Pandemic delays new Alberta university funding model indefinitely

A funding model that will link Alberta public post-secondary funding to performance will be delayed for at least a year, the advanced education minister says.

The COVID-19 pandemic has introduced too much uncertainty around post-secondary enrolment for the coming academic year to immediately proceed with a new funding model, Minister Demitrios Nicolaides said in a Monday interview.

"We need to be flexible and give our institutions a degree of certainty as best as possible in these uncertain times," Nicolaides said.

He's still committed to the approach and wants it in place for the 2021-22 school year, he said.

Nicolaides also said a broad review of Alberta's post-secondary institutions will also begin soon. The province will soon issue a request for proposals for a contractor to study the sector.

"I think it's well overdue for us to really sit down as a sector and think about where we want to go," he said. "Once we do that, we'll be able to develop a roadmap to get us there and make sure all institutions are rolling in the same direction. And I'm absolutely confident we'll have a stronger system as a result."

He hopes that review will be done in time for the start of performance-based funding.

Adopting a performance-based funding model was a recommendation of a blue ribbon panel which last year reviewed Alberta's spending. That panel also said Alberta's post-secondary system lacked a co-ordinated direction — a finding that has prompted the systemic review.

Enrolment to be a target at all schools

Taking the lead from some European and American institutions, the government was to start a new funding model on April 1 that would tie 15 per cent of schools' public funding to their success at meeting targets the government wanted to see. By 2022-23, 40 per cent of public funding would be tied with their ability to meet those targets.

Alberta's 26 post-secondary institutions were still hammering out "investment management agreements" with the government that spelled out the targets for each school.

Although those agreements have yet to be released, Nicolaides said meeting enrolment goals is going to be a component of all agreements.

"It would be counterproductive to establish targets related to metrics that are quite up in the air at this point," Nicolaides said.

With in-person classes limited or unlikely at many institutions this fall, Nicolaides said he's heard some students are delaying their first year of college, technical programs or university. With travel restrictions in place around the world to prevent the spread of the coronavirus, schools that rely on large numbers of international students are also expecting their enrolment numbers to dip this fall.

Other targets such as the number of students enrolled in internships or co-operative programs and graduates' success at finding jobs in their field would also be affected by public health orders and Alberta's battered economy.

Nicolaides is also considering whether an administration-to-professor ratio should be a measure for institutions, as he pushes them to cut administration costs.

Government reducing funding to post-secondaries

Earlier this year, Nicolaides delayed the funding change by a couple of months, then moved the start date to July 1. Now he doesn't have a new due date for the funding agreements.

However, the province's 2020 budget was approved based on the assumption post-secondary funding would be tied to performance starting this year. Nicolaides wouldn't say on Monday how the policy change would immediately affect funding for post-secondary institutions.

The provincial government is also cutting its funding to post-secondary institutions by 20 per cent during the next three years, saying schools in other provinces run on far less public money per student. Those funding cuts are uneven, and the University of Alberta, for example, is grappling with how to absorb a 10 per cent public funding cut.

The government wants institutions to get a greater proportion of their funding from tuition and other sources, such as grants and fundraising.

The delay of performance-based funding comes as a relief to some student organizations.

Students had pushed for delay

Emmanauel Barker is the director of public relations and advocate for the Alberta Students' Executive Council, which represents student associations at 17 Alberta polytechnical schools, colleges and universities.

Performance-based funding should help improve the transparency and accountability of institutions, Barker said. While he supports the new approach, he has also been pushing for a delay of six months to a year to give the model a chance to succeed.

The organization is also asking schools to limit tuition hikes to cover inflation costs alone this coming school year. Institutions will be permitted to charge up to seven per cent more tuition on average starting next year. Barker said the government should delay that new cap for a year.

"Students are willing to pay their fair way in tuition," he said. "The ASEC members are very proud of that. The issue is, these are pretty unprecedented circumstances."

Rowan Ley is more skeptical of the future funding model. The chair of the Council of Alberta University Students and vice-president external of the University of Alberta Students' Union said he fears the approach will bring "cuts in disguise."

Institutions that struggle to meet prescribed goals will receive less funding to improve, then slip further away from those goals and enter a "death spiral," he said on Tuesday.

As a demographic bulge moves toward post-secondary student age and unemployed workers in a down economy look to retrain, Alberta will need more public investment and spaces in universities, Ley said.

"While we may disagree on the model itself, I think we can all agree universities need stability right now," he said. "We can deal with the long-term concerns about the performance-based funding model as it comes, but for the time being, we're worried about the immediate crisis universities are facing and the decision the minister is taking will ease the burden on universities on the coming year."

In response to questions, the Northern Alberta Institute of Technology issued a statement Thursday evening saying the school was already under financial pressures before March, when the pandemic hit.

"We are still working through the details of the minister's latest decision regarding investment management agreements, however any decision to provide increased financial flexibility during the pandemic is a welcome development," spokesperson Bryan Alary said in the statement.