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The University of Toronto fell out of the top 20 in this year’s Times Higher Education World University Rankings list, dropping two places to 21.Kevin Van Paassen/The Globe and Mail

The presidents of Canada's most prominent universities are issuing a call to action after six of the country's eight top-ranked schools lost ground in the latest edition of one of the most influential university rankings.

The University of Toronto fell out of the top 20 in this year's Times Higher Education World University Rankings list, dropping two places to 21. Last year, it was the only Canadian university among the first 20 spots. Other renowned Canadian schools fell farther, losing anywhere from six to 21 places.

David Naylor, U of T's president, said the drop may be due to Canada investing less aggressively in its post-secondary sector than other countries are, particularly some in Asia.  "This is a case where standing still meant losing ground," Dr. Naylor said.

"Every Canadian who cares about the future of higher education and advanced research should be asking themselves whether this is the beginning of a trend," he added.

Rankings editor Phil Baty agreed, attributing the declines to rapidly increasing global competition that is challenging the one-time dominance of Western higher education. "What we're seeing this year in a really stark way is the beginning of the rise of Asia," Mr. Baty said.

The countries making leaps up the ladder were China, South Korea and Singapore, which have boosted their revenues, ramped up research support, and paid top dollar for professors.

"I don't think it's cause for hand-wringing alarm in Canada, but I think it's a real, clear warning shot about the growing strength of the Asian universities and their absolute commitment to generously funding top universities," Mr. Baty said.

Mr. Baty contends Canada's rankings are struggling partly because of a tendency to spread universities' core funding relatively equitably, primarily based on student enrolments, rather than pick winners who demonstrate strengths in research and teaching quality, as many European and Asian countries do. The rankings are determined based on 13 indicators ranging from scholarly publications and research income to teaching reputation and international outlook. Ontario's government has hinted at shifting more funding to performance and individually tailored mandates in recent months, but other provinces have not yet followed suit.

Governments' general reluctance to dole out funds based on merit has spread resources too thinly, said McGill University president Heather Munroe-Blum.

"The universities that are moving dramatically into the top ranks ... are in countries – both developed and developing – with a government saying, we are going to have a group of universities that have a sustained position at the top of the world league," Dr. Munroe-Blum said. "That isn't the Canadian culture, and we could use a lot more of that."

The rise of universities in Asia is also provoking concern about competition over recruitment of international students and faculty. A report commissioned by the federal government and released in August recommended that Canada double the number of international students on its campuses by 2022. With the reputation of Asian institutions growing, international students may think twice about leaving home while faculty may choose to relocate.

"All these universities overseas are going to start poaching our top talent. They come and they offer to double [a professor's] salary and provide them with literally millions of dollars in infrastructure and research funding – it's tough to say no to that," said John Hepburn, the University of British Columbia's vice-president, research and international.

The news isn't all grim for Canada – there are still only four countries with more top-200-ranked universities. And there were rare bright spots: in a year in which it endured the turmoil of Quebec student boycotts, l'Université de Montréal jumped from 104th to 84th, primarily on the strength of considerably stronger research measures, while the University of Ottawa improved from 185th to 171st.

Grading universities remains a hotly debated endeavour, especially when competing rankings produce striking differences – the recently-released QS World University Rankings placed McGill as their top Canadian school at 18th, compared to its 34th place THE rank. "I'm a little suspicious of a methodology where a ranking changes so much in one year," said Dr. Hepburn. "I mean, universities don't change that much in one year."

But after repeatedly tweaking and refining its methodology, the formula Times Higher Education used was kept consistent with last year's, which Mr. Baty hopes will give accurate year-to-year comparisons.

The fate of Canadian universities was mirrored in the U.S., where 51 of 76 American universities on THE's top 200 list fell. But that gave little solace to the University of Toronto's president.

"When the good folks at the Times Higher Education group try to offer consolation in saying that we haven't fallen much, and others have fallen more, I take no joy whatsoever. Who wants to be the biggest fish in a stagnant pond?" Dr. Naylor said.

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