1 We take the order here to be significant. This point of interpretation was confirmed by Post-Secondary Education when the Public Interest document was released.

Against this background we will now turn to the specific questions in this area.

1. What specific public policy objectives do you think the Saskatchewan university system presently serves. What, from your perspective, is or ought to be their relative priority? How, if at all, might these objectives be changed or adapted?
   
   The statement of public interest in the Appendix does not describe some radical new consensus. Rather, it by and large effectively characterizes the current behaviour of the Province's universities. While we did not participate in the drafting of the statement, we were certainly in close contact with the Department while it was being developed. All of this work was carried out in the context of the MacKay Report, about which the Department and the universities had substantial agreement. Thus, while we would change parts of the statement, we in general consider it to be a good one as far as it goes.
   
   The universities do a good job of providing a range of undergraduate and graduate programs to qualified entrants. The participation in university education in this Province is comparable to what is seen in other provinces. The universities also do a reasonable job in their research roles. The work at the University of Saskatchewan is more comprehensive in this area than is the case at the University of Regina, but both universities have been actively seeking to increase the quality and quantity of their research activities. There is, perhaps, less activity and certainly less recognition in the area of public service. It would be to the benefit both of the province and of the universities themselves to be more active and visible in this role.
   
   We sometimes hear from outside the University a call to be more engaged - at the extreme, to be solely engaged - in teaching. While teaching is critical to the University's mission, it is not all that makes us a university. Without the other aspects of our work we would be an undergraduate college or a technical institute.
   
   The University of Regina intends to contribute to the Province's life through research, economic development, and informed criticism of and participation in the private and public sectors. We would like to see a more consistent recognition on the part of government and its individual members - and not just on the part of the informed authors of the public policy statement - that these roles are important to the Province.
   
   
2. What are the principal challenges which today capture the attention of those with responsibility for university planning and management in Saskatchewan? At the system level? At the institutional level?
   
   At the system level we see evidence of the following emphases.
   

1. collaboration between the universities and especially "rationalization" of the offerings at the two universities,
   
2. improving accessibility especially as it is defined by keeping fees low,
   
3. improving accessibility for First Nations students,
   
4. building and maintaining a consensus around the good work of the past two years and the documents that have been produced because of it, and
   
5. maintaining government's stated commitment to the provincial universities in the light of other political pressures.
   
   At the institutional level we are devoting effort in response to these government emphases and to the following emphases of our own.
   

1. maintaining quality in our teaching enterprise, where quality refers to the "product" and its mode of delivery (the experience for students) and also to the academic level of the students themselves,
   
2. building local consensus on academic priorities,
   
3. revitalization and reorientation by renewal of the faculty complement with outstanding teachers and researchers in areas with identified priority,
   
4. improving our research capability and performance,
   
5. advancing our research and development park as a key component in our plans to become more effective in economic development in the Province, and
   
6. continuing to deal responsibly with these priorities in a difficult fiscal situation.
   
   

3. What gaps exist (or are perceived to exist) in the way in which universities, individually and collectively, are able to respond to articulated public policy need? What remedies might exist to address these gaps?
   
   The messages from government need to be clear and univocal. For example, while it is a major step forward to have been given a statement of the public interest, we will have wasted our joint efforts if government's short-term priorities are at odds with the longer-term stated goals. The public interest paper was only a few months old when the provincial budget was released. On budget day this year the universities were told that they were expected not to increase tuition fees sufficiently to cover the increases in cost. This was to be the case even though costs were not being met by the provincial grant (which was being held constant from the previous year). Politically, quality was sacrificed for accessibility. This is, of course, a reasonable public policy. But it is different from the policy we had been so recently told would apply.
   
   To view the same example from a different perspective, the government must either provide the resources that are needed to meet the policy objectives, or allow the universities to raise the resources in other ways, or recognize that the policy objectives will not be met.
   
   Both of the Province's universities have demonstrated a willingness to be responsive to "articulated public policy." The responsiveness would be improved by the province articulating and sticking with the articulation, and by providing resources tied to demonstrated responsiveness.
   
   
4. Which public policy objectives pose the greatest challenge to institutional management?
   
   This question is strongly correlated with question 2 in this section. There are two categories of "greatest challenge." The first is in balancing the competing demands for limited resources associated with the diversity of legitimate priorities. The second is in working beyond the challenges of determining academic focus within our own University, to doing this in collaboration with the University of Saskatchewan in a manner that is academically sound and politically acceptable to government and the people of the Province.
   
   
5. In what way, if at all, are market demands, both from students and employers, likely to change public policy objectives for the university system and/or the manner in which universities deliver their services?
   
   Market demands from students could result in an increased priority for accessibility. This could mean both that the level of tuition and other fees would be more carefully scrutinized, and that the demand for delivery to students geographically spread across the province and of all ages will increase. Public policy could well be shaped by these demands.
   
   Employers may increase their somewhat short-sighted tendency to look for specific skills (such as the ability to use particular pieces of computer software) rather than the traditionally more valued - and in our opinion more valuable - general skills and education that result from a university degree. Employers will almost certainly be increasingly interested in continuing education for their employees.
   
   The universities are likely to respond to these changes by offering more courses using distance delivery supported by information technologies, by offering courses that allow students to present themselves as having specific skills upon graduation, and by offering courses designed for continuing educational needs. These latter may be a mixture of professional development courses and traditional university courses; many of them might be tailored for specific audiences and delivered to targeted groups.
   
   That said, there remains an important aspect of the university as a place to which those wishing to learn and contemplate will withdraw from the rest of society and its demands. We expect that the university during the next few decades will combine aspects of the traditional teaching role with new teaching modes.
   
   
6. What other larger societal forces for change are acting on the university system and in which directions are these forces taking it?
   
   We deal with only two examples.
   
   First, a heightened awareness of the need for organizations - especially including universities - to be accountable to their various constituencies will have an impact on us during the next few years. The public interest paper already nods in this direction. But thus far in Saskatchewan there has been no specific or focussed discussion on this point in the university system.
   
   However, what has happened in other jurisdictions with respect to universities, and what is happening more generally with respect to public sector and quasi-public sector organizations will doubtless happen here. As a university we will need to produce some performance indicators or measures that will indicate how we are handling the public trust that we hold.
   
   If we are nimble we may be able to offer our own set of indicators before having another set imposed on us. However, even this funding exercise in which we are engaged will sharpen the focus on this issue because whatever mechanism is derived will be based on some set of indicators to determine the relative allocations between the two universities. That set of indicators will serve as a proxy for a performance measure in the wider community, and could very well significantly shape the internal debate about resources and priorities as well.
   
   Second, there is a continuing interest in and growing recognition of the importance of university education as preparation for a working career. The Department of Post-Secondary Education has made frequent use, for example, of a chart showing the decrease in the number of jobs available to persons with limited education and the increase in the number of jobs available to persons with university degrees. Students are aware of these data too, and come to university for this reason.
   
   At the same time, though, there is perhaps a decrease in the awareness of the value more "traditionally" attached to university education - that it is preparation for life as an informed and responsible citizen through being exposed to the important ideas and experiences of humanity. If students turn to the university only for job preparation - albeit at a more advanced level than in a secondary school or a community college or a technical institute - then the longstanding role of the university as repository and transmitter of heritage will be downgraded. Since the University of Regina sees this as one of its most socially significant roles, we might be driven to an internal resource adjudication and allocation scheme that is different from the one used between ourselves and our external partners, including government.
   

1. How do you believe the issue of funding adequacy should be addressed? Is adequacy a relative or an absolute concept? If relative, what are the norms against which university funding in Saskatchewan should be judged? If absolute, how might appropriate funding standards be set? Does your perspective on adequacy differ between operating and capital funding?
   
   It should be clear from the beginning that costs for post-secondary education are going to increase over time if our society is to advance and its citizens are to be well-prepared to live in it.
   
   Adequacy needs to be addressed by negotiation between the government and the universities. As a result of this funding study in which we are all engaged we will determine some measure of the need for funds by starting with actual or putative real costs rather than some other arbitrary measure. We expect the result will show that the universities are receiving less than is needed to carry out the activities they are carrying out - or, at least, to carry them out at some acceptable level of quality. If so, then three possibilities are open to us (assuming the current set of constraints on the availability of non-grant revenues).
   
   - Government can increase the funding to match the activity level.
   
   - The universities can decrease the activity level to match the funding.
   
   - We can all admit that the cost-based mechanism is invalid (i.e., the universities will lose credibility with respect to their cost arguments), probably by letting the quality deteriorate.
   
   Adequacy is inherently relative. All the universities in North America taken together offer degrees in programs that are funded at dramatically different levels in the different universities. If the universities of the remainder of the world are also included, the difference from minimum to maximum funding for a particular activity (per unit of work) will be even greater. Surely in many circumstances it is better to have poorly funded programs than to have no programs at all. The real question is what level of quality - access to library resources, access to laboratory equipment, use of adequate or advanced lecture and seminar facilities, student to instructor ratio, and so on - is in the public interest for the people of Saskatchewan, to use the government's phrase.
   
   It may well turn out that government is unwilling or unable to fund the universities at the level that we think appropriate, or that a funding mechanism suggests is appropriate. In those circumstances the question to be addressed will be whether the government will turn over funds to the universities, leaving them on their own to decide on the issue of quality versus number of activities carried out. The government may, and certainly in extreme cases should in the public interest, attach conditions to grants if the level of activity seems ridiculously out of line with the level of funding. It cannot be in the public interest to dilute quality endlessly. It is inconceivable to us that the universities would choose to do so, however.
   
   On the other hand, the universities will want to retain their autonomy. It is in our view definitely in the public interest that we do so, not just in our own interest. With autonomous decision making, we may well decide to strive for a different balance between the number of activities and the level at which each is funded than a funding mechanism might suggest, or than government might naively expect or desire. So, to repeat, adequacy needs to be addressed by negotiation between the universities and the government.
   
   One set of norms that might be appropriate would be the amount of funding per activity unit in the institutions, and as a percentage of family or provincial income in the province (with an appropriate regression for size of the population) in other jurisdictions in Canada and the United States. Saskatchewan should expect to be in the middle of the range, when any necessary adjustments are made for size and scale of operations.
   
   Of course, there is doubtless some minimum below which it is not reasonable to sink for any particular program. Our deans believe we are close to the minimum acceptable levels of funding in some programs now. To be clear, this is not to say that they cannot mount some program with a smaller resource commitment. Instead, they do not believe that what would be offered would be of a value consistent with the expectations of students, parents, society at large, and government in particular.
   
   In general, what has been said about relativity of funding also applies to capital expenditures. However, minimal acceptable levels are more easily definable in this domain: facilities deteriorate to where they do not meet safety and performance codes, or to where the cost of operating becomes outrageous because of foregone maintenance and replacement, or to where equipment fails to function. We are also probably more rapidly approaching crises that will be unacceptable in this area. Norms are better established in this domain, with 1.5-2% of current replacement value for buildings being a frequently used basis for determining costs.
   
   

2. Funding adequacy is as much a factor of the breadth and level of university activity as it is a factor of degrees of financial support. Is Saskatchewan appropriately served by the present configuration of university program offerings? By levels of university participation? By the present focus and level of basic and applied research? By the range of university public service?
   
   On the whole, Saskatchewan is well served by the present configuration of university program offerings. There are some new programs that should be developed and delivered, some programs that could be larger to respond to student demand (although not necessarily to market opportunities), some programs that could be reduced in size or eliminated. The universities are responding to expectations of change by addressing each of these areas - as they have always done, but with a special emphasis as a result of the MacKay Report. Inter-provincial rationalization may be desirable in some areas; it is exceedingly difficult to achieve.
   
   It is important to realize that most students take programs, and the overwhelming majority of resources are allocated to programs, where there is no reasonable doubt about relevance and need. All the energy expended on the public debate about the issue of program rationalization in recent years deals with questions that are largely at the margin, not at the core. Further, most of the debate in this Province has centred on programs that are perceived to be high cost duplications but that in fact are not. For example, business at one university and administration at the other: both are popular with students and both are relatively low cost programs to mount, and the private and public sectors in the Province seem to need and hire the graduates from both. It would be in the political interest of the universities to make some changes that are perceived to have a great significance, even if such changes would make little material difference for resource availability internal to the universities.
   
   Levels of university participation should be higher in the Province - at least in some segments of the population - if the citizens of this Province are to be prepared to build a competitive economy and a culturally attractive environment during the first quarter of the next century. Specifically, the participation of Aboriginal students is not yet acceptable. Since Aboriginal citizens form a large and growing segment of the Provincial population, they will need to have access to university education in considerably higher numbers so that as a group they can be full participants in the culture and in the economy. However, funding for Aboriginal students should not be solely a provincial responsibility; the federal government has traditionally taken at least some responsibility in this area. Federal and provincial responsibilities should be clearly delineated and the federal government should be encouraged to meet its responsibilities with effective programs.
   
   The research enterprise in the provincial university system, and especially at the University of Regina, is not what it needs to be to ensure the health of the economy and of the culture of the Province. This University has long had aspirations to increase its research activity, and it has done so over the last several years. We are now in a position to replace fully one quarter of our faculty over the next three years as a result of a faculty renewal program implemented in the winter of 1997. It is the intention of all the deans to seek outstanding candidates with the potential to contribute to an expanding research program.
   
   More specifically, the government's public interest paper states that there should be a greater emphasis in the universities' non-sponsored research being directed to problems of particular interest in the Province. Some specific areas are mentioned, but this list will gradually evolve. We agree that there is a need for a closer involvement of university researchers with applied research of immediate public interest. University of Regina researchers are already involved in many ways in such activities and will be responsive to new opportunities.
   
   The universities have perhaps been least successful in consistently being active in public service in the Province, and especially in being perceived to be active in this domain. The President of the University of Regina has repeatedly said that government should look on the universities as a resource on which to call when major issues are being addressed. However, this does not happen as much as it could. Further, university faculty members are not as aggressive in seeking out opportunities to be involved in applying their expertise to socially relevant problems and debates as is the tradition in some other jurisdictions. We intend to remedy this defect.
   
   
3. Addressing operating and capital funding separately, do you believe present university funding levels in Saskatchewan to be adequate or inadequate?
   
   In response to question 1 in this section we said that funding is relative. Having said that, we now say that operating funding in Saskatchewan is inadequate to deliver the existing range of programs at the University of Regina with the quality that we believe it is in the best interest of students and other citizens in this Province to expect from us.
   
   Capital funding is currently inadequate to maintain the integrity and safety of the physical plant at the University, while also operating and using the buildings. Equipment renewal is on a cycle that we believe to be unacceptable in comparison to what we believe to be expected at other universities in the country.
   
   
4. If inadequate, by what degree, where and in what manner is funding inadequacy most explicitly manifested?
   
   We expect detailed data collection and analysis to be part of a later phase of this funding study. We are not able to comment accurately on the degree of inadequacy. Generally, though, we expect later work to reveal that the current level of activities are underfunded in the provincial operating grants relative to norms in the country by something on the order of 25%.
   
   As for capital, we expect that analysis will show that the present level of funding is perhaps only 25% of what it should be to maintain the physical infrastructure and renew equipment on a reasonable life cycle.
   
   Funding inadequacy is manifested in budgets that are stretched tight in all areas of the University. Each dean and director believes his or her unit to be working effectively, yet to be without financial flexibility. At the institutional level there is little reserve to provide for new initiatives (some of which must be funded to stimulate intellectual growth) and to meet contingencies. As is always the case when the demand for a resource is high relative to its availability, managing the resource consumes a great deal of time. In particular, faculty members spend too much time on fiscal issues rather than on teaching and doing research. Further, some stresses are built in to the existing budget; for example, while most areas of the University are dependent on computer systems for some or most of their work, the current budget regime treats expenditures for central computer systems outside the operating budget.
   
   Overall, the inadequacy of funding is seen in units having difficulty meeting their mandates for innovation and responsiveness to changing needs, yet not having obvious ways remaining to them in which they can reduce expenditures and still maintain core programs and services. Classes are larger than deans and faculty members would like them to be. Classes are not taught by full-time members of faculty. Courses have enrolment limits. Courses are not offered. Equipment is old. Repairs to essential building components are deferred. The research enterprise suffers as faculty members devote too much of their time to teaching. Staff members are carrying workloads that they cannot be expected to carry, but that they volunteer to carry because of commitment to the University and its mission.
   
   
   

1. How would you describe the desirable characteristics of a university funding mechanism? E.g., promotes responsiveness to public policy objectives; provides for equitable distribution amongst institutions; provides income predictability, stability, flexibility, is transparent, etc.
   
   The public interest paper suggests that a funding mechanism should be characterized by fairness and equity, by objectivity and transparency, by predictability, and by stability. These seem like reasonable goals to us. Being responsive to public policy objectives is only good if they are clearly articulated and remain stable.
   
   
2. What are the factors which contribute towards an equitable distribution of operating funds?
   
   Knowing the criteria in advance.
   
   Having criteria that recognize needs and costs.
   
   Having criteria that recognize innovation and responsiveness to articulated stable public policy.
   
   Possibly having criteria that recognize performance against preset objectives.
   
   
3. Where and in what specific ways has the current distribution of operating funds adversely affected your institution?
   
   We've addressed this in the previous section to some degree.
   
   Over the longer term, the relative allocation has been held constant for years. During this period the University of Regina has significantly increased in size. The undergraduate enrolment now is double what it was 15 years ago. There has not been a commensurate growth in the grant. It may be, of course, that this is a problem of the adequacy of the overall grant rather than the equity of the split between the universities. We know that the University of Saskatchewan can make analogous and equally legitimate but different claims.
   
   It may be that the rigid distribution scheme currently in place may discourage creative thinking that moves programs in a desirable, but higher cost, direction. Admittedly there is little concrete evidence of this phenomenon at hand but we suspect we could find such evidence if we searched for it.
   
   In addition to the general description of the sorts of problems, there is a specific irritant for us at the moment. The operating cost of the University Centre (part of which went into use last Christmas, the remainder this spring) is about $1.2 million higher than the cost of the spaces that previously housed the collection of units and activities now in that building. The University was forced to absorb that cost in the current year's budget because there is no mechanism that relates grants to costs, or that allows for variation in the relative allocation to the two universities.
   
   
4. What general shape should a funding mechanism for Saskatchewan's universities take? E.g., line item; historically based; activity based formula; performance based formula; contractual; incorporating elements of fixed and variable costing/marginal costing; other, or some combination of these?
   
   Line item budgeting represents an intrusion into the traditional autonomy of the universities. We believe this autonomy is in the public interest because it shelters the society's educational institutions from the dangers of the potential vagaries of political manipulation. Further, approving budgets line by line would increase the annual workload between the Department and the universities excessively.
   
   Historical realities might need to be accommodated in a funding mechanism. It might be that a new mechanism appropriate for the decades ahead will leave one or the other of the universities with an expensive legacy from the time before the mechanism was established. While we cannot think at the moment of any such anomaly that is likely to occur, we are certainly open to having a new mechanism conditioned by the history of the development of the current commitments at each university. Perhaps such historical constraints would appropriately have a limited lifetime during which they would apply.
   
   We are certainly expecting that the new funding mechanism will be largely activity based. Choosing the set of activities on which to base the mechanism will require careful definition and debate over the next several months.
   
   We are open to having some part of the funding be determined based on performance against some preset objectives. However, while this University obviously has not had direct experience with such mechanisms we have heard anecdotal evidence from other jurisdictions. We would caution that the performance-based amount should be marginal (so that stability is not threatened) and that performance criteria be clearly defined, well understood, and unambiguously related to the policy objectives they are attempting to advance.
   
   If contractual implies that there could be terms and conditions attached to the grants - a kind of quid pro quo - then in principle this seems acceptable so long as the contractual aspects do not impinge on the appropriate level of autonomy of the institutions. We would like to discuss the details to see what might be envisioned here.
   
   In general we think the funding mechanism should recognize real costs. It should not use "magic numbers" to arrive at some entitlement. It should use costs that can be computed and related to actual activities. In designing the mechanism care should be taken not only to recognize high cost programs but also to recognize legitimate economies and diseconomies of scale.
   
   Because it will be based on real costs, the mechanism will need a recalibration mechanism so that the numbers do not drift from reality. We would, in limited circumstances, see a justification for using partial or discounted or marginal costs for some short periods of time. For example, it might be appropriate to use a multi-year average for some parameters (student enrolment, research activity, new course introductions). This approach could avoid an over-inducement to rapid growth that might not be in the best interest of the Province as a whole even if it increased the share allocated to one university or the other.
   
   As the question suggests, a mechanism that is complex and nuanced enough to cope with the diversity of activities and missions at the universities, and with the diversity of public policies to which they are responding, will doubtless need to be a combination of these and possibly other components.
   
   
5. Should a funding mechanism for Saskatchewan's universities encompass specific, institutional, mission-related elements? In what areas is this likely to be most appropriate?
   
   Since there are activities that occur at only one of the two universities, and since the government's public interest paper suggests that this might be even more pronounced in the future, a funding mechanism must deal with institution-specific concerns.
   
   The most palatable way to do this, of course, will be to aggregate activities into categories that might correspond to activities taking place at both universities. For example, having a category for funding responses to the needs of Aboriginal students will cover both institutions but with different results because of the presence of SIFC at the University of Regina. Having a category for funding dentistry would clearly be more difficult to cope with.
   
   However, even here it might be in the Province's and the universities' best interests to identify specific elements that are otherwise problematic and essentially take them out of the competition by identifying them separately. To be equitable, though, such funding should probably be tied to the specific element for which it is being provided, otherwise unfair cross-subsidies could occur.
   
   This is most likely to be appropriate in specialized faculties, schools and institutes.
   
   
6. Should a funding mechanism for Saskatchewan's universities provide separately for the three traditional components of the universities' mission?
   
   It is not clear that it is appropriate to fund instruction and research using separate components.
   
   In any case, funding public service activities will be tricky at best (what is it? how do we measure it? how do we determine the relative merits of different activities?). If this is to be pursued we will need to have considerable further discussion to clarify the intent.
   
   
7. Should the province's role differ with respect to its funding of teaching, research and public service? If so, how?
   
   The province and the students share the burden for funding the teaching enterprise. It is reasonable to expect that some agreement about the relative shares of the participants might be arrived at as a matter of policy.
   
   The province, the federal government (through its granting councils), private and public sector contract partners and donors all share the burden for funding the research enterprise. The province is expected by the federal government to be providing the infrastructure and overhead required for council-supported research. The public interest paper explicitly states that the province views this as a federal responsibility. Research should be done and is being done.
   
   The stress resulting from both levels of government refusing explicitly to cover the overhead costs associated with research cannot remain in the system indefinitely. The province is implicitly funding the overhead of federally funded council-supported research. The province also participates like other sponsors in contracting research from the universities. Finally, the province can be considered to be supporting the non-sponsored research that is carried out in the universities. In some sectors, such as science, most research is sponsored. In other sectors, such as the humanities, most research is non-sponsored.
   
   Public service is not separately accounted for, and except for specific contractual arrangements can be considered to be funded at the margin by the province.
   
   The province's role thus does differ with respect to funding different components of the universities' activities. These various differences should continue. It is an interesting point of public policy to ask whether it is in the public interest to carefully identify the province's contributions separately in each of these domains.
   
   
8. What ought to be the balance between general purpose and special purpose funding? What general criteria can be articulated to constrain special purpose funding?
   
   The vast majority of funding should be general purpose. The universities themselves should make allocation decisions after receiving a grant that is based on a number of observable parameters.
   
   Some special purpose funding should doubtless be provided. For example, there are a number of initiatives currently underway involving cooperation among the two universities and the government as a result of suggestions in the MacKay Report. It would be appropriate to have specialized funding identified for these initiatives (as indeed is the case). It is important for the universities to ensure that special purpose funding is moving them in directions they wish to take in the long term, since in the long term there may be entailed base budget reallocations that are necessary to take full advantage of specifically targeted funding.
   
   Special purpose funding should not continue indefinitely. This funding is presumably being used to bring about a change in emphasis. If the change is successful, the new balance of priorities should be reflected in the ongoing base grant. If necessary, new initiatives that are sufficiently different and that have ongoing costs could result in an elaboration of the funding mechanism itself to accommodate them. In any case, after a predetermined number of years the targeted funds should be absorbed into the base. Of course, new projects for specific targeting may well appear at that point.
   
   Funds for special purposes should be used only for those purposes during the period in which the funds are targeted. There should be a transparent mechanism (that could be audited) for demonstrating that the funds have been used appropriately. This mechanism should not impose any unnecessary overhead; the presumption should be that the universities are behaving responsibly.
   
   
9. Is there a place in a university funding mechanism for a system of incentives which encourage/discourage particular patterns of institutional behaviour? What particular behaviour ought to be encouraged/discouraged?
   
   Yes, it should be possible to use the mechanism to encourage virtue and to discourage vice. We are by nature so virtuous that we cannot even conceive of behaviour that should be discouraged.
   
   Excessive procrastination, excessively long memoranda, excessive repetition of a word in a sentence, and excessively long lists of questions should be discouraged.
   
   

10. Is there a place in a university funding mechanism for performance based funding? What indicators would most appropriately reflect government's expectations of university performance?
    
    We have commented on this already.
    
    Yes, there should be room for performance based funding. It should be possible to say what we are attempting to do, to devise measures that indicate whether or not we did it, and to base some portion of the funding on our ability to hit the targets. As we said, it will be necessary to carefully define the indicators.
    
    Some aspects of public policy are in inherent conflict, as we pointed out in the section on public policy. For example, keeping student fees low is good. But keeping fees low means, other things (specifically, the level of the government grant) being equal, that the amount of professorial time available for teaching will be lower than it might otherwise be, and thus classes will be larger than they might otherwise be. If a learning experience is improved by having a small class - and this is certainly true for at least some subjects - then the quality of the educational experience will be reduced for the students. They paid less and they got less for their smaller payment.
    
    Is this a better result than having higher fees and higher quality? How would we establish an indicator to measure this complex and inter-related set of factors? Students may see small classes as an indicator of higher quality (as the Maclean's survey apparently does), while a funding source may see them as an example of inefficiency.
    
    Similarly, if some university were paying higher than average salaries it might mean that it had given away too much at the bargaining table. On the other hand, it might mean that it had managed to attract high quality faculty members by an aggressive salary policy.
    
    This is, of course, where the rubber meets the road in the public debate about the cost of education. We would doubtless be able to devise performance measures that are mutually acceptable to government and the universities in areas that are less controversial, less interesting and consequently less important.
    
    
11. How should tuition and ancillary fee revenue be handled within a funding mechanism?
    
    Government should determine how much of the cost of a basic level of instructional program it intends to cover. Unless there is a major change of public policy, the amount government pays through grants will be less than the full cost of the program. The difference between the grant and the cost is fees. Fees thus represent the students' (subsidized) purchase of education.
    
    Government should not constrain the universities from charging higher fees. What we are advocating is essentially a free market approach. If the "product" is worth a higher price it will be bought. Otherwise it will not be bought. Universities would then be free to charge a higher price if they thought that students wanted a higher quality product than could be delivered with the amount provided by the government grant plus lower fees.
    
    Alternatively, the government could cap fees or, equivalently, deduct the full fees charged from the total entitlement to determine the grant. But we should guard against a rigid policy that specified a maximum percentage that fees could rise to of the total operating costs. Ironically, governments in some jurisdictions sometimes want to prohibit universities from charging too much but never want to protect them from charging too little to meet their costs in any given year.
    
    The range of fees charged by universities in Canada is small when considered as a percentage of the overall cost of a year of university. If other costs (books, travel, board, etc.) amount to, say, $10,000 to $12,000 per year then the difference between the highest and the lowest fees in the country is a relatively small percentage of the overall cost including fees. While there is a good deal of emotion and sentiment around the issue of fees, nobody in Canada knows at what point fee increases will become a disincentive to students. Certainly the evidence that is available does not indicate that this point has yet been reached. Perhaps students in Saskatchewan would like to decide for themselves how much a high quality education is worth rather than be forced to buy a lower quality product for a lower price.
    
    Capital

1. What are the principal determinants of the need for capital funding? For new construction? For plant renewal and adaptation?
   
   The principal determinant should be a mechanism based on the entitlement to space that derives from the existing provincial guidelines (based on a form of "building blocks" guidelines similar to those used in other jurisdictions). These guidelines are activity based in that they use as input measures the number of staff, number of students, number of library volumes, and so on.
   
   New construction should be justified by an analysis of the shortfalls indicated by the space guidelines. Of course, sources become available as part of federal initiatives, from private fundraising, and from provincial allocations.
   
   Plant renewal and adaptation should be funded based on a reasonable set of assumptions about building lifetimes. These should be "reasonable" in that they take the built environment at both universities as it is. The physical plant has an age and condition, and can be expected to decay in line with the amounts actually expended on the original construction. The assumptions should not be based on the best of all possible worlds, assuming that no cost corners were cut when buildings were constructed, and so on.
   
   
2. What are the factors which contribute towards an equitable distribution of capital funds?
   
   Current activity levels.
   
   Current physical plant and its condition. This is certainly a result of history that might have been inequitable, but it's unrealistic now to ignore commitments that have been made in the past but that affect current budgets.
   
   
3. Where and in what specific ways has the current distribution of capital funds adversely affected your institution?
   
   The problem here is adequacy, not equity. We are funded so far below our estimate of what is reasonable that we are unable to keep up with required service to our facilities.
   
   The chronic underfunding has left us with a large accumulated backlog of deferred maintenance. We estimate that the current need is for at least $10 million for this backlog. We submit the list of projects each year to government and will certainly provide it in the next phase of this study.
   
   Sometimes other aspects of public policy may interfere with the appropriate allocation of capital funds. There is certainly a perception that some building activity at the universities may have been supported by government as much to have some active construction projects in the city as to respond to the legitimate academic needs satisfied by the project. Conversely, when there is other building activity in the city the university's needs can be given lower priority.
   
   
4. If separate capital funding is afforded to the on-going renewal of physical facilities, how might a line be drawn between such funding and ordinary preventive maintenance, supported out of operating funds?
   
   It would be easy enough to provide an auditable list of projects that fit into each category without an unnecessary amount of effort either in the universities or in the government.
   
   
5. Should the operating funding mechanism earmark funds for the on-going renewal of physical plant?
   
   Yes, provided that a sufficiently large allocation is provided to actually address current needs and the accumulated backlog of pressing needs before expecting to see us allocate funds for larger renewal projects.
   
   
6. Should funding for equipment replacement be encompassed with an operating or capital funding mechanism?
   
   Computer equipment has such a short lifetime (or should, if we upgraded on a reasonable cycle) that it should be amortized and carried as an operating cost.
   
   Other larger pieces of equipment can be appropriately funded through capital.
   
   
7. Should there be any constraints placed on the use of operating funds for capital purposes?
   
   In general, no. Since the need for operating funds is always great (quite likely to continue to be greater than what will be provided) there is a strong disincentive to moving money out of the operating funds. However, unless the capital allocations become much larger than they have been in recent years, there will from time to time be capital requirements that cannot be met within the available allocations. Under those circumstances the universities should be allowed to do what they need to do.
   
   
8. How should private funds be encompassed within a capital funding mechanism?
   
   If private funds can be raised to build facilities that fit within the range of facilities the government would fund if it could, then the new facilities should thereafter participate in the calculation of operating costs.
   
   Of course, this could mean that the entrepreneurial activity of one or both of the universities could have an impact on the amount of money to be supplied by government, or to be left on the table for the other university. The difficulty of coping with that situation seems worth dealing with for the advantages to the system overall that result from attracting private funds to improve facilities.
   
   
   

We assume that, since the federated colleges are participating in a related but to some degree independent study, they will be asked directly for their views on the issues raised in these questions. Some of our response refers to the colleges' own declarations in Saskatchewan's Federated Colleges: A Briefing Paper for the Honourable Robert Mitchell Minister of Post-Secondary Education, 19 February, 1996 (hereafter cited as SFC). SFC describes the colleges in this way:

1. Federated colleges ensure diversity in education and diversity in opportunities for students.
   
2. Federated colleges are academically integrated with a larger university.
   
3. Federated colleges have administrative and financial independence.
   
4. Federated colleges are cost effective and contribute extra financial resources to the wider university.
   
5. Federated colleges place their primary emphasis on teaching undergraduate students and supporting them to succeed at university.

We now turn to the specific questions addressed to us with respect to the colleges.

1. From a public policy perspective, how might one explain the role of the federated colleges within the context of a university system in Saskatchewan?
   
   Points 1 and 5 in the SFC list address the role of the colleges. It has been recognized historically in the Province that this diversity is of value. We agree that it is in the public interest to foster a diversity of perspectives in the provincial university system, and that the colleges are an effective way to bring religious and cultural diversity to our campus. It is also clear that they provide a special emphasis on helping undergraduate students deal with their university experience and that the colleges thus can be viewed as one way of providing an enriched, personalized experience to students.
   
   
2. Can any case be made for the funding of the federated colleges in a manner or at a level that differs from the funding of the universities? Do the principles which underpin your response differ between operating and capital funds?
   
   It's easy to make cases for funding the colleges differently from the universities:
   
   On the one hand, colleges should be funded at a lower level than the university with which they are federated because the university provides some common infrastructure. Moreover, while diversity is desirable it is not one of the highest priorities on the public agenda and if there are diseconomies of scale the colleges should carry their disproportionate "share" by private fundraising.
   
   But on the other hand, colleges should be funded at a higher level than the university with which they are federated because there are diseconomies of scale associated with having smaller institutions with their own infrastructures. Since it is in the public interest that the colleges exist, it is in the public interest to pay for them.
   
   More realistically, colleges and universities should be funded on the same basis in that the same set of criteria should be applied to each. If a college more exactly conforms to some expressed priority of government than does the university, then the college may be able to attract disproportionate funding (this might be the case in particular with the Saskatchewan Indian Federated College). However, since the colleges have chosen to be separate it does not follow necessarily that the province should pay for diseconomies of scale associated with that decision - if there are any.
   
   Point 4 in the SFC list stresses what the colleges bring to the federation. Conversely, the colleges also draw on the federation's resources. In particular, programs mounted by the University of Regina are sometimes more heavily used by students registered through the colleges than by students registered through the University. Further, the cost of providing library resources, for example, is growing faster than the average rate of growth of costs in the institution. Since the University provides the main library facilities (even though there are specialized libraries in the colleges) we might legitimately expect that the University's share of the costs of the federation is increasing. If, in fact, there is a cross subsidization from a university to its federated college(s), this will be a more significant factor at the University of Regina because the colleges are a larger part of the federation here.
   
   Assessing the funding needs of the colleges on the same basis as is used for the universities (with an appropriately rich set of criteria) seems appropriate.
   
   Being open to this possibility of assessment must entail an openness to a realistic consideration of the costs associated with the colleges. The universities must not be disadvantaged in the competition for limited resources by decisions that are taken independently in the colleges federated with them. For example, if there are diseconomies of scale associated with administrative fragmentation, then the University of Regina must be a participant in decisions about administrative organization if funding is to flow to the federation as a whole without regard to those diseconomies.
   
   These remarks apply equally to operating and capital funding.
   
   
3. What general principles should define the relationship between the federated colleges and their respective university partners? What are the essential elements of college autonomy?
   
   This is addressed in point 3 of SFC and has been mentioned in the answer to the previous question. It is important to guarantee the academic freedom of the colleges to represent the diverse intellectual, spiritual and cultural perspectives that are their primary contributions to the university system in the province. The colleges believe that this requires administrative and financial independence.
   
   Whether administrative independence is a necessary condition for their academic freedom is perhaps debatable in theory. But speaking pragmatically and politically, they must retain a significant degree of autonomy.
   
   
4. What are the factors which might contribute towards an equitable distribution of funds between the federated colleges and their university partners? Among the federated colleges?
   
   If the colleges and the universities taken together in each of the two cities are to be seen as federations then the same factors should apply to all participants. For the distribution of funds to be equitable among the participants, we will all need to agree on answers to the questions raised in part C of this list and answered above ("C: Alternative University Funding Mechanisms"). We do not see that there are any particularly different aspects of this issue with respect to the colleges, save for the issues of autonomy and identification of relative benefits of the federation to the various partners, already identified above.
   
   
5. Where and in what specific ways has the distribution of funds adversely affected the federated colleges?
   
   The colleges should answer this question for themselves. We have heard their views on this matter but we are not in a position to comment because we do not have access to the relevant information.
   
   
   

One suggestion in the MacKay Report was that the government needed to clarify for the universities what it expected from them. In response to this suggestion the Department of Post-Secondary Education and Skills Training published the document Public Interest and the Revitalization of Saskatchewan's Universities in the fall of 1996. That document contains discussion together with emboldened text that makes explicit statements about government's perception of the public interest in several domains. To facilitate reference to that material while reading the body of the present paper, this appendix contains the highlighted text from each section of the document.

It is clearly in the public interest for government to support universities, legislatively, morally, and financially, and to ensure their autonomy, vitality and academic freedom. It is the duty of government to ensure that the universities are properly accountable for the moneys and privileges granted to them.

The government, as primary guardian of the public interest, has a responsibility for clarifying broad public priorities and directions for the guidance of the universities as they go about their business.

The government has a responsibility to ensure that the two universities together provide an array of programs and services appropriate to Saskatchewan in a cost-effective manner, without unwarranted duplication or overlap.

1. Quality: The Government of Saskatchewan believes that all teaching and research programs must maintain high quality.²
   
   
2. Accessibility of University Programs and Services: The government of Saskatchewan believes that it is in the public interest for all qualified Saskatchewan residents to have reasonable access to university education at the undergraduate level.
   
   Proximity of access must be related to the nature and cost of the programs. It is desirable and appropriate for both universities to offer a broad range of programs in the liberal arts and sciences. The government believes that, between them, and without duplication, the two universities should maintain access to high-quality graduate and professional programs, especially in those fields of particular importance to the social, economic and cultural heritage and future of the province. A professional program to support each key area, such as agriculture, information technology, health and social policy development, should be available at one or the other of the universities. Certain other professional and graduate programs, particularly those with high costs and low enrolments, should be available on a regional or national basis, through interprovincial agreements.
   
   
3. Equity: It is in the public interest for the universities to provide opportunities for groups that have faced or continue to face barriers to full participation in the learning and working opportunities of the universities, including Aboriginal people, visible minorities, people with disabilities and women.
   
   It is in the public interest that the university provide a place of work and study that enables all members of the university community to achieve their full potential. This means providing a learning and working environment that is free of attitudinal, systemic, physical and communication barriers to access and participation and free from discriminatory policies and procedures.
   
   
4. Meeting the Learning Needs of Society: The government believes that it is in the public interest for the universities to ensure that there is a fair and appropriate balance between the teaching activity and scholarly pursuits of their faculty, and to ensure that their internal procedures for performance review recognize effectiveness in teaching as being at least as important as excellence in research.
   

1. Learning Needs of the New Economy: The government believes that it is in the public interest for the universities to be flexible and creative in recognizing and responding to the changing needs of an increasingly diverse student population, and to collaborate willingly and effectively with other post-secondary institutions in meeting the needs o society and of the new economy.
   
2. Learning Needs of Aboriginal People: It is in the public interest for the universities to intensify their efforts to encourage the empowerment of Aboriginal peoples through participation in post-secondary education, both within universities and in Aboriginal institutions. One goal is for Aboriginal people to be represented in proportion to their population across all university programs and services, among students, faculty, staff and board members. Another goal is for universities to represent more fully and appropriately in their academic activities Aboriginal knowledge and culture. To that end, universities must ensure that individual Aboriginal people have fair, reasonable and properly supported access to programs and positions.
   
3. Learning Needs of Rural, Northern, and Small-urban Saskatchewan: Government believes that it is in the public interest for the universities together to provide greater access to their programs in rural, northern and small-urban areas, and, as much as possible, to ensure that students in these areas have access to programs of study which lead to degrees and certificates or reflect the students' needs for lifelong learning. It is further in the public interest for the universities to consult with educational and community representatives about levels and types of demand for university education, and to develop the technologically and pedagogically most effective means of instruction.
   
   

5. Research: It is in the public interest for each university to develop its own distinctive areas of research specialization.
   

1. Sponsored Research: The Government of Saskatchewan believes that, since research sponsored by the federal government benefits the nation as a whole, it is in the national interest for the federal government to be responsible for the costs of such research, including indirect costs.
   
2. Non-sponsored Research: The government believes that it is in the public interest to develop a mechanism whereby a greater proportion of non-sponsored university research work would be focussed on topics of particular importance to Saskatchewan and the prairie region, without unduly constraining customary freedom of inquiry.
   
   

6. Service to the Community: The government believes that it is very much in the public interest for the universities to continue to place a high priority on public service as they revitalize themselves.
   
   
7. Social and Cultural Development: It is in the public interest to have high-quality university teaching and research programs engaged with the health, social and cultural issues facing the province and the nation.
   
   
8. Economic Development: It is in the public interest for the universities, between them, to maintain high-quality academic and research programs in all of these vital areas [previously mentioned were: biotechnology, information technology, agriculture, mining, energy, forestry, tourism]. In vital areas where no programs currently exist, the government encourages the universities to develop appropriate collaborative and interdisciplinary strategies for remedying such deficiencies.
   
   
9. Integration of Technology in Teaching and Learning: The government believes that it is in the public interest for the universities to integrate multimedia learning approaches in all facets of education and training to enhance both quality and effectiveness, to increase access to learning opportunities, and o prepare learners to participate fully in a society based increasingly on the global development, sharing and trading of knowledge.
   
   
10. International Activities: It is in the public interest for the universities to attract foreign students, to reflect international realities and challenges in their curricula, where appropriate, and to market their educational and research expertise internationally. The government recognizes its responsibility to assist in appropriate ways with such endeavours.
    
    It is in the public interest for the universities to co-ordinate their international activities with one another, and with other institutions (e.g., SIAST) and government agencies which are also involved in international initiatives.

_______________________

2 In contrast with most other sections of the Government paper, there is no emboldened text in the section on this topic so the first part of the first sentence has been quoted.

 

Funding of university education

1. Distribution of the Costs of University Education: The government believes that the costs of university operations should be shared by the provincial and federal governments and the students in such a way that their respective contributions to post-secondary education are reasonable and affordable for all parties.³
   
   
2. Criteria for University Funding:

• Fairness and Equity;
• Objectivity and Transparency;
• Predictability; and
• Stability.
  
  

1. Tuition Fees: It is in the public interest for the universities to keep their tuition fees in line with those at the universities in neighbouring provinces.
   
   The government acknowledges that it could be in the public interest for the universities to adopt a policy of charging higher fees in high-cost professional programs, especially if there is evidence that graduates from those programs can look forward to good employment prospects and high incomes.
   
   The government acknowledges that I could be in the public interest for the universities to reserve some spaces in professional programs for foreign students who would enroll under the auspices of formal agreements between the universities and foreign governments or agencies, and who would pay the full cost of their university education. However, the government believes that any such arrangements should not unduly reduce the access for Saskatchewan residents.
   
   
2. Student Assistance Programs: The government of Saskatchewan recognizes a responsibility to take the lead in working with students and all post-secondary institutions to develop options for discussion at the national level with the federal government and other provinces.
   
   In particular, the Government of Saskatchewan will be developing proposals on possible improvements to student financial assistance as part of the development of its training strategy. These will take into account concerns about increased education and training costs, rising debt load and, to the extent possible, federal proposals.
   

________________________

3 Since there is no emboldened text in this section of the document, part of the last sentence has been used.

 

Accountability

The government believes that is has a responsibility to hold the universities accountable, acting on behalf of the citizens of this province, within the framework of priorities and obligations set forth in this paper.

 

Responding to the immediate fiscal pressures⁴

First, reducing administrative expenses and increasing the efficiency of administrative processes, through co-operation between the universities or "in-house", as appropriate.

Second, ensuring that curricula, class schedules and degree requirements are designed so as to achieve the most effective use of available personnel and facilities consistent with academic freedom and academic standards.

Third, eliminating demonstrable duplication of academic programs without a significant reduction in access to such programs (unless justified by lack of demand from students or lack of demand for graduates).

Each university should examine its own array of programs and courses to ensure no two departments, colleges or faculties are offering essentially the same class o program without clear justification.

The universities should work together to ensure that there is no unnecessary program duplication between them.

Fourth, ensuring that the numbers of students accepted into professional programs reflect the anticipated demand for professionals.

Accessibility to university education could be maintained if fewer students are accepted into certain programs by increasing the number of students accepted into other, lower-cost programs.

Fifth, examining each specialized academic program with low enrolments and high costs with a view to reducing its size, closing it, or making arrangements to provide the program on an interprovincial basis.

Sixth, taking steps to increase non-governmental revenues, keeping in mind the revenue generation activity at universities in other provinces and the need to maintain a fair and reasonable balance between the student's share of costs and those of the governments.

 

 

4 Since there is no emboldened text in this section of the document, the list (without discussion) has been used.

 

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Revised on: October 23, 1997
This document can be found at URL: "http://www.uregina.ca/presoff/vpadmin/DesRosiersResp.html"
Copyright 1997, University of Regina. All rights reserved.

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