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Economy

What’s behind the explosive growth in Canadian university costs?

Published

11 months ago

8 minute read

From the Macdonald Laurier Institute

By David Clinton for Inside Policy

Dramatic increases in high-end employment costs have been a significant driver of rising university costs.

We’ve probably all seen reports describing out-of-control higher education costs in the United States. An education that in the 1970s could be financed with some savings and a part-time job at the local Burger King will now cost you the equivalent of a down payment on a multi-family investment property.

Those increases are not just the result of regular inflation. When you track US college costs against consumer goods (as the economist Mark J. Perry did), you’ll see that, besides healthcare, rising college-related expenses are unlike anything else.

What changed? The word on the street is that those crazy tuition costs are mostly due to colleges hiring vast armies of non-teaching administrators.

But what about Canadian universities? Back in 2006–07, according to Statistics Canada, across all Canadian universities the average inflation-adjusted cost of one year’s undergraduate tuition was $17,363. Fast forward to 2023–24 – and that same tuition-only cost has now doubled to $34,628.

Note how I referred to those numbers as “costs.” That’s because $34,628 is what you’ll pay if you’re an international student without scholarships. Thanks to government subsidies, Canadians get a big discount. In fact, the average domestic student currently pays only $6,434. But it’s taxpayers who cover the difference.

So, tuition is rising far faster than inflation. But figuring out what’s behind those increases will take some work.

The rise of the university administrator

As the chart shows, since 2001, teaching jobs have dropped from accounting for 17.38 percent of all university positions down to 14.52 percent in 2022. In other words, universities are, proportionally, hiring teaching staff at significantly lower rates than they used to. But please do keep that “proportional” bit in the back of your mind, as we’ll come back to it later.

Source: Statistics Canada/The Audit

However, those numbers don’t tell us who universities are hiring instead of teaching staff. Perhaps they’re building up their food services, security, and custodial crews?

There is at least one identifiable subgroup that’s visibly ballooned: education support services. That North American Industry Classification System category (NAICS Code 6117) includes educational consultants, student exchange program coordinators, testing services, research and development, guidance counsellors, and tutoring and exam preparation services.

Since 2001, the proportion of support services staff in relation to all hires has more than doubled, from 1.06 percent to 2.62 percent. Their absolute numbers across Canada rose from 3,829 to 15,292. (Statistics Canada offers plenty of data and insights on the topics raised in this article. For further investigation, go here, here, and here).

That’s certainly an interesting trend. But an increase of just 1.5 percent isn’t enough to explain the tuition growth we’ve experienced. And I’m also not sure that the “education support services” category maps directly to the class of high-earning administrator they’re talking about in the US. It looks like we could use some more data.

Tracking Salary Changes in Ontario Universities

The year 1996 saw a welcome victory for government transparency when Ontario’s then-Progressive Conservative Premier Mike Harris mandated the annual disclosure of all public sector employees earning more than $100,000. Since that year, the Sunshine List, as it’s popularly known, has grown from just 4,500 names to more than 300,000. However, $100,000 won’t buy you what it once did – especially if you must live in Toronto.

Perhaps we could bring those numbers up to date. Using the Bank of Canada’s inflation calculator, I identified the inflation-adjusted value of 100,000 1996 dollars for 2003 and for 2023. I then identified the individuals on the list who were employed by universities in 2003 and in 2023 and whose salaries were above the inflation-adjusted thresholds. The new thresholds, by the way, were $117,000 for 2003 and $175,000 in 2023.

The first thing that hits you when you see the adjusted data is the explosive growth in hiring. Ontario universities (not including colleges) employed 2,191 individuals earning more than $117,000 in 2003. Twenty years later, the number of employees earning more than $175,000 had ballooned to 8,536. That’s 290 percent growth. The number of people with “dean” in their job description climbed from 195 to 488 during those years. And there are now 6,772 professors on the high earners’ list as opposed to just 1,782 back in 2003.

For context, Statistics Canada tells us that there were 397,776 students enrolled in Ontario universities in 2003 and 579,057 in 2022 (the latest year for which data is available). That’s an increase of 46 percent – which doesn’t justify the 60 percent jump we’ve seen in high-paid deans and the 74 percent increase in similarly high-paid professors.

I think things are starting to come into focus.

Now let’s find out what happened to salaries. Did you know that there’s a strategic management professor who’s earning more than $650,000 annually? And what about that hybrid dean/lecturer who’s pulling in close to $600,000?

Okay… those are probably outliers, and there isn’t much we can learn from them. However, I can tell you that the average university employee in our Sunshine List earned $140,660 back in 2003. Twenty years later, the inflation-adjusted equivalent of that salary would be $211,887. But in the real world – the one that those on the public payroll graciously agree to share with us – the average 2023 university employee on the list earned $220,404. That’s a difference of only 4 percent or so, but that’s after we already accounted for inflation.

Perhaps I can illustrate this another way. The sum of all university salaries above the $117,000 threshold in 2003 was around $308 million. In 2023 dollars, that would equal $464 million. But the actual sum of all 2023 salaries above $175,000 was $1.8 billion (with a “B”)!

So, yes, tuition has doubled since 2006–07. And it seems that dramatic increases in high-end employment costs have been a significant driver. As the taxpayers paying for most of this, there’s a question that we must ask ourselves: has the epic growth in university employment delivered value to Ontario – and to all Canada – at a scale that justifies those costs? In other words, are the students now graduating from Canadian schools equipped to successfully enter a demanding job market, navigate a fractured political environment, and strengthen weakened communities? Recent scenes from campus protests suggest that might not be the case.

David Clinton is the publisher of The Audit (www.theaudit.ca), a journal of data-driven policy analysis. He is also the author of books on data tools, cloud and Linux administration, and IT security.

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Economy

US strategy to broker peace in Congo and Rwanda – backed by rare earth minerals deal

Published on May 3, 2025

By

MXM logo MxM News

Quick Hit:

Senior Trump advisor Massad Boulos says the U.S. is brokering a peace deal between the Democratic Republic of the Congo (DRC) and Rwanda that will be paired with “Ukraine-style” mineral agreements to stabilize the war-torn region.

Key Details:

  • The U.S. wants Congo and Rwanda to sign a peace treaty and, on the same day, finalize critical mineral supply deals with Washington. Boulos told Reuters that both deals are expected within two months.

  • Rwanda’s side of the treaty involves halting support for M23 insurgents, while the DRC has pledged to address Rwanda’s concerns about the Hutu-dominated FDLR militant group.

  • DRC President Tshisekedi has floated the idea of giving the U.S. exclusive access to Congolese minerals in exchange for help against M23. “Our partnership would provide the U.S. with a strategic advantage,” he wrote in a letter to President Trump.

Diving Deeper:

According to a Thursday report from Reuters, President Donald Trump’s administration is accelerating efforts to finalize a dual-track strategy in central Africa—pushing for a peace agreement between the Democratic Republic of the Congo and Rwanda, while simultaneously brokering “Ukraine-style” mineral deals with both nations.

Massad Boulos, Trump’s senior adviser on Africa, told Reuters that the administration expects the mineral agreement with Congo to be signed on the same day as the peace treaty, followed shortly by a separate deal with Rwanda. “The [agreement] with the DRC is at a much bigger scale, because it’s a much bigger country and it has much more resources,” Boulos explained, while noting Rwanda’s potential in refining and trading minerals is also significant.

The DRC and Rwanda have set a tight timetable, agreeing to exchange draft treaty proposals on May 2nd and finalize the accord by mid-May. Secretary of State Marco Rubio is scheduled to preside over the next round of negotiations in Washington.

Rwanda’s cooperation hinges on its withdrawal of support for M23 rebels, who have taken over key territories in eastern Congo. These insurgents have even paraded through captured towns alongside Rwandan troops, prompting international condemnation. In return, Congo has committed to addressing Rwanda’s longstanding concern over the presence of the FDLR—a militant group composed largely of Hutu fighters accused of plotting to overthrow Rwanda’s Tutsi-led government. The FDLR has been active in the region for years and remains a major point of contention.

The instability in eastern Congo—home to over a hundred armed groups—has prevented investors from tapping into the country’s vast mineral wealth. The DRC holds an estimated $24 trillion in untapped resources, including cobalt, copper, lithium, and tantalum, all essential for advanced electronics, renewable energy systems, and defense applications. Boulos emphasized that no deal will go forward unless the region is pacified: “Investors want security before they invest billions.”

Reports suggest M23 has seized control of major mining operations, funneling stolen minerals into Rwanda’s supply chain. Though the UN’s peacekeeping mission, MONUSCO, was designed to stabilize the region, it has been ineffective during this latest wave of violence. President Tshisekedi asked the mission to withdraw last year, and several countries—including South Africa, Malawi, and Tanzania—are now pulling their peacekeepers after M23 captured the regional capital of Goma in January.

Red Cross teams began evacuating trapped Congolese soldiers and their families from rebel-held areas on Wednesday. At least 17 UN peacekeepers have been killed so far this year.

In a March letter to President Trump, President Tshisekedi made his case for a strategic partnership, offering exclusive U.S. access to Congo’s mineral wealth in exchange for American support against the insurgency. “Your election has ushered in the golden age for America,” he wrote, describing the proposed deal as a “strategic advantage” for the United States.

Boulos, who has longstanding business ties in Africa, quickly visited the DRC following the letter and began working to finalize the terms of the proposed agreement.

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Business

Overregulation is choking Canadian businesses, says the MEI

Published on May 2, 2025

By

  From the Montreal Economic Institute

The federal government’s growing regulatory burden on businesses is holding Canada back and must be urgently reviewed, argues a new publication from the MEI released this morning.

“Regulation creep is a real thing, and Ottawa has been fuelling it for decades,” says Krystle Wittevrongel, director of research at the MEI and coauthor of the Viewpoint. “Regulations are passed but rarely reviewed, making it burdensome to run a business, or even too costly to get started.”

Between 2006 and 2021, the number of federal regulatory requirements in Canada rose by 37 per cent, from 234,200 to 320,900. This is estimated to have reduced real GDP growth by 1.7 percentage points, employment growth by 1.3 percentage points, and labour productivity by 0.4 percentage points, according to recent Statistics Canada data.

Small businesses are disproportionately impacted by the proliferation of new regulations.

In 2024, firms with fewer than five employees pay over $10,200 per employee in regulatory and red tape compliance costs, compared to roughly $1,400 per employee for businesses with 100 or more employees, according to data from the Canadian Federation of Independent Business.

Overall, Canadian businesses spend 768 million hours a year on compliance, which is equivalent to almost 394,000 full-time jobs. The costs to the economy in 2024 alone were over $51.5 billion.

It is hardly surprising in this context that entrepreneurship in Canada is on the decline. In the year 2000, 3 out of every 1,000 Canadians started a business. By 2022, that rate had fallen to just 1.3, representing a nearly 57 per cent drop since 2000.

The impact of regulation in particular is real: had Ottawa maintained the number of regulations at 2006 levels, Canada would have seen about 10 per cent more business start-ups in 2021, according to Statistics Canada.

The MEI researcher proposes a practical way to reevaluate the necessity of these regulations, applying a model based on the Chrétien government’s 1995 Program Review.

In the 1990s, the federal government launched a review process aimed at reducing federal spending. Over the course of two years, it successfully eliminated $12 billion in federal spending, a reduction of 9.7 per cent, and restored fiscal balance.

A similar approach applied to regulations could help identify rules that are outdated, duplicative, or unjustified.

The publication outlines six key questions to evaluate existing or proposed regulations:

  1. What is the purpose of the regulation?
  2. Does it serve the public interest?
  3. What is the role of the federal government and is its intervention necessary?
  4. What is the expected economic cost of the regulation?
  5. Is there a less costly or intrusive way to solve the problem the regulation seeks to address?
  6. Is there a net benefit?

According to OECD projections, Canada is expected to experience the lowest GDP per capita growth among advanced economies through 2060.

“Canada has just lived through a decade marked by weak growth, stagnant wages, and declining prosperity,” says Ms. Wittevrongel. “If policymakers are serious about reversing this trend, they must start by asking whether existing regulations are doing more harm than good.”

The MEI Viewpoint is available here.

* * *

The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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