HESA

Higher Education Strategy Associates

Tag Archives: Memorial University of Newfoundland

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.

 

September 12

The Newfoundland Strategy

There was an interesting study out last month from a group of scholars at Memorial University of Newfoundland (MUN), led by Education Professor and Canadian Higher Education über-blogger Dale Kirby, called Matriculating Eastward . With MUN’s out-of-province student numbers skyrocketing in recent years (intake from the other Atlantic provinces has risen fivefold since 2002), the report used both quantitative and qualitative methods to examine the reasons that out-of-province students chose Memorial as their place of study.

Not surprisingly, cost emerges as the number one factor – with fees having dropped over 35% in real terms over the last decade, MUN has become the region’s low-cost education destination. But number two on the list was interesting – availability of program of choice. It’s a hint at least that cost on its own might not be enough to make a school a “destination” – it still needs a degree of comprehensiveness and reputation for quality capacity in order for people to want to go there in the first place.

The study unsurprisingly concludes that keeping MUN a low-cost environment is key to its remaining competitive for out-of-province students. But that’s not something the university can decide on its own – MUN’s tuition is a function of provincial government largesse. And the province’s return on investment for massively subsidizing out-of-province students depends to a large degree on whether or not they choose to stay in the province after graduation. Here, the study’s results are less encouraging – migrant students’ willingness to consider staying in the province after graduation is not much better than “neutral” (3.3 on a scale of 1 to 5, where 5 is “strongly agree”).

It’s an argument at least in favour of a two-tier tuition scheme, with one rate for home students and another for immigrants who are (arguably) just subsidy-shopping. As long as oil revenues stay healthy, it’s hard to see Newfoundland changing course. But if budget cuts ever loom, there’s every chance for Newfoundland could imitate Quebec and make visiting students pay in order to maintain locals’ privileges.