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What’s behind the explosive growth in Canadian university costs?

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From the Macdonald Laurier Institute

By David Clinton for Inside Policy

Dramatic increases in high-end employment costs have been a significant driver of rising university costs.

We’ve probably all seen reports describing out-of-control higher education costs in the United States. An education that in the 1970s could be financed with some savings and a part-time job at the local Burger King will now cost you the equivalent of a down payment on a multi-family investment property.

Those increases are not just the result of regular inflation. When you track US college costs against consumer goods (as the economist Mark J. Perry did), you’ll see that, besides healthcare, rising college-related expenses are unlike anything else.

What changed? The word on the street is that those crazy tuition costs are mostly due to colleges hiring vast armies of non-teaching administrators.

But what about Canadian universities? Back in 2006–07, according to Statistics Canada, across all Canadian universities the average inflation-adjusted cost of one year’s undergraduate tuition was $17,363. Fast forward to 2023–24 – and that same tuition-only cost has now doubled to $34,628.

Note how I referred to those numbers as “costs.” That’s because $34,628 is what you’ll pay if you’re an international student without scholarships. Thanks to government subsidies, Canadians get a big discount. In fact, the average domestic student currently pays only $6,434. But it’s taxpayers who cover the difference.

So, tuition is rising far faster than inflation. But figuring out what’s behind those increases will take some work.

The rise of the university administrator

As the chart shows, since 2001, teaching jobs have dropped from accounting for 17.38 percent of all university positions down to 14.52 percent in 2022. In other words, universities are, proportionally, hiring teaching staff at significantly lower rates than they used to. But please do keep that “proportional” bit in the back of your mind, as we’ll come back to it later.

Source: Statistics Canada/The Audit

However, those numbers don’t tell us who universities are hiring instead of teaching staff. Perhaps they’re building up their food services, security, and custodial crews?

There is at least one identifiable subgroup that’s visibly ballooned: education support services. That North American Industry Classification System category (NAICS Code 6117) includes educational consultants, student exchange program coordinators, testing services, research and development, guidance counsellors, and tutoring and exam preparation services.

Since 2001, the proportion of support services staff in relation to all hires has more than doubled, from 1.06 percent to 2.62 percent. Their absolute numbers across Canada rose from 3,829 to 15,292. (Statistics Canada offers plenty of data and insights on the topics raised in this article. For further investigation, go herehere, and here).

That’s certainly an interesting trend. But an increase of just 1.5 percent isn’t enough to explain the tuition growth we’ve experienced. And I’m also not sure that the “education support services” category maps directly to the class of high-earning administrator they’re talking about in the US. It looks like we could use some more data.

Tracking Salary Changes in Ontario Universities

The year 1996 saw a welcome victory for government transparency when Ontario’s then-Progressive Conservative Premier Mike Harris mandated the annual disclosure of all public sector employees earning more than $100,000. Since that year, the Sunshine List, as it’s popularly known, has grown from just 4,500 names to more than 300,000. However, $100,000 won’t buy you what it once did – especially if you must live in Toronto.

Perhaps we could bring those numbers up to date. Using the Bank of Canada’s inflation calculator, I identified the inflation-adjusted value of 100,000 1996 dollars for 2003 and for 2023. I then identified the individuals on the list who were employed by universities in 2003 and in 2023 and whose salaries were above the inflation-adjusted thresholds. The new thresholds, by the way, were $117,000 for 2003 and $175,000 in 2023.

The first thing that hits you when you see the adjusted data is the explosive growth in hiring. Ontario universities (not including colleges) employed 2,191 individuals earning more than $117,000 in 2003. Twenty years later, the number of employees earning more than $175,000 had ballooned to 8,536. That’s 290 percent growth. The number of people with “dean” in their job description climbed from 195 to 488 during those years. And there are now 6,772 professors on the high earners’ list as opposed to just 1,782 back in 2003.

For context, Statistics Canada tells us that there were 397,776 students enrolled in Ontario universities in 2003 and 579,057 in 2022 (the latest year for which data is available). That’s an increase of 46 percent – which doesn’t justify the 60 percent jump we’ve seen in high-paid deans and the 74 percent increase in similarly high-paid professors.

I think things are starting to come into focus.

Now let’s find out what happened to salaries. Did you know that there’s a strategic management professor who’s earning more than $650,000 annually? And what about that hybrid dean/lecturer who’s pulling in close to $600,000?

Okay… those are probably outliers, and there isn’t much we can learn from them. However, I can tell you that the average university employee in our Sunshine List earned $140,660 back in 2003. Twenty years later, the inflation-adjusted equivalent of that salary would be $211,887. But in the real world – the one that those on the public payroll graciously agree to share with us – the average 2023 university employee on the list earned $220,404. That’s a difference of only 4 percent or so, but that’s after we already accounted for inflation.

Perhaps I can illustrate this another way. The sum of all university salaries above the $117,000 threshold in 2003 was around $308 million. In 2023 dollars, that would equal $464 million. But the actual sum of all 2023 salaries above $175,000 was $1.8 billion (with a “B”)!

So, yes, tuition has doubled since 2006–07. And it seems that dramatic increases in high-end employment costs have been a significant driver. As the taxpayers paying for most of this, there’s a question that we must ask ourselves: has the epic growth in university employment delivered value to Ontario – and to all Canada – at a scale that justifies those costs? In other words, are the students now graduating from Canadian schools equipped to successfully enter a demanding job market, navigate a fractured political environment, and strengthen weakened communities? Recent scenes from campus protests suggest that might not be the case.

David Clinton is the publisher of The Audit (www.theaudit.ca), a journal of data-driven policy analysis. He is also the author of books on data tools, cloud and Linux administration, and IT security.

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Economy

The White Pill: Big Government Can Be Defeated (Just Ask the Soviet Union)

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From StosselTV

People have been “black pilled” to think the world is doomed. Michael Malice says there’s hope.

In his book, “The White Pill,” he argues that tyrannical regimes, like the Soviet Union, can be toppled.

Today, media and universities distort history, and push socialism. It used to be worse. The New York Times once covered up Stalin’s famine, even as millions starved. Why? Malice says it’s because NYT star reporter Walter Duranty liked communism’s utopian promises, and status he got from his exclusive Stalin interviews.

Malice says the fall of the Soviet Union should give us hope that America can resist the universities and media’s brainwashing – or any tyranny that someone is “black pilled” about.

Our video explains Malice’s “white pill” and why you might want to take it.

After 40+ years of reporting, I now understand the importance of limited government and personal freedom.

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Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people.

Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20.

Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year.

Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.

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To get our new weekly video from Stossel TV, sign up here: https://www.johnstossel.com/#subscribe

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Alberta

Ford and Trudeau are playing checkers. Trump and Smith are playing chess

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CAE Logo

 

By Dan McTeague

 

Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry.

There’s no doubt about it: Donald Trump’s threat of a blanket 25% tariff on Canadian goods (to be established if the Canadian government fails to take sufficient action to combat drug trafficking and illegal crossings over our southern border) would be catastrophic for our nation’s economy. More than $3 billion in goods move between the U.S. and Canada on a daily basis. If enacted, the Trump tariff would likely result in a full-blown recession.

It falls upon Canada’s leaders to prevent that from happening. That’s why Justin Trudeau flew to Florida two weeks ago to point out to the president-elect that the trade relationship between our countries is mutually beneficial.

This is true, but Trudeau isn’t the best person to make that case to Trump, since he has been trashing the once and future president, and his supporters, both in public and private, for years. He did so again at an appearance just the other day, in which he implied that American voters were sexist for once again failing to elect the nation’s first female president, and said that Trump’s election amounted to an assault on women’s rights.

Consequently, the meeting with Trump didn’t go well.

But Trudeau isn’t Canada’s only politician, and in recent days we’ve seen some contrasting approaches to this serious matter from our provincial leaders.

First up was Doug Ford, who followed up a phone call with Trudeau earlier this week by saying that Canadians have to prepare for a trade war. “Folks, this is coming, it’s not ‘if,’ it is — it’s coming… and we need to be prepared.”

Ford said that he’s working with Liberal Finance Minister Chrystia Freeland to put together a retaliatory tariff list. Spokesmen for his government floated the idea of banning the LCBO from buying American alcohol, and restricting the export of critical minerals needed for electric vehicle batteries (I’m sure Trump is terrified about that last one).

But Ford’s most dramatic threat was his announcement that Ontario is prepared to shut down energy exports to the U.S., specifically to Michigan, New York, Wisconsin, and Minnesota, if Trump follows through with his plan. “We’re sending a message to the U.S. You come and attack Ontario, you attack the livelihoods of Ontario and Canadians, we’re going to use every tool in our toolbox to defend Ontarians and Canadians across the border,” Ford said.

Now, unfortunately, all of this chest-thumping rings hollow. Ontario does almost $500 billion per year in trade with the U.S., and the province’s supply chains are highly integrated with America’s. The idea of just cutting off the power, as if you could just flip a switch, is actually impossible. It’s a bluff, and Trump has already called him on it. When told about Ford’s threat by a reporter this week, Trump replied “That’s okay if he does that. That’s fine.”

And Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry. Just over the past year Ford and Trudeau have been seen side by side announcing their $5 billion commitment to Honda, or their $28.2 billion in subsidies for new Stellantis and Volkswagen electric vehicle battery plants.

Their assumption was that the U.S. would be a major market for Canadian EVs. Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,”according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”

But Trump ran on abolishing the Biden administration’s de facto EV mandate. Now that he’s back in the White House, the market for those EVs that Trudeau and Ford invested in so heavily is going to be much softer. Perhaps they’d like to be able to blame Trump’s tariffs for the coming downturn rather than their own misjudgment.

In any event, Ford’s tactic stands in stark contrast to the response from Alberta, Canada’s true energy superpower. Premier Danielle Smith made it clear that her province “will not support cutting off our Alberta energy exports to the U.S., nor will we support a tariff war with our largest trading partner and closest ally.”

Smith spoke about this topic at length at an event announcing a new $29-million border patrol team charged with combatting drug trafficking, at which said that Trudeau’s criticisms of the president-elect were, “not helpful.” Her deputy premier Mike Ellis was quoted as saying, “The concerns that president-elect Trump has expressed regarding fentanyl are, quite frankly, the same concerns that I and the premier have had.” Smith and Ellis also criticized Ottawa’s progressively lenient approach to drug crimes.

(For what it’s worth, a recent Léger poll found that “Just 29 per cent of [Canadians] believe Trump’s concerns about illegal immigration and drug trafficking from Canada to the U.S. are unwarranted.” Perhaps that’s why some recent polls have found that Trudeau is currently less popular in Canada than Trump at the moment.)

Smith said that Trudeau’s criticisms of the president-elect were, “not helpful.” And on X/Twitter she said, “Now is the time to… reach out to our friends and allies in the U.S. to remind them just how much Americans and Canadians mutually benefit from our trade relationship – and what we can do to grow that partnership further,” adding, “Tariffs just hurt Americans and Canadians on both sides of the border. Let’s make sure they don’t happen.”

This is exactly the right approach. Smith knows there is a lot at stake in this fight, and is not willing to step into the ring in a fight that Canada simply can’t win, and will cause a great deal of hardship for all involved along the way.

While Trudeau indulges in virtue signaling and Ford in sabre rattling, Danielle Smith is engaging in true statesmanship. That’s something that is in short supply in our country these days.

As I’ve written before, Trump is playing chess while Justin Trudeau and Doug Ford are playing checkers. They should take note of Smith’s strategy. Honey will attract more than vinegar, and if the long history of our two countries tell us anything, it’s that diplomacy is more effective than idle threats.

Dan McTeague is President of Canadians for Affordable Energy.

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