In May 2005, the budget provided substantial increases in investment in postsecondary education as part of the McGuinty government’s Reaching Higher plan. While grateful for the increased investment, universities are concerned that it will be a challenge to meet the government’s Reaching Higher objectives of enhancing quality of higher education. As shown in the table below, the government funding announced to date and the tuition revenues associated with the March 8 announcement will not keep pace with anticipated enrolment growth. When university annual inflation of 4.6% is factored in, the resources per student are likely to leave Ontario still near last place among provinces in per-student funding for universities. (See COU Press Release of March 8, 2006 for the analysis of university price increases in recent years.)
The table below shows the impact of the May 2005 budget and March 2006 tuition fee announcement on the total operating revenues that universities can expect to receive over the 2005-06 to 2009-10 period.
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|---|
| Additional PSE Funding ($m) | 447 | 7364 | 932 | 958 | 1,156 |
| University share1 ($m) | 282 | 523 | 689 | 708 | 862 |
| Annual Increment | 282 | 241 | 166 | 19 | 154 |
| Total Grant ($m) | 2,631 | 2,872 | 3,038 | 3,057 | 3,211 |
| % Increase | 12.0% | 9.2% | 5.8% | 0.6% | 5.0% |
| Total Fees2 ($m) | 2,286 | 2,451 | 2,572 | 2,756 | 2,962 |
| % Increase | 4.1% | 7.2% | 4.9% | 7.2% | 7.5% |
| Grant per BIU3 ($) | 4,316 | 4,537 | 4,716 | 4,598 | 4,667 |
| % Increase | 6.8% | 5.1% | 3.9% | -2.5% | 1.5% |
| Fees per BIU ($) | 3,749 | 3,872 | 3,992 | 4,145 | 4,305 |
| % Increase | -0.8% | 3.3% | 3.1% | 3.9% | 3.8% |
| Grant + Fees per BIU ($) | 8,065 | 8,409 | 8,707 | 8,744 | 8,972 |
| % Increase | 3.1% | 4.3% | 3.5% | 0.4% | 2.6% |
| Adjusted for 4.6% annual inflation ($) | 7,711 | 7,667 | 7,558 | 7,218 | 7,048 |
| % Decrease | -1.4% | -0.3% | -1.1% | -4.0% | -1.9% |
Notes
1 For 2005-06, the additional grant allocation information has been provided by MTCU. For all other years, the university share of the additional PSE funding is derived by assuming that universities, after receiving the sector’s funds allocated for graduate and medical education, receive two-thirds of the remaining PSE funds.
2 Assumes 4.5% per year in average tuition per student plus enrolment growth.
3 For each level, every program is assigned a Basic Income Unit (BIU) weight that approximates its relative cost to run. For example, a first-year undergraduate arts and science program has a BIU weight of 1, while most medical programs have a BIU weight of 5 and Ph.D. programs an annual weight of 6. The sum of the BIU weight times the number of Full-Time Equivalent (FTE) enrolments for each level and program equals an institution’s total number of BIUs. The underlying BIU projections are derived from undergraduate trends calculated by the CUPA/CESPA model (which forecasts 9.8% growth from 2004-05 to 2009-10) and MTCU graduate expansion plans (14,000 more spaces by 2009-10).
4 This figure is as reflected in the 2006 budget documents.
