Alberta
Province defends post-secondary funding changes. Says United Kingdom, Denmark, Finland, Hong Kong using performance-based funding
Minister Nicolaides meets with student leaders prior to announcing a new post-secondary funding announcement.
From The Province of Alberta
Transforming post-secondary funding
A new outcomes-based post-secondary funding approach will increase transparency and accountability and help build a modern and diverse workforce for the future.
Under the new funding model, a portion of government funding to colleges, universities and polytechnics will be based on achieving key performance measures. Performance measures will encourage institutions to improve services, increase efficiencies and create opportunities for Albertans through strong labour market outcomes and innovative programs and research.
“This is a new and completely transformative funding model for our universities, colleges and polytechnics. Our new approach will help ensure students are set up for success by encouraging institutions to produce job-ready graduates. Students make a significant investment in their post-secondary education, and it is essential we do everything possible to give them a rewarding career at the end of their studies. By shifting the focus to performance, we will ensure taxpayer dollars are being used in the most responsible way possible.”
“The University of Calgary has the ability to create the ‘arc to the future’ for Calgary and help re-imagine Alberta. The outcomes-based funding model is not only a tremendous opportunity to transform our post-secondary system, but to graduate a workforce that is capable of adaptation, with the skills and abilities to innovate and to support economic growth and diversification.”
“We look forward to working with government to implement the new outcomes-based approach to funding. This approach should improve predictability in government funding levels and enhance accountability for results delivery, both of which will benefit our students.”
“Alberta’s post-secondary presidents welcome the opportunity to work with the Government of Alberta, our learners and other stakeholders in building a performance-based model that will enable us to achieve an overall vision for Alberta’s post-secondary system, that builds on the strengths and core mission of each institution, and that maximizes the quality of our learning and research environments so that learners and communities can reach their highest potential.”
“Alberta’s students deserve an institutional funding model that is both modern and evidence-based. ASEC supports the changes made by the Government of Alberta towards a model that fits our values of transparency, accountability, affordability and predictability. We look forward to working with the government in the further development of the Campus Alberta Grant allocation.”
In addition to tying public investment to results, government is also transforming its relationship with post-secondary institutions by negotiating three-year funding agreements. Investment management agreements will include specific performance targets for each institution. They will also specify the government funding each institution will receive if they meet their performance targets. Three-year terms will help institutions plan for the future and build on their record of excellence.
The amount of funding tied to performance outcomes will begin at 15 per cent of operational funding for 2020-21 and gradually increase to a maximum of 40 per cent by 2022-23. A small number of performance measures will be introduced for the 2020-21 academic year, and more measures will be gradually introduced over the next three years to a total of about 15.
Quick facts
- Government provides operational funding to 26 universities, colleges and polytechnics every year, but historically, this funding has not been tied to any targets or outcomes. While government provides many different kinds of grants to post-secondary institutions, only operational funding through the Campus Alberta Grant will be tied to performance.
- The MacKinnon Report identified that the current post-secondary funding structure does not link funding to the achievement of specific goals or priorities for the province, such as ensuring the required skills for the current and future labour market.
- Outcomes-based funding is a global trend in higher education. About 35 U.S. states use a form of performance-based funding. Over the past 10 years, additional jurisdictions have implemented various methods of performance-based funding, such as the United Kingdom, Belgium, Spain, Portugal, Italy, Norway, Sweden, Denmark, Finland, Poland, Australia, New Zealand and Hong Kong.
- While performance measures will be finalized after discussions with post-secondary institutions, students and faculty, some examples may include:
- graduate employment rate
- median graduate income
- graduate skills and competencies
- work-integrated learning opportunities
- administrative expense ratio
- sponsored research revenue
- enrolment (including potential targets for domestic students, international students and under-represented learners)
- Performance measures will also be weighted differently depending on the institution. For example, different performance measures will be more important to different kinds of institutions.
- Institutions that meet all of their targets will receive 100 per cent of their allocated funding.
- If an institution does not meet its targets, the institution will receive funding that is proportionate to its level of achievement. For example, if an institution achieves 90 per cent of its target, it will receive 90 per cent of its funding for that target.
From the Fraser Institute
By Tegan Hill
According to last week’s fiscal update, the Smith government recorded a $8.3 billion surplus in 2024/25—$8 billion more than what the government projected in its original 2024 budget. But the good times won’t last forever.
Due largely to population growth, personal income tax revenue exceeded budget projections by $500 million. Business tax revenue exceeded budget expectations by $1.1 billion. And critically, thanks to relatively strong oil prices, resource revenue (e.g. oil and gas royalties) saw a $4.7 billion jump.
The large budget surplus is good news, particularly as it will be used to pay down government debt (which taxpayers must ultimately finance) and to invest for the future. But again, the good times could soon be over.
Recall, the Alberta government incurred a $17.0 billion budget deficit just a few years ago in 2020/21. And it wasn’t only due to COVID—until the recent string of surpluses, the government ran deficits almost every year since 2008/09, racking up significant amounts of debt, which still largely persists today. As a result, provincial government debt interest payments cost each Albertan $658 in 2024/25. Moreover, in February’s budget, the Smith government projected more deficits over the next three years.
Generally, Alberta’s fiscal fortunes follow the price of oil. Over the past decade, for example, resource revenue has been as low as $2.8 billion in 2015/16, while oil prices slumped to $US45.00 per barrel, and as high as $25.2 billion in 2022/23, when oil prices jumped to $US89.69 per barrel.
Put simply, resource revenue volatility fuels Alberta’s boom-and-bust cycle. In 2025/26, the West Texas Intermediate oil price will be a projected $US68.00 per barrel with projected resource revenue falling by $4.9 billion year-over-year.
But oil prices don’t need to dictate Alberta’s fiscal fortune. Indeed, if the Smith government restrains its spending, it can avoid deficits even when resource revenues fall.
There are plenty of ways to rein in spending. For instance, the government spends billions of dollars in subsidies (a.k.a. corporate welfare) to select industries and businesses in Alberta every year despite a significant body of research that shows these subsidies fail to generate widespread economic benefit. Eliminating these subsidies is a clear first step to deliver significant savings.
The budget surplus is undoubtedly positive for Albertans, but the good times could soon come to an end. To avoid deficits and debt accumulation moving forward, the Smith government should rein in spending.
Tegan Hill
Director, Alberta Policy, Fraser Institute
Sat Parhar has been appointed as the first chief of the Independent Agency Police Service, marking the next step toward a new municipal policing option.
The appointment of a new chief for the Independent Agency Police Service (IAPS) marks the next step in giving municipalities a new option for local policing and builds on the work already underway for the agency to assume the police-like duties currently carried out by the Alberta Sheriffs. The IAPS will empower municipalities to adopt strategies that effectively respond to their specific safety concerns, enhancing public safety across the province.
Chief Parhar brings more than 25 years of policing experience, including senior roles with the Calgary Police Service, most recently as deputy chief. His frontline policing experience and deep understanding of Alberta’s complex and diverse public safety landscape positions him to lead the agency as it takes shape and begins its work as a new municipal policing option, keeping communities safe.
Once operational, the agency will strengthen Alberta’s existing policing model and complement the province’s current police services, which includes the RCMP, Indigenous policing services and municipal police. It will help fill gaps and ensure law enforcement resources are deployed efficiently to meet Alberta’s evolving public safety needs and improve law enforcement response times, particularly in rural communities.
“Appointing Chief Sat Parhar is a key milestone in Alberta’s plan to give municipalities a real choice in how their communities are kept safe. This is about building a modern police service that reflects the priorities of Albertans, strengthens local decision-making, and ensures every corner of our province, especially rural areas, can count on responsive, effective law enforcement. With his decades of experience and deep understanding of Alberta’s policing landscape, he is the right leader to bring this vision to life.”
“This appointment signifies a significant step forward in our efforts to establish a more robust, community-focused policing model that is better equipped to meet the unique needs of our local residents. Under Chief Parhar’s visionary leadership, we are confident that we will develop a modern, efficient police service that not only enhances public safety but also aligns closely with the priorities and values of Albertans. His experience and commitment are vital in shaping an IAPS that is responsive, transparent, and dedicated to fostering trust and collaboration within the community, ultimately ensuring a safer and more connected society for all.”
Chief Parhar’s immediate priorities will be to hire an executive team and commence organizational planning such as developing key recruitment, training and other operational policies. Chief Parhar’s appointment is the first step of many to establishing the IAPS.
“It’s an honour to take on this role and help shape a modern police service built for Alberta. My focus from day one will be on setting high standards for professionalism, building strong relationships with our partners and ensuring this service reflects the needs and priorities of the communities we serve.”
The Independent Agency Police Service was formally created through regulation following the passing of Public Safety Statutes Amendment Act, 2024. The agency will operate as an independent Crown corporation, and will be renamed the Alberta Sheriffs Police Service, with its head office located in Calgary. The IAPS will be operationally independent from the provincial government with civilian oversight, consistent with all police services in Alberta.
“When it comes to policing, municipalities like ours deserve a choice – especially when the current system leaves us disadvantaged simply because of our size. We look forward to learning more about what that alternative will look like once an Alberta police agency is fully established and the options are clear. For us, this is about fairness, sustainability, and ensuring municipalities have access to policing solutions that reflect both their needs and their realities.”
Quick facts
- The regulation establishes the IAPS Provincial Corporation and its governance structure including board of directors, board of director powers, financial responsibilities and accountabilities.
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