Why Canada Needs Great Universities
December 15, 2006
An Address to the Women’s Canadian Club of Toronto
INTRODUCTION
Thank you for inviting me to spend some time with you this afternoon. The Canadian Clubs across this great country are very important institutions, and I feel privileged to join this meeting of the Women’s Canadian Club of Toronto.
I am sometimes asked what it’s like to be president of the country’s largest university. Annual revenues from all sources of $1.8B…Over 11,000 employees, and 22 unions… Three vibrant campuses…More than 700 acres of land in the Greater Toronto Region, 25 percent of it in Toronto’s downtown core… Scores of buildings, some spectacularly new, some wonderfully old…And most important of all, more than 65,000 students in every imaginable discipline…
On a bad day, it feels like herding cats. On a really bad day, it feels like herding cheetahs!
But here’s why it’s so worthwhile. Great universities are places where brilliant young women and men come to us from myriad backgrounds, and they transform before our eyes from teenagers still finding their way in the world to adults ready to make their mark on the planet.
Many in the audience will have shared the joy of that experience. Think back: When you first arrived on a university campus, you were entering a very new world with big challenges. University was where many of you came to appreciate the value of critical thinking and the power of ideas. You may have found and followed the vocational pathways that defined your professional lives and careers. Certainly few periods in life would have offered you more potential for personal growth.
For those from small towns like me, it was a chance to meet people from every cultural and religious background. I can certainly remember staying up all night in intense discussions aimed at solving the world’s problems. I also remember a few less pleasant all-nighters studying for mid-terms and finals!
And University was and remains a great chance for young people to learn about navigating complex social interactions. One personal example: After my college at U of T decided to make all residences mixed gender spaces, there were some very interesting negotiations about the use of washrooms!
With graduation, we took away with us lessons, memories, and not infrequently our life partners. While much of our best learning was done outside the classroom, we also were inspired and stretched by great professors. These teachers are still to be found in every great university. They are the pedagogical magicians, the educational electricians who have an ability to re-arrange our mental circuitry permanently.
I suspect that all here who have been fortunate enough to share a university experience have benefited enormously from it, and so has our country.
That brings me to the issues that constitute the core of my remarks today: Some of the challenges facing our country, some of the challenges facing our universities today, and some of the ways they can be jointly addressed.
THE GLOBAL KNOWLEDGE ECONOMY
We are fortunate to live in a remarkably prosperous nation, with extraordinary natural resources, and there is lots of good news. We have the best national balance-sheet among the G8 family of industrialized countries. Our social safety net is one of the most comprehensive in the world. Two weeks ago, the University of Toronto’s renowned Institute for Competitiveness and Prosperity offered a positive appraisal of the global standing of Canadian industry. We have indeed seen Inco, Falconbridge and other Canadian companies disappear from the world stage. But according to the Institute, Canada’s world-class companies are actually larger and substantially more numerous than 20 years ago.
We are also a remarkably tolerant and diverse society. Did you know that almost 44% of Torontonians were born outside of Canada? That’s more than Miami at 40%, or Sydney, Australia at 31%. And it’s much higher than New York, Los Angeles, or Montreal.
Lest we become too smug, however, consider the following.
Do you remember when Prime Minister Chrétien used to boast that the United Nation’s Human Development Index rated Canada as the world’s best place to live? We don’t hear much about this index from politicians lately, because Canada has been slipping. We are currently in sixth place behind Norway, Iceland, Australia, Ireland and Sweden.
The Commonwealth Fund is a very reputable US healthcare think-tank. Its survey data suggest year after year, that Canada’s healthcare system is also slipping. Most recently, the Commonwealth Fund compared primary care in Canada to six other nations. While 98% of family doctors in the Netherlands use electronic health records, Canada has the weakest records infrastructure with only 23% uptake of electronic record-keeping among GPs. Only 47% of Canadian primary care doctors had after-hours arrangements — dramatically lower than in the Netherlands, New Zealand, the UK, or Germany.
The “Global Competitiveness Report 2006-2007” was released in September by the World Economic Forum. In it, Canada fell in the rankings from our 2005-2006 results. On the “Business Competitiveness Index,” Canada went from 14th to 15th. On the “Global Competitiveness Index,” Canada went from 13th to 16th.
What about R&D investment? That’s an obvious priority if we’re to keep up with other nations and take advantage of our highly-skilled workforce. Unfortunately, our per-capita private sector R&D investment is about 60% lower than the G8 leader, Japan. Examining gross R&D spending in the OECD, we rank 15th. Even Norway and Australia have more researchers and R&D personnel on a population-adjusted basis than we do.
The competition today and in the future is even more daunting when we consider China and India. R&D spending in China has been growing at an annual rate of about 17%, far higher than the 4% to 5% annual growth rates reported for the US, Japan and the European Union over the past dozen years. More than 5 million new students enrolled in Chinese higher education institutions last year, 4.7 times more than in 1998. In 2004, India alone produced 200,000 engineering graduates, and enrolments in Indian universities are also rising steadily.
THE CHANGING LANDSCAPE OF ONTARIO UNIVERSITIES
Those numbers from India and China illustrate an obvious fact. Other nations have figured out that the most important asset they have in the new global economy is people — creative or innovative people, who can challenge conventional wisdom, who can generate or fill new and exciting jobs. So, let’s examine Canada’s recent record in post-secondary education. As with our overall economic performance, there is good news and bad news.
Good news: Enrolments in colleges and universities have never been higher. Graduate enrolments, in particular, are growing fast, and they correlate closely with productivity and prosperity. The Ontario Government in its ‘Reaching Higher’ plan has committed almost $6.2B over 5 years in new student aid, infrastructure support, grants to cover growth in the numbers of students, and funding to enhance the quality of higher education. Job opportunities for those who attend universities are expanding, and higher participation rates in post-secondary education will help Canada compete in the global knowledge economy.
Bad News: In Ontario, the provincial government anticipated growth of about 60,000 full-time equivalent students in universities between 2002-03 and 2006-07. The actual growth has been 74,000. By 2009-10, it appears that the growth in university enrolments will be 46,000 more than budgeted in the Reaching Higher plan. There is according a risk that quality-oriented funding will now be redirected to cover the growth in student demand.
Here’s another ‘good news-bad news’ pairing.
Good news: Canadian universities are competitive in several dimensions with their better-funded American counterparts. Our institutions are remarkably consistent. They run a gamut from reasonably good to truly excellent. We may not have elite undergraduate colleges like Amherst, Swarthmore, or Williams. But we have fine undergraduate-oriented universities from coast to coast for those who want a more personalized environment.
Similarly, our large research-intensive universities may not come close to Harvard or Stanford in numbers of Nobel laureates. But the research productivity of institutions such as McGill, UBC, and the University of Alberta, is very competitive with excellent universities of similar size all over the world.
The University of Toronto, in particular, can legitimately claim some prominence on the global landscape. In total publication output in computerized indices compiled by Thomson ISI, U of T produces more scholarly work than any other public university in the world. Add in the private universities, and only Harvard publishes more.
I can make a reasonable case that the University of Toronto is among the world leaders in disciplines ranging from medieval studies to neurosurgery. And that’s not only the biased view of a university president.
In October’s Globe and Mail Report Card on Canadian Universities, Alex Usher of the Educational Policy Institute commented on world-class universities and assessed five Canadian universities as having a genuine claim to being world-class in more than one broad field of study. Among those five, Usher said, the University of Toronto is the only institution which is genuinely world-class across a wide range of fields.
But let’s turn back, one last time, to the bad news that accompanies these positive aspects of Canadian university performance…
Bad news: I am profoundly concerned about the sustainability of our research excellence and the quality of our undergraduate student experience. These concerns are widely shared among presidents of research-intensive universities in every province except, perhaps, Alberta. Nowhere are they more acute than in Ontario.
At the beginning of the 1980s, Canadian universities actually received $2,000 more per student from governments than their US public counterparts. Today US governments invest $5,000 more per student than Canadian governments. Add in increased tuition flexibility in the USA and the gap widens further.
In 1991-92, 70% of all revenues coming to the University of Toronto were per-student grants from the province of Ontario. In 2005-06, that percentage had fallen to 44%. We now rely much more heavily on tuitions, philanthropy and other revenue sources.
Over those same fifteen years, per capita spending on universities in Ontario has consistently been dead last among provinces. In contrast, Ontario’s spending on elementary and secondary schools, and spending on health care is right at the national average of all the provinces. As I noted earlier, Mr McGuinty’s Government has taken some important first steps to close that gap with its Reaching Higher plan — but the gap, as you can imagine, has cumulated over many years and it remains substantial.
These funding constraints are taking a toll. The experience that so many in the audience enjoyed as undergraduates at Ontario universities has already changed.
On average, Ontario universities have higher student-to-faculty ratios than institutions in other provinces, bigger class sizes and reduced student services.
Students are making their unhappiness clear. In 2006, all Ontario universities participated in the National Survey of Student Engagement – a survey also used at many American universities. When we compare Ontario universities to their US peers, there are unsettling differences. The intensity of student-faculty interactions at Ontario universities is at least 25% below that seen at US peer universities. And the degree of active and collaborative learning at Ontario institutions is lagging at least 15% below that of the US peer group.
Perhaps these effects are less dramatic compared to, say, resource shortfalls in health care. People die if they wait too long for coronary surgery. No one will die waiting to see a professor because a class is too big. But I would suggest that the long-term impact of these circumstances on the imaginations and motivations of the next generation should worry all of us.
WHAT IS TO BE DONE?
Let’s agree that Canada needs great universities. And let’s assume that we need a higher education system that can leverage our greatest national asset — all the bright young minds of the next generation. Given the danger signals I’ve outlined, what is to be done?
First, lest you think that any new investments by governments will be outrageously expensive and somehow drive taxes dramatically higher, here is a useful comparator.
Last year, spending on health care rose by about $3B in Ontario. That increase alone is more than equal to the total spending of the province on core operating grants to universities. In fact, Ontario spends about the same on the Drug Benefit plan for senior citizens and recipients of social assistance as it spends in per-student grants to all the province’s universities put together.
Not only are the solutions affordable, some of them are not very complicated. For the federal government, a couple of simple steps make immediate sense.
First, research carries direct and indirect costs. Grants traditionally covered only the direct costs, and universities were left to pay for heating and lighting laboratories and research spaces, for cleaning and accounting, and for all the other indirect costs associated with research. Today, for every dollar of direct research funding that the British government provides to universities, it adds 46 to 48 cents for those indirect costs. Science grants from American federal agencies cover even more – as much as 80 cents if the indirect costs can be documented.
The federal grants in Canada, however, pay on average 26 cents on the dollar. What that means is that each research grant we won through the hard work and talent of our faculty, staff and graduate students, actually compromises our educational operating budgets.
It gets a little worse. In Canada, unlike any other industrialized nation, federal indirect cost coverage occurs on a sliding scale. The bigger your research operation, the lower the coverage…It’s one of those understandable all-Canadian compromises — designed to keep everyone happy, but inadvertently penalizing excellence.
Let me contrast this way of thinking with what Germany has recently decided to do. In October, the German Government designated three universities from among its 102 universities as elite schools that will qualify for more than $100 million each over the next five years in additional funding…A very different mind-set, and one that I believe will pay huge dividends in the long haul.
That said, I am pleased to report that the federal government has recently been moving to bring the floor for all institutions up to 40 cents on the dollar. That position has been officially endorsed by the House of Commons Standing Committee on Finance only in the last few days. Implementing fair coverage of the indirect costs of federal research grants would in itself do a huge amount to help all of Canada’s research-intensive universities.
In the interests of brevity, let me mention one other area where federal action could be affordable, straightforward, and effective. Speaking to the Canadian Club last month, I urged the federal government to support a major suite of graduate scholarships that would help the next generation of young Canadians to pursue advanced degrees. That action can be a visionary investment in access and quality – if we are willing to allocate those scholarships on the basis of proven performance – the academic performance of the student, and the research performance of her or his graduate supervisor.
I also suggested then that the federal government make a parallel investment in internationalization. As exemplified by our vibrant multicultural city, Canada has a wonderful comparative advantage in its ability to embrace talented and energetic immigrants from every conceivable corner of the planet. With apologies for self-plagiarism, let me repeat unabashedly what I said three weeks ago in this venue: “Why not make it easier for the best and brightest from around the world to come here? If they stay, we’ve got outstanding new citizens. And if, sooner or later, they return to the country from whence they originated, we have life-long friends – individuals likely to take leadership roles in their countries, potential trading partners or political allies.”
Let me turn now, however, to the more complicated solutions, ones that relate largely to the role of provincial governments.
Just a few days ago, the Canadian Council on Learning released a very important report on Canadian Post-secondary Education – entitled suggestively, “A Positive Record – An Uncertain Future”. I commend that report to you because it highlights clearly that Canadian governments do not have a coherent system of higher education.
For starters, we need to integrate our thinking about undergraduate programs more fully with the thinking about secondary schools in this province. Ever since the abolition of standardized grade 13 testing in Ontario, it’s been hard for us to make sense of high school marks. Recently, with the elimination of grade 13 altogether, we’ve gone through a period of rapid adjustment. One example: We’re still trying to sort out where elementary calculus should be taught.
This systems-oriented thinking has to be extended not just across high schools and post-secondary institutions, but across colleges and universities. I flagged earlier that participation rates in higher education have risen sharply. What’s the ceiling? Should 60% or 85% of all high school graduates go to a college or university? How many should enter skilled trades?
We aren’t clear even on the proportions for colleges versus universities. Canada invests more in community colleges than any OECD country. That investment was a boon for this country in economic terms, but in recent years students are voting with their feet and choosing universities over colleges of applied arts and technology. Should some of the colleges convert to degree-granting institutions? If so, how many and how?
Within the university sector itself, we also need greater clarity about who is doing what. Where everyone tries to do the same things with limited resources, everyone does worse. We need a rationally differentiated system of universities and colleges – one that can better accommodate the changing demographics of higher education. If we build a more rational system — one in which different institutions are valued for their different missions — then every institution will be better off, as will our students and their families.
That could well mean that undergraduate enrolments at large research-intensive universities in Canada, and certainly in Ontario, are capped or even reduced. There tends to be a view that one baccalaureate is pretty much the same as others. I don’t believe that’s true or that it’s the best way forward. The experience of undergraduate education in a big research-intensive institution is different from a small undergraduate-oriented university. Why not reinforce and clarify that differentiation? In the process, we could maximize the efficiency of our post-secondary system and the choices that our students have.
In my view, part of differentiation means allowance for responsible self-regulation of tuitions. What tuition caps have done is turn Canadian universities into volume-driven organizations. There is virtually no reward for higher quality. Because tuitions are so tightly regulated, and government funding is also capped, there is little flexibility, and limited capacity for dynamic development. Part of building a rational system is allowing for some gentle competition among institutions in the same market segment. That means allowing some institutions to increase fees modestly in hopes of enhancing quality and still attracting great students, while others flat-line tuitions and seek top-flight students by offering competitive quality at a lower price.
I know, by the way, that in making those comments, I am tackling a dominant shibboleth of Canadian student culture. That shibboleth runs as follows: Higher tuitions always mean reduced access for students from lower income households. That argument sounds idealistic, but it’s actually a little bit self-interested for middle-income students to take such a position. In fact, at the University of Toronto, we have used tuition flexibility in meaningful measure not just to keep moving forward, but to ensure that we get the best and brightest on board, regardless of their economic circumstances. How is that so? A substantial percentage of new tuition revenue is used to generate pools of bursary funds to offset tuition charges for low-income students who need financial assistance. We spend over $30M a year on needs-based bursaries. We guarantee that no student admitted to our university will have to leave because of financial shortfalls. And when we seek donations, we place special emphasis on bursaries and scholarships to support access and offset tuition costs. A simple example: during the University’s multi-year campaign that ended on December 31, 2003, we raised more than $500 million for student aid through direct gifts and leverage from government matching programs. And this system works. In recent years between forty and fifty percent of our undergraduates report a total family income of less than $50,000 per annum.
Let me also emphasize that I am not talking about deregulation and some free market pricing frenzy. There must be responsible self-regulation of tuitions, with ongoing reforms to student aid and stringent institutional performance agreements that demand and measure maintenance of access. Not every university will be able to meet those stringent requirements for maintenance of access. But if they can find and measurably sustain a balance – the balance across dimensions of quality, accessibility and affordability – I believe universities should be granted greater autonomy to chart their own futures and cover their own unique institutional costs.
CONCLUSIONS
Let me conclude more or less where I started. For many Canadians, including many in this room, a university education has been a gateway to personal growth and a lifetime of opportunities. Those of us who are privileged to work at universities take great pride in the accomplishments of the faculty, staff and students who constitute our immediate community. We feel very good about the fact that, in myriad walks of life, across the humanities, the social sciences, and the sciences, university professors have made discoveries, created knowledge and developed ideas that have changed Canada and shaped the modern world. But we also know that the biggest contribution that our professors can make rests in helping to educate the young people and adult learners who are today’s students. That is why we view all our alumni – not just the prize-winning professors or a few famous graduates – as the living legacy of our institutions.
And our institutions – Canada’s universities – are still doing pretty well, all things considered. So, fortunately, is Canada. But last year, the prestigious Economist magazine asked a very pointed question: It praised Canada as a success story. And it said: “Canada can always be relied on to do well; can it be relied on to do better? As befits the people who rejected the American Revolution, Canadians distrust big ideas, preferring to put their faith in a proven ability to muddle through. The price of all this is a certain complacency. And the price of complacency is a certain lack of ambition.”
Ladies and gentlemen, the young people who come to the University of Toronto today do not lack ambition and they are not complacent. But they will face a future with serious challenges, here at home and abroad. What comes after the oil sands? How will we make the transition from a petrochemical economy to new energy technologies? Can global warming be slowed? How can we arrest ecological degradation and the loss of so many animal species in many different countries? What new infectious diseases like SARS will emerge and how will they be contained? For that matter, how can we stop the toll already being exacted globally by HIV and the AIDS epidemic? Political and ethno-cultural strife continue world-wide, and astonishingly, military action continues to be a key element in resolving our differences. Can we not find a better way to live together on this shrinking planet?
These challenges, among many, are part of the legacy we are leaving the next generation. Fortunately, their inheritance from us also has some positive elements. As part of that positive inheritance, I believe we have an obligation to pass along a stronger, more sustainable, and more rational system of higher education. In such a system, I hope that great universities will be even better positioned to shape the great minds of the future. And if we are successful, the students of today and tomorrow will make their children’s world a kinder, gentler, healthier, greener and altogether better place.
Thank you for your attention, season’s greetings, and best wishes to you and your loved ones for a wonderful new year.