‘Advanced education is a critical part of a nation’s strategic focus’: Five takeaways on how post-secondaries are crucial to fulfilling Canada’s national ambition

Canada is at a critical economic inflection point, poised for historic investments in strategic sectors like defence, AI, and energy. Yet, RBC Thought Leadership’s newest analysis warns that the country’s colleges and universities are scaling down due to severe financial and policy neglect, creating a dangerous disconnect between national ambition and institutional capacity. In a recent episode of Hub Dialogues produced in partnership with RBC Thought Leadership, host Sean Speer explored this growing crisis with two of the bank’s leading policy experts: John Stackhouse, senior vice-president in the office of the CEO at RBC, and Jackie Pichette, director of skills policy for RBC Thought Leadership. Their conversation outlined both the urgent challenges and a potential path forward for Canada’s post-secondary system. Below are five key takeaways from their discussion. 1. A system scaling down when Canada needs to ramp up The core of the problem is a financial one. As national ambitions grow, post-secondary institutions are being forced to contract. Jackie Pichette pointed to a fundamental imbalance that is causing this retrenchment. “Colleges and universities across the country have a balance sheet problem,” Pichette stated. “Public funding has not kept pace with inflation, and tuition has been frozen for about a decade in every province across the country… So anyone who’s following the news has seen layoffs, announcements of program closures, and canceled capital projects. This is happening across the country… for the ones where we haven’t seen it yet, it’s likely only a matter of time.” This scaling down, she argued, creates a direct conflict with the need for the talent and innovation these institutions produce, leading to a situation where “we have too many people being trained for careers that don’t exist anymore in academia, and too few people being trained for roles in the skilled trades where there’s a real shortage.” 2. Post-secondary is a critical, yet underleveraged, economic engine Stackhouse pushed back against any notion that past investments in post-secondary have been ineffective, arguing that the sector has been fundamental to Canada’s recent economic successes. “Some of Canada’s economic successes… have come because of what we’ve invested in post-secondary,” he said, citing clear examples. “The life sciences sector in Vancouver… is a global life sciences leader… a critical one is the University of British Columbia. We are seeing Canada excel in artificial intelligence… because of the University of Toronto and University of Waterloo… We were able to build the trans mountain expansion pipeline… because of skilled labour that came out of colleges, particularly across British Columbia and Alberta.” He emphasized that post-secondary education is not merely a social good but a vital component of economic strategy, crucial for “the creation of opportunity for individuals as well as collectives, and ultimately, a nation.” 3. A new model is needed: Why competencies matter A central theme of the discussion was the need to modernize education itself. Pichette explained that this involves a shift towards a clearer focus on the actual skills—or competencies—that a credential represents. “I wouldn’t say it’s less of a need to move away from credentials, but more of a need to move toward credentials that send a clearer signal… about what competencies those credentials represent,” she said. “So what does someone holding a credential know, and what can they do?” This shift is increasingly urgent as the labour market evolves. “Employers described moving away from hiring people based on job titles towards hiring based on what they called skill families. And I don’t think that we’re preparing Canadians for that kind of a hiring system,” Pichette noted, adding that it may also require a fundamental rethinking of how students are assessed, especially in an AI-saturated world. 4. Strategic focus on defence, AI, and energy is essential The report highlights three strategic sectors—defence and space, AI, and energy—where a more focused post-secondary effort is crucial. Stackhouse explained that these are areas where massive public and private investment is imminent, but the academic partnership is lagging. “We need those for sovereignty reasons, but also there’s going to be a lot of investment, and therefore an economic opportunity as well,” he said. He pointed out that in other leading nations, “advanced education is a critical part of a nation’s strategic focus, and that’s probably something our post-secondary system has not seized on enough.” To bridge this gap, the experts propose creating new “workforce alliances.” Pichette described them as high-level tables that would bring together post-secondary institutions, employers, and unions to “lay out a division of responsibilities” and build a concrete plan to meet the massive skills shortage in these fields. 5. Indigenous partnership is key to energy and broader talent strategies Finally, the conversation underscored that Indigenous communities must be at the heart of Canada’s skills strategy, particularly for major energy projects. “Canada’s Indigenous population is growing faster and is significantly younger than non-Indigenous Canadians,” Pichette noted, highlighting a major opportunity. “Energy projects in particular are only going to be successful with Indigenous partnership.” She argued that success depends on direct, community-led collaboration. “Communities need to be directing the strategy. Industry needs to be involved in ensuring the training is aligned with the skill needs and post-secondary needs to be designing and delivering the training with government support for funding.” This could involve innovative delivery models like mobile training units or simulators to ensure access in rural and remote communities.