Pandemic prompts Alberta government to pare back post-secondary funding model changes

The Alberta government is scaling back its plans for tying post-secondary institutions’ funding to their performance this year.

Starting this fall, five per cent of provincial funding to polytechnics, colleges and universities will be contingent on their ability to meet one target.

Taylor Hides, press secretary to Advanced Education Minister Demetrios Nicolaides, said in an email this week that all institutions are expected to meet their targets this year.

“Due to the pandemic, the initial performance-based funding agreements will only be for a one-year term, rather than the multi-year agreements that were initially planned,” Hides said. “We have also reduced the proportion of the initial year in consideration of the difficulties imposed by the pandemic.”

Nicolaides declined an interview request.

The minister had hoped all 26 institutions would begin new three-year agreements this fall that initially tied 15 per cent of their public funding to multiple metrics. That proportion was slated to rise to 40 per cent by the 2023-24 school year.

Just how quickly the proportion of funding at risk will rise in future years, or what measures the money will be tied to, are still undecided, Hides said.

The COVID-19 pandemic had already prompted Nicolaides to delay the change by one year.

People with knowledge of the new arrangements said in 2021-22, the at-risk funding will be tied to schools’ abilities to offer students work experiences relevant to their programs. The province calls this “work-integrated learning.”

Schools asked province to pare back plans

Mike Mahon, chair of the Council of Post-secondary Presidents of Alberta (COPPOA) and president of the University of Lethbridge, said institutions are already weathering substantial change.

Work-integrated learning can include clinical placements for health sciences students, internships, co-op arrangements with private companies, working in labs with professors, and other experiences, both paid and unpaid, Mahon said.

Some programs are a more natural fit with practical training than others, he said. At U of L, all students are offered a work-integrated learning opportunity, he said.

Mahon said he’s glad Nicolaides decided to start with this measure, as data show that graduates with practical experiences have an easier time finding jobs.

Rowan Ley, chair of the Council of Alberta University Students, said the scale back is a relief, but delaying the new funding model completely would have been better. Universities are still dealing with multiple crises, he said, including the pandemic, struggles to adequately deliver all classes remotely and grappling with four years of planned funding cuts.

The model will also require universities to add needless bureaucracy to measure, collect and report the data, he said.

He’s also concerned that distilling work-integrated learning down to a single measure won’t convey any information about the quality of experiences students are offered. 

The value of motivation

Earlier in the week, Minister Nicolaides told a committee examining his ministry’s budget that research shows that tying one-to-three per cent of public funding to an institution’s ability to meet their targets doesn’t create adequate motivation for them to change.

“In order for a model to be effective, there needs to be some weight behind the proportion of funding that’s at risk,” Nicolaides said.

But with the United Conservative Party’s claims that Alberta post-secondaries are funded too generously compared to schools in other provinces, Mahon says even five per cent of funding at risk is enough for schools to take steps to hang on to every dollar.

Schools collectively saw a 6.2 per cent public funding drop this year, and expect to lose about 20 per cent of provincial grant money over four years.

“When you’ve come through the kind of budget cuts we’ve come through and with more to come, from what we understand, any kind of reduction is meaningful, because we’ve been reduced so significantly,” Mahon said.

During the budget meeting, Nicolaides said performance-based funding is not an attempt to further cut grants to institutions.

He also said that tying money to some measures, such as graduation rates, causes negative consequences, such as schools limiting admissions to minimize their risk. Nicolaides said Alberta would have to add countermeasures, such as enrolment targets, to prevent such undesirable behaviour.

Rowan Ley, Vice President External at the University of Alberta’s Students’ Union, says performance-based funding is structured in such a way that can only hurt schools financially. (Submitted by Rowan Ley)

Student leader Ley said the problem with Alberta’s proposed model is there are no financial rewards for institutions that exceed their targets.

“My biggest concern with the incentives it creates is it’s all stick, no carrot,” he said.

Sticking with new model a ‘macho thing,’ consultant says

The Ontario government is also in the process of tying post-secondary funding to performance. Although the 10 new metrics are already in place, none of the funding will be at risk until fall 2022.

Consultant Alex Usher, who runs Higher Education Strategy Associates, analyzed Ontario’s model and found that most of the measures change very little from year to year. That means little of their funding is at risk if their performance slips.

While it may sound politically tough to crack down on how colleges and universities spend public money, the move is more about public perception than any financial threat to institutions, he said.

“It’s a macho thing, okay? ‘We’re going to bring these guys to heel. We’re going to make them perform. They’ve been living off the public teat for too long.’ Which are all things this government has said,” Usher said of Alberta. “Having done that, they feel it difficult to back off.”

The Alberta government likely wants to forge ahead with a tempered version of the program for political reasons — so they can say they put their plan in place before the next provincial election comes, he said.

The so-called “investment management agreements” for each of Alberta’s 26 post-secondary institutions are expected to be in place by the fall. Although every school will be assessed on one measure, the goal for each institution will be different, Nicolaides’ press secretary said.