Gerald Munt - University of Winnipeg

Financial and Funding
Trends in Canadian
Universities
Presented by: Gerald Munt
Strategic & Budgetary Priorities
The University of Winnipeg

Areas to address
The long-term funding changes
Tuition as a strategic driver
The access story
The meltdown and its aftermath

The Funding Changes
Up to to 1996-8 – Education costs shared with
Federal government - substantial operating funding
1996 to 2004 Provinces cut back as federal revenues
reduced – dramatic tuition increases
2004 to present – federal increases in research funds
– provincial increase in operating combined with
limitations in tuition increases
2009 plus – Decline in endowments – Probable future
decline in federal and provincial funds

Despite recent increases in government funding, rapid enrolment growth and
inflationary pressures have resulted in universities having significantly less
resources to support teaching, learning and research than in the 1980s and
most of the 1990s
Revenues per FTE student in constant 2006-07 $
$21,000
$18,000
$15,000
$12,000
$9,000
$6,000
$3,000
$0
1980-81
1982-83
Sub-total (net) general operating and special
purposes and trust revenues
Government
Student fees net of scholarships
Gifts, donations and investment income
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
Source: AUCC using data from Statistics Canada. Thanks to Herb O’Heron
2000-01
2002-03
2004-05
2006-07
Deflator based on the U.S. Higher Education Price Index

Federal Cash Transfers for Post-Secondary
Education (% of GDP)
0.6
0.5
0.5
0.44
0.44
0.4
0.3
0.2
0.33
0.29
0.19
0.23
0.15 0.16
0.1
0
1983-
84
1986-
87
1989-
90
1992-
93
1995-
96
1999-
00
2001-
02
2004-
05
2007-
08
Source: CAUT Almanac 2008-09 based on Stats Canada Data

Provincial Responses Varied
Slide from CAUT Almanac 2008-09

First Impact – Higher Tuition
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
1976 1986 1996 2006
0ther 3.6% 4.7% 7.1% 14.3%
Tuition 13.2% 14.2% 22.4% 29.2%
Government Funding 83.2% 81.1% 70.5% 56.5%
Source: CAUT Almanac 2008-09

Increased Tuition Impact
Competition for students
Enrolment Strategy and Management
Greater focus on recruitment and retention
MacLean’s and Globe and Mail as marketing tools
Expansion of scholarships and bursaries
Two and three-tiered tuition
Endowments grew to fund support
Gifts and donations grew from $90 M to $250 M between
1990 and 2004 (Source: AUCC Trends)
Some provinces have matching fund programs
More support for individuals
Tax expenditures
Student loans
Tuition freezes and controls

Differences in population change will continue to drive
much different enrolment demand in different parts of
Canada
B.C. - C.-B.
Alta. - Alb.
Sask.
Man.
Ont.
Que. - Qc
N.B. - N.-B.
N.S. - N.-É.
P.E.I. - Î.-P.-É.
Will impact recruitment costs
in different ways as well
N.L. - T.-N.-L.
CANADA
70% 80% 90% 100% 110%
Medium growth scenario Population change age 18 to 21 2008 to 2018
Statistics Canada
Thanks to Herb O’Heron and AUCC

Enrolment Strategies mean new
Target Groups
Higher revenue
International
Inter-provincial
Executive seminars
Groups not currently major focus
Adult Learners
New Canadians
Groups with significant barriers
Low income
Aboriginal

Some impact so far
Disability
Visible Minority
Aboriginal
International
2002
5%
14%
3%
5%
2008
8%
19%
3%
6%
Source: CUSC Survey

Low Income/Aboriginal
Proportion of Canadians Aged 18 to 21 Accessing
Post-secondary Education by Income Quartile
50%
40%
30%
20%
10%
39%
29% 29% 28% 28% 28%
24%
19%
College
University
0%
Lowest Lower Middle Upper Middle Highest
Source: Statistics Canada’s Survey of Labour and Income Dynamics as cited in “The
Price of Knowledge” 2004 (Canada Millennium Scholarship Foundation)

Minimal Improvement to Date
“[A]lthough participation rates grew for children of all
backgrounds from 1976 to 1994, the participation gap between
poor and middle-income groups also grew during the same
period.” (AUCC Trends)
“the rate of university attendance is about two times greater for
youths from high income families (over $100,000) compared to
youths from the lowest income families throughout 1993 and
2001.” (Marie Drolet)
Similar experience in Manitoba. A survey, using geography
based on postal codes, showed minimal change for Low SES
students between 1998-9 and 2003-4

It’s more than Finances
Affordability is only one element influencing access.
Tuition Fees are only one element of affordability
“Differences in long-term factors such as standardized test
scores in reading obtained at age 15, school marks reported
at age 15, parental influences, and high-school quality
account for 84% of the gap. In contrast, only 12% of the
gap is related to financial constraints.” (Marc Frenette)
“about the same proportion of Aboriginal high school
graduates is going on to graduate in some form of PSE as
high school graduates in the general population.” Michael
Mendelson

Increasing Access means either greater
supports or higher turnover
Child care, transportation, housing, and other
infrastructure
Extended admin hours
Transition programs
Pedagogical changes

Other Impacts
Faculty growth not keeping pace with
enrolment growth
Expanded role of investment return in overall
strategy
Deferred maintenance

Faculty numbers have expanded by 23 percent between 1997 and 2007 but
still trail well behind the 37 percent growth in full-time enrolment over the
same period
Index 1976=100
225
200
175
150
125
100
75
50
25
0
1955
1958
Full-time faculty
Full-time students
Expansion
From 6,000
To 30,000
1961
1964
1967
1970
1973
1976
Funding
enrolment
growth with
marginal
revenues
1979
1982
1985
1988
1991
1994
Source: Statistics Canada data and AUCC estimates
Thanks to Herb O’Heron and AUCC
Mid -
1990s
funding
cuts
Reinvestment
1997
2000
2003
2006e

2004-2009 Enhanced Government
Support
Increased faster than:
Student growth
Government spending as a whole
K-12 education
Health expenditures
Source: On the Brink – Alex Usher and Ryan Dunn

The Double Impact of Current
Recession
Stock market influence on endowments,
pension funds and salary costs.
Probable funding cutbacks either during
recession or, more likely, as the economy
recovers and governments cut spending to
balance their budgets

Impact of Market Decline
Reduce Endowments
Scholarships and Bursaries
Reduce Pension Assets (means increased
operating costs
Delay retirements
Especially for faculty/staff who are in money
purchase plans or who planned to supplement
their pensions with private savings

Endowments
Currently $10 billion for Canada as a whole
Highly concentrated
U of T = 25%
Top four (UBC, McGill, U of A) equals 50%
Most revenues are restricted
Required to withdraw 3.5% of average assets
which is actually more when applied to
current principal.
Source: On the Brink

Impact of Recession
Government revenues will be hurt
Effects their ability to maintain expenditures
More likely to be immediate in provinces with
balanced budget commitments/legislation
Otherwise delayed until economy recovers
and Governments reduce expenditures to rebalance
budgets
Will have some enrolment increases

Questions
Is this a short-term or long-term problem?
Hunker down or get active?
According to AUCC 8 out of ten provinces have some
form of tuition control. If funding cutbacks are coming
are requests for major tuition increases far behind?
70% of university operating costs are staffing related.
How do universities adjust to sharp declines in
revenue when cost increases are far less adaptable?