provincial review of postsecondary education, did this moment actually call for a more fundamental, radical and future-focused reassessment of higher education in Ontario?

This policy paper begins from the premise that financial sustainability represents only one of the challenges to postsecondary education in Ontario today, and that, in fact, longer-term sustainment of the publicly-assisted system will have limited success without a more future-focused agenda that responds to the changing learner, landscape and marketplace for postsecondary education. In that vein, the paper offers advice to provincial policymakers and postsecondary leaders on alternative priorities for the future of the system, and some bold additional proposals to consider.

The Context for Postsecondary Education in Ontario Today

Let there be no doubt: Ontario’s postsecondary education system is critical for the province’s long-term prosperity and civic vitality. There are 900,000 postsecondary students enrolled in Ontario’s public universities and colleges alone — the equivalent of seven percent of the province’s total population. Fulltime enrollments grew by over 20 percent at both universities and colleges between 2010 to 2020, among the highest provincial rates in the country.3

Postsecondary education is a significant sector in the Ontario economy, with a large workforce and around $23 billion in annual revenues, primarily via grants and investments from governments, and tuition and fees paid by learners.4 Postsecondary institutions are the province’s primary vehicle for delivering adult education and training at scale. They are regional hubs of advanced research and skills development, driving economic growth across sectors and within Ontario’s regions and communities. Evidence suggests that postsecondary education also fosters important civic habits including voting, volunteering, and donating to nonprofit causes, which contribute to social cohesion.5 In short, universities and colleges are a large, and sometimes underappreciated, economic and social asset to the province.

At the same time, Ontario’s universities and colleges face daunting, generational challenges beyond just ensuring healthy balance sheets. These include:

• Reconciling the increasingly competitive higher education marketplace, from private colleges and new university entrants in Ontario, to global digital providers like Coursera and the emergence of educational programs and credentials from global brands like Google and IBM.
• Confronting the opportunities and risks of a rapidly digitizing society, most recently with the mass pandemic shift to online learning, and the foundational disruption of generative AI to traditional instructional models.
• Facing increasing pressures to meet the shifting skills development demands of the economy and labour market, amidst persistent calls from employers for more responsiveness to fill “skills gaps.”
• Demonstrating clear outcomes and return on investment for learners, citizens and policymakers, with growing calls for postsecondary accountability, quality assurance and pay-for-performance.
• Managing an emerging crisis around runaway growth of international students, spurred to a significant extent by provincial policy that has constrained operating grant and domestic tuition revenues; and
• Adapting to the changing profiles and expectations of today’s learners - and growing undercurrents of public disaffection with higher education, as fierce debates about free speech and political bias roil campuses south of the border.

Unpacking each of these, and their interactions, would require a much more extensive treatment. In this short paper, our aim is to stimulate debate about the future of higher education in Ontario by presenting three alternative priorities for policymakers and system leaders.

To read the full report, click here.