The Province of Nova Scotia and it’s publicly funded universities have reached their third Memorandum of Understanding (MOU) since 2004. In a perfect world, the MOU is an agreement that acts like the rulebook for universities to follow in order to receive their operating grant from the government. Like the previous agreements, it represents a three year commitment to working together, but unlike the other agreements, this one will not lead to a stronger university system. Having sat in on the negotiation process, I can tell you that it’s bad for Nova Scotia, it’s bad for our universities, and it’s bad for our students. To explain why, we need to look closely at the previous two agreements.
How we got to MOU III
The main purpose of the previous two Memorandums of Understanding (MOUs) was to give universities sustainable and predictable levels of funding for three years at a time. This is common practise across Canada. In fact Nova Scotia had become considered a leader in these Multi-Year Funding Agreements. So much so, that ours had been the model for the development of a multi-year funding agreement in New Brunswick, one of the few provinces that didn’t have a long term funding plan for its universities.
When MOU I began, Nova Scotia was chronically underfunding its universities. The first two MOUs guaranteed steady increases in government funding for six years. Still, by the end of MOU II, Nova Scotia’s government was funding our universities at a per-student rate lower than most, if not all other provincial governments in Canada (the last year we have national data for was 2008, and at that time we were dead last). This year (2011-12) the universities have been in limbo, without a formal funding agreement, but received a reduction in their operating grants from government of about 14 million dollars.
Now comes MOU III, which makes no mention of funding levels at all, other than noting that they’re too high and universities will be given at least four months notice of future year’s funding levels before they take effect.
It’s a good time to remind ourselves that universities really only have two revenue sources to fund their general operations: government support and tuition fee revenue. They also get a fair chunk of research dollars and donor contributions, but those types of dollars are solicited with a specific purpose. Research money is project based, and universities typically don’t solicit their alumni asking for support to pay the heating bill, hire a new professor to teach first year English or to pay the saintly custodial staff that keep our schools so squeaky clean.
Tuition Regulation
Instinctively, as the purse strings of taxpayer funding are tightened, the universities have put pressure on the government to loosen regulation on tuition fees. You might recall that about this time last year, the Minister of Advanced Education announced that she would be enforcing a three per cent cap on tuition increases for all students, except for those in Law, Medicine and Dentistry who saw their tuition fees balloon from 6 – 14 %.
We first saw the minister weaken her stance on capped tuition increases when Dalhousie asked to increase international student differential fees by an additional seven per cent, on top of the planned three per cent increase. We reminded her that allowing this would be breaking her commitment to students, and she compromised by only allowing a 3.5 per cent increase.
In MOU III, announced today, we’re seeing some definite bad news for students and plenty more mixed messaging from government on tuition regulation. In Section 11, the government’s oft-stated commitment to keep tuition for “Nova Scotia students” at or below the national average is weakly repeated. In the same section we read that annual increases in tuition rates will be limited to three per cent “pending the outcome of the Tuition Policy Review.” Other language in the same section suggests that out of province students can expect to see the cap on their tuition lifted or loosened by 2013. In programs where students have tuition fees lower than those of programs at “comparable” institutions, you can expect the administration to be working hard as bricks to raise those fees to match “comparable” programs.
The universities have said that they want more “flexibility” on tuition fees. That’s not really true. They want flexibility on tuition fees as much as students do. They want flexibility in the upward direction, while we want flexibility in the downward direction.
The province has also cleared the way for universities to freely increase tuition fees as much as they please for students of Law, Medicine and Dentistry programs, where tuition and fees amount to tens of thousands of dollars per student annually. Students of upper income families are already overrepresented in the professional faculties. For example, a 2002 survey of Canadian Medical Schools demonstrated that almost half (43.5 per cent) of medical students came from neighbourhoods with median family incomes in the top quintile of Canadian earners. Deregulation of tuition fees in the professional programs will only further this trend.
International student fees have also been completely deregulated. When it comes to international student fees, some university presidents will say that tuition fees will only be increased “as much as the market will bear”. Meanwhile, other presidents will tell you that low international tuition fees prevent us from being competitive in the global market. You should read that last line again, there aren’t any typos in it.
For at least the next three years, international students should consider their wallets the only release valve that the universities will draw significant revenue increases from, for two reasons. First, compared to professional student tuition fees, international student fees are much easier divert to any area of the university that needs money. Second, not every school has professional students, but they’ve all got international students.
Accessibility
Language in each of the three MOUs would lead you to believe that accessibility has been a major priority of this government and the previous two governments that signed MOUs with the universities. The only MOU that really did anything about access was MOU II, which froze tuition fees and was administered alongside a tuition reduction program.
To be clear, this MOU is just plain bad for accessibility. Considered as a whole, this MOU and other policies introduced by this government only make university education less accessible. Of course observers are bound to say something like “Yes, but it could have been a lot worse.” That’s true. But compared to previous MOUs, this one is a lot worse. Things can always get worse.
Know this: while tuition prices will continue going up for the foreseeable future, the purchasing power of a student loan has steadily declined each year since 2006. Last year, over 2,200 students on student loans were an average of $3,054 short of what they needed to pay for tuition, books, rent and groceries. See Figure 1.
ANSSA has been asking the government to increase the cap on student assistance grants to ensure that the neediest students are able to afford to attend university.
The Innovation Fund
The core purpose of MOU III is “to achieve a System wide cost structure that is sustainable relative to the fiscal capacities of the Province”. To assist universities in achieving cost reductions, the province has offered an innovation fund of $25 million dollars to the universities, available over the next three years. The purpose of the fund is to assist universities in reducing their operating costs by 25 million dollars while maintaining quality before the fund disappears entirely at the end of 2014. The magnitude of the fund compared to operating grant cuts are demonstrated in Figure 2. Even before the rising costs of goods are considered (which won’t be fully covered by the allowed tuition increases), there is a significant shortfall. And in 2014, the innovation funding disappears, leaving what is surely, by that point, a greater than $25 Million shortfall between expenses and revenues.
This part of the plan is just plain wonky, it reminds me of an older sibling stealing my supper, chewing it up, swallowing some and spitting the rest of it out on my plate before telling me “It’s still good.”
Figure 2 - Innovation Funding vs. Operating Cuts
While I’m all ears if someone has a plan to enhance collaboration and eliminate redundancy from the university system, I’m doubtful that a 25 million dollar savings can be found while the system absorbs almost all of three years worth of inflationary costs.
The Change Mandate
The last major piece of this agreement is that the parties agree to “work actively over the three years of the agreement on a change mandate” which will address issues like accountability, funding formulas, tuition policy, research, affordability and accessibility. To be honest, we thought these issues would be directly addressed by the work of the MOU negotiating committee we’d been apart of. However, due to some serious foot-dragging, the issues were never addressed.
Our first reaction to this was “Great! When can we start?” Then came the news that students wouldn’t be a part of the “Partnership” of university and government officials charged with executing the initiatives.
We told the government and the universities that we, as student representatives, want to be part of those discussions, we want to be proactive contributors on government policy for the universities we fund. We don’t want to be forced into the position of being reactive, negative student groups, but if we’re not invited to the table, we’ve really got no choice. We reminded those around the table that while the Province contributes over 320 million dollars annually into the university system, so do students.
Some language around the partnership board guarantees that students will be kept abreast of the work plans of the MOU, and that we will be invited to give input on specific issues and working groups. The sentiment was clear, however, that there were certain issues for which the government and universities were not interested in having us around the table.
This isn’t surprising, however, as soon into the process that lead to this MOU we were told that, while we would be invited to all meetings of the MOU negotiating committee, we would not be invited to the meetings of the working groups comprised of government staffers and university executives.
Wrap Up
So, to sum up:
Since 2004, Nova Scotia has made stepwise improvements by using MOUs I & II to increase funding to a chronically underfunded university system, and eventually freeze and reduce tuition. Over the next three years the government will cut funding by about $25 Million dollars annually, while the expenses facing the university system will grow by $30 Million each year. Tuition will “sort of” be capped at three per cent for most students, but no ones going to betting their MLA pension on it. International students will pay oodles more than they ever did for tuition, and some presidents think that will make us a more attractive place to study. Out of province students will likely soon face a similar, but not so extreme version of what international students will face. While most universities are busy shaking students by the ankles to get every last penny from their pockets, their presidents will be attending regular closed door meetings with government, most likely asking for looser regulations on shaking students by the ankles.
Useful Links:
MOU I (2004) * MOU II (2008) * MOU III (2012)
ANSSA’s Original Submission to the MOU Negotiating Committee * ANSSA’s Response to Draft MOU *
