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For an element that accounts for more than $3.5-billion of spending in Ontario's budget, university education has been strangely absent from the Ontario election campaign so far.

Yes, Tim Hudak has promised to repeal the 30 per cent tuition grant that is available for students whose families make up to $160,000 and the NDP has vowed to keep that break and give students another one in the form of a tuition freeze, while compensating universities for the lost revenue.

What is not being discussed – because it is at once controversial and arcane – is the idea lurking in the long-simmering strategic mandate agreements that the Minister of Training, Colleges and Universities was close to releasing before the election was called. The SMAs are the seeds of change in how universities are funded, away from basing government funds on increases in student numbers to providing a possible mechanism that recognizes smart growth rather than growth at any price.

Like health, education is an area where efficiencies are particularly hard to find. In the case of education, good demographic changes – a higher percentage of people attending postsecondary – have led to a spiral of costs. In the last decade, the number of students going to university in Ontario has grown by a third and operating grants have kept pace rising by approximately $1-billion. Revenue from tuition fees has just about tripled, but some of that increase is rebated back to students in the form of university-specific scholarships.

Clearly, past patterns will not be repeated – enrollment pressure is being replaced nationally by anxiety over declining enrollment in the future. That may offer a salve to provincial governments, but it does not help universities that have come to depend on a model of growth that rewards them for packing bodies into institutions. In asking universities to choose priorities, SMAs open the door to funding that is partially dependent on institutions meeting goals in their areas of specialization. In some cases, predictions about what the SMAs will contain are easy – U of T will certainly emphasize its research dominance, Ryerson its experiential and co-op strengths – but both the larger comprehensive institutions like York and the smaller, niche players like Brock or Trent have opportunities to carve out areas in which they excel.

What happens after those priorities are set is where students and their families come in. If programs were funded at some universities and not others, students may find themselves having to choose a university away from home if they wanted a specific experience. Theoretically, in return, the program they attended would be – or be in the process of becoming – the best of its kind. Growing pains are guaranteed.

Ironically, SMAs were supposed to already be in place. The 2012 Commission on the Reform of Public Services recommended that the government recognize that operating grants based on enrolment are not keeping up with institutional growth and that SMAs be implemented by last fall. Then Dalton McGuinty resigned and ministers changed; a round of SMAs came out in 2013 and another round followed, with negotiations between government and the institutions taking place over the last six months.

Now, the mandate agreements could be made public after the election and possibly, by mid-July, since many of them are signed. (There are, intriguingly, holdouts, though perhaps due to disorganization rather than conflict.) Universities, creatures somewhat nervous about change, will demand much more time to consult internally before turning the SMAs into funding blueprints. Even if the process from SMA to change in funding formula takes years, the shift would be a major legacy, government and university sources say. (The SMAs were already not consultative enough at some institutions, coming from the admin side with little input from faculty, said Kate Lawson, the president of OCUFA, the Ontario faculty association.) Universities may also attempt to postpone signing off on this future for a while longer. One way to do so is to agree only to mandate agreements that cover every mission the university currently undertakes rather than prioritize them; another is to demand higher caps on tuition fee increases.

Is there room on tuition fees? The last Liberal budget lowered the cap to 3 per cent a year for the next four years from 5 per cent in the previous seven, making universities think twice about relying on students to fund an increasing proportion of their revenue. (Tuition now accounts for a third of revenues at Ontario universities, up from a quarter in 2001.) What's not in doubt is that moneys from other sources, including investments, has declined. Lawson says a study from the faculty association's actuaries did not find a pension crisis and a new, proposed multiuniversity super fund could offer savings and higher potential for growth. Others say operating revenue will be stretched if there are shortfalls in pension contributions. What's certain is that further dividing how the envelope marked government revenues is distributed is likely to be a long negotiation.

So the postsecondary sector is right to be alarmed that the parties' plans for universities have not generated public debate. Revenue growth is minimal but we expect quality and affordability to be maintained. No party has sorted out how to solve that equation.

Simona Chiose is The Globe's education editor.

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