The Cost and Value of Universities

In 2018 Nova Scotian taxpayers will spend more than $400 million dollars in support of universities, and another $26 million in student scholarships and bursaries.

The students themselves spend more than that amount on their share of tuition and fees. In addition, most of them study away from home and pay for food and accommodations in the city or town where they study.

Are taxpayers and students getting good value for their money?

1. In the school year just ended, the universities enrolled more than 37,000 full-time and more than 7,000 part-time students. The number of students graduating from Nova Scotian high schools goes down each year, so it is a credit to the universities that enrolments have remained close to even with the preceding year.
2. Those students often receive an education which equips them to be valuable economic and social contributors—doctors and other health care professionals, information technology specialists, visual and performing artists, lawyers, architects and engineers, entrepreneurs, managers, scientists, and many more.
3. About 8,000 of those were full-time Visa Students, up 4.3% from the previous year. The average foreign student spends $36,000 on tuition and fees, room and board, and incidentals, for a total of almost $300 million on local goods and services.

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   These students are fully covering the cost of their education and making important contributions to the communities where they study. This is especially important to Halifax and Sydney.

   Some of our universities would have no viable future without foreign students. Saint Mary’s, which has 30% of its students from outside Canada, receives less than 28% of its funding from the province.

4. The foreign students add diversity to our communities and are excellent candidates to provide a needed boost to our immigration numbers. Surveys suggest that three quarters of them would like to stay in Nova Scotia if they saw the right opportunity.
5. The universities, particularly Dalhousie, bring in hundreds of millions in external research money from both government and private sources. The most recent example is the Ocean Supercluster of Atlantic universities and private companies that will add $150-$250 million of federal money to the $125 million of private commitment to research funding, again to be largely spent on local goods and services.
6. Universities employ a lot of people. Dalhousie alone has more employees than Michelin in Nova Scotia: 1,200 full time faculty, close to 600 part-time faculty, and 2,000 other staff.
7. The university staffs and students are both creators and patrons of the arts. Symphony Nova Scotia would find it harder to attract talented musicians if there were no opportunity to supplement their income with part-time university work.

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   The universities provide valuable research support, and well-educated students, to many provincial industries such as fisheries and aquaculture, almost anything else involving the oceans, the wine industry, and information management.

Since 2015, the universities have been required to reach outcome agreements with the governments. These address financial stability, efficiency, student attraction and retention, student learning experience, academic quality, and student safety, as well as areas particular to the focus of each institution.

Some university presidents were initially skeptical about the process. Because the outcomes are expressed at a high level, they now view it as not burdensome, and potentially useful in promoting collaborations between institutions.

All that being said, the universities will be challenged to succeed in the future:

1. The present funding formula calls for funding increases of 1% per year. That is less than inflation. The difference must be made up by tuition increases which typically have been amounting to 3% per year. That is more than inflation and risks making tuitions uncompetitive, and harder to afford for Nova Scotian high school graduates.
2. The typical teaching load is five half credits spread over two of the three annual academic terms. Tenured faculty are expected to spend the other half of their time on research.

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   There are many research outcomes that are useful to the province’s economy or social framework. Those are the ones that are touted by the universities.

   Many researchers produce papers which may be useful in general (think, say, about advanced mathematics, particle physics, English literature, Classics) but have no particular relevance to Nova Scotia.

   At Dalhousie, which has the lion’s share of external funding for research, less than half the faculty is receiving funding from outside agencies.

3. To deal with a tight funding environment, a university needs to be able to adjust staffing levels to enrollment, not only in total, but by faculty. If the university is maintaining enrolment by offsetting persistent drops in arts students with increases in business and computer science, it needs to be able to gradually adjust faculty staffing accordingly.

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   The typical collective agreement makes it extremely difficult to do so. When St. Mary’s closed its Faculty of Education, it had to pay one if its professors (who was not wanted by any of the universities continuing to have faculties of education) for five entirely unproductive years.
   The same obstacles make it difficult for universities to dismiss faculty who are neither productive researchers nor competent teachers.

In a world where the best jobs are in the knowledge economy, our universities are an enormous asset. We risk seeing that asset deteriorate if the universities are unable to become more efficient, and if growth in government support for those that do fails to keep up with inflation.