How switching to three-year post-secondary degrees could kickstart Canada’s economy: Hunter Prize 2025

The Hub’s third annual Hunter Prize for Public Policy, generously supported by the Hunter Family Foundation, focused on solving Canada’s stagnant living standards and slow productivity growth. A diverse group of ten finalists has been chosen from nearly 250 entries, with the finalists and winners chosen by an esteemed panel of judges, including Theo Argitis, Hon. Lisa Raitt, Frances Donald, Jack Mintz, and Alicia Planincic. The Hub is pleased to run essays from each finalist this week that lay out their plans to help solve this persistent policy problem. The Hunter Prize is made possible thanks to the support of the Centre for Civic Engagement. Think of how much ink has been spilled over the age of retirement in Canada. Sixty-five or 67 years old? Retirement age even became a defining election issue. We were all debating the wrong thing. If you want a more productive economy and more years of labour force participation, why not put the extra two years of work at the start of our working lives instead of the end? Widespread adoption of accelerated, three-year post-secondary degrees would do just that. They are a simple, powerful fix for Canada’s stagnating productivity. Accelerated degrees will graduate talent faster, strengthen the labour force, elongate careers, and even save governments money, all while improving the country’s economic standing. To implement this, we need simple regulatory tweaks, conditions attached to existing funding for universities, and a $4,500 annual completion bonus for students. Getting a university degree is a good thing for the nation and for students. It increases a person’s employment rate, starting salary, lifetime earnings, and job security. The problem is Canadian university students are stuck in undergraduate classrooms too long. For students entering out of high school, the average undergraduate degree takes 4.74 years to finish. Only 43 percent of students graduate in four years. More than a third of students opt for more schooling, and nearly one in five enrolled college students already has a university degree. This delay has real consequences. The share of 25-year-olds in the workforce has dropped from 75 percent to 60 percent over the past few decades. The median age of graduation for a master’s degree is 27; for a doctorate, it’s 33. It’s now entirely possible for graduate students to spend longer in post-secondary classrooms than they did in elementary school. Longer time in undergraduate programming means delayed entry into the workforce, lower lifetime earnings, and higher student debt. Research shows that even just a six-12 months delay in workforce entry can take a decade to recover from financially. The impact ripples outward. Young Canadians are living at home longer, marrying later, having fewer children, and buying homes later in life. Governments pay the price, too. Provinces give universities $13,657 per student, per year, on average. Plus another $6,000-$7,000 per student annually in direct financial aid. That’s roughly $20,000 per student each year they’re in post-secondary. The longer students take to complete their undergrad, the worse the return. For students, for taxpayers, and for the economy. Accelerated, three-year undergraduate degrees are the solution. Many European countries already do this. Three-year degrees are standard in the U.K., Italy, Sweden, and other countries. Canada can catch up quickly by trimming electives while keeping core programming and content mastery requirements in place. For example, at Toronto Metropolitan University, up to 40 percent of courses can be electives. That’s nearly a year and a half of a four-year degree. At the University of British Columbia, Bachelor of Arts students can graduate with just 42 of their 120 credits in their core program area. However, a full 51 credits can be electives. By reducing elective requirements, students can graduate in three years without compromising academic rigour, classes in their field of study, or eligibility for graduate programs. The core content remains intact; the fluff goes. Here’s how it works. First, provinces should update their post-secondary qualifications frameworks to allow for three-year degrees. The new degree offering must retain the mastery of core content requirements, and the degree conferred at the end of the three years must be the same as the traditional four-year version. This ensures students who choose the accelerated degree are still eligible for the same graduate programs as a four-year student. Next, provincial governments should tie university funding to the adoption of accelerated degrees. Reducing electives will mean some programs shrink or close, and faculty reductions may follow. Universities may not welcome this, but with capped international enrollment and mounting financial pressures, structural change is inevitable. We may as well embrace a more positive overall economic outcome than cutting programs for the sake of cutting programs. If funding is conditional on the adoption of accelerated degrees, institutions will adopt them. Last, provinces should offer a $4,500 annual bonus to students who enroll in accelerated programs—paid only upon successful completion of each academic year—through their existing student assistance programs. This amount, worth roughly half of their annual tuition, ensures uptake. Critically, the benefit to Canada’s GDP and productivity is only realized if students graduate on time. Therefore, these payments must only be released to students once they have completed and passed each of their classes for the academic year. These bonus payments would make a huge difference for students. The average student debt at graduation is $32,000. When the bonuses are combined with the savings from not having to borrow for a fourth year of studies, student debt levels could be cut by more than half. Those savings compound and could be used for a down payment, a first car, or a stroller instead of servicing debt. Some may argue these bonus payments are expensive for provinces. However, the cost is fully offset by the $13,657 in university transfers saved, per student, by not funding a fourth year of university. When we add the savings from not having to pay tuition assistance for the fourth year of study, governments will actually save thousands per enrolled student. Given that the savings are achieved every time a student opts for the accelerated degree, the savings increase with larger student uptake. In fact, if enrollment is rapid, Canada’s labour force could even benefit from a double cohort graduation phenomenon, as Ontario saw after eliminating grade 13 in 2002. The task Canada faces is how best to reverse its declining GDP per capita and productivity figures. Productivity is a formula: value of output over time. Most ideas to fix Canada’s productivity issues focus on producing more output, but, like the retirement age debate, they, too, are focused on the wrong part of the equation. If we want to fix our productivity issues, we need to realize that Canada’s most valuable resource isn’t oil, tech, or talent. It’s time. Let’s stop squandering it. Read the policy paper: