HESA

Higher Education Strategy Associates

Category Archives: Funding and Finances

June 15

School’s Out!

This is my last blog of the academic year.  I may post once or twice during the summer, if something big happens or if someone important says something titanically stupid and I need to vent, but otherwise I’ll keep your inboxes unsullied for a couple of months.  For those of you who have trouble drinking your 7AM (EST) coffee without reading this blog, my apologies, but it’s time for batteries to re-charge.

When I return on August 28th, it will be in a new format, with advertising.  I know, I know, but six years of doing this thing every day for free is probably enough.  If you have something – a conference or a service or a product – that you want to promote to a large and attentive higher education audience, do get in touch at info@higheredstrategy.com.

This was a below-par year for higher education, globally.  Brexit and Trump (and Xi, and Erdogan) called into question  some of the basic ideas underpinning internationalization.  No major government (to my knowledge, anyway) did anything particularly new or exciting in terms of investing in research and core funding, though there are some US states which seem to be upgrading their investments a bit.  We seem to be at the end of a long cycle of global higher education expansion and – Africa excepted, maybe – the focus is instead moving to efficiency and value for money.

In Canada, government support to institutions hummed along just below inflation while staff pay settlements kept growing at above inflation.  Cue more international students to fill the fiscal gap.  We’re so far into this cycle it seems impossible to ever stop.  But at some point, governments will call a stop to it and this ride is going to come to an end.  The fact that Agent May has been busted (three years ahead of schedule) in London and UK universities might once again be free to swing for the fences where international students are concerned should be a source of concern for everyone.  We’re about to have competition again, folks.   You ready?

Are things going to get better?  Well, on research the answer is probably yes.  It seems like the Government of Canada, in response to the Naylor Report, is going to spend more money on fundamental research, which is good.  The questions for next year are really: i) do the feds have the intellectual capacity to hold two thoughts in head at same time and invest both in fundamental and applied research at the same time and ii) how crazy is the super-cluster competition going to be?  But on the fundamental question of core funding for institutions, I think the answer is no.  Governments across the country and the political spectrum are wedded to the idea of starving institutions and giving more money to students.  Newfoundland is only the most egregious example.

But I’m optimistic.  I see more and more universities and colleges being increasingly strategic about their budgeting and operations.  I see money coming open internally as that long-delayed wave of retirements slowly starts to happen.  I see faculty associations (mostly – there are exceptions) moderating financial demands in light of prolonged financial difficulties.  And as always, I am constantly amazed at the dedication, brilliance and inventiveness of the tens of thousands of people who work in our post-secondary institutions.

And with those happy thoughts, I bid you all a good vacation.  And if you have any comments about the blog and how it’s been over the last year – what I should change, write more/less about – please do get in touch with me at alex at higheredstrategy dot com.  I am always eager for feedback.

Now, go play in the sun.

June 13

Who Should Benefit from Skills Training Money?

We seem to be in a period in Canada where money for “skills” is in vogue, mainly because it is seen as a panacea for lots of quite separate problems. At a really high-order level, you’ve got the Innovation ministry in Ottawa pounding the drum on skills because the tech industry says skills are a bottleneck to whatever kind of tech-powered Nirvana the Minister imagines Canada to be headed towards. And then you’ve got the Employment and Social Development Ministry and to an extent the PMO who see investing in skills as a social cohesion play – more skills means more jobs means we won’t look like the US rust belt and we can avoid a nasty bout of populism up here.

I’ll focus on the social cohesion play for the rest of this blog because no one wants to hear my views on the Innovation Minister’s views on coding again (though on the off-chance you do, see here). The mostly-unacknowledged problem we have right now is that there are three entirely separate possible foci for skills training, and very little (as far as I can tell) strategic direction about where we should be spending our dollars.

The first direction is pretty simple: providing money to train people who have lost their jobs. This is what Employment Insurance has done for over forty years. It’s not particularly good at it; but then, it’s not like any other countries are particularly good at it either. Re-training people mid-career is hard, especially if they don’t have an especially high skill level to begin with.

Then there’s the second direction, the one the Harper government tried to take us down, a bit. And that’s providing money to employers to provide more skills to their own workforce. The argument here – in part – is that we can to some extent prevent unemployment by subsidizing companies to invest more in their employees’ skills and thus make them more competitive. This is essentially what the Canada job Grant was supposed to do.

Finally, there’s a third direction, which is to help people develop their own skills, shall we say, prophylactically. That is, help workers get whatever skills they think they need in order to make themselves more flexible, and more employable. Now obviously you don’t need policy to do this – in a market economy people can invest in their own skills as they like, but repeated evidence from around the globe shows that if you do that then you tend to get a Matthew effect: those that already have tend to get more.

It’s never entirely clear why those with lower skills don’t invest on their own. Is it money?  Time? General disinclination to spending time in a classroom? But they don’t, so people are always looking for ways to try to entice them.  Not many schemes have worked well, however. One notable attempt to do this in the UK via something called “individual learning accounts” ended in dramatic failure and mass fraud.

One obvious possibility to encourage this kind of training would be to create some kind of guarantee for workers to be able to take time off for training, an idea which was contained in the 1985 MacDonald Commission (which dubbed it a “Time Bank”). Ontario could have gone this route last month when it announced its labour reform package, but instead decided to give everyone a third week of paid holiday instead. Missed opportunity.

The point I want to make here is not just that these are three different target “markets” for training, it’s that they are to some extents at cross-purposes with one another. For instance, employers really like the second type, because they get to direct where the training goes. They are somewhat less keen on the third kind, because if individuals are investing in their own skills, they are probably to some extent doing so to give themselves insurance and make themselves more mobile.

Because funds are not inexhaustible, there are trade-offs between subsidizing different types of training. At some point, if we’re going to get skills training policy right, the question of what skills, for who, and when, have to be answered openly and trade-offs have to be analyzed and debated. We’re not there yet – right now it’s mostly an inchoate “Need moar Skillz!” But we need to get there soon. Otherwise this is all a waste of time.

June 08

That Andrew Scheer Free Speech Promise

That Andrew Scheer Free Speech Promise

You may recall that a few weeks ago I profiled the higher education/science/youth proposals of the various Conservative Party leadership hopefuls.  You may also recall that the candidate who eventually won the context, Andrew Scheer, had one proposal that distinguished him from the rest of the pack, to wit:

In addition, Scheer pledges that “public universities or colleges that do not foster a culture of free speech and inquiry on campus” will “not have support from the federal government”.  He then lists the tri-councils and CRCs as specific funding mechanisms for which institutions would not be eligible: it is unclear if the ban would include CFI and – more importantly – CSLP.  Note that the ban would only cover public institutions; private (i.e. religious) institutions would be able to limit free inquiry – as indeed faith-based institutions do for obvious reasons – and still be eligible for council funding.

Scheer elaborated on this just once in the media, so far as I can tell, telling the National Post on April 19th  of troubling trends on campus “a pro-life group having its event cancelled at Wilfrid Laurier University; a student newspaper at McGill refusing to print pro-Israel articles; and protest surrounding University of Toronto professor Jordan Peterson for his views on gender pronouns.”

A lot of people are scratching their heads about this.  What the heck is that all about? they wondered.  Does he actually mean it?  And how would that work, exactly, anyway?

Let’s take those questions separately.

What the heck is this about?  It is hard to see any pressing cases of people who were simply not allowed to speak led to this statement.  The stuff at Wilfrid Laurier was perhaps childish but no one was prevented from speaking.  The McGill Daily is perhaps wrong in its editorial policy, but freedom of the press also means the freedom not to publish things.  And students at U of T are presumably as free to criticize Jordan Peterson as Peterson himself is free to be an obnoxious jerk.

There certainly have been cases where speakers have been shouted out or prevented from speaking on campus because of protests but not recently (I can think of two off the top of my head: Benjamin Netanyahu at Concordia in 2002 and Anne Coulter at the University of Ottawa in 2010.)  If we broaden the complaint to other things like taking down “free speech walls” because of perceived derogatory comments, or preventing abortion rights groups from displaying pictures of aborted fetuses at tabled in busy hallways because it’s gross and upsetting, you can probably come up with stuff that is slightly more recent.   But I suspect he’s really reacting to south-of-the-border stuff that happens to make the news up here, in particular the events at Middlebury College, a tony liberal arts school in Vermont where controversial social scientist Charles Murray was fairly violently and crudely prevented from speaking back in January.

(If you want a really exhaustive compendium of perceived slights to free speech in Canadian universities, the Justice Centre for Constitutional Freedoms provides one annually in its Campus Freedom Index, the 2016 edition of which is available here).

So if there’s no urgent policy problem here, what’s it about?  My guess is that roughly akin to Stephen Harper’s anti-census position.   It’s a way of throwing meat to the party’s populist faction without actually adopting a fully populist platform.

Does he actually mean it?  Hard to tell, but my guess is that he does, at least to the extent that he wants to be able to have a platform to talk about unaccountable lefty cultural institutions.  It’s not a loosely-worded pledge: specific exemptions have been carved out for faith-based institutions (part of Scheer’s base), which I think suggests this isn’t something he came up with on the back of a cocktail napkin. Plus, in his victory speech, he went out of his way to repeat the pledge, which he was in no way obliged to do.  And he got a huge cheer from the crowd for doing so.  Antithetical to higher education sensibilities it may be, but it plays with the base.

(And yes, it has been pointed out a few times that among the people who might be most put out about this would be the pro-Israel types who try to stop the “BDS/End Israeli Apartheid” rhetoric on campuses, and who were a particular target of Tory woo-ing during the Harper years.  I think the safe assumption is that Scheer knows and doesn’t care).

How would that work, exactly, anyway?  This of course is the big question, and the one that has most people scratching their heads.  Presumably there would be some kind of complaint process: but to whom would the complaint be addressed?  What kind of body in Ottawa would have the ability to a) judge whether or not an institution was or was not promoting a culture of free speech and b) the power to order a remedy in the form of full or partial removal of funding from federal granting councils?  Does Scheer really think an administrative body could do this?  How would institutions not litigate both of these decisions into outer space?

Also, how does Scheer imagine that provincial governments – you know, the ones which actually have the constitutional responsibility to run and regulate postsecondary education – will react to any intrusion into their jurisdiction?  Can you imagine, for instance, how the Andrew Potter fiasco at McGill would have escalated if Andrew Scheer had taken Potter’s side?  The province, which genuinely lost its mind on the subject for about a couple of days (one major newspaper ran a piece comparing Potter to Rwandan genocidaires), would have gone berserk if Ottawa had tried to meddle.

These complications, in the end, are probably going to be used to create a graceful way to get out of the specifics of the pledge.  No government is going to put the University of Toronto’s hundreds of millions of tri-council funding at risk over a spat about personal pronouns, or yank nine figures worth of funding from McGill because it doesn’t like the Daily’s editorial policy on Israeli settlers in occupied Palestine.  But it might really want to keep those issues in the public eye for partisan purposes.

So, in the event of a Conservative victory, expect an office to be created that would report on “violations” of campus free speech, no doubt staffed by former authors of the Campus Freedom Index.  Money won’t be placed at risk, but institutions would be put on notice.  And Conservative partisans would be delighted.  Which is the real point of the policy.

One can deplore this attitude, of course.  But the point is that Scheer believes that beating this drum will increase his chances of winning power.  He’s probably not completely wrong to think that.  Wiser heads will spend time in the coming months pondering why bashing universities is popular to begin with.

June 06

Making “Applied” Research Great Again

One of the rallying calls of part of the scientific community over the past few years is how under the Harper government there was too much of a focus on “applied” research and not enough of a focus on “pure”/”basic”/”fundamental research.  This call is reaching a fever pitch following the publication of the Naylor Report (which, to its credit, did not get into a basic/applied debate and focussed instead on whether or not the research was “investigator-driven”, which is a different and better distinction).  The problem is that that line between “pure/basic/fundamental” research and applied research isn’t nearly as clear cut as people believe, and the rush away from applied research risks throwing out some rather important babies along with the bathwater.

As long-time readers will know, I’m not a huge fan of a binary divide between basic and applied research.  The idea of “Basic Science” is a convenient distinction created by natural scientists in the aftermath of WWII as a way to convince the government to give them money the way they did during the war but without having soldier looking over their shoulder.  In some fields (medicine, engineering), nearly all research is “applied” in the sense that it there are always considerations of the end-use for the research.

This is probably a good time for a refresher on Pasteur’s Quadrant.  This concept was developed by Donald Stokes, a political scientist at Princeton, just before his death in 1997.  He too thought the basic/applied dichotomy was pretty dumb, so like all good social scientists he came up with a 2×2 instead.  One consideration in classifying science is whether or not it involved a quest for fundamental understanding; the other was whether or not the researcher had any consideration for end-use.   And so what you get is the following:

June 6 -17 Table 1

(I’d argue that to some extent you could replace “Bohr” with “Physics” and “Pasteur” with “Medicine” because it’s the nature of the fields of research and not individual researchers’ proclivities, per se, but let’s not quibble).

Now what was mostly annoying about the Harper years – and to some extent the Martin and late Chretien years – was not so much that the federal government was taking money out of the “fundamental understanding” row and into the “no fundamental understanding” row (although the way some people go on you’d be forgiven for thinking that), but rather than it was trying to make research fit into more than one quadrant at once.  Sure, they’d say, we’d love to fund all your (top-left quadrant) drosophilia research, but can you make sure to include something about its eventual (bottom-right quadrant) commercial applications?  This attempt to make research more “applied” is and was nonsense, and Naylor was right to (mostly) call for an end to it.

But that is not the same thing as saying we shouldn’t fund anything in the bottom-right corner – that is, “applied research”.

And this is where the taxonomy of “applied research” gets tricky.  Some people – including apparently the entire Innovation Ministry, if the last budget is any indication – think that the way to bolster that quadrant is to leave everything to the private sector, preferably in sexy areas like ICT, Clean Tech and whatnot.  And there’s a case to be made for that: business is close to the customer, let them do the pure applied research.

But there’s also a case to be made that in a country where the commercial sector has few big champions and a lot of SMEs, the private sector is always likely to have some structural difficulties doing the pure applied research on its own.  It’s not simply a question of subsidies: it’s a question of scale and talent.  And that’s where applied research as conducted in Canada’s colleges and polytechnics comes in.  They help keep smaller Canadian companies – the kinds that aren’t going to get included in any “supercluster” initiative – competitive.  You’d think this kind of research should be of interest to a self-proclaimed innovation government.  Yet whether by design or indifference we’ve heard nary a word about this kind of research in the last 20 months (apart perhaps from a renewal of the Community and College Social Innovation Fund).

There’s no reason for this.  There is – if rumours of a cabinet submission to respond to the Naylor report are true – no shortage of money for “fundamental”, or “investigator-driven” research.  Why not pure applied research too?  Other than the fact that “applied research” – a completely different type of “applied research”, mind you – has become a dirty word?

This is a policy failure unfolding in slow motion.  There’s still time to stop it, if we can all distinguish between different types of “applied research”.

May 31

The Financial Landscape of Canadian Universities

I was updating some old charts on sources of university income for a presentation last week and they are kind of interesting so I thought y’all might want to have a look.

The first is the total income of Canadian universities over the past 35 years, in constant dollars.  What it shows is that total income has increased in a relatively steady fashion ever since the late 1990s (the slight spikiness of the last decade has more to do with uneven endowment income than anything else).  Total income for 2014-15 was around $35 billion, or more than double the figure of twenty years earlier, even after accounting for inflation.

Figure 1: Total Income of Canadian Universities, 1979-80 to 2014-15, in $2013

May 31 Fig 1 Total Income of Cdn Unis

But of course, student numbers have increased substantially over the past two decades.  In the late 1990s, we had about 650,000 university FTEs; in 2014-15 those numbers had increased to nearly 1.1 million.  So if we calculate income on a per-student basis the gains are less impressive.

Figure 2: Per-student income of Canadian Universities, 1979-80 to 2014-15, in $2013

May 31 Fig 2 Per student income

Income per student stayed roughly stable through the 80s and 90 at around $23,000 per student per year in constant dollars.  Income then began to rise sharply.  For most of the last decade the figure has hovered around $31,000, or about one-third higher than it was in the 1990s.

Now, this flies in the face of conventional wisdom.  Cutbacks are everywhere, right?  So how can there be so much money in the system?  Well, a few reasons.  The main one is that there actually hasn’t been much an increase in dollars available for operating funding.  On a per-student basis, government funds are now lower than they have been at any point this century, and if research funds are removed from the equation, then they are more or less lower than they have been at any point since these records began.  What has offset this is a rise in income generated from tuition (more on that in a second) and income from other sources (which is not the same as net income, so not all of this is available to the academic enterprise).

Now, a quick peek back at figure 1 shows that the big trend of the last few years has been a decrease in government funding (the blue area) being offset by an increase in student contributions (the green area).  That’s a real trend: after a decade of student contributions sitting at around the 20% mark, they have increased in the last few years to 25%.

Figure 3: Tuition Fees as a Percentage of Total Income, Canadian Universities, 1979-80 to 2014-15

May 31 Fig 3 Tuition Fees as Percentage

But before anyone goes around yelling about the evils of tuition fees, it’s worth remembering that tuition fee increases for domestic students over the past few years have been roughly inflation plus one percent.  The increases in tuition income per student, however, have been rising at about inflation plus three per cent.  How is this possible?  Simple.  International students and – to a lesser extent – increased enrolment in higher tuition programs.

This is the very simple lesson of the past half-decade.  Governments can allow public funding to erode quietly, keep domestic tuition relatively stable and institutions can make up for it all by enrolling more and more international students.  So far, it’s worked as a strategy, even if no one owns up to it actually being a conscious strategy.  But there are limits to this policy and eventually, something has to give.

It would be helpful if we started having out-loud grown-up discussions about what those limits are, and what we do when we hit them, rather than playing it all out in silence with nods and winks.  But that implies maturity among our politicians.  Based on their recent performances, I have my doubts.

May 24

The Rock

No, not Dwayne Johnson (though You’re Welcome is indeed a great song).   I’m talking about Newfoundland (and Labrador), where the Minister of Advanced Education, Gerry Byrne, has decided to pick a fight with Memorial University of Newfoundland (MUN).

Why, you ask?  Good question.

MUN is in a position somewhat like the one the University of Alberta faced a couple of years ago, only worse.  Up to about 2012, a decade of hydrocarbon-fueled provincial budgets made MUN a pretty fun place.  The provincial government drenched the institution in money, which allowed it not only to keep tuition low (this year, $2,759 vs. Canadian average of $6,373), but also allow MUN to receive over $40,000 per FTE student, higher than the average in any other province (note this is not to say that MUN’s income per student was higher than that of any other Canadian institution.  It wasn’t.  But it made the top ten).

But of course, we all know the oil boom party came to a halt a few years ago.  Since then, it’s been cut, cut, cut – as I noted back here last week, provincial spending on post-secondary education has fallen by a remarkable 21% over the last six years). Some may want to accuse the provincial government of savagery in its cuts, but to be honest I’m not sure what choice they had.  Outside of OPEC countries, few jurisdictions’ budgets were as geared to the price of oil as Newfoundland’s, so when the price started to fall, across-the-board cuts were pretty much inevitable and there wasn’t much prospect of higher education being spared much pain.

So, MUN had to face cuts.  But the problem with cutting budgets at a university is a little thing called tenure.  Salaries of tenured faculty eat up about 30% of most Canadian universities’ budgets.  Throw in benefits and you’re up to around 40%.  If someone tells you to cut 20% the budget, but 40% of the budget is essentially untouchable, that means the rest of the budget has to be cut by about one-third.  And I don’t care what business you’re in, that stings.

But wait a minute, you say.  Doesn’t Newfoundland have the country’s lowest tuition, both for domestic ($2,759 vs. national average of $6,373) and international ($9,360 vs. $23,589) students?  Actually, aren’t international students only paying about 40% of the cost of their education?  After all, students there can afford a fee increase: only Manitoba has a smaller percentage of students receiving student aid.  There must be some flexibility there, right?

Well, as it turns out, no.  That would of course be the right thing to do, but the government doesn’t want to take the blame for raising tuition for middle-class students (though it doesn’t seem to have a problem cutting student aid to the poorest by 78%).  It flirted with allowing MUN to raise fees last year, but the university could see through that trap and refused.  This year, it ran out of room to manoeuvre and so proposed a set of fee increases which fell harder on out-of-province and international students than they did on domestic ones.  Cue grumbling about administrative waste, inefficiency, and high administrative salaries, not just from the usual suspects internally but from the Minister himself, who clearly wants to pose as a defender of students against the mean old administrators.  First, he says, MUN needs to wring out every bit of efficiency possible out of current structure – to that end, he says, the university needs to go back to “zero-based budgeting”.

Now, I don’t know any specifics about MUN, but it’s a fair guess that after ten years of having a firehose of money pointed at them by the provincial government, the institution had probably grown flabby in some areas.  It would be against human nature if it hadn’t.   But here’s the thing about university overspending: when it happens, it’s like blowing up a balloon.  The extra funds don’t cluster in one area, they are spread pretty evenly throughout the institution; like a balloon, the institution looks the same only bigger.  Did you really need to hire six people in student services instead of five?  Did you really need that extra tenure line in economics?  Could our profs maybe make 5% less than those at Dalhousie rather than exactly the same?  So fair play to the Minister – there are almost certainly efficiency gains to be had.

But note that most of the “extra costs” listed above are salary costs.  That’s normal because most universities spend 70%+  of their money on salaries.  And a lot of these salaries are covered by collective bargaining agreements which are pretty tightly worded to prevent job losses   How do you zero-base budget in that environment?  You can’t.  At best you wait for people to retire and then restructure around those who are left.  The Minister knows all of this perfectly well and that the idea of zero-based budgeting in this context is as dumb as a bag of hammers, yet for some reason he pretends otherwise.

It’s not that MUN doesn’t need to keep a lid on costs and restructure.  It does, and is already doing it.  But without breaking collective agreements (is that what the minister wants?  he should say so), cuts of this magnitude are very difficult to implement.  What MUN needs is some breathing space, something that a rise in fees would provide.  The Minister should stop trying to pick fights with the university, and try working constructively with it to mitigate the problems that the 21% cut his government’s cuts have created.

 

April 18

Naylor Report, Take 1

People are asking why I haven’t talked about the Naylor Report (aka the Review of Fundamental Science) yet.  The answer, briefly, is i) I’m swamped ii) there’s a lot to talk about in there and iii) I want to have some time to think it over.  But I did have some thoughts about chapter 3, where I think there is either an inadvertent error or the authors are trying to pull a fast one (and if it’s the latter I apologize for narking on them).  So I thought I would start there.

The main message of chapter 3 is that the government of Canada is not spending enough on inquiry-driven research in universities (this was not, incidentally, a question the Government of Canada asked of the review panel, but the panel answered it anyway).  One of the ways that the panel argues this point is that while Canada has among the world’s highest levels of Research and Development in the higher education sector – known as HERD if you’re in the R&D policy nerdocracy – most of the money for this comes from higher education institutions themselves and not the federal government.  This, that say, is internationally anomalous and a reason why the federal government should spend more money.

Here’s the graph they use to make this point:

Naylor Report

Hmm.  Hmmmmm.

So, there are really two problems here.  The first is that HERD can be calculated differently in different countries for completely rational reasons.  Let me give you the example of Canada vs. the US.  In Canada, the higher education portion of the contribution to HERD is composed of two things: i) aggregate faculty salaries times the proportion of time profs spend on research (Statscan occasionally does surveys on this – I’ll come back to it in a moment) plus ii) some imputation about unrecovered research overhead.  In the US, it’s just the latter.  Why?  Because the way the US collects data on HERD, the only faculty costs they capture are the chunks taken out of federal research grants.  Remember, in the US, profs are only paid 9 months per year and at least in the R&D accounts, that’s *all* teaching.  Only the pieces of research grant they take out as summer salary gets recorded as R&D expenditure (and also hence as a government-sponsored cost rather than a higher education-sponsored one).

But there’s a bigger issue here.  If one wants to argue that what matters is the ratio of federal portion of HERD to the higher-education portion of HERD, then it’s worth remembering what’s going on in the denominator.  Aggregate salaries are the first component.  The second component is research intensity, as measured through surveys.  This appears to be going up over time.  In 2000, Statscan did a survey which seemed to show the average prof spending somewhere between 30-35% of their time on research. A more recent survey shows that this has risen to 42%.  I am not sure if this latest co-efficient has been factored into the most recent HERD data, but when it does, it will show a major jump in higher education “spending” (or “investment”, if you prefer) on research, despite nothing really having changed at all (possibly it has been and it is what explains the bump seen in expenditures in 2012-13)

What the panel ends up arguing is for federal funding to run more closely in tune with higher education’s own “spending”.  But in practice what this means is: every time profs get a raise, federal funding would have to rise to keep pace.  Every time profs decide – for whatever reasons – to spend more time on research, federal funds should rise to keep pace.  And no doubt that would be awesome for all concerned, but come on.  Treasury Board would have conniptions if someone tried to sell that as a funding mechanism.

None of which is to say federal funding on inquiry-driven research shouldn’t rise.  Just to say that using data on university-funded HERD might not be a super-solid base from which to argue that point

March 31

The Meaning of Zero

I’ve had a lot of time over the past week to think about the federal budget. And the more I think about it, the more baffled I am about the decision to completely stuff the granting councils. I think it is either a sign of real political ineptness, or that something pretty awful is in the pipeline.

It’s not as though the Liberals are averse to spending on Science, per se. The budget dropped hundreds of millions of dollars on Artificial Intelligence, Cleantech, Superclusters, what have you. And it’s not as though they have a problem with that money going to college and universities: the AI money was clearly headed to McGill, Toronto and Alberta, winning supercluster applications are going to need universities as partners (in a rational world they should all have also polytechnics/colleges to provide technical skills training as well, but I’m not totally convinced Industry Canada understands this yet).

So why not the granting councils?

Yeah, yeah, don’t say it: the Naylor Report. Because they are waiting for the Naylor Report (which has mysteriously disappeared) and they don’t want to spend any money until it’s out because there might be a big shake-up.

(Related note: the Science Minister, Kristy Duncan, was on my Ottawa-Toronto flight this week. I asked her when the Naylor Report would be published. She said read page 88 of the budget [which says the report will be released “in the coming months]. I asked what was taking so long. She said they had just had so many consultations, it took time to read them all. I said yeah, but Naylor submitted the report on time in December, right? She said – and I quote – “well, that’s a position”. Make of this what you will, but for me at least it did not dispel the impression that games are being played.)

The problem with this thesis is that imminent future program change wasn’t a barrier to spending in some other program areas. Youth Employment Services and the Post-Secondary Student Support Program, both got very significant increases in their budgets despite the fact that the budget indicated that both would be subject to change in the near future. In those cases, the budget was written so as to show a budget bump for two years and two years only, to indicate that the government didn’t think the old structures would still be around.

So why did the government push for temporary budget boosts in other areas but not the councils? I am not sure, but I don’t see a credible answer that says “once Naylor is published the taps will flow”. I think a more likely answer is this: maybe this government doesn’t actually like granting councils as a policy tool any more than the last one did. No, there’s no “war on science” – though frankly, if it were a Conservative government that had hidden the Naylor Report and given the councils 0%, I’m pretty sure we’d be hearing that phrase 24/7.   

But I think it’s dawning on people that federal disenchantment with granting councils is not a partisan thing. The Chretien/Martin government may eventually have been good to councils (1995 budget excepted), but they also set up and funded a whole bunch of different science agencies (Brain Canada, Genome Canada, etc) precisely because they thought they knew better than the councils where science money should be spent. The Harper government wasn’t much into creating new agencies, yet was pretty consistent in funding big science projects every year outside the council structure.

One last piece of data: Universities Canada couldn’t even muster up a word on the councils’ behalf on budget night – it was all “yay MITACS and yay future Naylor report”. Seriously, their press release was embarrassing. Possibly someone in government leaned on them to give positive publicity “or else” (this has been known to happen), but possibly also that in the grand scheme of things, as long as money is coming in via clusters or AI or whatever, university administrations don’t give two hoots about the councils either. And if they don’t, why would the government?

From all of this I draw two conclusions.

One, even if the Naylor Report does result in more money for Science (and I’m not sure we can take that for granted), it’s not obvious that the councils will be the recipients of the money. The belief in Ottawa that granting councils “don’t get the job done” is deep; there is a bipartisan consensus that politicians and senior public servants, collectively, can manage the science enterprise better than scientists.

Two, Universities Canada is apparently deeply comfortable with this situation, even if not all its members are. For there to be a change in policy direction, someone is going to need to challenge the prevailing science discourse directly in Ottawa. And if it Universities Canada isn’t going to do it, it will have to be done by scientists themselves organizing and representing themselves independently in Ottawa. Sure, CAUT claims to do this, but ask a random sample of active scientists if they think this is the right vehicle for Science representation and you’d probably struggle to get into double-digits. Scientists themselves have to organize this fight, and quickly.

Three, it’s possible I’m entirely mistaken about this. Maybe the government just goofed in its messaging and there really is a pot of gold at the end of the Naylor rainbow, and Universities Canada’s behind-the-scenes work (of which I assume there is a great deal) will pay off handsomely. But honestly, at this point: would you bet on that?

March 30

What’s Next for Student Aid

A few months ago, someone asked me what I wanted to see in the budget.  I said i) investment in aboriginal PSE, ii) system changes for the benefit of mature students and iii) changes to loan repayment (specifically, a reduction of the maximum loan payment from 20%  of disposable income to 15%).  To my great pleasure, the government came through on two of those wishes.  But there is still a lot of work to do yet.

Let’s start with the Post-Secondary Student Support Program, which the Government of Canada gives to individual First Nations to support band members’ education costs.  The Budget provides a $45 million (14%) bump to this program but also said the Government would “undertake a comprehensive and collaborative review with Indigenous partners of all current federal programs that support Indigenous students who wish to pursue post-secondary education”, which I think is code for “we’d prefer a new mechanism which is somewhat more transparent than PSSSP”.

Let’s just say I have my doubts about how easy this collaborative review will be.  Indigenous peoples – young ones especially – have a lot of issues with the federal government at the moment, and it will be difficult to try to manage a focussed review of this one subject without a lot of other agenda items intruding.  I’ve written on this subject before, and there certainly are ways which the funding could be arranged to be managed more efficiently.  That said, some of these ways involve taking management away from band councils and giving it to some other aboriginal organization operating at a larger scale and not all bands are going to find that appealing.

Anyways, the takeaway is: if the feds are expecting a replacement to PSSSP to be in place by fall 2019, they’d better get to work yesterday.

Now, what about the new measures for mature students/adults returning to school?  This was a welcome budget initiative, because the policy discussion has perhaps been focussed too heavily on traditional-aged students for the past few years.  There are however, maybe two cautions I would put on the initiative and how it will roll out.

The first is the budget description of the $287M over three years for programs benefitting these students as a “pilot project’.  I am fairly certain that is PMO-speak, not ESDC-speak.  First of all, I’m moderately certain the law doesn’t allow pilots; second, the idea that provinces are willingly going to spend time and money re-jigging all their program systems to accommodate program changes that are inherently temporary in nature is kind of fanciful.  So I suspect what’s going to happen here is that over the next few months CSLP is going to come up with a bunch of different ways to help this population (change cost allowances for older students, and maybe for dependents too), re-jig how prior-year income is calculated, raise loan limits for this population, raise grant eligibility, etc etc) and then roll them out in roughly ascending order of how irritating they are for provinces to program.  It’s not going to be a big bang, which may limit how well the policy is communicated to its intended targets.

But there’s a bigger issue at play here which the government missed in its haste to get a budget out the door.  One of the biggest problems in funding re-training are the artificial breaks in funding and jurisdiction that occur at the 12-month mark.  If your program is shorter than that, you’re covered by various provincial labour market initiatives and on the whole your compensation is decent.  Longer than that, you’re on fed/prov student aid, which in general is not as generous (and more to the point is repayable).  It would be useful for the two levels of government to work together to provide a more seamless set of benefits.  Perhaps regardless of program length, learners could benefit from 8 months of the more generous treatment and then move on to a slightly less-generous mixed loan/grant system.  This wouldn’t be a quick shift: my guess is that even if you now started talking about how to achieve this, it would still take four or five years for a solid, specific solution to come into view (if you think universities are slow, try federalism).  But still, now’s as good a time as any to start, and perhaps the dollars attached to the mature students programs may be a good conversation starter.

My third wish – the one that didn’t get any traction in this budget – was for improvement in student loan repayment.  I’m not that disappointed in the sense that I’m not greedy (no budget would ever have given me 3-for-3), but I do think there I work to be done here.  Perhaps this gets enacted as part of the follow-up to the Expert Panel on Youth being chaired by Vass Bednar and due for release at some point this spring (although who knows, if the Naylor Report is anything to go by, we could be waiting into 2019).  Or perhaps not: it’s not like CSLP hasn’t already been given a huge whack of work for the next couple of years.

But if that’s the worst problem we have in student aid in Canada, I’d say we are in pretty good shape.

 

(As a coda here, I’d just like to pay tribute to the Canada Student Loans Program’s Director-General, Mary Pichette, who is leaving the public service shortly.  Mary’s been involved two big rounds of CSLP reform: the one in 2004/5 which first created the grants for low-income students, and second the ones around the 2016 budget (not just the increase in grants but the many smaller but still important changes to need assessment as well. 

 I won’t say –I’m sure she wouldn’t want me to – that those two reforms were down to her.  But they were down to teams that she led.  She did a lot over her two stints in the program to make the policy shop more evidence-based and her legacy is simply that she’s made life easier for literally hundreds of thousands of student across the country.  They can’t thank her, but I can.  Mary, you will be missed.)

March 29

Conflicting Views on Research Funding

Every year on budget night, we at HESA Towers publish a graph tracking granting council expenditures in real dollars.  This year it looks like this:

Tri-council Funding Envelopes

Research Council Funding.png

Some people really like the graph and pass it around and re-tweet it because it shows that whatever governments say about their love for science and innovation, it’s not showing up in budgets.  Others (hi Nassif!) dislike it because it doesn’t do justice to how badly researchers are faring under the current environment.  Now, these critics have a point, but I think some of the criticism misunderstands why government funds research in the first place.

The critique of that graph usually makes some combination of the following points:

  1. Enrolments have gone way up over the past fifteen years, so there are more profs and hence more people needing research grants.
  2. At some councils, at least, the average grant size is increasing, sometimes quite significantly.  That’s good for those who get grants, but it means the actual number of awards is decreasing at the same time as the number of people applying is increasing.
  3. In addition to an increasing number of applicants, the number of applications per applicant also seems to be increasing, presumably as a rational response to increasing competition (two lottery tickets are better than one!).

Now, from the point of view of researchers, what all this means is that “steady funding in real dollars” is irrelevant.  On the ground, faculty are having to spend more time on grant proposals, for fear of not receiving one.  The proportion receiving awards is falling, which has an effect on scientific progression, particularly when it happens to younger faculty.  So it’s easy to see why the situation has academic scientists in a panic, and why they’d prefer a graph that somehow shows how applicant prospects of receiving grants are nosediving.   And that graph would as be as undeniably true as the one we publish.

But, from the perspective of Ottawa, I think the answer might well be: “not our problem”.

Here’s why.  The main reason governments get into the research game is to solve a market failure.  The private sector can’t capture all the benefits of basic research because of spillovers, so they underinvest in it.  Therefore, governments invest to fill the gap.  This has been standard economic theory for over 50 years now.

So, to be blunt, government is there to buy a particular amount of science that is in the public interest given corporate underinvestment.  It is not there to provide funds so that the academic career ladder works smoothly.

Provinces and universities decided to hire more science profs to deal with a big increase in access?  Great!  But did anyone ask the feds if they’d be prepared to backstop those decisions with more granting council funds?  Nope. They just assumed the taps would keep flowing.  Academia decided to change the rules of pay and promotion in such a way that emphasized research, thus creating huge new demand for more research dollars.  Fantastic!  But did anyone ask the feds to see how they’d cope with the extra demand?  Nope.  Just hope for the best.

There’s a case, of course, to say that the federal government, via the granting councils, should be more concerned than it is with the national pipeline for scientific talent.  What’s happening right now could really cause a lot of good young scientists to either flee their careers or their country (or both), and that’s simply a waste of expensively-produced talent.  But for the feds to thoroughly get into the business of national science planning requires provinces and institutions to give the councils a more direct role in institutional hiring decisions and the setting of tenure standards.  I bet I can guess how most people would feel about that idea.

So could the government put more money into granting councils?  Sure.  Could some councils make things better by reversing their Harper-era decisions to go with larger average grant sizes?  Yes, obviously.  But let’s remember that at least part of the problem is that institutions and academics have taken a lot of decisions over the past twenty years about what research and scientific careers should look like with very little thought to the macro fiscal implications, under the assumption that the feds and the councils would be there to bail them out.

That needs to change, too.

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