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When government demands a “return on investment” from education

With its move to performance-based funding, Alberta is rethinking the purpose of postsecondary

Alberta is at the forefront of several provinces radically changing how they fund postsecondary education.

Since the United Conservative Party (UCP) formed government in 2019, universities across Alberta have lost $460 million in annual funding grants. The largest school in the province, the University of Alberta, lost $200 million of base funding over three years and has undergone drastic academic restructuring, experiencing mass layoffs and year-over-year tuition increases.

The bottom line is austerity, but the sales pitch is jobs. While large chunks of money were removed from universities and colleges in general, some smaller chunks of funding were added to high-demand programs — things like nursing, coding, and commerce.

The impacts of this are both ideological and practical, raising questions about the greater purpose of a university education and which programs an institution has to invest in if it wants to keep the lights on. The model is known as “performance-based funding,” and the idea is that governments shelling out to universities and colleges should be getting a return on investment.

On this week’s CANADALAND, Edmonton-based reporter Oumar Salifu looks at the implications for students and host Jesse Brown puts questions to Alberta’s minister in charge:


The following is an edited and condensed version of CANADALAND’s interview with Demetrios Nicolaides, Alberta’s Minister of Advanced Education and UCP MLA for Calgary-Bow:

Jesse Brown: I’m looking at the changes that university students are facing in Alberta, and some of this looks really drastic. They’re facing tuition hikes, like a 104.5% increase for graduate psychology students, undergrad students facing as much as a 44% tuition increase. Where are students supposed to come up with this money? How are they supposed to deal with this?

Demetrios Nicolaides: First and foremost, all students currently in those programs are grandfathered in. As well, once the increases have been completed, in the vast majority of circumstances, those programs still, from a cost perspective, remain below or near the national average. It’s also important that we do take additional steps to bolster student aid. One of the things that I looked at specifically was to see whether an institution was planning on using some proceeds of the new revenue to support student financial assistance. And they all were. As well, the Government of Alberta is providing $12 million over three years to support our existing scholarships and $15 million over three years to create a new bursary for low-income students. Because I think we can all agree that financial barriers should not limit somebody’s ability and potential to be able to access postsecondary education.

Brown: It shouldn’t be a barrier, but in some cases it is. New law students are facing an increase of 29% this fall. We spoke to an Indigenous law student who is really concerned about the impact of these hikes on diverse students who have gone through quite a bit to get to the point where they’re accepted and ready to embark on things like law school. Are the increases in student aid or scholarships enough to cover the changes that students like that are now facing?

Nicolaides: We survey and talk with students regularly. We just completed a survey very recently on whether students are able to meet their financial obligations with what student aid offers. The vast majority have indicated that they are able and that what is being offered through student aid is sufficient to help. But of course, we need to continue to look at that.

Brown: It’s all well and good to point to improvements to some of these measures like student aid. But we’re not just talking about a one-year thing here. My understanding is that these cuts have been happening year over year. The CBC found last summer that, over the two prior years, the University of Alberta had its provincial base operating funding slashed by 19%, the University of Calgary by 12%. How long can this sustain? It’s one thing to say financial barriers shouldn’t get in the way, but these cuts are increasing financial barriers and they’re happening year over year. Are you done yet, or are more cuts coming?

“It’s very important for us to look at postsecondary education through the lens of jobs”

Nicolaides: As a government, we set out with an ambitious goal and target, to balance the budget. We naturally had to take a very close look at funding that was provided to postsecondary institutions. And what we saw was that postsecondary institutions in Alberta were receiving disproportionately higher funding amounts from the provincial government than was the case in other provinces. So we had to make some corrections. We are starting to reinvest into the postsecondary system. In fact, we have recently rolled out $171 million over three years to create 10,000 additional spaces in our postsecondary institutions. So I think we’ve made some of the difficult decisions, made some of the corrections, and we’re now in a position where we can start to expand capacity and make sure that everybody has an opportunity to attend postsecondary.

Brown: Well, not everybody. I mean, that $171 million is very targeted. While the rest are getting cut, certain programs are receiving extra help, like energy, healthcare, aviation, finance, finance technology, computer science, and information technology. It seems like this isn’t just belt-tightening; there’s a philosophical shift in how the province wants to spend money on postsecondary, targeted towards vocational training. Is that a fair characterization?

Nicolaides: No, I wouldn’t say so. And I’ve heard that characterization. Just for clarity, the Government of Alberta does not fund specific programs. Funding is provided to postsecondary institution as a block operating grant. We don’t provide any details as to how the institutions should use those operating dollars. Over the past few years, we’ve made some reductions to the operating grant that we’ve provided to institutions. With the $171 million, what we are seeing — and the intent behind this — is there are many programs where there are very high waitlists. There’s incredible demand. In veterinary medicine, we hear a lot of concern that there are not enough vets in the province and that we need more vets. Yet at the same time, the program at the University of Calgary is very limited in its capacity; they receive more applications than they’re able to accommodate. So you start to scratch your head and wonder, we have more students who want to go into this program and there’s demand from the labour market, but we’re not able to meet that demand because of capacity limitations. So I don’t agree with the premise that, you know, we’re trying to prioritize some programs.

Brown: I’m not sure you’re actually disagreeing — because if it’s about the probability of getting a job, of what the market demands, that is a philosophical shift, from education for its own sake. I’m aware your government has announced that you’re investing $23 million in a quantum physics hub. I’m not aware of any similar investment in anything in the humanities. I think we just need to recognize that there is a shift in thinking about what education is for and why the province would pay for it and what it wants to prioritize. It does seem like “vocation” is on your list of criteria for directing these funds.

Nicolaides: Well, the broad view, and the lens through which I view postsecondary education, and that I think students view postsecondary education, is from a career-oriented standpoint. I think it’s important that we have job-ready graduates. And when our students finish whatever program they’re in, they’ll need to begin their career in whatever occupation that is. There is indeed a focus, and that is on ensuring we have job-ready graduates, including in the arts. You know, I’m an arts graduate myself; arts provide a lot of very valuable skills that are needed in the economy, in terms of communication and critical thinking and other skills. It’s very important for us to look at postsecondary education through the lens of jobs and job-ready graduates. It’s important to our economy, but more importantly, it’s critical to our students.

Brown: You and I both, having done arts programs for undergrad, maybe benefitted from a prior conception of what university was for, where you could kind of just fuck around for a few years without knowing what you’re gonna do. Even if you’re there with the hope of getting, like, a good job afterwards — for many, many decades, we sort of made people go through learning philosophy, history, literature. Maybe this is incredibly outdated, but I feel like I benefitted from not going to four years of journalism school right out of high school. And I prefer politicians who, like yourself, have not just been doing politics since, you know, student government, and journalists who have specific knowledge about other topics before they focus on vocational training. That was the tradition for many, many years. Now there are conservative governments across North America that are shifting postsecondary education to job-focused outcomes and making funding contingent on that. Is that not losing something really valuable?

Nicolaides: Yeah, I certainly agree, an incredible part of the postsecondary experience is being able to dip your toe into a variety of different subjects and topics. And that remains the case.

Brown: There is a hue and cry from universities in Alberta and elsewhere that when you tie funding to outcomes, when you introduce performance-based funding metrics, you’re fundamentally changing the relationship, the independence of the academy. And because policy dictates outcomes, that’s gonna change what’s invested in, how the whole thing runs. Are you worried about that?

Nicolaides: As I mentioned before, government used to just provide a block grant, an operating grant, and say, “Here’s your operating grant, and use it as you need to finance your operations.” And we’re changing that to a performance-based funding model, whereby the government will provide the institutions with their operating grant and establish targets against key metrics, in discussion — this isn’t a punitive action — in discussion with postsecondary institutions, to have clarity on what the return is for that investment.

Brown: That’s a little cold, and sounds like a very transactional way of thinking about education — “return on investment” in some immediately measurable kind of model.

Nicolaides: Well, it’s a very important investment. In Alberta, it’s $2 billion that the government provides to our postsecondary institutions. And there’s no question it’s an incredible and worthwhile investment. But I think it’s a much deeper issue of how accountability is structured in the postsecondary system.

Brown: Alberta has been shedding young people. There are two separate studies that have found that more young people are leaving Alberta than moving into the province, for the first time since the late 80s. You’ve brought up that Alberta has been offering tuition at lower than the national average. But as a means of attracting people to the province, aren’t you working against that interest?

Nicolaides: No, I don’t believe so. When we talk about retaining young people, there’s no question that we have to do that and we have to keep the best and brightest here. And I think there’s multiple pieces to that. Yes, there’s attraction. How do you encourage young individuals to leave other provinces and say, “I want to go study at the University of Alberta” or “I want to go to Calgary”? I think a lot of that has to do with reputation and ranking and quality. What we do know, and what experts in my department have told me, is that students will move to other provinces, to other jurisdictions, pay higher tuition, and make all those changes if they truly believe they’re getting a higher-quality experience.

Brown: I mean, you’re right; there are some students who will pay more if they believe they’re getting higher quality. And those are students who can afford to pay more. So I think one question here is: which kind of students are you trying to attract and retain?

Nicolaides: I don’t believe that we’re focusing on any particular kind of student. We have very competitive tuition rates. I think there’s great opportunity for so many young people to look at coming to Alberta and studying here, getting a high-quality education at comparable rates in an incredible province, and then having great prospects and outcomes at the end of it. And I think Alberta provides them with those opportunities.

Top image includes Nicolaides at a government press conference last fall, as well as a screencap of a recent promotional video from the University of Alberta.

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