To: Demetrios Nicolaides, Minister of Advanced Education, Alberta

From: That guy from HESA Towers

Dear Minister,

So, you have finally got to the end of the Alberta 2030 Process.  Congratulations!  The question now is: where do you go from here?

When the UCP came to power, it had two fundamental aims with respect to higher education: reduce government expenditures to fit the province’s new post-oil-bust financial circumstances and make institutions more active partners in the province’s economic development.  Both were entirely justifiable policy aims.  All governments want universities to contribute more to making a prosperous society: hell, pretty much the entire purpose of providing public funds for research-intensive universities, from Humboldt to today, is to drive prosperity-enhancing knowledge spill-overs.  And as for cutting funds to institutions: nobody was ever going to cheer for it, but few would have argued that the Albertan government should indefinitely keep itself at the top of the Canadian $/per-student charts regardless of economic circumstance.  Being the country’s top spender was an affordable luxury when oil was $100/barrel, but less so when it was $40/barrel.

The problem was that whoever was counselling you in 2019 gave you some titanically bad advice about how to go about accomplishing these tasks.  You could have gone to universities and colleges apologetically and said “sorry, guys, we have to cut our coat according to our cloth, but we’ll work with you to make up revenue some other way”.  You could have outlined ways in which you thought universities could effectively work with community and industry to make both Alberta’s graduates and firms more successful and found ways to enable those ideas. 

But you didn’t do that. 

 Instead, you essentially accused universities of being spendthrift (what, were they supposed to not spend money given to them by previous governments?) and insufficiently concerned with graduate outcomes.  You picked a fight with them.  The initial UCP stance was never going to win popularity contests, but there was no need to treat the institutions as enemies.  You’re supposed to burn bridges after you’ve crossed them; doing it beforehand creates problems.

Then you moved into the Vision 2030 process.  This could have been useful to build bridges with the community: identifying common problems, coming up with common solutions.  But then you sub-contracted the process to McKinsey.  For the institutions, this inevitably gave the perception that “strategy” was something being done to them rather than with them.  The secrecy around the data produced by McKinsey, delivered in the form of power-points emblazoned with text from the consulting giant that the information contained was proprietary and that it objected to any release of the document through Freedom of Information because the data was proprietary, similarly did nothing to make this feel like a participatory exercise.  And the less said about the price tag, the better.

Still, here we are.  The Vision 2030 plan has a whole bunch of worthy stuff in the sections on Developing Skills, Strengthening Innovation and Internationalization: lots of good, small, practical items on which the sector will be happy to collaborate.  Build on this!  After the big own-goals of the first eighteen months, these baby-steps towards genuine partnership will be important.

But that still leaves you with two big decisions to make.  The first is on tuition.  Your cuts to institutions have been so significant that the money side of the equation does not work without significant fee increases.  The key is to strike a balance between preserving access to Albertans while at the same time giving institutions the ability to be entrepreneurial and raise needed funds.  That probably means a three-fold strategy.  For international students, it’s a clear case of “let ‘er rip”.  For domestic students in high-cost (e.g. medicine) and professional programs, you will want to give institutions more freedom to set fees while reassuring Albertans that fees won’t go stratospheric.  Tying fees to an external standard is one way to do this: for instance, you could set a maximum of whatever Ontario is charging minus 20%, or at 125% of the national average, or whatever.  Specifics don’t really matter here.  Pick a standard that is workable from both a financial and technical point of view and stick to it.

But those two decisions alone won’t raise the revenue needed to cover the cuts. There will need to be some movement on core undergraduate fees.  Obviously, this is politically sensitive because it will affect the largest number of students and families.  Don’t drag this out: make it one big increase and then it’s done.  Again, find a way to tie it to an independent standard.  Back in the Klein administration, Minister Jack Ady came up with a policy of keeping tuition fees to 30% of university income (I can’t remember if it was 30% of operating or 30% of total income).  You need something like that now.  If what you’re aiming for is a funding mix similar to British Columbia, where fees are 50% of total income but a major proportion of that income is international/professional, then what you will probably want to do is keep domestic fees to 20-25% of total income.  So, allow fees to rise to whatever that level is and then keep them nailed to that target.  It avoids you having to make this politically fraught decision over and over again.

But – and you can’t avoid this bit even though it’s going to be hell to explain to the Premier’s office and Treasury Board – these reforms can’t be achieved without a hell of a lot more money in student assistance.  Prior to 2010, Alberta had one of the most generous SFA systems in the country, but it was mostly wiped out by a deficit-fighting Stelmach government.  The result was a system that is low on need-based grants and huge on loans (because the parental contribution rules were all abolished, thus making loans essentially universal – a recipe for high student debt).  Alberta still has grants (e.g. the Rutherfords) but they are nearly all merit-based, and guess who gets those?  Not the financially marginal.  So, you’re going to need to dump a couple of hundred million in aid.  With luck, and the assistance of large federal grants, maybe you can come up with a free-tuition guarantee for the lowest-income Albertans.  Or at least a credible argument that the most vulnerable Albertans won’t be worse off after the tuition hike than before it.  This isn’t negotiable.  It simply must be done.

The other outstanding issue is governance.  For unaccountable reasons, you chose to raise the issue of joint boards for institutions.  This was unfathomable for all sorts of reasons; the whole reason you don’t have a single province-wide multi-campus University of Alberta is because the whole idea was found to be incompatible with local civic aspirations about 60 years ago.  I am pleased to see that in some of your recent remarks, you seem to have been pushing what seems to be the most minimalist version of a joint board (what Americans call a “co-ordinating board” rather than a “governing board”), one in which the principle of subsidiarity is maintained and the higher-level board is not much more than advisory.  Possibly you wanted something stronger to begin with, but seriously, this is the best you are going to get without raising an almighty stink which – given recent polls – the Premier could probably do without.  Smile, claim victory, and move on.

One last point, and that has to do with getting universities to focus more on the economy.  When I was last out your way, the anecdote that seemed to be making the rounds was about one of your two big universities and how the province’s group of fast-rising IT companies found its computer science program out of date and the faculty hard to approach and deal with.   Your response was to include some metrics on graduate pay in the new Performance-Based Funding system, in the hopes that it would get institutions to focus on getting more students into high-paying jobs in a shorter space of time (and that this, in turn, would also be good for the businesses that hire them).  

You have picked up on an important issue here, but almost certainly chosen the wrong tool to address it.  It’s not just that the PBF system you’ve chosen to emulate (Ontario’s) doesn’t actually apply the required financial pressure and even if it did, “starting graduate salaries” is a bad metric through which to exert pressure. This is because (a) the figure is more dependent on the state of the broad economy than it is on an institution’s efforts, and (b) it neglects the other more important ways in which institutions interact with the community and the economy.

Evaluating and improving the processes by which institutions engage with external partners is a much better and more direct measure.  This is a huge black hole in Alberta’s quality assurance process, which – like Ontario, but unlike most other jurisdictions on Earth – focuses solely on academic programs and not on the functioning of the larger university where all these programs are set.  Change this.  Expand the Campus Alberta Quality Council’s mandate, consult widely on good practice, codify the process elements, and start holding institutions accountable on these kinds of activities in exactly the way you hold them accountable for program quality.  It’s a more direct way to alter institutional practice than PBFs, and there is no need to set up additional infrastructure in order to make it work.

In any case, good luck.  In tough times, Alberta needs thriving colleges and universities more than ever.  Past missteps aside, you can still help them be so.