In an unprecedented move, the government of Alberta has granted the DeVry Institute of Technology, a for-profit US-based corporation with 21 campuses across North America, the right to grant academic degrees.
"This is a serious development that could have profound implications for public universities across the country," said CAUT president Tom Booth. "This decision by Alberta creates the first for-profit university in Canada."
At a provincial Cabinet meeting in early February, an Order in Council was passed that designated the DeVry Institute of Technology-Calgary as "an institution that may grant baccalaureates in respect of 4-year Bachelor of Technology in Computer Information Systems, 4-year Bachelor of Technology in Electronics Engineering Technology and 4-year Bachelor of Business Operations programs."
The Order was made based on the recommendation of the province's Private Colleges Accreditation Board.
University of Calgary Faculty Association president John Baker called the decision a "body blow" to Alberta's public universities. "Alberta's university system has been weakened over the last decade with the dramatic loss of provincial funding," he said.
Baker also expressed anger over the apparent lack of public consultation.
"Our university system is being inalterably affected, yet the government slipped this decision through Cabinet just before an election, without even a news release announcing this precedent-setting action," he said.
Until now, only a handful of non-profit private institutions has been awarded degree-granting status in Canada. For-profit institutions have never been granted this status.
"The public and not-for-profit nature of post-secondary education in Canada serves the public interest," Booth explained. "A public system best guarantees that knowledge is freely available, and that opportunities to pursue a university or college degree are widely accessible and affordable."
Average tuition at DeVry Calgary is about $8,000 a year, compared to $4,400 at the University of Calgary.
According to Booth, the establishment of private for-profit universities represents a serious threat to public universities because private institutions will inevitably drain resources away from an already underfunded public system -- even if governments say they will be ineligible for public funding.
"Whether it's indirectly through student loan programmes or training subsidies, or directly through public research funding and government grants, private universities will take badly needed funding from the public system," he said.
Both presidents also warn that public funding for post-secondary education could be open to challenge under Canada's trade agreements as a result of Alberta's decision to recognize DeVry as a private university.
Under the North American Free Trade Agreement, Alberta must provide a level playing field for public and private universities. DeVry could challenge government funding to post-secondary education institutions, claiming it gives public universities an unfair competitive advantage. NAFTA regulations could also force Alberta and other provinces to open the post-secondary education "market" to any American or Mexican corporation that meets the same conditions as DeVry.
DeVry, a multinational corporation based in Oakbrook Terrace, Illinois, is no stranger to controversy. Last November it was hit with a consumer protection class action lawsuit in the United States by disgruntled former students who claim the company engaged in widespread deception and unlawful business practices. The plaintiffs allege DeVry failed to provide competent staff for its program of instruction and that laboratory and computer equipment was inadequate.
And in 1995, students at DeVry's two Toronto-area campuses temporarily lost their eligibility for provincial student loans when it was discovered the company had improperly released Ontario Student Assistance Program funds. After an independent audit, DeVry was reinstated as an OSAP-eligible institution, but was forced to reimburse the provincial government $6.9 million.
For critics, these cases highlight concerns about the quality of education offered by private universities like DeVry.
"The great strength of the current publicly-financed system is it balances applied skills with broader insights from the sciences, humanities and social sciences," Booth noted.
"DeVry does not provide this more comprehensive educational experience."