The solution is a ‘mission-driven research agenda’: Five takeaways on how Canada’s post-secondaries can help boost the economy and increase competitiveness

Canada’s universities and colleges, long a source of national pride and opportunity, are at a crossroads, according to a DeepDive report recently published in The Hub. The report, which synthesizes insights from two major RBC Thought Leadership papers, warns that the postsecondary system is fraying under budget pressures and struggling to meet labour-market demands, jeopardizing the country’s economic future. It contends that institutions are being forced into short-term survival decisions instead of making long-term investments in national prosperity. To reverse this trend, the document outlines five critical areas for change to transform postsecondary education into a true “growth engine.” Below are the five key takeaways from the report. 1. A new financial arrangement is the foundation The report identifies a chronic and structural funding shortfall as the core challenge. Public spending on postsecondary education has fallen from 1.47 percent of GDP in 2011 to the OECD average of 1.1 percent today. This has created a massive dependency on international student tuition, which accounted for all new operating revenue growth in the sector between 2010 and 2023. Recent federal caps on study permits have exposed the fragility of this model, leading to program closures and job losses. The report proposes a multi-pronged solution: rebuild public investment tied to transparent outcomes like student success; offer “measured tuition flexibility paired with access guarantees,” with a share of new revenue directed to student aid; and “stabilize international student policy” with multi-year targets. The authors argue that financial stability is not an end in itself but “the precondition for a sector that can credibly promise students, employers, and communities that it will deliver what the economy now demands.” 2. Institutions need responsive, differentiated mandates Despite a diverse landscape of universities, colleges, and polytechnics, the system suffers from “academic drift”—a gravitational pull toward a homogenous “university model.” The report calls for true diversification, where colleges are funded to expand hands-on, equipment-intensive training for all ages, and universities focus on deep disciplinary strengths and research partnerships. Data is identified as the “missing infrastructure” needed to guide this strategic shift. Better data on program outcomes and credential stacking would help institutions specialize, avoid redundancy, and give learners confidence “that their time and money are buying labour-market value.” The report concludes that “mandates are not marketing slogans; they’re operating systems.” 3. Programs and services must be modernized for a new era Curricula have failed to keep pace with the skills needed in an AI-saturated world. The premium has shifted from information recall to “analytical reasoning, problem-framing, creativity, communication, and the ability to learn and relearn across a career.” The report urges that every program embed these transferable skills and that AI be reframed from a niche specialty to a “literacy that every graduate possesses.” Modernization also means serving lifelong learners. The report recommends expanding “flexible, career-relevant pathways,” including competency-based education that lets workers with existing skills earn credentials faster. For major projects in sectors like energy and defence, it emphasizes “community-led partnerships that bring together technical training, environmental monitoring, and ownership pathways, ensuring benefits flow locally while speeding up execution.” 4. Governance structures require an agility upgrade Current governance is described as a bottleneck, with leaders “hemmed in by a public-service legal and regulatory architecture” that stifles innovation. The report calls for “smart flexibility,” not deregulation. This includes modernizing professional accreditation, updating collective agreements to balance job protection with institutional viability, and shifting quality assurance from measuring hours in a classroom to “evidence of learning and labour-market relevance.” The goal is a system that “lets institutions pivot as quickly as the labour market they serve.” 5. Research must be practical and mission-driven While Canadian universities carry a large share of the national R&D burden, the incentives still disproportionately reward publications over practical application. “Promising ideas often stall at the ideation stage, and talented individuals leave to join ecosystems that know how to bridge the final mile from lab to market,” the report finds. The solution is a “mission-driven research agenda” focused on national priorities like defence, AI, and energy. This requires updating grant councils and tenure criteria to value “problem-solving and commercialization,” and fostering new collaborations. The report even proposes a bold, new BOREALIS entity—a Canadian version of DARPA—to fund high-risk, high-reward projects outside the traditional grant cycle, helping to “rebuild Canadian industrial capabilities.” Generative AI assisted in the production of this story.