Canada’s post-secondary schools need a major wake-up call

How much impact does PSI research have on society, or at least other researchers globally? Citation indices are important in this respect. Canada’s share of the world’s top 1 percent cited publications (excluding the U.S. and China) is the 6th highest of 12 countries. It is better than France and Japan, but has declined almost 5 percent from 2016 to 2020 and is below the U.K., Italy, and Germany, never mind the U.S. Using global university rankings, I calculate the average number of universities that a country has in the top 100 global rankings by country for 2025. As seen in the table, Canada averages 3.3 universities in the top 100 (University of Toronto, UBC, and McGill, with the University of Alberta listed once). On the other hand, the U.K. has 13 universities ranked in the top 100, and Australia, with two-thirds of Canada’s population, has, on average, eight universities. Correcting for population size, Australia, Hong Kong, Singapore, and Switzerland have the most top 100 universities, given population size. A new funding framework for better performance Across provinces, government share of PSI revenues ranges from one-third in Ontario to nearly half in Nova Scotia. Tuition and other revenues cover the budget. Yet, the current funding approach for PSIs is woefully inadequate in encouraging better performance. In most provinces, grants are based on previous year allocation, with increases often determined according to ad hoc or temporary adjustments. Ontario and Quebec funding is partly based on enrolment, and Ontario is the only province to use performance-based funding. However, Ontario caps enrolment-based funding that, as of 2023, results in 20,000 unfunded spaces. Moreover, performance funding is only at risk for failing to meet metrics rather than being based on different levels of success. Along with some U.S. states, Australia, and the U.K. with far more top 100 universities than Canada, have a sophisticated approach to funding based on enrolment and performance. Australia’s government provides almost three-fifths of PSI revenues based on three grants. The teaching grant is related to “clusters” of different programs with per-student payments based on student demand, costs, and workforce priorities. The research grant is based on performance (such as research funding and citations). An engagement grant provides funding linked to geography, Indigenous, and low-income students. The U.K. only provides a quarter of PSI revenues for teaching based on enrolment and program costs, as well as the share of students at risk. Besides project-specific funding, the U.K. also provides general research funding related to performance using a peer-review assessment of research quality, impact, and environment of each faculty (the last assessment was in 2021, with the next one in 2029). The recent Alberta panel report uses a similar “best practice” approach found in other successful jurisdictions, with the aim of creating incentives for institutions to develop new sources of revenue and reduce costs beyond relying on public grants and domestic tuition fees. To put it in perspective, the average per student education cost is roughly $25,000 per year, of which the province covers $10,000 (tuition is $7,000 and other revenues $8,000 per student). The provincial funding would be based on enrolment (related to clusters similar to Australia), performance, and a basic grant to cover overhead. The formula would vary across institution types since the share of costs related to instruction, research, and overhead differs considerably for comprehensive universities and polytechnics compared to other PSIs. Data on performance should be made available to the public. A new approach would also be used for setting tuition fees. Institutions could compete in setting both domestic and international student fees on a competitive basis. However, similar to Australia, domestic fees would initially be set at a maximum varying by program to encourage institutions to reduce costs and develop new sources of revenue to make up the shortfall in their budgets. After the initial year of a multi-year program, tuition fees would be guaranteed by capping increases to be no more than inflation or 2 percent, like the current approach used for international students. Overall, teaching, research, and community impact performance would be based on outcomes, not inputs like administrative costs. Instead, it would be up to the institutions to reduce costs and develop new sources of revenue to balance their budgets. To assist institutions in becoming more autonomous, governments would reduce red tape that hinders institutions from improving performance. Those institutions that succeed in growing enrolment will be compensated for their growth. Political support waning The Alberta panel recommended additional government funding, especially to facilitate the transition to a new funding framework. However, it expressed concern that “the public’s confidence and financial support are necessary for the viability and success.” Specifically, institutions are losing public support with unfair diversity, equity, and inclusion practices, and when institutions take political positions on controversial issues. Institutions need to follow the principle of “neutrality,” allowing for freedom of expression and in hiring and admission criteria to avoid discrimination. Favouritism towards marginalized groups can backfire by hurting the reputations of successful applicants who would have succeeded without being labeled. Students should be free to speak their views without fear of intimidation. A recent survey published by the Aristotle Foundation found that 85 percent of very conservative students fear being penalized by professors for their views, while a quarter of very liberal students feel intimidated. The reaction to antisemitism on campus is a deepening concern as Jewish students are being intimidated by some professors and students. Fifteen percent of Jewish students experience daily abuse, and 85 percent been abused at least once during the year. PSIs must take action to protect faculty and students subject to intimidation. Unless PSI leadership takes these issues seriously, they will find voters reluctant to provide further funding, or even worse, support financial penalties on those PSIs who are weak in dealing with discriminatory practices. Conclusion: Is more PSI funding needed? A basic question that could be asked is why post-secondary institutions are publicly funded. After all, governments could have a voucher system in which low-income students have access to autonomous institutions that compete based on high performance. The argument for public support is to make sure sufficient resources are directed at access, student training, and research in society. Once voters are called upon to support PSIs with the taxes they pay, the funding framework should incent good performance. That is happening in several jurisdictions, but not in Canada. If institutions aren’t performing well, they need incentives to do better.