1. Ministry of Training, Colleges & Universities Postsecondary Education Division Higher Education Agenda: Ontario Philip Steenkamp Deputy Minister Ministry of Training, Colleges and Universities July 2007

2. Ministry of Training, Colleges & Universities Postsecondary Education Division 2 Presentation Overview Roles and Responsibilities for Postsecondary Education –Council of the Federation Strategy for Postsecondary Education and Skills Training in Canada Postsecondary Trends and Labour Market Needs –Labour Market Information –Demographic Trends –Enrolment Projections The Ontario Experience –System Design –Funding Overview –Reaching Higher

3. Ministry of Training, Colleges & Universities Postsecondary Education Division 3 Roles and Responsibilities

4. Ministry of Training, Colleges & Universities Postsecondary Education Division 4 Roles and Responsibilities for Postsecondary Education Canada’s 13 provinces and territories have constitutional responsibility for education Provinces and territories and the federal government each have roles to play in ensuring Canada’s future prosperity. To this end, the federal government also has an interest in maintaining and improving postsecondary education and skills training throughout the country Government funding is the primary source of funding for colleges and universities In addition to provincial funding for colleges and universities, the federal government assists through transfer payments and research funding Both orders of government support postsecondary students through the provision of student financial assistance

5. Ministry of Training, Colleges & Universities Postsecondary Education Division 5 Premiers Deem PSE & Skills a Priority In Banff, Alberta in 2005, Canada’s provincial and territorial premiers deemed postsecondary education and skills training a priority and announced initiatives to develop a PSE and skills strategy. An investment in postsecondary education and skills today is an investment in jobs for tomorrow. It is an investment in our future prosperity. But higher education is more than an economic imperative. It is the measure of our commitment to opportunity – it is the foundation of an engaged citizenry and strong democracy. - Council of the Federation Communiqué, August 12, 2005 Key elements of the Council Of the Federation vision for PSE & Skills as articulated in Banff Communiqué include:  P/Ts are responsible for training and education in Canada  PSE & training systems must be able to meet new challenges and ensure that Canada remains competitive in the global economy  Approaches to economic development must be tied to effective strategies for education and training

6. Ministry of Training, Colleges & Universities Postsecondary Education Division 6 COF Strategy for PSE & Skills Competing for Tomorrow, the Council of the Federation’s strategy for postsecondary education and skills training in Canada identified five key priorities: 1.Improving Access: ensuring that traditionally disadvantaged and under-represented Canadians are not left out of the 21 st Century’s highly educated and skilled workforce 2.Enhancing Quality: ensuring that Canadians can benefit from world class teaching and facilities through quality enhancement and measurement 3.Increasing Participation in the Skilled Labour Force: removing barriers to participation in Canada’s thriving economy 4.Skills for the 21 st Century Workplace: ensuring that Canada’s workers are equipped to compete in global markets and keep up with rapidly changing technology 5.Expanding Research and Innovation: to encourage productivity growth in Canada and improve economic competitiveness

7. Ministry of Training, Colleges & Universities Postsecondary Education Division 7 Postsecondary Demand and Labour Market Needs

8. Ministry of Training, Colleges & Universities Postsecondary Education Division 8 Facts of the Ontario Economy: Ontario GDP and G7 Ontario’s major trading partner, the United States, has the strongest economy among G7 nations with real gross domestic product (GDP) growth of 3.2% in 2005. Canada and Ontario, however, had the second highest economic output in 2005. Source: OECD, OECD in Figures, National Accounts of OECD Countries, 2006, and Statistics Canada

9. Ministry of Training, Colleges & Universities Postsecondary Education Division 9 Facts of the Ontario Economy: Ontario Employment Rates & G7 Among the core working-age population (15-64), Ontario’s employment rate of 73.3% in 2006 was higher than that of G7 nations. Source: OECD Employment Outlook 2007, and Statistics Canada

10. Ministry of Training, Colleges & Universities Postsecondary Education Division 10 Trends in Manufacturing Employment In relation to all other industries, manufacturing employment has declined since July 2003 In June 2007, Ontario manufacturing sector employed 935,400 people, down 50,300 jobs compared to December 2006 Source: Statistics Canada, Labour Force Survey Employment growth in manufacturing sector relative to all other industries, Ontario, Jan 02 – June 07 (Jan 02 = 100) Source: Statistics Canada, Labour Force Survey

11. Ministry of Training, Colleges & Universities Postsecondary Education Division 11 Projected Job Openings By Education in Canada 2006-2015 According to the most comprehensive projections of future job openings currently available*, over the decade from 2006 to 2015, there will be 5.5 million job openings** in Canada Two thirds of these (3.6 million jobs) will be in occupations requiring postsecondary education and in management These projections are consistent with the approach used by MTCU for Ontario, and are endorsed by experts including the Conference Board of Canada (MTCU’s partner in conducting demand projections) and Don Drummond of the TD Bank Source: HRSDC, Looking-Ahead: A 10-Year Outlook for the Canadian Labour Market (2006-2015), October 2006 ( page 56). HRSDC (Canadian Occupational Projection System) 10 year outlook for the Canadian Labour Market ** “Job openings” pertain to non-student employment – which excludes employment of young people who are employed while studying. Total job opening including jobs of students would be 5.7 million. Total PSE/Mgmt = 66% Total Job Openings, Canada 2006-15 (New Job Creation plus Retirements) Less than high school: 8% High school and/or occupation- specific training 26% College education or apprenticeship training 34% University degree 21% Management Occupations 11%

12. Ministry of Training, Colleges & Universities Postsecondary Education Division 12 Slower Future Labour Force Growth Over the next quarter century, labour force growth in Ontario is expected to slow substantially -- averaging 0.8 to 1.0% yearly, compared to an average annual rate of 1.9% over the 1976-2004 period The significant slowdown in projected labour force will occur after 2011 when the baby boomers begin to enter their senior years. Declining labour force participation rates and slower growth in the core working-age population will contribute to the slower labour force growth Slower labour force growth could lead to a tight labour market and a slower pace of employment growth.

13. Ministry of Training, Colleges & Universities Postsecondary Education Division 13 Rising Labour Supply Through Immigration The Census showed that in 2001, immigrants comprised 27% of Ontario’s population and 29% of Ontario’s labour force. Immigration will continue to be the major driver of population and labour force growth in the future, especially in the cities where most immigrants tend to settle. Immigrants account for about 70% of Ontario’s net labour force growth today. Without immigration, Ontario’s labour force would experience steady declines rather than the slower rates of growth that are projected. With current projected levels of immigration With zero immigration

14. Ministry of Training, Colleges & Universities Postsecondary Education Division 14 Social Return to Education The Price of Knowledge report found that university graduates represent 16.1 per cent of the population, provide 33 per cent of income tax, and consume 9.1 per cent of government transfer such as employment insurance or social assistance. Those with less than high school represent 19.2 per cent of the population, provide 8.8 per cent of income tax, and consume 35.1 per cent of government transfers University Graduates High School Graduates Percentage of Population 16.119.2 Percentage of Income Tax paid by group 33.08.8 Percentage of Government Transfers consumed by group 9.135.1 Source: Junor, S & Usher, A. (2004). Price of Knowledge. Access and Student Finances in Canada. Millennium Research Series. Millennium Scholarship Foundation. Canada

15. Ministry of Training, Colleges & Universities Postsecondary Education Division 15 World’s “Oldest Countries” Although Europe has a considerably “older” population compared to Canada, the share of elderly population (population over 65) in Canada was 13.1%, just slightly below the OECD average of 13.8%. Source: OECD Factbook 2006: Economic, Environmental and Social Statistics - ISBN 92-64-03561-3 - © OECD 2006; Statistics Canada estimates, 2005

16. Ministry of Training, Colleges & Universities Postsecondary Education Division 16 Age Distribution Shift to an Older Population Slower projected growth in the number of children and people of core working age, along with rapid growth in the number of seniors, will result in a shift to an older age structure. The baby boomers begin to enter their senior years starting in 2011, and by 2031, all baby boomers will be seniors Sources: Statistics Canada, 1971-2001, and Ontario Ministry of Finance projections. Age 0-14 Age 15-24 Age 25-44 Age 45-64 Age 65+ Per cent 11.9M13.5M15.0M 16.4M10.4M8.8M7.8M Population

17. Ministry of Training, Colleges & Universities Postsecondary Education Division 17 Demographics: National 18-24 age cohort projections - Ontario within Canada in 2007-2031 Ministry of Finance, March 2006

18. Ministry of Training, Colleges & Universities Postsecondary Education Division 18 Challenges: Canada’s Changing Demographics Changing demographics across Canada pose new challenges for postsecondary policy makers Disparate demographic trends across Canada present unique challenges to each jurisdiction

19. Ministry of Training, Colleges & Universities Postsecondary Education Division 19 Demographic Trends: Atlantic Provinces A recent study on factors and trends in Maritime university enrolment by the Maritime Provinces Higher Education Commission (June 2007) concluded the following: –“Accounting solely for the demographic decline, undergraduate enrolment could decline by as much as 10% between 2008 and 2018.” This follows a 13% drop in the number of 18-24 year olds in the Maritimes between 1990 and 2000 (27% in Newfoundland and Labrador). Over the same period there was a less than 1% drop in the number of 18-24 year olds in Canada.

20. Ministry of Training, Colleges & Universities Postsecondary Education Division 20 Demographic Trends: Ontario Full-time Undergraduate enrolment at Greater Toronto Area and Central Ontario universities grew 62 per cent between 1995 and 2005. Universities in other regions of Ontario grew by 36 per cent. Population growth through 2015 is projected to increase enrolment by approximately 35,000 to 40,000 assuming no change in the current participation rate, with at least 30,000 due to a higher population in the Greater Toronto Area. The university participation rate has been increasing, while the college rate is flat. Ontario received approximately 125,000 immigrants in 2006, the majority of whom settled in the Greater Toronto Area. About 44 per cent of the population in the Toronto Census Metropolitan Area is foreign born (2001).

21. Ministry of Training, Colleges & Universities Postsecondary Education Division 21 Trends in Ontario Policy makers are considering how best to plan for the projected further growth in the postsecondary education system and in the Greater Toronto Area. At the same time as the numbers of postsecondary students are growing, students are also moving between college and university sectors in significant numbers. In Ontario, efforts are being made to ease barriers to movement between the sectors. Developments in other jurisdictions highlight the importance of student mobility and transferability of credentials. Recent enrolment patterns show a small shift away from sciences/technology toward arts/social sciences for both colleges and universities. Key Greater Toronto Area sectors (information and communication technology, financial services, and the entertainment cluster) have experienced strong employment growth and have high PSE attainment.

22. Ministry of Training, Colleges & Universities Postsecondary Education Division 22 Participation Rates Recent expansion of postsecondary education saw increases in university participation rate, but not in the college sector 2006-07 enrolment and 2007-08 application data signal participation rate trends continue Full-Time Enrolment as Share of 18-24 Population

23. Ministry of Training, Colleges & Universities Postsecondary Education Division 23 Straw Model: Projected Demand at Ontario Institutions Changes in the participation rate can have greater effects on enrolment than demographics, for illustrative purpose this straw model shows the effects of a +/- 1 per cent change in the participation rate Participation rate plus 1% Constant Participation Participation rate less 1%

24. Ministry of Training, Colleges & Universities Postsecondary Education Division 24 University expansion surrounding Greater Toronto Area The previous decade has seen massive growth at Ontario’s postsecondary institutions, particularly those universities in and around the Greater Toronto Area Growth in Ontario universities, 1995-2005

25. Ministry of Training, Colleges & Universities Postsecondary Education Division 25 Internationalization of PSE in Ontario Increasing number of international students in Ontario (inbound) Province is supporting study abroad opportunities for Ontario students (outbound) –3 exchange agreements Baden-Wurttemberg, Germany Rhone-Alpes, France Maharashtra-Goa, India Ontario International Education Opportunity Scholarships ($2,500) –272 in 2006-07 –800 in 2007-08

26. Ministry of Training, Colleges & Universities Postsecondary Education Division 26 The Ontario Experience

27. Ministry of Training, Colleges & Universities Postsecondary Education Division 27 System Design - Capacity The growth of 18-24 year olds is predicted to be primarily in the GTA Past and Projected Change in Population Age 18-24

28. Ministry of Training, Colleges & Universities Postsecondary Education Division 28 System Design – Differentiation (Mission Drift) Mission drift speaks to the perceived growing tendency for sectors and institutions to overlap and become more alike and less different from one another Obvious differences include the relevant emphasis put on undergraduate education versus graduate education and research, or program mix and the variety of credentials offered Arguable, this trend towards increased homogeneity and mission drift stems from a number of potential factors –The perceived “massification” of higher education in which 40 per cent to 50 per cent of the population now participates in postsecondary studies, as opposed previously, when a university education was reserved for the elite –Increased competition causes institutions to imitate more successful institutions it order to maintain market share or reputation –Funding formula arrangements that provide uniform incentives towards institutional behaviour

29. Ministry of Training, Colleges & Universities Postsecondary Education Division 29 System Design - Pathways There is growing evidence for increasing demand for better pathways in Ontario In 2005-06, 25 per cent of college students enrolled with the main goal of preparing for future university or college study, up from 16 per cent in 2000-01 Currently, 7 per cent of Ontario college students have a university degree, and over 9 per cent of college graduates continue onto university within 6 months of graduating University transfer from colleges, 2001-05

30. Ministry of Training, Colleges & Universities Postsecondary Education Division 30 Trends in Ontario PSE Revenues Institutions are relying less on operating grants, and more on tuition and other operating revenue (donations, investment income and ancillary activities) Shares of total operating revenue at Ontario institutions, 1991 - 2006

31. Ministry of Training, Colleges & Universities Postsecondary Education Division 31 Reaching Higher: New Ongoing Operating Investments ($ Millions)  The government announced its Reaching Higher Plan as part of the 2005 Ontario Budget. Reaching Higher represents $6.2 billion in new investments in postsecondary education and training by 2009-2010 – the most significant multi-year investment in Ontario’s higher education sector in over 40 years. 6,1781,6011,3591,3001,035683200 Total New Investments 36687 866244- 4,3051,16695893273244750 1,537358314282241192150 Cumulative Total2009-102008-092007-082006-072005-062004-05 Student Financial Assistance Training and Apprenticeship and Other Initiatives Operating Grants to Colleges and Universities As Announced in the 2005 Ontario Budget*

32. Ministry of Training, Colleges & Universities Postsecondary Education Division 32 Reaching Higher Raising total base operating grants to colleges and universities to $4.2 billion in 2007-08. This includes $4.0 billion in combined operating grants to colleges and universities and $0.2 billion in operating grants targeted for health human resources and postsecondary transformation funding; Announcing an additional $390 million to postsecondary institutions for more classroom space, higher enrolments and more training; By 2007-08, supporting graduate education with $170 million in additional funding and expanding graduate spaces by 12,000; Providing more than $580 million in student financial aid through the Ontario Student Assistance Program in 2007-08; Increasing first-year undergraduate medical enrolment by 23 per cent by 2009-10 over 2004-05; and Committing $55 million by 2009-10 to create more opportunities for francophones and those traditionally underrepresented in postsecondary education.

33. Ministry of Training, Colleges & Universities Postsecondary Education Division 33 Reaching Higher Increasing full-time enrolment by 86,000 since 2002-03, a 22- per-cent increase; Increasing special access funding by $20 million in 2006-07 for small, northern and rural colleges, bringing total funding to $65 million; Re-introducing upfront grants, benefiting nearly 60,000 students and limiting student debt to $7,000 per completed year of study. In 2006-07, 145,000 students are benefiting from enhancements over the last three years to student aid; and Capped tuition increases – following two years of tuition freezes – at an average of five per cent annually, or $100 for 90 per cent of college students and $200 for 70 per cent of university students.

34. Ministry of Training, Colleges & Universities Postsecondary Education Division 34 Map of Ontario’s Publicly Assisted Universities Algoma Sault Ste. Marie Note: OCAD is a provincially- assisted

35. Ministry of Training, Colleges & Universities Postsecondary Education Division 35 Ontario’s Publicly Assisted Universities: Operating Revenues ($5.0B) Source: COFU-UO, Volume 1, Table 2, 2005 Numbers may not add up due to rounding Tuition & Other Fees $2.3B, 45% MTCU Grants & Contracts, $2.3B, 47% Donations, Miscellaneous & Other Income, $0.3B, 6% Other Government Grants/Contracts $0.1B, 3%

36. Ministry of Training, Colleges & Universities Postsecondary Education Division 36 Map of Ontario’s Publicly Assisted Colleges of Applied Arts and Technology plus Three Agricultural Colleges * * Agricultural College * *

37. Ministry of Training, Colleges & Universities Postsecondary Education Division 37 Ontario’s Publicly Assisted Colleges of Applied Arts and Technology: Operating Revenues ($2.5B) Source: Ministry of Training, Colleges and Universities Numbers may not add up due to rounding Provincial Grants, $1.2B, 49% Other Income, $0.4B, 15% Ancillary Fees, $0.2B, 10% Tuition Fees, $0.7B, 26%

38. Ministry of Training, Colleges & Universities Postsecondary Education Division 38 Conclusion Provinces and territories have shown leadership in setting the agenda for postsecondary education and skills in Canada Provinces and territories, like Ontario, have made major investments in postsecondary education Despite these common measures, disparate demographic trends throughout the country are requiring unique policy solutions