General Operating (G.O.) Income funds most of the key functions supporting the operation of the institution, as well as the teaching area – Instruction & Non-Sponsored Research (Instruction). It represents around 60% of total income at the average Top 25 university.
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 exceeded 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
There is limited value in Income comparisons at the individual school and provincial levels,especially as universities appear to measure and report their enrollment in different ways. However, multi-school averages across a time continuum are insightful.
The following chart shows the growth in General Operating income Per FTE (full-time equivalent) Student. The increase from an average of $17,369 in 2001 to an average of $23,199 in the latest year represents REAL income growth of 33.6%. That’s Income growth AFTER allowing for inflation and increased enrollment. (The growth in operating resources is actually even larger, because there is another fund that supports operational activities – the “Special Purpose & Trust Fund. It is used, more in some provinces than others, to provide funding dedicated to particular purposes.)
This growth in real income creates significant questions around the universities’ repeated claims that their challenge results from income deficiency.
Students are usually quick to echo these claims and point the finger of blame at the provinces. The following chart explains their frustration:
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.
- Average provincial contributions Per-Student are marginally below their 2001 level, but have declined by 15.4% since the provinces started turning down the funding tap in around 2009 *.
- Average Per-Student contributions have increased by 94.8% since 2001, and by 48.2% since provincial contribution levels started to decline.
- Total G.O. income per FTE student has increased by 33.6% since 2001. Even since the decline in provincial commitment levels, it has increased by 11.4%.
* These 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 charts suggest. Even with those complexities considered, the shift from public to student funding is real and significant.
The shift in income source is central to the student (and probably public) perception that provincial under-funding is the cause of PSE’s problems. It’s an understandable perception because student fees have increased rapidly, and continue to do so, fuelling stress and driving up debt.
However, the dollar numbers do not support the universities’ contention that a lack of Income is the issue. That’s a difficult case to make when their REAL (inflation- and enrollment-adjusted) incomes have grown so significantly – not just since 2001, but even since provincial support levels started declining in many provinces.
This raises the distinct possibility that they don’t have an income problem but a spending (resource allocation) problem.
While that’s a controversial hypothesis, the increase in real income, and some of the expenditure analysis on this site, support it. How could it not be a credible conclusion when, despite the major increase in real income levels, class sizes have been growing, faculty have been forced to deal with cutbacks, and the overall classroom experience has been deteriorating?
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, and the failure of provincial ministries to confront that issue. That is the primary focus of this site.