PSE needs total overhaul to control costs

Revenues are declining and students are paying for it unless administrations start taking necessary initiative

Deloitte Canada issued a damning report about the financial state of Canada’s universities on Tuesday.

Pressed by declining government revenue, declining private donations, rising pressure on students to make up the difference, universities across Canada are being forced to take a hard look at their accounts.

According to the report, the top 10 financial challenges universities will face in the coming year are:

1. Over budget and under-funded: As funding declines, cost management is key
2. The rivalry intensifies: Competition to attract the best students heats up
3. Setting priorities: The danger of making decisions in the dark
4. Moving at the speed of cyberspace: Technology upgrades are needed across the board
5. Rethinking infrastructure: A renewed focus on asset optimization
6. Linking programs to outcomes: Where training and market demand intersect
7. The best and the brightest: Attracting and retaining talented faculty
8. A sustainable future: Enhancing environmental performance
9. Education for all: Tackling diversity, accessibility and affordability
10. Regulations and reporting: New responsibilities require better disclosure

The problem is that governments and private donors are free to reduce their contributions to universities when times are tough. Students are not. When income declines and — as the report notes — costs of program delivery climb, students are on the hook for the remainder.

What universities need to do is start taking a stern look at their expenses, figuring out who is paying for them and cut where necessary. No longer can schools be all things to all people. Streamlining of core programs, focusing efforts — even at the cost of the peripheral programs — is going to become increasingly necessary.

“Despite the merits of a world-class liberal arts education, there is a danger in supporting a curriculum that is too theoretical. Today’s fast-paced world needs construction crews, hospital workers and people to build cellphone towers. Institutions must respond to these realities by ensuring their educational agendas are in sync with forecast marketplace demands,” Arsh Maini, a senior consultant with Deloitte India wrote in the report.

While there will undoubtedly be a massive outcry as universities keen on research and engineering cut their arts programs, other schools are likely to cut expensive science and engineering programs in favour of robust arts programs. This is a good thing, a healthy thing, as each school becomes the best at what they do.

This streamlining — a complete overhaul of how higher education is financed in Canada — is necessary to the continued survival of our diverse education system.

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.