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Alberta’s new post-secondary funding model tied to performance measures

Provincial funding for Alberta universities changing to performance-based model
WATCH: Colleges and universities will soon have to prove their performance to receive provincial funding in Alberta. As Tom Vernon explains, the UCP government is changing how it hands out funding, and it's set to start this year.

Alberta’s new funding model for post-secondary institutions ties some of the money to performance measures.

Advanced Education Minister Demetrios Nicolaides says that starting in April, up to 15 per cent of operational funding provided to schools through grants will be linked to enrolment, graduation rates and filling job market needs.

That number is to grow to 40 per cent of funding by 2022.

“I’m proud to announce today a total transformation in government funding to our post-secondary institutions,” Nicolaides told a news conference Monday. “This new model is designed to help our students succeed.

“We can build a stronger post-secondary system … that ensures young Albertans can find rewarding careers (and) a stronger system that ensures taxpayer dollars are being used to support teaching and research instead of growing administration.”

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Nicolaides said the funding model is used successfully in the United States, some European countries and in Hong Kong.

“Policy-makers and leaders around the world are taking a close look at the relationship between government funding and labour-market outcomes of post-secondary institutions, and we must do the same to remain competitive.”

Consultations with universities, colleges and polytechnical institutes are to begin right away. The government has the final say on performance targets that will be unique to each institution.

Other performance measures could include administrative spending, work-integrated learning opportunities and revenue from sponsored research.

MacKinnon panel report urges Alberta post-secondary schools to rely less on government funding
MacKinnon panel report urges Alberta post-secondary schools to rely less on government funding

Nicolaides said schools will not be forced to compete against each other for taxpayer dollars.

Institutions that meet all their targets will receive 100 per cent of their allocated funding. Lesser outcomes will be treated proportionally. For example, if a school meets 90 per cent of its target, it will receive 90 per cent of its funding for that target.

The plan is to have some measures in place this year. More are to be introduced in the years that follow to a maximum of about 15 measures.

They will be included in new three-year funding agreements with post-secondary schools. The agreements will spell out the performance targets and the money to be received if they are met.

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READ MORE: MacKinnon Panel report urges Alberta post-secondary schools to rely less on government funding

The Council of Post-Secondary Presidents of Alberta said it has been calling for changes in funding. But it cautioned in a statement that “the funding model that is developed must build on well-established system strengths and not generate unhealthy competition among Alberta post-secondary institutions.”

The council noted schools are already dealing with five per cent cuts to operating budgets introduced in last fall’s provincial budget, with more cuts coming.

This year’s advanced education operating expense is $5.1 billion and is to be reduced over four years to $4.8 billion.

Last week, Nicolaides sent out letters to 21 post-secondary schools warning that they are going over budget this year. He urged them to immediately cut spending in areas such as travel, hosting and hiring.