Excellent analysis, including how colleges are treated differently than universities and the resulting incentive for their more rapid growth in international students:
The education of Doug Ford comes at a high price.
Not for him — the premier is doing just fine.
But under his stewardship, post-secondary education has spiralled from crisis to catastrophe. It is a disaster of Ford’s own making, with implications that go far beyond Ontario’s colleges and universities.
Here’s the problem with the premier’s post-secondary playbook: He’s been playing with other people’s money — a shell game — while gambling on the outcomes.
What looked like a good deal for Ford has become a bad bet for the entire province. The chaos over surging foreign enrolments on campus, amped up by the premier, has created panicky headlines.
But if you dig a little deeper, the crisis has also created an unsavoury windfall for the province: A “head tax” on foreign students, on top of a shell game for colleges, which together buff up the provincial treasury by hundreds of millions of dollars.
That’s on top of the savings for Ford’s Progressive Conservatives by freezing funding for higher education in Ontario at a time of rising inflation (disclosure: I’m a senior fellow at Toronto Metropolitan University and also at the University of Toronto’s Munk School of Global Affairs and Public Policy).
Upon taking power in 2018, Ford ordered every post-secondary institution to cut tuition by 10 per cent — without making up the shortfall. Those fees have been frozen ever since, while government funding stagnated year after year — inflation be damned.
Ontario’s colleges, left to fend for themselves after the tuition cut and freeze, were encouraged to make up the difference by recruiting high-paying foreigners with abandon. The inflated cash flow propelled all but one of Ontario’s 24 colleges into sudden surpluses worth more than $660 million in 2022.
Conveniently, that windfall benefited Ford’s Tories because the colleges’ balance sheets show up on the books of the provincial treasury. That’s a sweet deal for Ford and his surplus-addicted finance minister, Peter Bethlenfalvy.
But the province’s universities, most of which resisted the temptation to feast on foreign students — are now in dire financial straits, with 10 of 23 now running deficits.
Happily for Ford’s Tories, those university deficits are seemingly not the province’s problem — neither fiscally nor politically. That’s because any university’s red ink doesn’t show up on the province’s balance sheet, since they are deemed autonomous institutions (unlike colleges which report directly to the government).
It’s an accident of history that manifests as an accounting quirk. But it amounts to a handy political payoff for the premier.
Moreover, Ford’s Tories have been shamelessly milking foreign students with a de facto “head tax,” which is dressed up as an international “recovery fee” for every warm body lured to Ontario. It’s not a massive amount — more than $140 million a year — but it’s profiteering all the same.
Campuses are at the breaking point. Communities are at the boiling point over housing shortages exacerbated by an unplanned foreign influx.
Forced into action by the province’s inaction, the federal government imposed a cap on foreign students and work permits last month. With cascading abuses, Ottawa had little choice but to act — Ontario broke the system, and now Queen’s Park has to take responsibility for fixing it.
The boom will fall especially hard on Ontario, which already fills 51 per cent of the permits with only 39 per cent of the population. And it will hit universities harder than colleges and private educational institutions, which cornered an outsized share of permits driven by a strategy of greedy growth.
Will the government play hardball with universities when it comes to those scarce international permits, in order to protect the foreign cash flow of colleges who are already Ford’s preferred partners for his policy of promoting the skilled trades?
Last year, it seemed the premier had seen the light. The Tories set up a fancy-sounding Blue Ribbon Panel on Post-secondary Education that quickly focused on fixing the distorted bottom line with straightforward advice:
Stop cutting tuition and stop freezing funding.
“The sector’s financial sustainability is currently at serious risk, and it will take a concerted effort to right the ship,” its report warned in November.
The outside panel recommended a one-time tuition hike of five per cent in 2024-25, followed by increases of two per cent (or higher, tied to inflation) thereafter. By the panel’s calculations, it would take a tuition increase of 25 per cent to make up for lost monies — politically unpalatable, so it urged the Ford government to increase funding by about 10 per cent with subsequent increases of at least two per cent (plus inflation).
Its report urged the government to confront its growing addiction by moving to “reduce or eliminate the student recovery fee for international students paid by colleges,” amounting to $750 a year.
Ford’s reaction? Pull out the populist playbook:
“I just don’t believe this is the time to go into these (Ontario) students’ pockets, especially the ones that are really struggling, and ask for a tuition increase,” he told reporters last month, calling instead for more “efficiencies.”
Let’s not confuse efficiencies with distortions. By profiting from the penury of post-secondary institutions — boosting his own bottom line while starving universities and contorting colleges — Ford is giving the province a costly lesson about false economies.
Source: How shamelessly has Doug Ford ground down Ontario’s colleges and universities? Let me count the ways
Multicultural Meanderings 