When the Ontario government announced in this year’s budget that by 2024 - 2025 it would link 60 per cent of its university funding to performance metrics, it positioned the policy as a means of encouraging positive economic outcomes, training people for jobs and restoring accountability.
The announcement did not usher in a new approach as much as it accelerated a conversation a decade in the making – one that has been supported by the University of Toronto.
At its centre is the question of how to recognize universities’ education mission as well as their specific contributions to improving the lives of individuals and communities. As Canada’s top research university, the University of Toronto has long advocated for funding mechanisms that recognize its role in driving national and provincial innovation and prosperity, alongside its teaching mission.
The University’s priorities reflect discussions with its important stakeholders including faculty, alumni, students and governments.
The upcoming round of discussions toward the strategic mandate agreement recognize the University’s impact and autonomy, allowing the institution to weight each metric to reflect its specific goals.
At the same time, while the agreement offers an opportunity to talk with government about how to best prepare Ontario for the future, the financial impact on the University of Toronto’s budget will be limited. It is estimated that 13 per cent of the University’s revenue will be linked to performance once the new mechanism is fully implemented in 2024-25, with far smaller shares tied to each indicator.
Trevor Rodgers, Assistant Vice-president of Planning & Budget, explained how the University of Toronto is using the discussions with government to highlight the university’s impact on students, job creation, entrepreneurship, and provincial prosperity.
Q: Sixty per cent of funding tied to performance metrics is a substantial figure. How much of a shift is that target from previous rounds of discussions toward a strategic mandate agreement?
It is a big change for Ontario, but it started a long time ago. The Province’s differentiation policy framework, established in 2013, was very much aligned with advocacy by U of T for a funding model that recognized other types of activity we do outside of teaching, notably research and innovation.
The first SMA, from 2014 to 2017, started the differentiation discussion. Then the 2017 to 2020 agreement set out the structure under which we would have performance-based funding. When we negotiated that agreement, the previous government signalled they would begin attaching about 10 per cent of funding to performance metrics by 2020.
That certainly was a shift, because funding moved away from an exclusive focus on enrollment. What has changed with the new provincial government is an increase in the proportion of funding that will be tied to performance, a decrease in the number of metrics, and a focus on priorities of the current government: issues like graduate skills, labour market outcomes, and economic impact.
Q: What performance metrics do you feel most closely reflect U of T’s priorities, and which may need further discussion?
The proposed research funding, graduation rate, and experiential learning metrics are ones we already follow quite closely in monitoring our own performance.
The community impact and graduate skills metrics could be more challenging. The province has shared with us that they are considering enrollment relative to total community population as an indicator of community impact. This is problematic for universities in large urban regions that are growing quickly. I would argue that something like the proportion of our students from low-income families would be a better measure of U of T’s impact on the community: approximately a quarter of our first-year undergraduate students come from families with incomes of $50,000 or less.
The graduate skills indicator is not slated to come online for three years, as the government acknowledges it needs more lead time and discussion. The question is which skills we are trying to measure for university graduates – program content, critical thinking and reasoning, literacy – and how those skills can be measured effectively.
Q: What will be the outcome of the performance metrics on the university and its different faculties?
Right now, we are doing a budget model review and looking at exactly this question. The conversation began during SMA2, in anticipation of implementing performance based funding in 2020. The university’s budget model allocates all revenue at the level of divisions. When most revenue was tied to enrollment, we could distribute that among divisions very easily because we track enrollment at that level.
As we move toward a different driver of revenue, the question is how we implement that internally. We don’t have an outcome to that discussion yet — but the default is not that we allocate division-level funding on the basis of all metrics in the SMA. In many cases, that would not make sense, or we won’t have division-level data. However, where it makes sense for U of T, we might want to invest in initiatives that both advance our priorities and drive improvement in our performance metrics.
Q: How much room is there to negotiate the framework of the SMA between now and 2024–2025?
We expect to get more details about the structure of the next agreement when we begin negotiations in the fall. The government has signalled that they would be willing to consider modifications to our initial weighting of indicators within the performance-based funding model at some point during the five-year agreement. For example, if things change in terms of university priorities, if we have a new strategic direction, we might be able to go back and reweight our performance metrics after the second year. I think that’s positive.