The future is not what it used to be: re-examining provincial postsecondary funding mechanisms in Canada

Abstract

This commentary suggests that current provincial funding mechanisms for postsecondary education (PSE) in Canada are not adequate for achieving the sectoral goals of quality, accessibility and responsiveness to the needs of the labour market. It argues that alternative funding mechanisms need to be considered, particularly student-based funding. The author begins with an overview of the financing of Canadian higher education systems, then highlights several policy objectives that provincial governments need to focus on. The essential features of a conceptual framework, based on the 'notion of agency' that highlights the importance of incentives in PSE funding, are described. This is followed by a description and evaluation of the funding mechanisms employed by the provinces, before an alternative that replaces a significant part of current institutional subsidies with student-based funding, is proposed. The commentary concludes with a brief discussion of policy imperatives.