The role of Canada’s postsecondary system in building the country’s future is under threat and the system needs reforms to improve its relevance, including integrating real-world experiences into programs and enabling private sector investment in R&D, according to a report by RBC.

RBC Thought Leadership and partners identified five requirements critical to reforming the postsecondary sector:

1. A new financial arrangement.

A strong postsecondary sector requires sufficient, stable financing, but public spending on postsecondary institutions in Canada has fallen from 1.47 percent of GDP at its height in 2011, to the current OECD average of 1.1 percent. As a percentage of GDP growth, public spending is $13 billion short of where it was 15 years ago.

The report recommended:

• Increasing public spending on the postsecondary system, with government funding possibly tied to specific criteria or outcomes.
• Exploring a new funding arrangement between the federal government and Canada’s U15 research universities, to advance research in areas of national interest.
• Creating a larger role for student fees, offering institutions more flexibility when it comes to tuition.

2. Responsive mandates.

With greater financial footing, postsecondary institutions can play a more strategic role in Canada’s economic pivot – advancing specific priorities. They will be better positioned to do that with mandates that respond to more distinct learner or industry needs.

With a new funding arrangement, colleges could provide more applied, industry-driven learning, which is expensive to deliver – often requiring technical equipment and small class sizes.

Responding quickly to industry and community training needs will continue to be an essential part of Canada’s economic transition and presents opportunities for institutions with aligned mandates, for example:

• Plans to fast track major energy projects will need to overcome large, technical skill gaps in rural and northern parts of the country.
• Canada’s armed forces are suffering severe skills shortages in aviation, search and rescue and technicians, to name a few.
• Of more than 1,000 Canadian adults surveyed recently, less than half felt they could use AI tools effectively, and less than a quarter indicated having received AI training – pointing to opportunities for adult upskilling programs.

Compared with other jurisdictions, Canada tracks little information about how the country’s education system has been functioning, let alone information that would enable foresight about where it needs to go, the report noted.

With better data, institutions could examine, for example, whether certain demographics of students have more success with some program formats than others. And when it comes to lifelong learning, institutions could gain insight into how credentials complement one another or stack together to impact career advancement in specific industries.

The report recommended:

• Updating institutional mandates in ways that play to and develop their unique strengths and meet specific labour force needs.

The federal government in September announced up to five new workforce alliances of employers, unions and industry groups, focused on skill development in “sectors under pressure” like energy and advanced manufacturing.

“Postsecondary providers with relevant mandates should be at these tables, and quick to respond with relevant programming,” the RBC report said.

• Provincial governments should play a coordination role, ensuring institutional mandates complement one another and align with social and economic needs, creating incentives for institutions to develop and lean into thematic strengths.
• The federal government should engage the provinces in developing regulations to standardize data collection and offer consistent, up-to-date, granular data that allows for program-level analysis and student-level outcomes tracking.

3. Modernized programs and services.

College and university programs and services need to be more aligned with the world of work and the opportunities available to graduates.

All programs should be helping students develop and hone skills in entrepreneurial thinking, communication and a basic awareness of how businesses operate, along with analytical thinking and flexibility and agility.

Canada needs its postsecondary programs to produce graduates who are competent technology users, to know when and how to leverage AI to increase productivity while being aware of its limitations and risks.

Postsecondary institutions “should be moving much faster, finding ways to integrate the latest technology in programs and supporting services to optimize student experiences, operational efficiency and program quality.”

The report recommended:

• Rethinking program content, delivery models, assessments and instructor roles to optimize learning in a modern context.
• Ensuring every program offers applied learning opportunities that develop transferable skills like problem-solving, communication, technology literacy and entrepreneurial thinking.
• Leveraging technology and AI, including effectively integrating AI as part of the student experience, and faculty and staff identifying places where AI can relieve their own workload.
• Offering technology-enhanced learning opportunities (such as hybrid and distance learning, simulations) and support services.
• Serving the needs of lifelong learners by presenting all credentials as steppingstones rather than discrete offerings.

4. Updated governance structures.

Being more responsive and modern requires more institutional flexibility. Externally, regulatory bodies and policy frameworks can be overly restrictive and work against making reforms and changes.

Internally, risk-averse institutional cultures, fragmented governance environments and restrictive collective agreements often layered with tenure can impede leaders’ ability to take decisive action.

The report recommended:

• Provincial governments could engage postsecondary leaders to understand and dismantle regulatory roadblocks, including exploring the ways in which professional regulatory bodies facilitate or inhibit responsiveness.
• Postsecondary leadership together with labour unions could review collective agreements and/or governance and human resource policies – striving for balance between job protection and institutional viability – drawing on union experience and expertise to outline new expectations like modernized job tasks and teaching methods.

5. Practical, mission-driven research.

Together, Canadian governments, postsecondary institutions and businesses need to do a better job of ensuring research advances national priorities, supporting Canadian communities and businesses with timely innovations, the report said.

Postsecondary research often ends at the ideation phase with little incentive to push toward patents or commercialization; promising innovations and innovators go elsewhere, like Silicon Valley.

There still a place for inquiry-driven research. But for many institutions (and departments within them) advancing innovations, and ensuring they go beyond the ideation phase, will require a reorientation – from exploring topics to advancing goals – and an openness to taking on research contracts with industry partners who have defined milestones and clear deliverables in mind.

The report recommended:

• Updating federal granting to incentivize research that produces intellectual property or advances national priorities.
• Focusing institutional research strategies (as part of updating mandates) to advance specific industries or public interests like health care, national defence, or food security.
• Rewarding innovation and community impact in tenure and promotion processes.
• Experimenting with new approaches and collaborations – Canada’s defence spending commitments, for instance, offer a prime opportunity. A new Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS) could draw on academia and industry strengths to drive innovation, much like the Advance Research and Invention Agency in the U.K. or the Defence Advanced Research Projects Agency in the U.S. – both of which fund high-risk, high-reward projects, free from the typical political constraints and academic processes.  
• Industry coming to the table with more funding for research contracts. RBC