2.19: Alex Usher on Canadian Higher Education

Tiffany MacLennan (TM): This is the World of Higher Education podcast, but you may have figured out already that this is not Alex Usher. I’m Tiffany MacLennan, one of the producers of the World of Higher Education Podcast, usually a Research Associate at HESA, but currently a full-time master’s student. About two years ago, I pitched the idea of a podcast to Alex to which he said no but after a lot of consistent begging, here we are at season 2 episode 19. So far, I would say we’ve had great success with this project. We bring on cool people, we learn cool things, and most importantly we get to share them with you. We invest a large proportion of time from this podcast on picking guests and topics that can teach you something new while also showing the applicability to your own context. Usually, we record 2-3 episodes ahead, we give guests a list of 10-12 questions, and we give them a two-minute timer to answer. For the first time, the scheduling gods worked against us and so this week is a little bit different. Our guest this week is Alex Usher, President and CEO of Higher Education Strategy Associates. Alex joins me (your host of the week) to talk about the Canadian Higher Education sector, higher education consulting, and his thoughts on the future of higher education. While this week we learned that the two minute timer we ask people to abide by is actually quite a challenge, we hope you learn something new about the past, present, and potential future of the Canadian post-secondary landscape. But that’s enough from me, let’s turn it over to Alex.

Tiffany MacLennan (TM): For our non-Canadian listeners tuning into this episode, and for those who might be new to the Canadian higher education sector overall, can you walk us through the components of the Canadian higher education system?

Alex Usher (AU): Like most things in Canada, the answer is always it depends. We have 10 different provinces and 90 percent of the system looks the same across all 10 provinces and yet the 10 provinces are all like 1 percent different. So, it's a really annoying system to try to describe. We have a university system that looks pretty much like the university systems that you see in Australia and the UK. There are some minor differences, but they tend to be filled with fairly large institution. Canadian universities are larger than most and a larger percentage are research intensive than in most countries. 55 percent of students study in institutions, which are research intensive, which is very high internationally. But the university system, it looks the same as it does everywhere. It's some are good and some are bad. Some are big, some are research intensive, et cetera, et cetera. Where the real difference has happened around the college side. We have effectively three types of colleges, one in Quebec, which are called CEGEPs, the collège d'enseignement général et professionnel. Those are two-year institutions, which start after 11 years of primary and secondary, and they and they lead to university. So, you must go to college to go to university in the rest of the country. We have community colleges, some of which are much larger and much more technology intensive than the others. We tend to call those polytechnics. Those are fairly unique institutions, they're somewhere between what the Europeans call universities of applied sciences and what the Americans call community colleges. They do offer some degrees but not many. Each of those 3 types of institutions: CEGEPS, polytechnics, and community colleges enroll about 1/3rd of the community college sector in Canada, which compared to most other countries is actually pretty large. It's about a third of the system overall.

TM: You did say that a lot of our system is comparable to Australia or the UK but our listenership for this podcast is primarily from the US. So, if you were to compare the Canadian post-secondary system to the US, what are the things that are different and what are the things that are actually the same?

AU: I would argue there's probably three or four things that you want to look at. The first of all is you have to imagine the American system and then you take the American system, rip out the privates. Then you've got something that does not look that different from Canada anymore. That's the big difference. It’s that a quarter of the American system or 30% American system just doesn’t exist in Canada. We have privates, but they're not prestige privates. They don't drive policy. None of that kind of stuff. So now, if you if you imagine the American public system and the Canadian public system, those are pretty similar. Here's the next big difference: Canadian institutions have a lot more freedom than American ones do. American public institutions are pretty closely curtailed or controlled by the state or state boards. I think that's the main thing is that these state either governing or coordinating boards and those are mostly unknown in Canada. You've got the exception of Quebec and I guess to a lesser extent, New Brunswick. Canadian institutions, they're on their own. They act like private institutions in the United States, even though they're publicly funded and obviously have got some public accountability relationships, but that's what makes it different. The public funding levels are a little bit higher in Canada, but not much, right? So, Ontario does not look that different from the United States, to be honest with you. Where there used to be a lot of difference was in tuition fees, and it's certainly true that domestic in state tuition in the U. S. is higher than in province tuition in Canada. But we're starting to get very similar proportions of our income from student fees. In the U. S., the big flagship does it by getting out of state students as well as international students, except for Quebec, we don't have that out of state/in state distinction in Canada, but we do certainly go after international students a lot because with regulated tuition fees and flat public funding that's the only new place you can get money. So that's where we go to get it. In those 3 senses, I would say you can encapsulate most of the difference between Canada and the U. S.

TM: Your last answer does lead in well to this next question. Can you walk us through the last 20 years of funding to the sector and what the student demographic breakdown has looked like?

AU: Let's start with the demographics. One of the interesting things about Canada is because of the way our immigration system works, we are one of the very few countries in the world where white second or more generation students are not overrepresented in post-secondary, right? So, the over representation comes from visible minority students. Largely because that's who our immigrants have been for the last few years. They've come from Asia and the main reason they're here is to make sure their kids get a good education. So you end up with a situation where right now, more than 50% of some of the big universities in Canada like U of T, University of Alberta, University of Calgary, those are in cities which are what the Americans would call “majority minority.” So that's what the student population looks like. So that's different. The big underserved population is our First Nations communities. I'm not sure what to say about that. It's a national disgrace, but there we are. Their attendance rates are about half those of the mainstream population.

In terms of funding, look, Canada was on a roll, we forget this now, but Canada really was on a roll between about 2001 and 2008 and higher education got its share. They were allowed to charge higher tuition fees every year. They got more money from government every year. They raised more money from the private sector every year. So, from 2000 to 2008, that was the best decade in Canadian funding since the 60s basically, so it had 40, 50 years since we'd had any times that good and bent it poorly and we were left with a sort of a bloated system. Then after the financial crisis, government money tailed off. We've had no real increase in government funding in the last 15 years. All new funding in the system since about 2011 has come from international students. So, we've come to be fairly reliant on private income from overseas. The way I think most governments see it is public funding of public institutions is a public good, but getting foreigners to pay for your public institutions is a public great. That's really the has been the attitude I think of most provincial governments until quite recently.

TM: The quite recently though has been really quite recent. Over the past few weeks, Minister of Immigration, Refugees, and Citizenship, Marc Miller, has announced a variety of changes to the regulations on international students in this country. What are they? What will the effects of the sector be? And are there universities or colleges that will fare better or worse than others?

AU: What happened was, is that as provinces defunded institutions and forced institutions to be reliant on international students, all of a sudden, the guy responsible for handing out visas in this case, Marc Miller, suddenly became the de facto minister of higher education in this country because he had more control of the funding than they did. Look, it's not simply that students want to study here. We've had a system for about 15 years introduced by the former prime minister Stephen Harper, which was the creation of a pathway to citizenship through education. The idea was simple and pretty smart, which was basically: hey, if they study here, they'll be great citizens. They'll already be pre-Canadianized by the time they get in the system. So, not a bad idea. The problem is that particularly students from India, in the last couple of years, realized that this was a backdoor to citizenship and that in effect, that whole system of points, which made Canadian immigration famous, the point system, could be circumvented just by having a community college hand out an acceptance letter to a 1-year program and Canadian community colleges monetize that. Several of them were extremely greedy about it. Conestoga, a medium sized community college based in Kitchener, Waterloo built a half dozen new campuses and brought in 34, 000 students last year. Wow. So, they brought in some changes. The details are pretty boring. Basically what they've done is they've given each province a cap and told each province to figure out how many students each institution will get. That's a huge political hot potato that's been thrown to the provinces. We don't know when the answers to that question will start to appear. My guess is we're still probably at least a month away in most provinces, the way the caps were enacted, where they were done in such a way that they would particularly punish Ontario, which is where the most egregious cases of international student excess like Conestoga have appeared. So, Ontario institutions are going to lose about half their international student visas next year. The question is just how does that how does the cut get distributed? We know that master’s and PhD students are outside the cap so that, that protects a lot of University of Toronto students for example. We just don't know about the rest. There's political decisions that have to be made, and we have no sense of how that's going to be resolved.

TM: You touched on this a little bit, but Canada doesn't have a federal education minister or higher education minister or anything of that sort. Basically different parts of the sectors are distributed under different ministers, whoever that is of the day. How do you think that affects things like research and innovation or student aid? Do you think having these things nested under a singular federal minister focused on education would benefit the higher ed sector?

AU: Absolutely not. Look, there are lots of people who think that the federal government as the “bigger government” is the more important government and therefore it should do things. The thing is there's a really basic reason why education is a provincial responsibility under the constitution, and it has to do with the French language and the Catholic religion, which was a big deal in 1867, if not now. I think Canada actually has some pretty good things going on in post-secondary education. I would argue our student aid system, as federalized as it is and bumpy and unequal between provinces as it is, actually runs really well. It's one of the best examples of cooperative federalism. You can go across any one of the numbers of areas of shared jurisdiction, you would be hard pressed to find a program that works as well as CSLP. In research, the feds effectively have unfettered reign. It's doesn't really stop them from doing anything. I think there are sometimes where things could be coordinated a little bit better with the provinces. There's a whole science federalism that we probably should be more engaged in than we are. I'm not sure what else you could do. I don't think it changes very much. You got to remember that the feds know almost nothing about post-secondary. If you look at the speed and some of the implementation of the immigration caps and you look at some of the nonsense that is coming out of the immigration ministry about creating trusted providers, it's absolutely clear to me and it should be clear to everybody that the feds know nothing about post-secondary. You may find the current liberal government more congenial than your conservative provincial government. That doesn't mean “the good guys”, if that's your perspective, are always going to be in power in Ottawa, right? It's concentrating power even more, might not always seem like such a great idea, particularly when institutionally, let me repeat this, the feds know nothing about post-secondary education. There's just no reason to trust them with the file.

TM: Tell us how you really feel, Alex. Another, maybe newer, external influence on the sector, is the fact that the private sector at least seems to be growing. For example, if you walk around downtown Toronto, Northeastern is putting up some pretty nice offices. What's going on with the private sector, especially international private sector entering the country? Are there things that the Canadian institutions need to be worried about? Or/and what things can they learn from these institutions?

AU: Good question. I would say private institutions have never not been on the scene, right? We have a lot of private institutions and tend to be religious in nature. The idea of secular institutions, let alone secular for-profit institutions really dates from around 2000. In Ontario and Alberta and BC, you start getting independent degree granting advisory agencies, so that if you want to set up your own university, you can apply to this agency and say “hey, look, I can do everything a degree granting institution can, let me offer degrees.” That's, people started setting things up then. So, we had an Australian university set up in Canada for a while. Charles Sturt had an education school in Brampton. More recently, we've seen some of the big international conglomerates like global university systems. They've set up a couple of universities in Canada like University Canada West in Vancouver, and I can say the University of Niagara Falls, but I have a feeling that's not actually what it's called in Ontario. At UCW, they're bringing in 10,000 MBA students every year from around the world. So, to that extent they're playing on an international market. All-on domestic institutions are rarer, but they're picking up. I think the issue there is less about meeting the technical terms of being a full-fledged granting institution and more about having the funding to really carry it off. Are they doing well? UCW is doing well because it's going after international students. Northeastern is doing well because it can iterate master's level business programming really fast. My impression is it is eating the lunch of second tier business schools in Ontario. I don't think it's hitting Schulich at York, I don't think it's hitting Rotman at U of T but I'm pretty sure it's hitting Smith at Queens, and I'm pretty sure it's hitting Lazaridis at Laurier because they're more attuned to the market, frankly and they can build programs faster. For whatever reason institutions can't. They have to go through the same degree approval process. There's no reason they shouldn't be able to externally, but just internally the impetus to create new programs and find new markets is there in the private sector and is less so in the public sector.

TM: Interesting. When we opened questions about this podcast up to the general public, there was quite a few about what do private consultants in higher education do? Or, in other words, what do we do on a daily basis? What are some of the biggest challenges for us as consultants or in consulting overall? And why do people hire us instead of just doing it themselves?

AU: The really big consultants are people like Unifor, right? That's the Unifor group and Cubane and NOUS. Those are people who are doing some interesting work, in terms of trying to help institutions get a handle on their own workforce and what people do. I think there's a big move across Canadian institutions as money becomes scarcer to pursue what is, what central administrations will call operational excellence and what a lot of people in institutions, I think would call centralization. They're not quite the same thing, but I think there is a lot of what passes for saving money in higher education is about centralization because higher education duplicates a lot of stuff across faculties. So people are looking for ways to get around that. It's not just duplication of jobs. It's doing jobs differently. We're working at one university right now where that hires literally 40 people a day across 250 workdays a year. You have to think about how many hiring committees you've got to control to make that work. You to think about how many applications you're taking, processing, tax forms, et cetera, et cetera. You got to make that work. Operational excellence is making that work as a service. It's not easy to do. Anyway, those are the kinds of things that people work on that they tend to go to big money consultants for. Look there's consultants who do all kinds of things. What we do for institutions tends to be strategic planning. Every few years when it's time to refresh your task lists, or the orientation of your institution, we tend to help them organize a sensible program of internal and external consultations. We try to ask questions that provoke something other than mundane answers. What are you about to be when you grow up? You want people to answer those kinds of questions ambitiously. It's so easy after many years of cuts, lots of people in institutions are crouching and protective. They don't want to look up, don't want to look for the exciting stuff. So what we're trying to do is to get people to think about alternatives and be ambitious. We also do a little bit of other stuff around little tasks around strategic enrollment management, around interpretation of data, but I would say, that's a particular market for us. The big 15 or 20 institutions in the country all have internal staff who can do much of what we do. What they don't have is, once you get out of that 20, they tend to be a little thinner and that's where they look for some consulting help.

TM: Interesting. I remember my first few weeks at HESA and learning that people outsource strategic plans to consultants and being really confused on why people did that. Having gone to the smaller spectrum of university sizes who did it themselves, I watched them go through the process. Capacity is really interesting and how capacity plays out.

AU: There's very little that we do that institutions couldn't do on their own. What we do are the things that institutions find it easier to pay for. Because yeah, there's lots of talented people at most universities but they don't have the time. In some cases, they don't have the internal standing to do it. In some cases, it's easier to bring someone in from the outside because they're seen as a neutral party. We've got that a lot of places that we've worked when we do the environmental scan, that people are really appreciative that we do it and not, the “big bad administration, because they're seen as being biased. So, we can be helpful that way, in not really being a referee but just being a sort of a neutral expert that can play with all sides and make sure that some top people don't have to spend all their time doing planning, which is not everybody's cup of tea.

TM: One of our followers also asked, “generally, are there areas where you think universities need more in house capacity to make our work more effective?” And my quick answer is: label your data. The flip side of that, what are things that universities and colleges could be doing or should be doing to build their own in house capacity for strategic decision making?

AU: I would look to the kind of systems that University of Calgary and to a certain extent Carleton University have put in place for strategic planning. That is that planning is not something that you do every 5 years, it is something that you do continually. I don't just mean that in the sense that sometimes pandemics come along and swat your strategic plan into the bleachers that. That isn't it. It's that the strategic conditions under which you're working change all the time: funding changes, new governments come in, new technologies like generative AI come in. And so, the question is, how are you always working towards your mission? You need to be thinking about that all the time, and you need to be bringing people from across the institution into that discussion. It's not just an elite exercise. I think you have to bring people together. I would love it if every institution in the country printed a document that basically said, here's our strategic position in 2024 and show how it's changed since 2020. Here's how the world's changed and here's the opportunities and threats that those that those changes bring. That would be fantastic. I think it would make it easier for institutions to make decisions quickly when they need to, if everybody in the institution has a shared understanding of the opportunities and threats.

Let me add one other thing. Institutions could be way better at explaining how the hell they spend their money. One of the things that generates distrust is because financial statements are difficult to read. And everyone wants to know where last year's surplus went. We're in a deficit this year, “but yeah, we were in a surplus last year. Why don't we spend that?” The answer is most of that money has been spent shoring up the pension fund or repairing roofs on buildings and that kind of stuff. But actually, universities are terrible at telling that story. Without that story, there's no trust, and without that trust, there's no good basis for long term planning, to be honest.

TM: I would agree. Coming down to our last two questions, second last, you've been working in the sector just about as long as both your co-producers have been alive, Sam and I. You know the landscape, you know the institutions, you know the policies, you know how they changed over time, from all your years of experience, if I gave you the magical power right now to change one singular thing about the higher ed sector in Canada, what would it be and why?

AU: Thank you for reminding me of my age. That was very kind of you. Honestly, I would say if there was one thing I would change, it would be to have provinces to introduce well thought out, and I'm using those words advisedly, systems of performance-based budgeting. Nobody knows what they're buying. We spend, 20 billion of public money on universities and colleges every year, and it's not clear what the heck we're buying other than peace and quiet. Go away, shut up. Here's some money. I think governments are increasingly ill informed about what it is they're buying. Like they have no sense. I think a lot of them think what they're actually buying is power or he right to intervene whenever they want. That's dangerous stuff. I really do believe that it would be better for them to say “look, if you can get to equality in male/female professorships, that's worth 10 percent of your budget.” They do that in Berlin. I think there's a couple of German states where that's one of the things that they mark it on. They should have some kind of reward for granting degrees rather than just having students there. You should have rewards for research. We do have performance-based budgeting in research. This was called the indirect cost of research. It's a weird program, but it is basically performance-based funding. I think if governments could explain to institutions what they were interested in and how much relative to each other they were interested in, and that's what a PBF does, that'd be fantastic. I think it would also be helpful for university administrators, because they could actually turn around and say to their internal constituencies, “look, guys, this is what the public is paying us for and therefore, this is what we're going to, these are the goals we're going to focus on”. In the absence of that, everybody thinks their own goals are the most important and it becomes a political fight and not a fight about how can we best achieve these specific goals that publicly elected governments have given us.

TM: In traditional World of Higher Education podcast episode ending questions, if we came back and did this interview again in 20 years, so 2044. What do you think will change in the Canadian higher education system? What leaves you with some optimism even in this moment of, “wow, we really need some new funding models to survive the next few years?”

AU: What leaves me optimistic is what leaves me optimistic about the country as a whole, which is unlike most developed countries, we're going to be bigger in 20 years than we are today. There's no demographic cliff here. In fact, we're gaining talent from all over the world. So, we're going to be, assuming things don't go gravely bad, we're going to be a bigger country, maybe the world's most multicultural country. We're going to be a meeting place from around the world. Our ability to bring in talent is still going to be terrific. What hangs in the balance is whether or not Canadians, not just governments, but Canadians can actually abandon those old clientelistic politics, which are based around natural resources and can see what it means to succeed as a science economy, as a knowledge intensive economy. Once we get that, we'll be okay. You know what I mean? So basically, I'm hoping that we don't get another oil boom. If we get another oil boom, we'll forget everything again and we'll go back to the dumb policies of the 2012 to 2018 where we just forgo everything. There was a period in the late nineties and early 2000s where we did actually know “oh yeah, we got to invest in these things, that's good.” We'll remember it again. The issue is whether we'll forget it a third time, but, the basic thing is we're going to have talent. We'll have access to good talent. So those are the basics. I think lots of things could wipe it away. A fascist government in the U.S. would probably not be nice for us and it would have some real consequences, but assuming the ship stays afloat, I think we'll do okay.

TM: That's all we have time for. Thanks for joining us today.

AU: Thank you.

TM: That’s it for week’s episode of the world of higher education podcast. Sam and I would like to thank Alex Usher for letting us continue to run this podcast on his company’s money. We have a lot of fun. Join back next week for your regularly scheduled programming. Bye for now.