“We must not let in daylight upon the magic”. Canada’s university establishment has embraced Walter Bagehot’s defence of the British monarchy as it vainly attempts to maintain its monopoly on higher learning. Despite widespread agreement of the critical importance of “lifelong learning”, the vested interests of Canada’s higher education system are determinedly resisting reforms that would make this goal achievable.
The current system of higher learning in Canada remains an enduring vestige of state planning. The major component of funding is the enrolment-based grant, an elaborate and outdated system of quotas. Manitoba and other provincial jurisdictions use a version of this funding formula.
In Ontario, for example, enrolment grants are based on a “corridor funding system” that allocates a fixed share of enrolment grants to each university. The “corridor” refers to the fact that an institution receives a fixed share of grants as long as a five-year moving-average of its enrolments remains within a 3 per cent band. If actual enrolments are lower than this, a university will lose grant income and if it exceeds this band the institution will not receive grants for additional enrolment. In this system, successful institutions are actually discouraged from expanding. They simply use stricter entrance requirements to channel unworthy students to institutions with excess capacity. Imagine BMW passing poor drivers along to Ford.
Ostensibly, this system of grants is designed to “follow the student” but the only way that the student can get access to the grant is through the institution. Yet the provincial government tightly controls the supply of grant-supported institutions. The students are merely pieces in an elaborate chess game, or more precisely, checkers.
This system is geared toward filling the quota with full time students. For this reason, universities are less inclined to recognize the learning of those who have received their learning elsewhere or to cater to the continuing education market. The consequence is that Canada is far away from achieving the “lifelong learning” culture that education advocates desire. Notwithstanding the breathless rhetoric about lifelong learning, the enrolment of adults in formal courses of part time learning has actually been in decline during the 1990’s.
Apart from discouraging lifelong learning, the current funding system does not encourage using technology to lower the per capita cost of learning. According to the OECD, Canada maintains one of the highest cost post-secondary systems in the world. The high cost of post-secondary learning is not unrelated to high student debt levels, a point that has yet to be fully grasped by the student unions.
Defenders of the current system often set up a false dichotomy between the human lecturer and learning technology. As elsewhere in the economy, there is not a choice between humans and technology per se, but rather the opportunity of using technology to improve the productivity of humans and to lower costs. A well-designed online course compares very favourably to the talk-and-chalk-in-front-of-hundreds-of-undergraduates-then-sluff-them-off-to-the-hapless-T.A. model so favoured by universities.
Two simple reforms would see change occur naturally through the market. The first is to convert support for higher learning from an institution grant to a citizen learning endowment. Each citizen would be granted a lifetime post secondary endowment that could be used for a variety of post secondary education and training options. The citizen would have complete control over how the endowment was spent with approved providers of post secondary education and training.
A necessary second innovation would be to open up the supply side of higher learning and allow new suppliers to compete for citizen learning endowments. Foreign and domestic providers should be invited to contest provincial higher education markets.
This idea is roughly in line with what has been recommended for Australia. The Review Committee on Higher Education Financing and Policy suggested that Australia develop a three pronged strategy to assure lifelong learning: a student centred funding model, the parcelling off of funding for research from teaching and measures to improve the higher education industry and encourage it to sell into the world market.
Of course the Canadian universities have fought against a student-centred funding model in the past. But why does an industry characterized by growing demand for its product, a self-acknowledged excellent brand and falling input costs fear change?
Michael Grant is a freelance economist based in Toronto. For more information on him see: http://www.grantinsights.com