Transforming post-secondary funding

Under the new funding model, a portion of government funding to colleges, universities and polytechnics will be based on achieving key performance measures. Performance measures will encourage institutions to improve services, increase efficiencies and create opportunities for Albertans through strong labour market outcomes and innovative programs and research.

“This is a new and completely transformative funding model for our universities, colleges and polytechnics. Our new approach will help ensure students are set up for success by encouraging institutions to produce job-ready graduates. Students make a significant investment in their post-secondary education, and it is essential we do everything possible to give them a rewarding career at the end of their studies. By shifting the focus to performance, we will ensure taxpayer dollars are being used in the most responsible way possible.”

“The University of Calgary has the ability to create the ‘arc to the future’ for Calgary and help re-imagine Alberta. The outcomes-based funding model is not only a tremendous opportunity to transform our post-secondary system, but to graduate a workforce that is capable of adaptation, with the skills and abilities to innovate and to support economic growth and diversification.”

“We look forward to working with government to implement the new outcomes-based approach to funding. This approach should improve predictability in government funding levels and enhance accountability for results delivery, both of which will benefit our students.”

“Alberta’s post-secondary presidents welcome the opportunity to work with the Government of Alberta, our learners and other stakeholders in building a performance-based model that will enable us to achieve an overall vision for Alberta’s post-secondary system, that builds on the strengths and core mission of each institution, and that maximizes the quality of our learning and research environments so that learners and communities can reach their highest potential.”

“Alberta’s students deserve an institutional funding model that is both modern and evidence-based. ASEC supports the changes made by the Government of Alberta towards a model that fits our values of transparency, accountability, affordability and predictability. We look forward to working with the government in the further development of the Campus Alberta Grant allocation.”

In addition to tying public investment to results, government is also transforming its relationship with post-secondary institutions by negotiating three-year funding agreements. Investment management agreements will include specific performance targets for each institution. They will also specify the government funding each institution will receive if they meet their performance targets. Three-year terms will help institutions plan for the future and build on their record of excellence.

The amount of funding tied to performance outcomes will begin at 15 per cent of operational funding for 2020-21 and gradually increase to a maximum of 40 per cent by 2022-23. A small number of performance measures will be introduced for the 2020-21 academic year, and more measures will be gradually introduced over the next three years to a total of about 15.

 Quick facts

• Government provides operational funding to 26 universities, colleges and polytechnics every year, but historically, this funding has not been tied to any targets or outcomes. While government provides many different kinds of grants to post-secondary institutions, only operational funding through the Campus Alberta Grant will be tied to performance.
• The MacKinnon Report identified that the current post-secondary funding structure does not link funding to the achievement of specific goals or priorities for the province, such as ensuring the required skills for the current and future labour market.
• Outcomes-based funding is a global trend in higher education. About 35 U.S. states use a form of performance-based funding. Over the past 10 years, additional jurisdictions have implemented various methods of performance-based funding, such as the United Kingdom, Belgium, Spain, Portugal, Italy, Norway, Sweden, Denmark, Finland, Poland, Australia, New Zealand and Hong Kong.
• While performance measures will be finalized after discussions with post-secondary institutions, students and faculty, some examples may include:
  • graduate employment rate
  • median graduate income
  • graduate skills and competencies
  • work-integrated learning opportunities
  • administrative expense ratio
  • sponsored research revenue
  • enrolment (including potential targets for domestic students, international students and under-represented learners)
• Performance measures will also be weighted differently depending on the institution. For example, different performance measures will be more important to different kinds of institutions.
• Institutions that meet all of their targets will receive 100 per cent of their allocated funding.
• If an institution does not meet its targets, the institution will receive funding that is proportionate to its level of achievement. For example, if an institution achieves 90 per cent of its target, it will receive 90 per cent of its funding for that target.