Top professors at the Harvard Business School can earn more than US$1,000,000 per year, whereas the top academic salary at University of Toronto is less than half of that amount.Faith Ninivaggi/Reuters
Christopher Worswick is a professor of economics at Carleton University and an external fellow of the Centre for Research and Analysis of Migration, University College London.
Observers have suggested that the Trump administration’s attacks on American universities will end up benefiting Canada. That, and the overall political situation, they say, will lead to a brain drain of elite U.S. professors to Canadian universities. Some academics, such as Yale’s Jason Stanley, have already made the move.
Stories like this are no doubt well received by Canadians, but they risk masking the serious financial challenges at Canadian universities that will very likely dissuade top U.S. academics from moving to to Canada.
In Ontario, the Ford government’s 10-per-cent cut in 2019/20 to tuition fees paid by domestic students (Canadian citizens and permanent residents) was followed by five years of domestic tuition freezes. Adjusting for inflation, these moves represent a cut of approximately 24 per cent in real terms. Universities in Ontario are rapidly running down reserves while cutting anywhere they can and, if the policy environment does not change, will need to make significant layoffs over the next two years.
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Universities in the rest of the country also face budgetary challenges. The financial situation for English-language Quebec universities is especially dire as the Legault government pulls tuition revenue away from McGill, Concordia and Bishop’s to support French-language universities in the province.
Adding to the faculty recruitment challenges facing Canadian universities, academic salaries are typically much higher in the U.S. than in Canada. Top professors at the Harvard Business School can earn more than US$1,000,000 per year, whereas the top academic salary at University of Toronto is less than half of that amount, after converting to U.S. dollars.
Health-care differences between the U.S. and Canada also make moving to Canada less attractive for top U.S. academics. A Harvard professor who moves to University of Toronto would be very unlikely to have a family doctor given the shortages in Ontario, which is something they would take for granted under Harvard University’s health plan. The faculty member would also be unable to purchase private health insurance in Ontario, unlike if they went to a university in virtually any OECD country.
Taken together, this is hardly an environment where we would expect professors from elite U.S. universities to go when they can move to almost anywhere in the world. The widely cited QS ranking places Harvard University 5th in the world, while nearby MIT ranks 1st. University of Oxford is ranked 4th and University of Melbourne is ranked 19th, while the highest-ranked Canadian universities are McGill at 27th and University of Toronto at 29th. It is unlikely that the extreme budget stresses these Canadian universities now face have yet to fully affect their global reputations, and so their rankings may not stay this high.
Universities are important parts of modern economies. In the case of Ontario, a 2021 Conference Board of Canada report found that universities’ annual activities and human capital development is equal in value to 11.7 per cent of the province’s GDP. Elite professors can raise the prestige of their institution and help attract international students, strengthening the economy through their tuition and expenditures. To gain more of these benefits, both the federal and provincial governments should adapt policies to help Canadian universities attract top academics from the around the world.
Provincial governments are clearly struggling to provide adequate funding for both health care and education, and health care is typically ranked by Canadians as the greater priority. In this context, provinces should focus public resources on reducing health care shortages and allow universities to operate more independently, setting tuition as appropriate to support their academic programs.
The Canada Research Chair program needs to be revamped. The annual transfer from the federal government to the university for a given category of chair has not changed since 2000, meaning that, in real terms, each chair has fallen in value by roughly 40 per cent and will continue to fall in real terms with future inflation. The Canada Excellence Research Chairs, introduced in 2008, are more generous, but the program needs to be expanded if it is going to attract many elite faculty members from the U.S.
Finally, as I have argued before, international student numbers at universities should be allowed to rise again given the high tuition fees they raise and the fact that these students typically go on to be strong candidates as economic immigrants. This would generate higher revenue, allowing universities to make more competitive salary offers to top international candidates.