Federal and Provincial Funding for Higher Education Needs a Reset

A Rapidly Evolving Global Landscape on Expectations and Accountability

As the US moves towards a ranking system for universities and colleges on access, affordability and graduate outcomes, and as the UK continues to exert pressure for greater accountability in various impact measures of teaching quality and research, the time has arrived for a new conversation about what our Federal and Provincial governments – and indeed Canadian citizens – may expect for their investments in higher education. Arguably the conversation is long overdue.

Having worked in two English universities (Surrey, and most recently Plymouth) and three in Canada (York, Dalhousie and currently Cape Breton University), I take a special interest in contrasting the policy contexts, governance and mandate questions that arise for universities in these particular geographies.

In recent years England[1] has undergone a revolution in funding arrangements, the virtual tripling of undergraduate tuition (funded by repayable student loans), the entry of private providers, and significant growth in degree-granting ambitions of the college sector. And the revolution is not over yet. Depending on the results of the forthcoming UK general election, the market-based reforms of the current Conservative—Liberal coalition may accelerate or the sector may see a transition to a graduate tax under a future Labour government. And yet despite these dramatic changes, some core features of the English funding system have been preserved, to the ongoing national advantage of all HE institutions.

Of course context and internal dynamics within the sector matter just as much as national politics. The UK has a national policy approach for the support of both teaching and research whereas in Canada everything is provincial or at most a Federal—Provincial hybrid. This explains why there are so many competing ‘mission groups’ in the UK: the financial stakes are high and everyone needs to be in a club to offset the enormous political influence of the Russell Group of self-styled elite universities.[2]

Today in Canada it would make no sense whatsoever in terms of influence or the pursuit of funding to develop a similar range of national mission groups, largely because the primary policy focus of most universities is on their provincial paymasters. The main exception of course is how to maximize research funding from federal i.e. Tri-Council agencies and the CFREF, which is where the U15 group of research-intensive Canadian universities is especially active.

Applying International Best Practices to Canada

I believe there is a Canadian national interest in a number of impact areas that are vital to the economic success of the country as well as the future of our graduates and Canadian society as a whole. Here are some of the areas of Canadian under-performance that could be transformed by more strategic Federal—Provincial coordination and incentive-based funding:

  • Marketing Canada as a preferred Higher Education destination, with appropriate links to progressive immigration policy
  • Enhancing the impact of research, including innovation and commercialization
  • Enhancing social justice
    • Support for First Nations access and success
    • Explicit support for the role of universities in regional economic development

Marketing Canada

With well designed national marketing portals and strategies, the UK and Australia clearly outperform Canada in marketing HE to international students. With two thirds of the population, Australia attracts double the number of international students compared to Canada. The UK attracts 3.5 times the Canadian figure with less than double the population. And yet our economic and geographic advantages – including proximity to the US – far outweigh those of our Commonwealth partners. And our need for immigration is exactly the opposite policy imperative to that of the UK where the topic has become a socially and politically toxic issue.

Enhancing the Impact of Research

According to the AUCC, “federal funding of the institutional costs of research for Canada’s universities averages 21.8%”, while the US, UK and Australia provide between 40% and 60%. This is clearly a systemic handicap for Canadian researchers. But the recently announced results for the UK Research Excellence Framework demonstrate just what can be achieved when a government dangles more than £1 billion in core ‘QR’ funding for the support of research excellence across the sector. The approach creates much debate but stimulates significant competitive activity between and within institutions to optimize research strategies and vie for core research funding based on metrics that now include significant weighting for impact. Australia is piloting a similar approach.

And it is not just the experience of the Anglophone world that we should pay attention to if we want to see greater social and economic impacts from research investments in Canada. At a recent AUCC event in Ottawa approaches to maximizing research impact through innovation and commercialization in Israel and Germany were presented, with many insights shared for Canadian universities and policy makers to ponder.

Enhancing Social Justice

Social justice and regional equity could be significantly enhanced by a more strategic and coordinated approach to funding of Higher Education in Canada. The Higher Education Funding Council for England (HEFCE) not only oversees the core grants to English universities for teaching and research, it also leads regulation of the sector (including quality assurance), best practice research and innovation, data collection and reporting, and ‘widening participation’.

In England widening participation is a formalized national funding approach “to promote and provide the opportunity of successful participation in higher education to everyone who can benefit from it.” As HEFCE notes: “this is vital for social justice and economic competitiveness.” Imagine what such an approach could mean for our First Nations if it could be developed as a serious Federal—Provincial partnership. When only “8 percent of Aboriginal people aged 25 to 64 in Canada have a university degree” according to AUCC, compared to 23 percent of non-Aboriginals, a new strategic initiative in this area would be enormously unifying for our country. The same logic could be applied to economically disadvantaged regions across Canada for whom universities and community colleges may represent one of the few sources of social cohesion and future prosperity. This question happens to be especially salient for the universities like CBU that are committed to both social justice and economic development.

Bringing it All Back Home* – Implications for Nova Scotia

In a November 2014 Academica article Winners and Losers in the future of Canada’s Universities former University of Windsor President Ross H Paul wrote of real challenges ahead for those institutions that did not fall into one of four favoured categories: high reputation, medical-doctoral institutions; small residential teaching institutions; focused institutions with “a particular cachet”; and those located in major metropolitan areas.

Perhaps reflecting his personal geographic experience Dr Paul did not list a single example of a university poised for success east of Montreal. Given that the majority of universities in Atlantic Canada have to survive in provinces that cannot afford to fully underwrite their HE sectors, his omission may be more perceptive than he realized.

Amongst his ideas for transcending the challenges facing non-favoured institutions and regions, was Dr Paul’s exhortation to “strengthen the university’s ties to its home region, rendering it locally indispensable.” It is this idea – which assumes that virtue is not necessarily to be found in accidents of geography or history or other forms of privilege – that has particular salience in Atlantic Canada. And it is this notion that should be central to ensuring that Canadian values of social justice and fairness are mirrored in Federal and Provincial approaches to regional economic development.

Like many smaller universities across Canada, the continued existence of Cape Breton University is crucial to the future social and economic renaissance of our region. We also happen to have a stellar record on graduating Aboriginal students. But we are not funded that way.

CBU has the highest high school entry standards and one of the highest final year student satisfaction rates in Nova Scotia. Half of all our graduates ever are attached to the workforce in Cape Breton Island. And yet through an accident of history and geography, we receive just half the public funding of neighbouring UPEI, which represents only a slightly larger population. We embrace accountability to stakeholders and we believe that universities should play a key role in the social, cultural and economic development of their communities, but to date that has not been reflected in provincial funding formulae.

To make things even more challenging, just like our more privileged sister institutions in the Atlantic region and elsewhere in the country, we are also handicapped by the absence of a national research funding strategy that properly rewards impact; and we do not benefit from a national marketing strategy that supports the recruitment of international students.

It is clear to many Canadian universities like CBU, that something has to give, and that to maintain quality and the delivery of desirable social, cultural and economic progress for our province and our country, new funding models are required – models based on outcomes and impacts as well as excellence. We should start the experiment in Nova Scotia.



[1] UK policy on Higher Education is not consistent across England, Scotland, Wales and Northern Ireland.

[2] The Russell Group in the UK take lobbying and influence on the sector to heights undreamed of by the U15 in Canada, although a recent joint meeting of the two associations may signal similar ambitions.

* With appropriate acknowledgments to Bob Dylan.