Here’s a puzzle:  In many provinces, the law allows for the establishment of new, private, degree-granting institutions.  So why don’t they do it?

Why don’t disaffected lawyers set up a cut-price law school in central Toronto to compete against the expensive products offered by U of T and Osgoode?   Why doesn’t a brand-name private secondary institution, like the Bishop Strachan School, create its own liberal arts college, a la Bryn Mawr or Wellesley?

In Canada, private higher education is often thought of as “unnatural”, even though it’s a major feature of many higher education systems around the world.  For instance, countries like Hungary, Poland, and Romania all have non-trivial private university sectors.  In all of them, new universities sprung up as a result of de-regulation following the end of the socialist period, and were able – in law and the social sciences, at least – to compete for students with more established universities, because the latter’s previous Leninist associations left them discredited.

Yet of these countries, only Poland has anything like the dependence on non-state funding that Canada has.  Over there, where private funding is limited mostly to private universities (a majority of students in all countries attend tuition-free), we look like the odd-system-out, because our public institutions rake in so much private funding through student fees and other private contributions.  From their perspective, our system is much more “privatized” than theirs.

Intriguingly, it’s exactly that tolerance of private funding that has kept public institutions in a monopoly position in Canada.  Our use of both private and public funding sources essentially gives us the best-funded system of public higher education in the entire world, a system capable of offering a wide range of high quality programs.    And this significantly limits the appeal of private higher education.

Given a choice, students will always prefer a name-brand public institution over a start-up private institution, provided they are offering the same product.  Private higher education thus tends to flourish only when public institutions aren’t funded well enough to meet demand (e.g. Korea, Japan), or when the public “brand” has been eroded (e.g. East-central Europe).

The likeliest way for a private system of higher education to evolve in Canada is if governments were to restrict funding from both private and public sources to the point where the range of quality programming offered was curtailed.  Only when public institutions can’t cover all the market opportunities will private institutions be able to compete for students, and hence become viable.

And yes, there is one province where that’s on the verge of happening.  It’s Quebec.  If I were betting on where private institutions were likeliest to emerge, that’s where my money would be.