Income

 

General Operating Income* (“GOI”) funds the teaching area (Instruction & Non-Sponsored Research – “Instruction”), the Library, Student Services, and the key functions supporting the operation of the institution – Central Administration, Physical Plant, and Computing & General. (* 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.)

Some 90% of GOI comes from provincial grants and student fees but the ratio has shifted dramatically. In 2001 grants represented 61.5% of GOI and Student Fees 32.8%; in 2024 those numbers were 41.9% and 49.9%, respectively.

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 provincial grant level, the higher the student fee level.
• The university’s mix of academic programs. Some courses involve substantially higher fees, which inflate the average.
• 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 most exaggerates the perception that provinces are contributing less and students more, and makes it difficult to monitor provincial support to domestic students.)

The chart below shows the change across the Top 25 since 2001 in “Real PSE Dollars” (adjusted for both inflation and increased enrollment). Positive values denote increases exceeding inflation and increased enrollment combined:

1 A) Changes in Real GO Income Per FTE Student – By Type (Top 25)

1-A-Changes-2024

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Those changes have drastically altered the funding picture:

2024 Shares of Total GO INCOME (Top 25):

• Provincial Grants – 41.9% (61.5% in 2001, 57.4% in 2010)
• Student Fees – Credit Course Tuition – 42.9% (27.0% in 2001, 29.3% in 2010)
• Student Fees – Non-Credit Tuition – 1.9% (2.4% in 2001, 2.1% in 2010)
• Student Fees – Non-Credit Tuition – 5.2% (3.4% in 2001, 4.5% in 2010)
• Student Fees – ALL – 49.9% (32.8% in 2001, 36.0% in 2010)
• Other Incomes – 8.2% (5.7% in 2001, 6.6% in 2010)

 

Students now provide slightly less than half of Total GOI; last year they contributed slightly more than half, but a significant uptick in Other incomes in 2024 apparently* pushed the student share back below 50%. (* Please see the note on Other incomes in the closing section of this page.)

 

The Case for Procedure-Based Controls on Student Fee Increases 

There is one other notable feature in Chart 1 A). During the first decade, 2001-2010, provincial grants were increasing at a rate greater than enrollment and inflation combined. Nevertheless, universities still sought substantial tuition fee increases. Under pressure from student associations, numerous provinces responded with caps on tuition fee increases – or even freezes.

During those years a suspicion developed within some student associations that their universities were circumventing those cap or freeze 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. However, 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 backdrop may become relevant when monitoring Other incomes in the coming years. Some provinces have urged their universities to increase their “Other Incomes” – thus reducing their reliance on both grants and student fees. However, this apparently creative suggestion poses some potential dangers to students – much like those (outlined above) relating to Other Fees.

A fee by any other name is still a fee, and it’s still effectively fee income if universities increase their Other Incomes by implementing excessive price increases for residence accommodation, meal plans and academic materials, or by imposing mandatory fees for services that were previously provided free and funded from tuition fee income. That, just like rising tuition fees, would increase student cost and further deepen student debt, and it could circumvent the restraints applicable to Other fees.

The Other Fees issue, and the way in which the provinces eventually addressed it, poses a very important question:

As procedure-based, student-involved controls have been successful in addressing legitimate concerns 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, de-regulating fees does not solve PSE’s problems, but feeds 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. Historically, as the numbers on this website demonstrate, 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 formally 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 Board approval for above-inflation fee increases. Those universities would need to “find the money from within”. While that would unfortunately be be a painful exercise, this website contains an abundance of examples of where that money can be found.

There is 25 years’ worth of evidence that most universities have been incapable of fixing their inefficiencies – instead, allowing them to worsen. That leaves a defined approval mechanism, which effectively forces them to do so, as the only reliable way of minimizing the likelihood of unnecessary tuition fee increases, and ensuring that adequate levels of funding reach the classroom. For some universities, which have been operating more efficiently, the task of readjusting to “a new normal” will be less painful and shorter in duration.

That approach would offer other benefits that address long-held student concerns and societal issues:

• 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 and its provinces are 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.

There would be many important and lasting benefits attached to breaking the “rinse and repeat” cycle of deepening inefficiency we’ve seen for a quarter of a century. 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“.