Canada’s colleges and universities are in surprisingly good shape, according to a recent report by Alex Usher and Janet Balfour of Higher Education Strategy Associates, a Toronto firm specializing in policy analysis and evaluation for post-secondary institutions.
The report shows that enrolments are high, students are coping with the costs, and faculty salaries are at least keeping up with inflation.
This is encouraging news, but it’s at odds with the post-secondary culture I lived in for 40 years as a college instructor. Right from the start in the mid-1960s, we never had enough money, enough classrooms, enough resources for the tsunami of baby boomer students. And when that tsunami finally receded, we hunted for other demographics to serve — the boomers’ parents, immigrants and international students.
So demographics built our post-secondary system, and demographics could collapse it — or change it into something very different.
How it started: A postwar education boom
To get some perspective, let’s go back to the 1941 Canada census. The population was then about 11.5 million, with 7.5 million of “working age” — 14 to 64. Just three per cent of the population were post-secondary graduates, and only 30 per cent of Canadians had completed high school. Just about everyone, though, had at least got through elementary school.
Educated as Canadians were, and few as we were in the Second World War, we still did pretty well. Out of Canada’s 7.5 million working-age citizens, 1.1 million joined the Armed Forces. By the end of the war, Canada was running the world’s fourth-largest air force and third-largest navy.
When the war ended in 1945, returning soldiers and their families at home wanted something better after years of economic depression and war. What they really wanted was social mobility, a chance to qualify for better jobs and careers.
That meant improved education opportunities. By 1947, the veterans charter had helped almost 35,000 veterans to enrol in universities, and thousands more received free vocational training.
They were among the first to prosper in the 30-year boom that followed.
How it’s going: Demographics drive new changes
Eighty years later, the 2021 census reported that 57.5 per cent of working-age Canadians had a college or university credential, more than any other country in the G7.
Demographics drove the initial surge in public education to meet the needs of the baby boomers from 1946 to 1964, who then surged into a suddenly expanded post-secondary system of universities, community colleges, trade schools and, in Quebec, CEGEPs.
Sixty years after the end of the baby boom, demographics are now driving new changes in post-secondary that have enormous political and economic implications — not all of them good.
The latest report by Higher Education Strategy Associates hints at some of those implications. “The State of Postsecondary Education in Canada 2023” offers an impressive panoramic view of our colleges and universities. They have helped to drive our economy, and they have become a key part of it.
“Between 1955 and 1970,” authors Usher and Balfour write, “post-secondary institutions quintupled in size as a percentage of the economy, from about 0.5 per cent of GDP to 2.5 per cent.... Public expenditures on post-secondary education — again, almost entirely universities — reached 1.9 per cent of GDP.”
That’s almost as much as we’re supposed to be spending now on national defence.
A dwindling contribution from governments
Federal funding for post-secondary education started to drop in the 1990s. According to the Canadian Union of Public Employees, the federal government’s cash transfer for post-secondary education was equivalent to 0.41 per cent of the GDP in 1992-93. This has decreased sharply in recent years. “In 2014-15, it was only 0.20 per cent,” the CUPE authors write. “That is less than half, compared to the size of our economy!”
Provincial funding has fallen as well. The Canadian Association of University Teachers estimates that in 2019-20, Newfoundland and Labrador was spending 1.4 per cent of its GDP on post-secondary education, while Alberta and B.C. spent 0.7 per cent and Ontario just 0.6 per cent.
Public funding in general has weakened, but post-secondary revenues have risen. Usher and Balfour report that between 2001 and 2021, “institutional income rose by 77 per cent in real terms,” to a total of $62.4 billion.
But governments’ share of support has stagnated since the 2008 financial crisis. Post-secondary institutions have relied on their endowments and on higher tuition fees for students — especially for international students, who pay the whole cost of their tuition and other fees, often while holding down jobs.
These resources have not been reliable. Usher and Balfour note that endowment revenue jumped in 2016-17, “a particularly good year for equities,” but collapsed in March 2020 when the pandemic hobbled the equity market.
Post-secondary institutions lost billions more from these sources in 2021, aggravated by inflation.
Well funded, but semi-privatized
Higher tuition, especially from international students, has become increasingly critical to post-secondary funding. As a result, say Usher and Balfour, “Canada’s higher education system is among the world’s best funded. In 2016, public and private expenditures on tertiary institutions amounted to 2.2 per cent of gross domestic product,” almost as high as in the United States and nearly twice as high as in Germany.
But the key phrase is “private expenditures.” Unlike in most western European countries, post-secondary education in Canada and other anglophone countries has become semi-privatized: Usher and Balfour describe it as “publicly aided rather than publicly financed.”
As high as it is, tuition is balanced by student aid — loans and grants — at three times the level available in the 1990s. “Total non-repayable aid was approximately $12-13 billion,” Usher and Balfour write. “This suggests that Canada has net-negative tuition fees on average.”
Encouragingly, the employment rate for any Canadian who’s graduated from trade school, college or university is about 90 per cent — eventually.
The class of 2008 and the class of 2020 both took longer than usual to find work. That work may be in the United States, where salaries for graduates with advanced degrees are well over $200,000, compared with about $175,000 in Canada.
The role of mature students, and what their presence meant
This is all very encouraging, but post-secondary education has weaknesses as well as strengths. Colleges and universities usually deal with students between 18 and 30, but that cohort shrank beginning in the early 1980s as the last baby boomers left high school.
Almost simultaneously, B.C. and the rest of Canada suffered the most serious recession since the 1930s. According to a 1993 report in the journal BC Studies, it lasted from 1981 to 1986. Unemployment rose from 6.7 per cent in 1981 to 14.7 per cent in 1984. Homeowners and other borrowers were facing interest rates that peaked in August 1981 at 22.75 per cent. The Social Credit government of Bill Bennett imposed a “restraint” budget that cut most public services including health, police and firefighting, and education. We didn’t know it yet, but neoliberal ideology was taking over the North American economy.
As a college teacher in the early 1980s, I saw a sharp increase in “mature” students in my classes. Many were middle-aged parents, usually women, who were looking to acquire professional skills to help supplement the family income. Dad, whether he was a worker or small-businessman, just couldn’t earn enough by himself anymore to cover the mortgage and living costs, much less put his late baby boomer kids through college or university. The age of the single-income family was over, and the single-parent family was henceforth almost always poor.
Mature students were a godsend to colleges and universities imbued with a culture of endless growth but now facing serious spending cuts. Mature students filled a lot of seats, and they were highly motivated to learn.
But they weren’t enough. As provincial and federal funding dried up in the restraint years, post-secondary institutions scrambled to sustain their growth with new programs that would attract new students — and higher tuition fees. Sometimes those students already had bachelor’s or master’s degrees but wanted some kind of specialized training in business or computers. We were happy to provide them.
The rise and role of international students
When I returned from a brief teaching stint in China in 1984, I bent the ears of my colleagues on how we should be teaching Chinese students who would return home and then provide Canadian firms with easy access to the most rapidly growing economy on the planet.
It didn’t work out quite that way, but the growing prosperity of countries like China, South Korea and Japan made it possible for families to send their kids overseas for prestigious degrees in North America, the United Kingdom and Australia. They began to turn up on Canadian campuses, paying the full cost of their tuition.
International students were few in number in the late 1980s and early 1990s, but they soon became a core presence across post-secondary schools. The revenue they brought in helped pay for programs for Canadian students that government funding could not provide.
Canadian colleges and universities now required active offices to serve international students and to recruit more. At education fairs across Asia, Canadian deans competed with their colleagues to bring in more students.
By 2020, international students made up 17 per cent of Canada’s student population but contributed 43.5 per cent of post-secondary tuition fees.
The University of Toronto has 25,000 international students, whose tuition provides a solid $1 billion towards the university’s $3.12-billion budget.
At the end of 2023, according to a Policy Options report, Canada had over one million international students at all levels. (International students who graduate from a Canadian high school can usually pay the same post-secondary tuition as Canadian residents and citizens.) This was an increase of 29 per cent from 2022, and over 200 per cent more than in 2013. Twenty per cent of those students were in B.C.
Forty-one per cent of all international students in Canada are from India, numbering almost 320,000 in 2023. Despite the hundreds of thousands of international students in Canada from India, a widely felt lack of infrastructural supports for mental health, housing and basic safety means that the percentage may fall in coming years.
The federal government has capped student visas for undergraduates, and all students must prove they have at least $20,635 to support themselves in addition to paying for their tuition.
Media in India are reporting such facts to their readers, and the recent political flare-up over the murder of Hardeep Singh Nijjar is only making matters worse by attacks on Canada. For example, the Hindustan Times recently ran a scare headline suggesting Justin Trudeau would “target Hindus” in Canada. The report implied that Hindus (including students) would be unsafe because the government was supporting Sikh separatists like Nijjar.
If students from India choose to attend school in Australia or the United States instead of Canada, Canadian colleges and universities will face a serious financial crisis. Laurentian University had to seek creditor protection in 2021.
Many other Canadian schools are coping with the financial aftershocks of the pandemic, declining investment revenues and, in the case of Simon Fraser University, “softening” international enrolments.
Losing international students has implications for more than a few cash-strapped schools. According to the Canadian Bureau for International Education, 70 per cent of international students plan to apply for a postgraduate work permit, and 57 per cent plan to apply for permanent residence in Canada. (That’s a key advantage of international students: so many stick around to become prosperous taxpaying citizens.)
Canadian-born students, especially gen Z (born 1997-2012) and gen alpha (born 2013 to the present) simply aren’t numerous enough to support themselves, plus their own children, plus an estimated 10.4 million seniors by 2037.
Since at least the Great Recession of 2008, our federal and provincial governments have failed to support Canadian-born post-secondary students and have similarly failed to support international students.
An aging professorate
Report authors Usher and Balfour note that post-secondary faculty are aging just like the larger population: “Whereas just 30 professors (less than one per cent) of all academic staff were over 65 in 2000, by 2021 that figure had risen to over 5,000 (12 per cent). Over a quarter of Canadian academic staff are over the age of 60, while only 15 per cent are under the age of 40.”
They add that while faculty salaries have increased 22 per cent since 2001-02, “nearly all of that growth occurred prior to 2009; since then average salary growth has largely been in line with inflation.” Faculty salaries are weighted in favour of the oldest and best paid, who have little incentive to retire.
This poses a long-term threat to Canadian universities because frustrated young academics will seek better careers outside the country, or give up on academic careers altogether.
And if enough international students stay away from Canada, we’ll feel it in the workplace as well as on campus: programs (and whole universities) will simply fold, and their faculty and staff will have to find work in a shrinking academic market. Graduate programs, and industries that rely on international graduates, will have to recruit their new hires some other way.
One way or another, we will have to find and train people who can support themselves, their families and the growing number of seniors in Canada. Statistics Canada estimates that by 2050 we will have 11 million to 13 million Canadians over age 65, out of a total population of 40 million to 55 million. Thousands of those seniors, mostly women, will be centenarians, born in the 1940s as part of the early baby boom.
Keeping seniors (and all Canadians) safe and healthy in the 2050s will require a demographic of young, highly skilled and productive post-secondary graduates. They will be expensive to train and to employ, but trying to do without them will cost far more.
It remains to be seen how our economy and post-secondary system could adapt to support such a population, especially in a century of severe climate change. But if it does not, very few Canadians in 2050 will live to see 80, let alone 100.
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