Economic Letter

David Bond is a retired bank economist who lives is Kelowna.

Canadian universities are suffering from the impacts of the COVID-19 pandemic and will probably undergo significant changes in the next five years.

First, the enrolment of foreign students will, at least in the short run, drop significantly. Over the last decade, these students have become an important source of income for virtually every Canadian post-secondary institution. Their tuition fees, typically two to six times higher than those paid by domestic students, fund a growing portion of the costs of Canada’s postsecondary system. Their total annual economic impact upon Canada has been estimated at in excess of $22 billion.

Those coming from distant homes, especially those from Asia, will now find it difficult to get to Canadian campuses. Just how much will be lost is hard to calculate. A British international consultancy found that, in a survey of more than 2,800 international students intending to study in Canada, 54 per cent planned to defer admission by a year and about 15 per cent of prospective international students have changed their intentions and are no longer planning to come to Canada.

Were that not worrying enough, provincial governments are telling these institutions to expect at least a 10% cut in their provincial government funding to help meet increased demands for spending on health care. For the administrations of these institutions the challenge will be enormous because cut in budgets of between 10% and 20% will generate very difficult choices.

Do they simply abolish certain course or disciplines, or graduate versus undergraduate spending, or cut back on library acquisitions? Do they freeze both salaries and hiring and postpone tenure decisions until they have a more certain outlook about future funding? And how do they plan for variations in student enrolment?

From a student point of view, the impact of the pandemic will probably yield significant changes in how their learning takes place. Large-size classes will probably be only a memory and the typical lab courses in the sciences with students forming teams will be very difficult to organize. Distance learning via the internet is possible with most of the humanities and social sciences but in the pure sciences it is not so clear how this works, particularly with the lab requirements mentioned above.

Moreover, student life will change and the use of certain common facilities such as the library, study spaces, athletic facilities and even student dormitories will have to adjust to social distancing requirements.

My thirty-plus years of experience as an academic and a member of the boards of post-secondary institutions leads me to doubt that these large and very diverse organizations can act quickly to adapt to radically different environments.

Consider just one question: the trade-off between graduate and undergraduate courses. Typically undergraduate courses, especially in the first and second years of study, are quite large (50 up to 200 students) and may involve one or more tutorials along with the main lectures. Those tutorials are normally run by graduate student teaching assistants who also do a great deal the marking of exams and essays.

A class of graduate students typically is no more than 25 and often from five to 10. The course still requires one faculty member regardless of the size. If you eliminate the graduate program to save money, however, you also eliminate the supply of teaching assistants who do much of the grunt work in large undergraduate courses. This less-than-glamorous work all gets shifted back to the faculty members who may be less than enthusiastic.

Moreover, the number of undergraduate courses each faculty member has to teach may increase. If these changes occur simultaneously across the nation, the option of moving to another institution may not exist and morale will suffer.

For provincial governments, all of this disruption presents an opportunity to bring about some rationalization of post-secondary education. One example would be limiting the number of graduate programs in a low-demand discipline to one or maybe two institutions in any province.

Which programs would be selected would have to be determined by the universities themselves with oversight from the governments.

This will take time and generate enduring hostilities and resentment.

In short, universities face a prolonged period of adjustment with no easy solutions.

David Bond is a retired bank economist and university professor who resides in Kelowna.