The Canadian university is quickly becoming less a public institution and more a private one, concludes the current issue of CAUT's Education Review.

Based on the latest figures available on university finances, the report finds that universities and university colleges have increasingly come to rely less on public funding and more on private revenues to sustain their operations.

In fiscal 1999, university revenues reached an all-time high of $12.4 billion — an increase, unadjusted for inflation, of 4.5 per cent over the previous year. However, rising tuition revenues and income from private donations and contracts continue to outpace increases in public funding.

The study points out that tuition income rose 6.8 per cent in 1999 while total provincial grants to universities increased just 2.1 per cent.

As has been the trend in recent years, the greatest source of gains in university revenues was for sponsored research, 12.5 per cent higher in 1999 than in 1998. This was largely due to significant increases in federal research funding and in private research contracts.

Since 1990, the study shows, total university revenues in Canada have grown by more than 18 per cent when adjusted for inflation. Most of these gains can be attributed to increases in tuition revenues (115 per cent), sponsored research revenues (48 per cent), and special purpose and trust fund income (34 per cent). Over the same period, total provincial funding fell by more than 8 per cent and provincial operating funding declined by almost 10 per cent.

CAUT president Tom Booth noted the decline in core funding and the rapid growth in sponsored research revenues reflects a broader change in public policy that is leading to widening revenue gaps between institutions.

"Governments have been reluctant to boost general operating revenues which benefit all universities, and have instead targeted funding toward sponsored research which benefits Canada's largest and most research-intensive universities," he said. "Smaller undergraduate teaching institutions have not experienced the same revenue growth as the larger research universities. There is emerging a two-tier university system in which teaching is clearly not a priority for public investment."

The report also notes that as a share of total university revenues, government grants and contracts now make up just 55.3 per cent of all revenues, down from 69 per cent as recently as 1990. By contrast, fees paid by students now constitute more than 20 per cent of all revenues and 32 per cent of operating revenues, compared to just 11 per cent and 17 per cent respectively in 1990.

Meanwhile, university expenditures on salaries continue to shrink as a share of total expenditures — falling from a high of 74.2 per cent of non-capital expenditure in 1976 to their now lowest level of 66.1 per cent in 1999. Academic salaries for instruction and non-sponsored research now represent just 25.7 per cent of total expenditures, down from 26.7 per cent in 1998.

Booth said primary responsibility for these developments lies with governments, but that university administrators have also contributed to this shift toward an increasingly privatized system of post-secondary education.

"A renewed commitment on the part of governments to adequately fund universities and colleges is urgently needed," he said. "But university administrators must also make a commitment to reinvest in human resources and to ensure that post-secondary education is affordable and accessible."

CAUT's Education Review (Vol. 3, No. 1, Creeping Privatization: University Finances, 1998-­1999) is available at www.caut.ca.