The General Operating (G.O.) Fund covers around 60% of total activity at the average university, including most of the key functions supporting the operation of the institution, as well as the teaching area – Instruction & Non-Sponsored Research (Instruction).

Some 95% of G.O. Income comes from provincial grants and student fees – after excluding incomes from the sale of products and services (which are handled differently at some universities). The split between them varies from province to province and from school to school.

This site does not explore the topic of Income in detail because the significant differences between universities and provinces undermine their comparability. A university’s Tuition Fee average depends on two high-impact variables. The first is its mix of academic programs, because some courses involve significantly higher Tuition Fees. The second is the level of international student enrollment, because international students pay much higher Tuition Fees and do not enjoy the same fee escalation protection; moreover, universities do not receive an operating grant for international students, and this affects the Fee/Grant balance – especially at schools with high proportions of international students.

According to the Canadian Bureau for International Education, international student enrollment grew from 326,120 in 2014 to 494,525 in 2017, with 370,710 (75%) enrolled at post-secondary institutions. Of these, 72% were in Ontario and British Columbia. Over 66% were in Toronto, Vancouver and Montréal, but no other city or region came close to hitting 5%. (These are the places at which rising international enrollment levels will most-exaggerate increases in average tuition fees and declines in average provincial support levels.) See Report

Notwithstanding the complexities, the broad Income picture is an important backdrop to this site because it raises significant questions regarding the fundamental premise of each annual budget debate – that the major challenge for universities is a lack of income.

Actually, inflation-adjusted incomes have grown significantly since 2001 – more in some sub-groups than in others, and notably less in Québec:

2.1 S

 

The following chart unpacks the revenue growth line for the Top 25 to show where the growth has come from:

2.2

 

The level of provincial support has declined markedly since 2009, but provincial funding still stands at around the same (inflation-adjusted and enrollment-adjusted) level as in 2001.

Meanwhile, however, the per-student contribution has exceeded inflation by 85%.

Needless to say, those changes have greatly impacted the split between provincial (public) and student funding:

2.3

 

Those averages, however, don’t tell the entire story.  Provincial operating grant support levels are somewhat higher for domestic students than those suggested by the charts, because the operating grants don’t cover international students; if the international students were excluded from the enrollment numbers, the level of provincial support in recent years would show less unfavourably. In the other direction, the increase in international enrollment has somewhat inflated the Tuition Fee average, so the fee escalation for domestic students, while still substantial and troubling, is not as large as the chart suggests. Even with those complexities considered, the shift from public to student funding is real and significant.

This shift may be a large part of the reason behind the perception that provincial under-funding is the cause of PSE’s problems. That may be true from a student perspective because it has resulted in much higher fees and a continuing upward trajectory.

However, from a university perspective, the dollar numbers do not support the perception that Income is the issue. Overall, the universities have enjoyed a major increase in REAL Income (i.e., inflation-adjusted and enrollment-adjusted income) – averaging 31% across the Top 25 since 2001.

This effectively means that the average Top 25 university has received enough income to cover inflation in every cost area, increase staff levels university-wide (despite the huge advances in labour-saving technologies) to directly match enrollment increases, and spend an additional 31%.

Against that background, it’s disconcerting that many senior administrators still maintain that their universities are struggling with an income deficiency.

The evidence that real income has grown so significantly raises the distinct possibility that they don’t have an income problem but a spending (resource allocation) problem.

That will be a controversial hypothesis, given the deeply-entrenched perception that under-funding is at the root of most of PSE’s problems. However, the increase in real income, coupled with some of the expenditure analysis on this site, indicates that it’s a valid hypothesis – more at some schools than others, but generally widespread.

How could we not consider that possibility when, despite the major increase in real income levels, class sizes have been growing, faculty have been forced to deal with cutbacks, and (as we’ll see later) the overall classroom experience has been declining?

It can certainly be argued that the swing to higher levels of student funding has not been forced by a societal decision that students must pay a higher proportion of the cost. That may just be the consequence of the inability of many universities to manage their fast-growing resources properly. That issue is the primary focus of this site.