HESA

Higher Education Strategy Associates

Category Archives: Politics

Elections, political parties and platforms, other political issues and processes

February 18

The Canada Apprentice Loan

One of the signature pieces in last week’s budget was the Canada Apprentice Loan (CAL).  Very few details were given out at the time (see p. 70 in the budget, here), but what details did emerge suggest two things to me: first, that the idea went into the budget less-than-fully-baked; and second, that it could turn out to be a fairly significant political mess.

The proof of this being less-than-fully-baked is the lack of detail surrounding the idea.  While the scheme seems to be about putting money into apprentices’ hands during block training periods, it made no mention of how this loan would mesh with the significant amounts of EI money apprentices already receive during those periods (training periods are considered a period “out-of-work” under EI, so apprentices are eligible for EI during this time, and receive payments equivalent to 55% of their normal working income as a result).  Does it replace the EI money?  It seems unlikely that the Tories would try a bait-and-switch, but the silence about integration suggests the issue hasn’t been thoroughly thought through.

But if it’s additional, what’s the $4,000 for, exactly?  Living costs? That would put the amount available to them over 100% of their wage rates. If that happens, all hell will break loose on the Canada Student Loans front.  CSLP doesn’t work on a wage-replacement principle, it works on an allowance principle: that is, it assumes that the purpose of student loans is to top-up students to a particular maximum, based on living arrangements, presence of children, and local cost of living.  For a single student living away from home, that probably means about $1000/month.  But apprentices earning $16/hour in their job already receive about $1600/month in EI funding.  If you lend this better-off group more money, what possible excuse do you have to say no when student groups come asking for similar treatment for CSLP?

Another possibility is that the loans are specifically for training costs.  But then why make it $4,000?  A Canadian Apprenticeship Forum paper from 2007 (see: here) showed that average training costs – including tools and apprenticeship registration fees – were just $1300, and that 50% of apprentices paid less than $800.  Nothing’s changed significantly since then, so why the super-high maxima?  Again, setting maxima well above actual need is going to set off a clamour for similar treatment in the CSLP.

Here’s my take: the current federal government is very fond of apprenticeships.  But the problem is that most of the levers of apprenticeship policy are in the hands of the provinces.  The only thing the federal government can really do is pump money into apprentices’ hands in the hope that the extra funding will make more people want to be apprentices.  That’s probably about as deep as the thinking went on this file before it went into the budget.

It’s possible it will get better upon implementation (as the recent ruckus on income-splitting shows, at least some of the Tory cabinet seem able to re-evaluate policy in the face of evidence), but as it stands right now, the roll-out of the CAL could be more problematic than the federal government seems to think.

February 11

Cooling the “War on Science” Rhetoric

Today’s budget day.  I think we can be reasonably certain that no matter what comes up on the R&D front, somebody is going to trot out the meme that the Harper government is conducting a “War on Science”.  But this is, at best, a half-truth.  There is an enormous difference between the Harper government’s record of heeding scientific advice and its behaviour towards government scientists, on the one hand, and its record of funding academic science, on the other.

Their record on the former is indeed pretty terrible, particularly when it comes to protection of lakes, waterways, and groundwater.  The charge that they are putting developer interests above environmental interests is, near as I can tell, absolutely true.   The decreased ability of government scientists to communicate their results in scholarly forums is ridiculous.  But the paranoia around this stuff is getting out of hand – some of the rhetoric around the closure of libraries in the Department of Fisheries and Oceans was pretty surreal.

(Apparently, plenty of people found photos of dumpsters full of books as prima facie evidence that jack-booted Tory ministers were personally eviscerating government library collections.  But regular book disposal is par for the course at any library.  Collections management strategies don’t just mean acquiring books, they mean getting rid of them when they are no longer necessary – in cases where similar collections are being merged, the proportion of volumes meeting that description can be quite high.  There is definite evidence of carelessness in the way collections are being disposed of, but anyone who thinks those decisions are made at the Ministerial level doesn’t understand Ottawa.)

Anyways, whatever their record on government science, the Tories’ record of funding academic science is something else entirely.  Some of the War-on-Science types like to add up all the tiny little cuts of the past year or two and present them as a sustained, coordinated attack on science. And there’s no doubt that some specific cases – the ones related to water, for instance (e.g. closure of the Experimental Lakes Area) – were probably linked to the government agenda.  But as for the rest of them: we’re coming back from a $50 billion deficit, and the government promised not to balance it on the backs of the provinces.  Cuts are to be expected, and it doesn’t seem as though Science is taking a disproportionate cut (though, thanks to Tory secretiveness about government operations, we can’t tell for sure).  Certainly, there has been nothing on the scale of the 14% cut the granting councils took in Paul Martin’s 1995 budget,  and nobody claimed there was a war on science back then.

In case you need a reminder going into today’s budget on the Tory funding record for Science, here it is:

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Could the Tories have done more?  Sure.  But that record simply isn’t one of a government “at war” with Science – which is presumably why people documenting the “War on Science” simply ignore it.

The only thing that worries me is that the numbers get smaller as time goes on.  Obviously, that has to do with the fact that the government entered a period of general restraint after 2010.  But I wonder: is it also the reaction of a government tired of getting kicked by a community to whom they have been relatively generous? Worth pondering.

 

February 10

China: The Expansion Hangover

The explosive growth of China’s higher education sector wasn’t achieved without incident.  In fact, the expansion has thrown up a number of challenges for institutions and students alike.

Let’s start with the institutions.  The so-called 985 universities – that is, the research-intensive schools directly under the control of the education ministry in Beijing – have done remarkably well out of government policies since the 1990s.  Peking and Tsinghua Universities, in particular, have become genuinely global powerhouses in certain fields of research (Tsinghua, along with Zhejiang and Shanghai Jiao Tong, now have publication outputs surpassing MIT’s, though citations still lag badly – an indication of the still-not-quite-mature state of science in China); other institutions like Fudan and Nanjing have also done well.

Less well-off are the many universities that are under provincial control.  They were all required to expand capacity in the late 90s, and did so under the expectation that they would be given access to the “diversified funding sources” they were promised in the 1998 Higher Education Law.  In practice, the provinces didn’t invest as much as hoped, and didn’t allow tuition to rise as much as hoped.  This left institutions – which had borrowed heavily in the expectation of future revenues – holding an enormous bag.  By 2011, some estimates had it that they collectively had a debt of about $US 41 billion.

Students, of course, were big winners – young people now are something like eight times more likely to end up in higher education than they were twenty years ago.  But when you expand numbers that quickly, you’re bound to run into some capacity issues on the other side.  And this is exactly what we find: unemployment among recent Chinese university graduates now runs at over 15%, compared to rates of just 3% for non-university graduates, and underemployment is also rife .  As I’ve noted before, that’s unlikely to curb demand because the risk-adjusted returns are still pretty good.  But the creation of a large number of unemployed young people is never a good thing for a government that puts political stability first and foremost.

More to the point, perhaps, the unemployment problem has made people even more desperate to get into one of the prestigious 985 universities, whose graduates can rely on institutional prestige to get them a job.  But as Damien Ma and William Adams pointed out in their excellent recent book, In Line behind a Billion People, access to these schools is highly unequal.  Each restricts seats for students who graduate from their own affiliated middle and senior schools (in which the children of local Party officials are overrepresented), and also set aside the majority of their places for pupils from their own city or province.  What that means is that students from Beijing (population: 20 million), who have their pick of eight of the thirty-nine 985 universities, can get into an elite school with much lower gaokao scores than students from Guangdong (104 million, two 985 universities) or Henan (94 million, no 985 universities).

The universities’ debt problem will probably disappear eventually – as it has done before with state-owned enterprises, Beijing is likely just going to wipe the debts at some point.  The graduate problem also probably fades with time as the economy grows.  But the problem of unequal access to top universities is a killer.  As Ma and Adams note, urban elites like their privileges; woe betide the Party who tries to take it from them.

January 30

Essential? Beware of What You Wish For

So I see that COU has commissioned a poll, which has come back with the result that: Ontarians think universities are almost as essential as hospitals and primary/secondary schools.

Some highlights:

  • 88 per cent of adult Ontarians ranked universities’ overall contributions to the province as important, just behind hospitals (92 per cent), and elementary and high schools (90 per cent);
  • 72 per cent of adult Ontarians say that teaching at universities to increase knowledge and skills is a very important contribution to society;
  • 79 per cent believe that, through research, universities make a very important contribution to understanding science and healthcare;
  • 87 per cent believe Ontario university students benefit greatly from university programs.

The purpose behind this poll is obviously to say, “Hey!  Don’t cut our funding, because Ontarians think we’re almost as important as hospitals!”  And while it’s tempting to dismiss this with a simple, “good luck with that”, I think it requires some much deeper reflection, because it actually worries the bejesus out of me – not because I think the results are bad, but because I’m terrified of how politicians will interpret them.  COU seems to hope that government will see the word “essential” and think: “money!”  But it’s just as likely that they will see the word “essential” and think: “holy moley, we’d better regulate that sucker”.

You see, when something becomes “essential” to citizens, they tend to blame the government if things somehow go wrong.   Heat, water, electricity?  All either government owned or heavily regulated. Phones, ditto.  Hospitals, primary schools, same thing.  They’re all, in essence, utilities – things taxpayers expect to have at their fingertips when they want it.  And governments judge their success on utilities by how little whining they hear about it.

There are benefits to being a utility, of course: you roughly know how much money you’re going to get each year; there’s certainly no need to compete with others; and there’s no need to be world-class or anything like that.  And this is just as well, because governments don’t care if their utilities are world-class.  They just care about them not causing problems with the voters.

But what if “essential” universities start doing things the government doesn’t like?  Well, then the government might do things like get stuck into enrolment policy, telling universities who they can and can’t enrol.  They might dictate to whom they give scholarship money (not foreigners).  Veto some choices for President.  Amend the strategic plan so that it meets “system-wide” objectives.  It’ll start slowly, and then before you know it, they’ll be in control, micromanaging universities to death.  Even if they do pay less than half the bill.

The basic problem here, once again, is that university costs continue to rise faster than university revenue.  The instinctive university response to this problem seems to be to go hunting for more money from government.  But there’s a price to pay for that – and for how long will universities pay it?

January 24

Canada’s International Education Strategy – How Did It Get So Bad?

When our Department of Foreign Affairs, Trade and Development (DFATD – not DFAIT as I said a few days ago; sorry) delivers something as bad as our new International Education Strategy, an inquest is in order.  But since self-reflection isn’t exactly an abundant resource in Ottawa at the best of times, it’s an inquest we’re going to have to undertake ourselves.

Let’s start with the document’s basic failures:

  • It talks about increasing enrolment without assessing capacity constraints;
  • It shows no obvious signs of being conversant with international education markets, how students choose their destination countries, or how students subsequently choose a country of residence;
  • It spends an inordinate amount of time talking about discussions with the rarely-before heard-of “Canadian Consortium for  International Education”, which is made up mostly of Ottawa-based industry groups (e.g. AUCC, ACCC, CBIE) who – surprise, surprise – reciprocated by praising the document to the skies, despite its evident thinness.

What, you might wonder, links these points?

It seems clear that the document’s authors valued pleasing the Minister and Ottawa-based education groups more than they valued functioning relationships with provinces and institutions.  That’s a fairly common Ottawa problem.  It’s much easier to work with tame, de-fanged Ottawa interest groups, who will always say “thank you” for a new government policy no matter how silly it is, than to deal with provinces who keep rudely reminding you that education is in fact their jurisdiction.

But that’s too easy an “out”.  Lots of federal departments still talk to their provincial counterparts in a constructive way over areas of shared jurisdiction.  The Canada Student Loans Program, for instance, manages to do this reasonably well – why can’t DFATD do so?

I see three possible reasons.  The first is that the people asked to run with this file were junior, and didn’t know any better.  The second, more likely reason is that Foreign Affairs is too sniffy to talk to mere provinces (“I joined the service to go to Rome, not Regina!”).  But most likely of all is simply that the government just doesn’t care enough about this file to do a good job on it.  Partly, that’s due to the regime, but the culture at DFATD is a culprit, too.  My sense is that international education is a bit of a backwater there; people on the rise don’t stay very long.  Actually doing a good job would require lots of tedious consultation with provinces and institutions.  By the time the file actually achieved something that could be thrown on your CV, you’ve already moved on to your next rotation, so why bother?  Better to dash off something quick for an “announceable” than to do the hard work for which someone else will inevitably take credit.

If that’s true, then the problem runs deeper than a single, deeply flawed report; there’s a whole institutional culture that stand between us and good policy-making.  And the Ottawa NGOs’ habit of thanking the government any time it announces something, regardless of how inane, far from making things better is just enabling the dysfunction.  We need to deal with this.  Soon.

January 23

International Education Strategies – How Others Do It

By now, a lot of you will have read – either on our Blog or at the Globe and Mail – my rant about the new International Education Strategy, released last week by the Government  of Canada.  A number of people said they agreed with me, but wanted to know what I would have recommended in its place.  I won’t do that (that’s the stuff I charge for, folks); instead, I want to contrast emerging international education strategies elsewhere, with our own.

Take Norway, which has just launched a new strategy designed to get more of their students to study abroad.  It has recognized that the main barrier to achieving this is financial, and has come up with better financial packages to help students go abroad.  In addition, because they have a desire to forge strategic relationships in particular parts of the globe, they are making deals to improve mobility to specific places: North America for graduate studies, Asia (mainly China) for undergraduate study.

The easy hit here is to note that the Norwegian outward-looking strategy is in stark contrast to the self-centred, mercantilist stuff that DFAIT released last week (“WE need skills!  WE need foreign students! It’s all about US!”).  The more important point, though, is that the Norwegians actually understand what “strategy” means.  They diagnosed a problem (Norwegian students not worldly enough), identified a barrier to a solution (need more money to make students more mobile), and threw appropriate resources at it.

Now compare this to our strategy.  Instead of diagnosing a problem, we picked a target out of the air – double the number of international students (Why double? Why not triple?  No clue – that’s how “out of the air” the number is).  We did not identify any barriers to the solution, other than the speed at which we can process visas.  No thought about institutional capacity factors, or reasons why foreigners might not want to come to Canada.  As for appropriate resources – $5 million for marketing, spread thinly over more than half the planet.  That’s not concentrating resources on a problem, that’s just tossing money around.  Norway 1, Canada 0.

Or take Sweden, where a number of CEOs have asked the government to re-think its policy of charging non-EU students full tuition, because it is reducing the number of young, Swedish-trained foreign graduates available to the Swedish tech industry.  Again, a goal (not enough foreign grads), a barrier (fees), and a solution (lower fees).  The Canadian strategy, on the other hand, assumes that huge cash payoffs from international student fees AND immense benefits from higher-quality immigration are both possible, and simply waves away any possible tension or trade-off between the two goals.  Sweden 1, Canada 0.

No point moaning now, I suppose.  We’re stuck with this abortion of a strategy at least until the next election.  The important thing now is to diagnose how we produced a document this bad, and how to prevent it happening again.  More on that tomorrow.

January 16

Canada’s Long-Awaited New Internationalization Strategy

It was released yesterday.  And it’s godawful.

It’s a thirty-page document, but minus the cover page, colophon, table of contents, introduction, twelve pages of fact sheets, and another four pages to describe previous consultations and provide global context, it’s really just ten.  Of these ten, roughly half describes initiatives the government has already undertaken, (existing scholarship programs, Mitacs funding, etc).  So, then, five pages, maybe.  Part of this is spent re-hashing lines about Canada’s “brilliant” reputation for international education – a claim which their own research says is utterly false (see: this previous post on DFAIT’s brand research).

In those five pages, the Government of Canada makes specific commitments to:

  • Spend $5 million to give Canada a re-brand.  And do a bunch of stuff already announced in the last budget
  • Consult regularly with stakeholders
  • Establish a Trade Commissioner presence within the Canadian Consortium on International Education to “co-ordinate efforts” (to what end is not stated)
  • Support an event management system to better co-ordinate events held by stakeholders.

That’s it.  That’s the entirety of the strategy’s commitments.  There are some additional words in there that talk about “developing the export of education know-how… by supporting marketing efforts of Canadian stakeholders”, but it’s all vague, meaningless guff.

Amazingly, the document sets no real goals for the government.  It sets targets for other people (e.g. doubling the number of foreign students by 2022), but that’s not the same thing.  There’s no rationale for such numbers as are in the strategy, and the activities in the strategy are not linked to intended outcomes in any way.  Similarly, although the document talks about focussing efforts on selected certain foreign markets, these markets turn out to be India, China, Brazil, the entire friggin’ Middle East/North Africa region, Mexico, and Vietnam.  The rationale for the last two are mysterious; the first four contain half the world’s population. That’s some focus.

Towards the end of the document, the government informs us gravely that it will be monitoring effectiveness, and putting performance measures in place – checking whether their “inputs” (spending 5 million bucks on a brand, and doing some consultations) are producing the appropriate “outputs” (265,000 more international students by 2022, a greater proportion of whom choose to stay here after studying).  When I say it is laughable, I am not using a figure of speech.  Honestly, I haven’t laughed so hard in weeks.

This “strategy”, if we can call it that, is without question the most thorough and comprehensive argument for why the Government of Canada should stay the hell out of higher education.  It is shallow.  It is abject.  It shows no sign of being the product of discussion with either the provinces, who are responsible for education in this country, or the colleges & universities who deliver it.  It does not articulate problems well.  It does not focus resources in a meaningful way, nor are the investments it lists in any way proportionate to what few goals it does set out.

In short, if one is left with any thought at all about this document, it is this:

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Canada, as a country, can and should do better than this.

January 07

How Universities Are Becoming More Labour-Intensive

Yesterday, I showed how universities in New Brunswick were – despite welcome new promises of stable funding from the provincial government – facing problems because salary increases were going to eat all the available new money.  Some of you possibly thought I was being alarmist.  But it’s easy enough to show how this can happen.  In Ontario, it already has.

For data here, I pulled the financial statements for the last five years at the “Big 8” (Toronto, Waterloo, Western, Queens, Guelph, York, Ottawa, and McMaster), which comprise about 75% of all university spending, and hence are a pretty good proxy for the university system as a whole.  It’s not as good as Stastcan data; but, on the other hand, it gives me something past 2011, which is the most recently-available Statistics Canada/CAUBO report.  And here is what it shows:

Figure 1: Total and Salaries/Benefits Expenditures, 8 Largest Ontario Universities, 2009-2013

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures at these institutions rose from $7.4 billion in 2009 to $8.6 billion in 2012, before falling back to $8.45 billion in 2013.  That’s a 14% nominal increase, which is about 6% after inflation – not bad.  Meanwhile, salaries and benefits rose from being 59% of overall budgets to being 63% of overall budgets.

Now that doesn’t sound so bad, either.  But let’s look at the same data another way:

Figure 2: Increases in Total and Salaries/Benefits Expenditures, 8 Largest Ontario Universities, 2009-2013

 

 

 

 

 

 

 

 

 

 

 

 

This looks considerably less good, doesn’t it?  As new money has come in and permitted higher spending, salaries and benefits have eaten fully 92% of the increase.  This, friends, is the consequence of increasing salary mass by 5% per year, when income is only growing at 3%.

And the consequences for the rest of the budget?  After salary increases, the Ontario 8 only had $83 million to put into non-salary areas.  On a base of about $3 billion, that’s an increase of about 3%, but after inflation, that’s actually a 4% reduction, i.e., a fall of about 1% per year.  And of course much of that money is earmarked for things like research, so in terms of disposable income, it’s likely that the figure is actually much higher.

Outside Ontario, we don’t see quite the same pattern.  I pulled 7 other comparable institutions (UBC, Alberta, Calgary, Saskatchewan, Manitoba, McGill, and Dalhousie) and found that on the whole they spent a greater proportion of their money on salaries (66% in 2013, compared to 63% in Ontario), but that there was no sudden change in the way money was spent (only 67% of new expenditure went to salaries, meaning the average went unchanged).  That said, there were differences inside this group.  Most actually managed to decrease their salary-to-total expenditure ratios; the two exceptions were Alberta (where salaries took 86% of all new expenditure) and McGill (where they took an astounding 179% of new expenditures).

For a set of institutions that endlessly bang-on about how hi-tech they are, Ontario universities are apparently one of the very few industries in the provinces that are becoming more labour intensive over time.  And that won’t change until compensation increases start coming into line with increases in income.

January 06

The New Normal

Happy New Year!  Did everyone have a great vacation?

The highlight of my vacation was going to Argentina and stumbling upon the world’s most unfortunately-named university in a suburb of Buenos Aires, named “Morón”.  It’s called – wait for it – Unversidad de Morón.  Seriously, their international marketing people must have the most difficult jobs in higher ed.

Anyhow, I wanted to start the year by talking about what was a hopeful development from last fall – the Government of New Brunswick’s decision to pre-announce university funding increases for the next two years.  Instead of waiting for provincial budget-time to make an announcement (which, quite honestly, is far too late for institutions needing to do serious planning), the government pre-announced not one but two(!) years’ worth of future increases: 2% for 2014-15, and another 2% for 2015-16.  And they also told institutions they could raise domestic undergraduate tuition by 3% for each of the next two years.  Assuming no big increase in domestic or international student numbers, that means the university can count on overall budget increases of around 2.33%.

Great news, right?  Guaranteed new money!

Put the champagne down, guys.  2.33% still isn’t enough to keep pace.  Cutbacks will inevitably follow.  To understand why, let’s look at professorial pay.

UNB profs are currently without a contract – and indeed are very close to a strike on the issue.  But their previous four-year contract was a fairly generous one.  It moved the salary grid upwards by (on average) 2.4% per year, plus everyone not at the top of their pay grade got annual bumps of (on average) about $1300/year.  What percentage that works out to in total depends on where your place is in the pay grid, but for new associate professors, on average, it was about 4% per year on the nose.

So, 4% in total on academics pay.  Benefits tend to scale at the same rate, as does non-academic pay, so 4% on those, too.  At most Canadian universities, salaries and benefits are about 60% of all expenditures.  Multiply that out – 60% times 4% = 2.4%, and right there we’ve already used up slightly more than the entire announced increase in funding.

That is to say: if labour contracts continue to play out the way they have over the past four years, there is exactly no money left over for anything else.  But since inflation erodes buying power, that actually implies ongoing cutbacks of all non-salary items of about 2% per year.  And that’s the best case scenario for a university, since I think few provinces will be as generous as New Brunswick this year.

The reality, then, is this: either staff pay settlements have to start coming into line with increases in institutional income, or the new normal is going to be continuing pay hikes, combined with annual cutbacks in all non-salary items.

That’s the math, and there’s no escaping it.

November 28

Some Free Advice for the Parti Quebecois

So I see that the Government of Quebec, far from hitting their zero deficit target this year, is in fact going to come in with a deficit of about $2.5 billion.  This means that, not only will the “reinvestment” in higher education – the money that was going to compensate institutions for not getting their promised tuition increase – not come any time soon, but it’s better than even-money that there’ll be cuts this year instead.

Two points:

1)      Hey, CREPUQ!  Still think the “playing it quiet” strategy in the spring of 2012 was such a hot idea?  Congratulations on such a well-executed plan.

2)      Man, Quebec universities need to find some revenue sources.

That second one is a bit of a problem, of course.  The PQ has indexed domestic tuition to some form of inflation, and, as I understand it, the Liberals have agreed to this policy as well – so that’s out.  It could charge differential fees to out-of-province students, but they already tapped that well back 1996, so that’s out too.

So what about international students?

There are two oddities about Quebec’s international student fee policy.  One is the policy of having regulated fees in some disciplines (e.g. arts, science) and de-regulated fees in others (e.g. engineering and business).  Institutions get to keep all the money they take from students in de-regulated programs, but in regulated ones, any money received over and above what domestic students pay gets clawed back by the Ministry (yes, really).  The second oddity is that international students from la francophonie pay Quebec tuition.

It’s clearly time for Quebec to get rid of both these policy oddities.  The first one can’t be eliminated on its own, as it will be perceived as favouring the anglo universities, and, you know, dieu nous en garde.  But if both are killed together, then there’s something in it for everyone.  McGill gets to cash-in on all the Americans who come to study Arts, and enjoy the more righteous legal drinking age, and U de M and Laval get to actually charge all those European and African students who come over for the Engineering and Business programs.

(This is where someone says: “but they’ll lose students if they charge more!”  Irrelevant.  The only issue is whether they make up the attendant lost revenue through higher fees.  Which shouldn’t be hard.)

The benefits of the francophonie tuition policy are minimal.  Heck, one of its main consequences is that the Quebec government is currently subsidizing over 700 French students each year to study in English at McGill.  So why bother?  For the Quebec government, killing it would be a cost-free way to help universities with their funding issues.  It should be a no-brainer.

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