TORONTO, January 9, 2024 – Today, Steve Orsini, President and CEO, Council of Ontario Universities presented at the Standing Committee on Finance and Economic Affairs.
He spoke about how universities are supporting student success and economic growth in Ontario, why students and universities are at risk due to current provincial policies, and calls on the government to immediately implement the Blue-Ribbon Panel’s recommendations to urgently address the financial sustainability of the university sector.
Below are his opening remarks:
Delivering on Student Success and Economic Growth
Thank you for the opportunity to appear before you today.
I would like to start by highlighting how universities are:
- supporting student success,
- developing the talent the economy needs, and
- fostering economic development in communities throughout the province.
Supporting Student Success and Economic Growth
Universities are responding to labour market demand to ensure Ontario has the talent it needs to be competitive. For example:
- Since 2010, universities have increased STEM enrolment by more than 68% and health care enrolment by 38%.
- In 2021 alone, universities graduated more than 50,000 workers in STEM and health care.
Universities are also graduating students with the knowledge and skills they need to be successful, job ready, and resilient in a rapidly changing economy.
- For example, university graduates have high employment rates — 90.4% are employed six months after graduation, which increases to 94.3% after two years, and about 90% are employed in an area related to their university education.
To help ensure student success, Ontario universities invest significant portions of their budget in student services:
- In 2021-22, universities invested more than $1.4 billion in student services (e.g., mental health and housing), a 22% increase over the last five years. To put this in context, provincial funding for student services totaled just 3% of these costs.
- Ontario universities also provide more than $1.3 billion in non-repayable financial support to students such as grants, bursaries, and scholarships. To put this into context, this is more than the entire OSAP budget for colleges and universities.
Demand for a university education is increasing. Over the last two years, university applications have increased by 11% and the Ontario Ministry of Finance is forecasting population growth of 18- to 24-year-olds. This will further increase demand from Ontario high school students.
Universities Continue to Drive for Greater Efficiencies
Universities have a long history of driving greater efficiencies.
- According to the government’s Blue-Ribbon Panel: “…salary and benefit costs in Ontario’s universities per full-time equivalent student are lower than in almost every other province.”
- The Panel goes on to say that: a comparison of salary increases with changes in the consumer price index over the past 10 years confirms that universities have managed these costs well.
In addition, on December 1 of last year, Ontario universities released an efficiency update outlining further ways they are driving greater efficiencies, automating processes, and finding cost savings.
Universities are at a Breaking Point
However, current provincial policies are undermining student success and economic opportunity.
- The current funding cap on domestic enrolment creates a growing barrier for Ontario students to attend an Ontario university. There are currently about 20,000 domestic students that are not funded by the province, resulting in a $175 million loss in revenue per year to the sector;
- Since 2006-07, Ontario operating funding for universities has declined by more than 31% in real per student terms;
- Ontario has the lowest per student funding in the country and provincial operating grants represent about 30% of total operating revenues;
- The cut and freeze to tuition over five years have reduced the real value of tuition by 25%;
- The effective repeal of Bill 124 has had a sudden and retroactive impact on universities of more than $345 million in 2023-24 and $266 million in each of the next two years; and
- There is currently a $4.6 billion backlog in capital maintenance.
As a result of these growing financial pressures, at least 10 universities are currently projecting an operating deficit for this year – 2023-24 totaling $175 million, growing to $273 million next year.
These financial pressures have led to cuts that are impacting student supports and services.
To avoid more cuts, universities need the investments necessary to maintain and enhance the programs and services that are vital to students, such as mental health supports, career services, start-up incubator programs, learning supports, and extra-curricular programs.
We do believe the government is aware of the implications of these financial challenges, which is why the province had the foresight to appoint an expert panel – the Blue Ribbon Panel – which laid out a comprehensive action plan late last year.
Recommendations
We support the work of the Blue-Ribbon Panel and call on the government to immediately implement the Panel’s recommendations by:
- Boosting operating grants by 10% this year and indexing future increases;
- Allowing for tuition increases starting in the Fall of 2024 by 5% and indexing future increases, while protecting low-income students; and
- Increasing special purpose grants to support Northern and Bilingual universities as well as research and innovation.
Unless action is taken immediately, more and more universities, and the students they support, are at risk.
Investing in universities is investing in students and our future.
We are therefore asking the Committee to recommend that the province urgently address the financial sustainability of the university sector.
Thank you again for the opportunity to speak with you today and I would welcome your questions.