Price Waterhouse Report on fiscal sustainability of colleges and analysis

PWC: Fiscal Sustainability of Ontario Colleges  {read the full report here}

Here are some key points from the report to focus on, along with brief comments (all commentary/analysis is in bold; all other text is taken directly from the report).   {Thanks to Jeff Brown for this.}

This is the overall conclusion that has the colleges in a panic (and, indeed, this needs to be taken very seriously):

• PWC has been retained by Colleges Ontario to provide an independent assessment of the fiscal sustainability of the Ontario college sector over the next decade to 2024-25. […] We developed a baseline model to project colleges’ fiscal position from 2015-16 to 2024-25 if the status quo is maintained (i.e., in the absence of further measures to increase revenues or decrease expenses). The baseline model shows that most colleges would soon face operating shortfalls that would grow to substantial deficits by the end of the Projection Period.

Here are some remarks regarding staffing:

• Labour costs (including salaries and wages, benefits and pensions) constitute approximately 65% of colleges’ expenses. Much of the administrative and support staff are fixed expenses, which means that the ability to reduce them in the face of lower enrolment is limited. (This is convenient – especially for administrative staff – who do not enter into the conversation when it comes to cost-cutting options).
• Part-time teachers offer colleges some relief from cost growth due to collective agreement obligations. (Okay – fair enough. There will always be some part-time faculty; that’s agreed).
• Reductions in academic staff could impact program delivery (e.g., faculty/student ratios). (Good point, i.e., the spectre of AI notwithstanding, at this point we still need teachers to actually teach students).
• Colleges believe that the engagement of part-time teachers enhances the ability of colleges to provide students with current, relevant, hands-on knowledge directly from those still working in industry as well as providing coverage for subject expertise in specialized areas.
• The use of part-time teachers also provides benefits in terms of flexibility in assigning
  teaching duties, dealing with fluctuating demands for courses, reacting to reductions in student enrolment and easing the risks in a program start-up.

(Regarding the final two bullet points: No argument here.  The faculty union seeks only a reasonable balance; no one is suggesting eliminating necessary part-time faculty).

Here are some excerpts from what the report suggests and recommends:

Changes in a combination of the following categories could result in a reduction in costs/increase in revenues:

1. Growth rate of tuition for domestic students
   2. Growth rate of international student enrolment
   3. Changes in staffing levels across all employee categories (i.e. including administration & support)
   4. Growth rate of annual grant funding for domestic students

(To the extent that staffing is mentioned as a factor, it is ALL employment categories, not only academic, that is referred to).

The report’s final recommendations:

• The provincial government has the ability to increase colleges’ flexibility through changes in policy
• The provincial government should consider allocating new targeted investments into colleges

This is why the union has been actively petitioning the provincial government to take action in this regard.  E.g.: meeting with MPPs to review the funding model (a meeting to which the colleges were invited, but declined to attend); establishing a task force to examine the issue of the faculty staffing complement as it relates to fiscal issues, etc.

Nothing in this report suggests that the only way to deal with this crisis is via the increased use of precariously employed faculty.  Moreover, it provides no justification for the colleges’ refusal to discuss no-cost items like academic freedom or job security/contract-length for partial load faculty.

Limitations cited at the end of the report (italics added for emphasis):

The findings of this Assessment are conditional upon such completeness, accuracy and fair presentation of the Information, which has not been verified independently by PWC. Accordingly, we provide no opinion, attestation or other form of assurance with respect to the results of this Assessment. This Assessment has been prepared for the Colleges Ontario for their exclusive use.