General Operating Income (GOI) funds most of the key functions supporting the operation of the institution (the Support Cost areas), as well as the teaching area – Instruction & Non-Sponsored Research (Instruction), the Library, and Student Services.
Some 95% of GOI* comes from provincial grants and student fees. (* Incomes from the sale of products and services are excluded from the analysis on this site because they are handled differently at some universities – rationale HERE).
This site does not explore the topic of Income in detail because significant differences between universities and provinces undermine their comparability. A university’s Tuition Fee average depends on at least three key variables:
- The level of support provided by the province. This varies based on several factors, including the state of the provincial economy, and the ideology of the governing party; generally, the lower the grant level, the higher the fee level.
- The university’s mix of academic programs. Some courses involve substantially higher fees.
- The school’s level of international student enrollment. International students pay much higher fees than domestic students, but are not normally covered by provincial operating grants. (This is the factor that exaggerates the perception that provinces are contributing less and students more, and makes it difficult to monitor provincial support to domestic students.)
There is a disturbing opacity attached to the third of those factors. International enrollment and the associated fee income have been increasingly large components of the overall PSE picture since at least the early 2000’s. However, CAUBO does not differentiate between domestic fee income and international fee income, and Universities Canada’s enrollment data doesn’t make that distinction, either.
This vital information is not easy to access. Even CBC had to resort to an access to information request to find some detail, stating that “The figures have never before been made fully available to the general public.” Read the article HERE.
In the absence of an alternative explanation it’s easy to suspect that much of Canadian PSE views the enrollment and income numbers as competitive information – too sensitive to be shared with outsiders, including the public.
When it comes to the quest to increase international enrollment, there is also a disconnect in the rationale advanced by the provinces and the implementation at university level. The provinces are now stressing that their original goal was twofold – to bring new revenues to PSE, and (based on the expectation that many of these students would become permanent residents after graduation) to address the projected skills deficit in workforce. However, charging these student 3-4 times the fees paid by domestic students would seem to suggest that the goal was (or has become) more about the money than the future workforce.
The chart below shows the change across the Top 25 since 2001 in “Real Dollars” (adjusted for both inflation and enrollment). Positive values denote increases exceeding inflation and enrollment combined:
1A
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Top 25 Change Overview (Inflation-adjusted):
- Provincial Grant income averaged $361 million in 2023 – up 37% since 2001 (down 8% vs 2010). It now accounts for 42.0% of Total GOI (61.5% in 2001, 57.4% in 2010).
- Total Student Fee income averaged $445 in 2023 – up 215% vs 2001 (up 81% since 2010). It now accounts for 51.6% of GOI (32.8% in 2001, 36.0% in 2010).
- Other incomes averaged $55 million in 2023 – up 127% since 2001 (up 22% since 2010). They now account for 6.4% of GOI (5.7% in 2001, 6.6% in 2010).
- Total General Operating Income averaged $861 million in 2023 – up 100% since 2001 (26% since 2010).
To add perspective to the above numbers, average enrollment has increased by 58% since 2001 (21% since 2010). Expenditure increases higher than that represent REAL increases (larger than inflation and enrollment combined).
The Case for Procedure-Based Controls on Student Fee Increases
There is one other notable feature in the chart. During the first decade, 2001-2010, provincial grants were increasing at a rate greater than enrollment and inflation combined. Nevertheless, many universities still sought substantial tuition fee increases. Under pressure from student associations, numerous provinces responded with caps (or even freezes) on tuition fee increases.
During those years a suspicion developed within some student associations that their universities were circumventing those constraints by implementing major increases in Other Fees (compulsory non-academic fees), which were then unregulated. The chart seems to lend credence to those suspicions.
Commendably, most provinces responded by establishing student-involved approval protocols for compulsory non-academic fees. These procedures have not constrained the ability of universities to implement or increase compulsory fees in order to fund non-academic initiatives. They have placed the onus on the universities to convince elected student leadership that the new (or increased) fees are reasonable, and that the activities they fund have – and continue to offer – value for students. When those requirements are met, the students have shown no reluctance to pay more; for them, it’s less about cost and more about value.
That scenario, and the factors that caused it to evolve, poses a very important question:
As procedure-based, student-involved controls have been successful in addressing disturbing issues surrounding compulsory non-academic fees, isn’t there a strong case for a more demanding and transparent process for determining Tuition Fee increases?
Senior administrators (and often faculty) have long voiced opposition to anything that looks or sounds like Tuition Fee regulation. However, the reality is that de-regulating fees has not solved PSE’s problems, but fed them.
The two central issues revealed by the analysis are unnecessarily-high fee increases, and declining levels of funding for the classroom. There have been many occasions on which provincial decision-making has fuelled those issues. When funding cuts are applied, the province usually leaves it to the universities to determine how their impact will be absorbed. All too often the response has been to increase fees but leave the inefficiencies unaddressed.
As noted on the MORE page, there have always been alternatives to excessive fee increases and inadequate classroom funding, but the lack of transparency in the decision-making process has kept those alternatives out of sight.
A more effective approach would incorporate institutional efficiency measures (Key Efficiency Indicators) into the process for approving tuition fee increases at the individual school level. This would make it more difficult for universities performing poorly on the efficiency indicators to secure approval for fee increases; in essence, the message to them would be “find the money from within”. This would not obstruct reasonable tuition fee increases, because student leaders have proven (through the mandated processes for approving compulsory non-academic fees) that they focus on value rather than just cost. They also, perhaps more than most, understand how inflation works.
There is 23 years’ worth of evidence that many universities have been incapable of fixing their inefficiencies in a deregulated model. That leaves a defined approval mechanism as the only fair and reasonable way of minimizing the likelihood of unnecessary tuition fee increases, and ensuring that adequate levels of funding reach the classroom.
That, in itself, is the major benefit, but it would offer other benefits that address long-held student concerns:
- It would provide students with greater financial certainty when they embark on their courses of study; they didn’t knowingly sign up for runaway cost inflation, and hitting them with it was demonstrably needless and arguably unprincipled.
- It would enhance accessibility so that young Canadians from less wealthy backgrounds can commence their journey of upward economic mobility; if Canada is sincere about driving that transition, this is a very good place to show it.
- It would start to arrest the deeply troubling rise in student debt; progress on that front would reduce the financial and emotional stress encountered by Canada’s younger generations as they try to build their lives, careers and families after graduation.
This kind of approach offers many important and lasting benefits. The challenge in implementing it will rest in switching the provincial and campus mindset away from the “Why we can’t” to the “How we can“.