One big story from out east that didn’t get a lot of play in the rest of the country was the news that the Nova Scotia government had, over the period 2013-2017, quietly bailed out Acadia University to the tune of $24 million.  This is of course the second time a Nova Scotia government has bailed out this decade: the Nova Scotia College of Art and Design (NSCAD) received about $10 million.

This isn’t really a partisan thing: it was an NDP government that bailed out NSCAD and a Liberal one which offered extra help to Acadia.  It’s a structural problem: Nova Scotia is not a very rich province, and it has a lot of universities, only one of which is large enough to have real economies of scale.  This problem was laid out in great detail seven years ago by economist Tim O’Neill in a special report on the system prepared for the Provincial Government but the Dexter government passed on making the difficult decisions.  Now, the new Liberal government has put some extra money in and has allowed institutions to raise a bit more money through tuition, but it doesn’t change the really basic structural challenge the province’s institutions face.  Come next recession, at least one university will be back in the same situation.

From the Acadia story we can glean two things.  First, former President Ray Ivany is clearly a very persuasive guy (but we kind of knew that).  Second, we now have some greater insight into the drafting of the controversial Bill 100, which provided for the possibility of universities to ignore collective agreements if they were in financial exigency and needed to restructure.  Turns out it wasn’t out of the blue: it was in reaction to Acadia telling them they needed a bail-out.  Bill 100 was the Government signalling to everyone in the province’s higher education community: bailouts aren’t the only possible outcome.  Radical restructuring is a possibility too.

How radical?  Well, two neighbouring provinces can give a sense of how bad things can get.  We’ve seen what kind of time Memorial University of Newfoundland is having dealing with cuts of 20% or more to income with little to no ability to recoup money from tuition fees.  In New Brunswick, cuts to provincial operating grants have if anything been as severe, if spread out a little more – a 22% drop in real terms from 2010-11 to 2015-2016 (see back here for more on provincial changes).  Student numbers have fallen as well, by nearly 15%.  That’s a double-edged sword, because while it means the per-student cut in the operating grant is not as severe, that’s also a lot less fee income coming in as well.

Figure 1: Change in university enrolments, Atlantic Provinces, 2010-11 = 100

Source: Association of Atlantic Universities

In fact, the only province in the region where things remain reasonably quiet is Prince Edward Island, where the UPEI is holding its ground both in terms of government grants and student numbers.  Compared to the rest of the region, that’s a reasonably good place to be.

The fundamental challenge of most of the region’s universities is size.  Small is a great selling point – if you can charge for it.  If you can’t, small just means fragile.  And fragility describes too many Atlantic universities right now.  Acadia won’t be the last university in the region to approach the brink; there’s almost certainly more drama to come in the years ahead.