Cape Breton University’s Case for Growth

In these fevered times, with a Provincial election writ due to be dropped any day now, it is fascinating to observe that the one topic on which all political parties seem to agree is the Cinderella status of the Province’s Universities.  It seems that no political party is – thus far – preparing to rise officially above the parapet of ‘well informed caution’ for the University sector.  Presumably none of the party pollsters believe there is a serious constituency for protecting the $330 million plus that the Province budgets for post-secondary education.  And so there seems to be no appetite for reversing a financial squeeze that has seen a 10% cut in University operating grants in just three years and which has left several Nova Scotia Universities in serious financial difficulty.

In recent months I have met privately with all political party leaders and have been hugely impressed by their personal grasp of the importance of the University sector to our Province’s economy, our cultural diversity, our attractiveness to inward investors, and even to our strategy for immigration. And yet I am not especially optimistic that post secondary education will feature significantly in any of the main parties’ election platforms for the upcoming Nova Scotia General Election.

How did we get into this situation?

I believe there are three fundamental issues we have to confront as a sector, and CBU is not exempt from any of them.  First, given global forces of marketization of higher education, every university is struggling to justify its existence simply on the grounds of scholarly excellence.  Second, governments typically pay for the university sector through just one department, and yet the benefits are shared across diverse departmental interests.  And third, our universities lack effective mechanisms for demonstrating accountability for their various contributions.

I will deal with each of these in turn and then suggest some possible ways forward for Nova Scotia and some specific implications for Cape Breton University.

Universities as a Public Good

The compelling societal, scientific and cultural arguments for universities go back to the 11th century and many of our colleagues treat them as sacrosanct. And yet all universities understand that a ‘right to operate’ based solely on scholarly excellence is insufficient in today’s challenging public sector funding landscape. That goes as much for Oxford, Cambridge and UofT as it does for CBU.  Happily, even leaving the traditional arguments for universities to one side, there is also a large body of evidence that describes the economic benefits to countries and regions of higher education institutions.[1]

In Canada, it is estimated by the Association of Universities and Colleges of Canada (AUCC) that recruitment of international students has an annual economic impact of approximately $8 billion.[2] In Atlantic Canada the Association of Atlantic Universities (AAU) estimates the export earnings of Universities – for this is what international student spending represents – at $565m.  Federal and provincial taxes attributable to the existence of Universities in the Atlantic region are nearly $500 million.  Fifty seven per cent of all research conducted in Atlantic Canada happens in Universities, earning the region $615m per annum and directly responsible for bringing many highly qualified (and high tax-paying) individuals who relocate to our region; we are major contributors to human capital development educating more than 90,000 students every year.  And yet – in recent years at least – universities in Atlantic Canada seem to have been treated more as a cost to be reduced, rather than a source of revenue and positive impact to be encouraged.  Of course this is not just an Atlantic Canadian phenomenon – one only has to look at what happened in Alberta this year to see the trend.  The UofA recently suspended admission to 20 Arts programs as the starting point for excising $56m from its budget the next two years.

The Structure of Government

If provincial governments were running businesses they would try very hard to contain costs that do not lead directly to prosperity (many government departments in Atlantic Canada and across the country looks after such budgets) and they would increase spending on those which do.

Unfortunately, very few governments behave this way.  So when the case for investing in universities in Nova Scotia ranges across so many departments, from Economic and Rural Development and Tourism (ERDT) to Health and Wellness, to Communities, Culture and Heritage, it is not difficult to imagine how the department of Labour and Advanced Education may struggle to defend its budget for PSE against the immediate and urgent needs of hospitals and social welfare programs.  And yet, that is the fundamental challenge for any future government that wishes to grow the Nova Scotia economy.   Spending is relatively easy; generating a larger economy that can pay for social needs through ensuring long term investment returns for tax payer’s dollars takes an ambitious vision and a good deal of political courage.

It is critical for the future prosperity of our Province that pursuit of public sector policy goals not be compromised by the management structure government has adopted to carry out its business.

Ensuring Accountability

In recent decades, the Province of Nova Scotia has veered from one funding formula to another; taking more or less account of the mix and real costs of programs, the affordability of tuition, the changing levels of interest of well to do families in Ontario sending their offspring to Nova Scotia, and (now) balancing the budget.  As a result, some strange and unintended consequences have occurred.   It has been particularly painful to see CBU to lose ground in operational funding in recent years compared to the rest of the sector. Since 2008 CBU has stayed pretty well flat in percentage ‘increase’ terms whilst the rest of the system increased net 20%.  In 2010/11 CBU’s funding shortfall was the second highest in the Province in straight dollar terms (after Acadia) – more than St FX and SMU combined.    And so today, with nearly 15% of the Province’s population, Cape Breton Island’s only University receives less than 6% of the Provincial funding envelope.

Many people have asserted to me that these phenomena are in large part due to a Halifax-centric view of the PSE world where the scorecard does not take full account of the distinct contribution that individual institutions like CBU make.  If this is the case, it is disappointing, and it needs to change, for both the social and political cohesion of our Province and our collective economic prospects.

So the challenge for CBU is now to make its case as:

  1. the only University in Cape Breton Island, with around 50% of our students recruited from within Cape Breton itself;
  2. the University with one of the best records in international student recruitment – nearly 30% of our students were of international origin last year, representing 31 nationalities;
  3. the University that is uniquely engaged with community economic development and industrial renewal in our Province – both through our programs (eg BACS and MBA CED) as well as commercial R&D through our Schools and the Verschuren Centre;
  4. the University that is uniquely positioned to draw upon the available range and depth of existing clinical capacity to assist in meeting the future human resource challenges in our provincial health care sector; and
  5. the University with the best record in the Province on aboriginal education – indeed the only University in the country to be mentioned in the Federal budget this year specifically because of our work on aboriginal business education.

These are the factors that we wish to have recognised and by which we are happy to be measured and held accountable in the future.  But we need to operate within a framework that recognises those contributions.

The Way Ahead

As described by Dr Tim O’Neil in his 2010 report for the Premier on the higher education system in Nova Scotia it is clear that demographic and fiscal constraints now require system-wide reform.  It is less clear to me who is going to lead the process of reinvention that is required.  If we were starting over in the Province we might not have 10 universities, as O’Neil’s report implies, but we would certainly want a number of highly differentiated autonomous institutions, creating specific sorts of value, and all generating an academic and economic ‘return on investment’ for our students and our communities.  I believe this is achievable within the next 4-5 years and I think Cape Breton University can help role model the possibilities.

In order to achieve this happy outcome, it is essential that three things happen:

  1. The current trend in Provincial PSE policy which is to treat each University on its individual merits, is most welcome and must be encouraged.  We need to transcend the sterile horse-trading around funding formulae and the chronic lack of incentives for innovation that have characterised our sector in recent years.  Instead we need a series of bilateral compacts with clearly understood investment and outcome assumptions.  CBU has nothing to fear being judged on its unique record and future contribution in terms of quality, innovation, efficiency, economic productivity and engagement with community, culture and the social life and prospects of Cape Breton Island and the Province.
  1. Stakeholders of our universities who benefit from our contributions must actively articulate the importance of PSE to their interests as HRM Mayor Mike Savage did recently for the six Universities in his patch.  This message needs to be heard by all departments of government, and not just Labour and Advanced Education which currently pays half our bills.  Other departments must be encouraged to add their weight to the arguments of LAE at budget time, not leave them stranded in defence of the ‘costs’ of PSE.  Like all PSE institutions, CBU must help our stakeholders – including local politicians, business leaders and civil society organisations – make the case for autonomous, accountable universities by providing them with the facts, so no one is left in any doubt about the vital role CBU plays in the Province and of course in Cape Breton Island.
  1. It is incumbent on Universities to hold themselves fully accountable for any funding we receive from our Province and indeed from our students through their tuition and our research partners and investors.  We are not ivory towers with a celestially granted right to exist.  As a Zócalo Public Square forum argued last year, Universities owe it to their local communities to engage deeply with them, solve problems with them, and deliver results for them.  This is not incompatible with scholarly excellence in education in research; indeed it is part of it.  For students who research real world problems and learn how to solve them are more employable and live more fulfilling lives.  CBU is committed to the highest possible levels of engagement and accountability, as we have shown since our inception and will continue to show in years to come.

Finally, if we accept the argument that universities are assets to be grown and nurtured, I believe that in order for us to further enhance our various contributions to Cape Breton Island, the Province and the world beyond Canada, we need to plan to grow in size, and with that our positive impacts.  One interesting benchmark for CBU is Vancouver Island University – one of three highly differentiated universities on the island (total population 750,000).    VIU has a very similar history to CBU, becoming a fully fledged University only in 2008, but today, in a community of just under 100,000 in Vancouver Island’s second city of Nanaimo, VIU has a student population of 18,000, of whom more than 1000 are aboriginal and more than 1000 are international.   Whether CBU could ever make it to 6,000 students, let alone 18,000 remains to be seen.  And if we did pursue a vigorous growth strategy, it would probably not be financed wholly by the Province of Nova Scotia, given current and projected demographic and economic constraints.    But it is possible to imagine growth financed by a combination of international and domestic recruitment, and remote delivery – all within a series of bilateral agreements with the Province that ensure ‘win win’ outcomes at all times.

During the Fall, I will be discussing these ideas with CBU’s stakeholders across the Island of Cape Breton, in Nova Scotia and beyond.  And I plan that by the New Year, CBU will have a bold and distinctive strategy for enhancing its impact on the world, starting with our home here in Cape Breton, and fully supported by our Province.

[1] OECD. (2007). Higher education and regions: globally competitive, regionally engaged. Paris: Organisation for Economic Co-operation and Development/Institutional Management of Higher Education.

[2] This figure will be significantly reduced this year because of industrial action by overseas visa staff