Post-secondary Education Position Paper

Introduction

Alberta’s post-secondary education system is a critical engine for job creation and the economic and social prosperity of Alberta. Our 26 post-secondary institutions build our economy and cultivate talent by preparing the next generation of employees and entrepreneurs. Universities, colleges, and polytechnics produce the innovators and leaders that ensure the continued success of Alberta’s key sectors – such as agriculture, energy, and health – and establish the industries of the future. They have shaped Alberta’s cultural and social development, and represent the values of all Albertans – optimism, entrepreneurship, and the idea that if you study and work hard, you can achieve your goals.

Over the last several decades, Alberta has undergone extraordinary growth. During this period, young Albertans could enter the workforce upon graduation from high school and find a high-paying job without any post-secondary education. Unfortunately, this growth was not without considerable volatility, including the most recent economic downturn. Today’s young Albertans no longer have that same access to good jobs immediately following high school. Additionally, professionals affected by the downturn are also looking to build new skills.

The PSE sector has played a significant role in developing the oil and gas industry in Alberta – educating its skilled workers and performing energy research. The sector is now poised to support Alberta yet again, this time by developing the workforce and industries of tomorrow. Alberta’s post- secondary institutions are an asset that can be leveraged as a source of tremendous innovation and creativity. More than ever, Albertans understand that economic security lies in being competitive in the face of a diverse and radically transforming economy.

According to Deloitte, disruptive technologies such as automation, artificial intelligence, robotics, and machine learning are revolutionizing industries, altering workplaces, and redefining what it means to hold a job.1 This trend largely favours highly-skilled workers. Over the next decade, two-thirds of job openings in Canada are expected to be positions that require post-secondary education, or are in management occupations.2

In addition to the shifting work landscape, Alberta’s demographics are also changing. Alberta is home to a young population. Our population is three years younger, on average, than that of Canada as a whole.3 Half of Western Canada’s population is under the age of 40.4 By 2024, the population of Albertans attending primary and secondary school is expected to grow by 26 per cent.5

Over the last decade, the demand for post-secondary education in Alberta significantly increased. University enrolments in Alberta increased by 53.5 per cent between 2005-06 and 2015-16.6 College enrolments in Alberta over that same time period also increased by 1.6 per cent.7 Additionally, apprenticeship enrolments also grew, and remain high across the country.8 These trends show no sign of stopping. Coupled together, the changing nature of both the economy and the population of Alberta mean that the demand for post-secondary education is set to only increase further.

Now is the time to discuss support for post-secondary education in Alberta. With a new focus on innovation, skills development, and research in our knowledge economy, post-secondary institutions have even more of a role to play.

For Alberta to achieve its full potential and provide employment opportunities for every citizen, we must do three things: we must grow the PSE system to enable more Albertans to participate, we must reduce financial barriers for the most vulnerable learners, and we must maximize the impact of research and innovation.

Increasing the capacity to educate Albertans

Every qualified student in Alberta deserves a space in higher education. Unfortunately, Alberta has the lowest participation rate for post-secondary education in Canada. From 2007 to 2014, Canada’s post-secondary participation rate fluctuated between 22 and 24 per cent.9 Over that same period, the post-secondary participation rate of Albertans between the ages of 18 and 34 remained steady at 17 per cent.10 For nearly a decade, Alberta either had the lowest participation rate in Canada or was tied for the lowest participation rate of all the provinces.

Post-Secondary Participation Rate (18-34 year olds)

 2005200620072008200920102011201220132014
Canada23%23%23%22%23%23%24%24%24%24%
Newfoundland and Labrador22%23%24%23%23%22%21%22%22%21%
Prince Edward Island20%20%22%21%20%22%22%24%23%24%
Nova Scotia21%22%21%20%20%21%23%22%23%22%
New Brunswick20%19%20%19%18%20%20%20%20%19%
Quebéc25%25%25%24%25%26%27%27%27%28%
Ontario24%24%24%24%25%25%25%26%25%24%
Manitoba21%21%21%21%20%21%21%20%20%20%
Saskatchewan19%19%18%18%17%18%18%18%19%19%
Alberta19%18%17%17%17%17%17%17%17%17%
British Columbia23%23%23%22%22%23%24%24%23%23%
Source: Statistics Canada, Labour Force Survey. 2016 (custom tabulation)
Figure 1: Post-secondary participation rates across Canada11

This has costs for our economy, and for Albertans. In recent years, our province has had to import a huge proportion of our talent by paying high salaries, creating major cost pressures for industries and public services, and placing unsustainable strains on public infrastructure. Investing in our post-secondary system’s capacity is key to sustainable workforce growth into the future, especially as this investment relates to government-funded places for domestic students.

Post-secondary education provides many benefits to Albertans, such as higher incomes. Among the 2013-14 graduating class province-wide, 92 per cent of graduates were employed within two years of graduation and were earning a median income of $61,667. By comparison, the overall median income for Albertans aged 25 to 64 was $52,488 in 2015.12 Across Canada, graduates of post- secondary programs designed for entry into higher-skill professions or graduate studies enjoy an earnings premium of 70 per cent compared with those holding only upper secondary or non-tertiary education.13

Increased participation in post-secondary education is also critical to meeting our workforce needs over the coming years and decades. Alberta’s most recent Occupational Demand and Supply Outlook forecasts a cumulative labour shortage of 49,000 workers in Alberta by the year 2025.

Among the occupations with the biggest projected shortages are computer and information systems professionals; nurse supervisors and registered nurses, and medical technologists and technicians. These in-demand careers all require post-secondary education.14

Our economy is rapidly changing, and the gap between high-skill and low-skill jobs is quickly increasing.15 To ensure our continued prosperity, resiliency and the rapid acquisition of new skills are required. According to estimates by the Organization for Economic Cooperation and Development (OECD), 38 per cent of jobs in Canada are at high risk of being automated. However, only 10 per cent of Canadians with post-secondary education are at high risk of losing their jobs to automation.16

Given these benefits, it is unfortunate that Alberta is lagging behind the other provinces in Canada in terms of participation. For the province to move to the national average for PSE participation among 19-year-olds and ensure the number of qualified young Albertans is on par with the rest of the country, the capacity of the Alberta PSE system would need to increase by 47,000 seats.17

Moreover, additional growth is needed just to accommodate current population growth in Alberta. Based on current elementary school enrolments, by 2026 we can expect a 15 per cent increase in the number of Albertans graduating from high school.18 Just to accommodate this population increase, the post-secondary system in Alberta would need to grow by about 40,265 spaces. In total, to keep pace with population growth and increase post-secondary participation to the national average, Alberta needs to create space for an additional 90,000 students by 2025.

Our goal should be to move towards the national average and accommodate the province’s growth rate by providing spaces for an additional 90,000 students by 2025.

Reducing financial barriers for the most vulnerable learners

Affordability should not be a barrier to higher education. Alberta performs well in terms of affordability: tuition in Alberta is considerably lower than the Canadian average when measured on the basis of ability to pay.19 One area where Alberta can improve affordability is with regard to need- based grants.

Alberta has the lowest percentage of student financial aid focused on grants and scholarships of the 10 provinces in Canada.20 Furthermore, Canada ranks 14th out of 16 OECD comparator countries in providing scholarships to post-secondary students.21

Figure 2: Non-repayable student aid as percentage of total aid provided by provincial government22

Financial means should not restrict participation in post-secondary education. Alberta’s talent pool should not be limited to only those who can afford to go to university or college. Our resources should be directed using a need-based framework. For example, the Canada Student Loans program awards loans based on “assessed need,” which is determined by the difference between a student’s financial resources and their costs. This program is an example of an established need- based structure.23

Numerous studies published since 2000 indicate that youth from families of higher socioeconomic status are more likely to attend post-secondary education, particularly if their parents have post- secondary education.24 Though overall tuition rates have relatively limited impact on participation rates and on the social composition of enrolments, cost does have an impact on access at lower income levels.25

This means that, although overall financial barriers to post-secondary education are modest, finances are a significant barrier for specific groups. Evidence supports the view that bursaries, grants and other forms of targeted student aid are an effective way to improve access among these groups.

In the United Kingdom, for example, students’ expectations about the size and likelihood of bursaries are a predictor of their interest in post-secondary education. Extensive U.S.-based literature also suggests that increases in grant levels offset the negative impact of tuition rates on participation – with greater effect sizes among low-income students.26

Taken together, this research suggests that, while finances are not a barrier to participation for most students, they are a meaningful barrier to low-income families, and targeted aid is an effective mechanism for increasing access.

Our goal should be to double the proportion of government student aid delivered in the form of grants or scholarships, with the emphasis on providing assistance to those from lower-income families.

Maximizing the impact of research, innovation and skills development

Research, innovation, and skill-development are fundamental to building a diversified, thriving, and adaptable economy in the global marketplace. Albertans have long known the tremendous impact that research and innovation can have on our economy and our future, as researchers from Albertan post-secondary institutions have made significant contributions to our society.

Unfortunately, Alberta is now lagging in research and innovation. Alberta earned a D grade on its Innovation Report Card from the Conference Board of Canada. While Alberta earned good grades in the areas of entrepreneurial ambition, enterprise entry, and labour productivity, we performed poorly in research and development activity and investment.27 This demonstrates that, while Albertans have the energy, ambition, and work ethic necessary to galvanize a truly innovative economy, Alberta can strengthen its research base.

Report card

Innovation IndicatorsCanadaN.L.P.E.IN.S.N.B.QuebecOntarioManitobaSaskatchewanAlbertaB.C.
Public R&DBBBA+CAABDDC
ResearchersDD-D-D-D-CCD-D-D-D-
Scientific ArticlesCCDBDCBCCCC
Entrepreneurial AmbitionABN/ACN/AAA+AAA+A+
Venture CapitalCDDCDBCDDDB
Business R&DDD-D-D-D-CDD-D-D-D-
ICT InvestmentCDDDCDCDD-CD
PatentsDD-DD-D-DDD-D-DD
Enterprise EntryN/AAACCDBBBAA
Labour ProductivityDCD-D-DDDDCBD
Note: Data for the most recent year available were used. For details on methodology and data sources, see the Methodology & Data section of this website.
Source: The Conference Board of Canada
Figure 3: Innovation Indicators28

Nationally, the post-secondary sector accounts for 37 per cent of research and development spending.29 The post-secondary sector is critical in part because it produces the basic research that business-driven innovation is built on. Post-secondary research is also intrinsically linked with educating a highly skilled workforce that is well positioned to participate in an innovation-driven economy.30

To remedy shortfalls in these areas, the Conference Board of Canada recommends that governments stimulate spending on innovation.31 Research and innovation is critical to creating employment, providing jobs, and contributing to the success of private firms and businesses. It is also fundamental to the economic and social well-being of individuals, communities, and the province. Post-secondary institutions are critical to a thriving innovation ecosystem. They are at the centre of research and development in Alberta, as they are the largest group of publicly funded research performers in the province.32

A long-term and stable public research funding strategy is essential to address our economic, health, social, and environmental challenges. Alberta must continue to invest in research, innovation, and skills development in cutting-edge technology, to develop the industries and leaders needed for the future.

Today’s youth are entering a job market where traditional entry-level positions are disappearing due to automation. Right from the start, companies demand that students possess a complex mix of technical and soft skills.33 Work-integrated learning (WIL) – including co-ops, internships, apprenticeships, applied research, field work, service learning, incubators/accelerators, boot camps, hackathons and more – provides the skills necessary to be successful in today’s workplace by offering students meaningful, practice-based learning opportunities to prepare graduates to thrive in the working world.

The consequences of failing to ensure that youth are equipped for success in today’s workplace are significant. For example, one recent study from TD Economics examined the so-called “scarring effect,” meaning the wage penalty associated with a period of unemployment when youth are first entering the labour market. This effect could be equivalent to 0.7 per cent of Canada’s GDP, or nearly $12.4 billion over the next 18 years.34

By integrating curricular learning into non-classroom settings, WIL delivers enhanced understanding of the labour market, builds connections to the professional workforce in their chosen field, and bridges the gap between theory and the practical demands of the modern workplace. WIL supports the talent pipeline in Alberta, ensuring that students are fully prepared to “hit the ground running” once they graduate. Alberta should not only support WIL, but should also be poised to leverage WIL opportunities from the federal government and incentivize businesses to work with post-secondary institutions to create WIL opportunities for students.

Students and business leaders are unified in their support for more WIL opportunities. According to a 2016 Abacus Data survey, 89 per cent of students and recent graduates support more work- integrated learning in programs, and 47 per cent do not think there are enough WIL opportunities for students.35 In a 2015 survey of major Canadian businesses, respondents noted that WIL opportunities constitute some of the most important sources of work experience for students and new graduates.36

Our goal should be to support research and innovation in Alberta and leverage work-integrated learning opportunities at a level higher than any other province in the country to yield the economic and social dividends this province deserves.

Conclusion

Post-secondary education and research brings value to our province by contributing to Alberta’s economic and social prosperity. Our universities, colleges, and polytechnics produce highly skilled graduates, from doctors to dentists, engineers to electricians, chefs to videographers. They connect Alberta and its companies to global markets and to cutting-edge ideas and approaches. Research at post-secondary institutions fosters innovation and supports industry; it creates the talent and expertise from which entrepreneurs, companies, and governments can become globally competitive.

The changing work and demographic landscape of Alberta demands a new approach to the PSE sector. If the status quo persists, Alberta will continue to source its highly-skilled workers from other provinces, furthering Alberta’s cost pressures and creating an unsustainable strain on infrastructure. Alberta’s talent pipeline – the young people ready to step in and contribute to our economy – will effectively leave the province to pursue other scholastic opportunities and find highly-skilled jobs elsewhere. This will continue to disadvantage Alberta’s competitiveness.

We now have an opportunity to position Alberta for its next phases of prosperity. In supporting research and innovation, delivering better access to Albertans, and providing our young people with the training and education they need in today’s world, we can build a diverse, responsive economy.

Alberta’s world-class post-secondary education system is fundamental to building our province’s bright future. By expanding capacity in the post-secondary system, we can provide employment opportunities for every citizen. By reducing financial barriers for learners, we can create opportunities for our most vulnerable populations. And by maximizing the impact of research, innovation and skills development, we can all embrace the technological opportunities of the future.

Footnotes

1 Deloitte, The Intelligence Revolution: Future-Proofing Canada’s Workforce, n.d., p. 4. As accessed at: https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/human-capital/ca-EN-HC-The-Intelligence-Revolution-FINAL- AODA.pdf on October 29, 2018.

2 Brookfield Institute, Future-Proof: Preparing Young Canadians for the Future of Work, March 2017, p. 8. As accessed at: https://brookfieldinstitute.ca/wp-content/uploads/FINAL-FP-report-Onlinev3.pdf on October 29, 2018.

3 Government of Canada, Towards a Western Canada Growth Strategy, n.d., p. 4.

4 Ibid.

5 Government of Alberta, 2015 Campus Alberta Planning Resource, 2015, p. 2. As accessed at: http://advancededucation. alberta.ca/media/475324/capr-socialenvironment-2015.pdf on July 30, 2018.

6 Higher Education Strategy Associates, The State of Post-Secondary Education in Canada, 2018, p. 13. As accessed at: http://higheredstrategy.com/the-state-of-postsecondary-education-in-canada-2018/ on October 29, 2018.

7 Ibid, p. 15.

8 Ibid, p. 17.

9 Government of Alberta, 2015 Campus Alberta Planning Resource, 2015, p. 3. As accessed at: http://advancededucation. alberta.ca/media/475324/capr-socialenvironment-2015.pdf on July 30, 2018.

10 Ibid.

11 Note that these participation rates cover 18 to 34 year olds. Government of Alberta, 2015 Campus Alberta Planning Resource, 2015, p. 3. As accessed at: http://advancededucation.alberta.ca/media/475324/capr-socialenvironment-2015.pdf on July 30, 2018.

12 Alberta Advanced Education, Alberta Graduate Outcomes Survey Class of 2013/14, Highlights for Publicly Funded Institutions, n.d. As accessed at: https://open.alberta.ca/dataset/21a39a16-a80e-430c-abe6-f9a4b1e8cad0/resource/d71b9204-e812-4e2d-bfff- 3d480820d74a/download/graduate-outcomes-survey-class-of-2013-14-infographic-4-employment.pdf on October 29, 2018. Alberta Treasury Board and Finance. 2016 Census of Canada: Incomes, n.d. As accessed at: https://finance.alberta.ca/aboutalberta/osi/census/2016/2016-census-incomes.pdf on October 29, 2018.

13 This premium refers to Tertiary Type A programs as defined by the OECD. These are defined as programs designed to provide sufficient qualification for entry to advanced research programs and professions with high skill requirements (e.g., medicine, architecture, law). Most university programs are classified as Tertiary Type A. OECD, Education at a Glance, Indicator A8: What Are the Earnings Premiums from Education?, 2011. As accessed at: https://www.oecd.org/edu/skills-beyond-school/48630790.pdf on October 29, 2018.

14 Government of Alberta, Occupational Demand and Supply Outlook, August 2016. As accessed at: https://open.alberta.ca/dataset/1da5b1b0-c061-430c-a9e5-65f79226bd2c/resource/1f6039ad-c1e4-4ee2-8ae5-c23bf1ec9ac3/download/2016-albertas- occupational-demand-and-supply-outlook-2015-2025.pdf on October 29, 2018.

15 Alberta Advanced Education, Global Winds of Change: 2018 Trends Driving Innovation in Adult Learning and the Public Service, May 2018.

16 Arntz, M., T. Gregory and U. Zierahn (2016). The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis. OECD Social. Employment and Migration Working Papers. No. 189, OECD Publishing, Paris.

17 Figure reflects the estimated enrolment growth required to increase post-secondary participation rate among 19-year-olds from approx. 50.7% (Alberta – 2014) to approx. 63.8% (Canada – 2014), based on Statistics Canada estimates of participation rate (Frenette 2017), provincial population age distribution (Statistics Canada Table 17-10-0005-01), and total enrolment in instructional programs for Alberta (Statistics Canada Table 37-10-0011-01). Marc Frenette, “Postsecondary Enrolment by Parental Income: Recent National and Provincial Trends,” April 10, 2017. As accessed at: https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626- x2017070-eng.htm on October 31, 2018. Statistics Canada, Table 17-10-0005-01, October 31, 2018. As accessed at: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501 on October 31, 2018. Statistics Canada, Table 37-10-011-01, October 31, 2018. As accessed at: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3710001101&pickMembers%5B0%5D=1.10& pickMembers%5B1%5D=2.1&pickMembers%5B2%5D=6.1 on October 31, 2018.

18 Alberta Education, “Student Population Overview,” n.d. As accessed at: https://education.alberta.ca/alberta-education/student- population/everyone/student-population-overview/ on October 18, 2018.

19 Calculation reflects average tuition as a percentage of median household income. As calculated from Statistics Canada, “Table 1: Number of households, median income and median income rank, Canada, provinces and territories” 2016. As accessed at: https://www150.statcan.gc.ca/n1/daily-quotidien/170913/t001a-eng.htm on October 31, 2018 and Statistics Canada, “Weighted average undergraduate tuition fees for Canadian full-time students, by province,” 2015. As accessed at: https://www150.statcan. gc.ca/n1/daily-quotidien/150909/t001b-eng.htm on October 31, 2018.

20 Sourced from provincial student aid programs. See Figure 2.

21 The Conference Board of Canada, Canada’s Post-Secondary Education Performance: An International Comparison, 2017, p. 5. As accessed at: https://www.conferenceboard.ca/temp/289a6cfd-9f09-4a02-b791-01e955f95f8c/9099_Can-PSE- Comparison_SPSE_RPT.pdf on July 30, 2018.

22 Sourced from provincial student aid programs.

23 Higher Education Strategy Associates, The State of Post-Secondary Education in Canada, 2018, p. 45. As accessed at: http://higheredstrategy.com/the-state-of-postsecondary-education-in-canada-2018/ on October 29, 2018.

24 Drolet, M. (2005). Participation in Postsecondary Education in Canada: Has the Role of Parental Income and Education Changed over the 1990s? Analytical Studies Branch Research Paper Series. Catalogue No. 11F0019MIE – No. 243. Ottawa, ON: Statistics Canada Business and Labour Market Analysis Division. Finnie, R., & Mueller, R. E. (2008). The Effects of Family Income, Parental Education and Other Background Factors on Access to Post-Secondary Education in Canada: Evidence from the YITS. (A MESA Project Research Paper). Toronto, ON: Educational Policy Institute.

25 Ibid, Drolet. Christofides, L. N., Hoy, M., & Cirello, J. (2001). Family income and postsecondary education in Canada. The Canadian Journal of Higher Education. 31(1), 177-195. Corak, M., Lipps, G., & Zhao, J. (2003). Family income and participation in postsecondary education. Analytical Studies Branch Research Paper Series. Catalogue No. 11F0019MIE-No. 210. Ottawa, ON: Statistics Canada Family and Labour Studies Division. Rivard, M., & Raymond, M. (2004). The effect of tuition fees on post- secondary education in Canada in the late 1990s. Working Paper 2004–09. Ottawa, ON: Department of Finance.

26 Callender, C. & Wilkinson, D. (2013). Student perceptions of the impact of bursaries and institutional aid on their higher education choices and the implications for the National Scholarship Programme in England. Journal of Social Policy, 42(2), 281-308. Educational Policy Institute. (2008). Access, persistence, and barriers in postsecondary education: A literature review and outline of future research. Toronto, ON: Higher Education Quality Council of Ontario.

27 The Conference Board of Canada, Innovation, May 2018. As accessed at: https://www.conferenceboard.ca/hcp/Provincial/Innovation.aspx on July 30, 2018.

28 The Conference Board of Canada, Innovation, May 2018. As accessed at: https://www.conferenceboard.ca/hcp/Provincial/Innovation.aspx on July 30, 2018.

29 Statistics Canada, Spending on research and development, 2016, June 23, 2017. As accessed at: https://www150.statcan.gc.ca/n1/daily-quotidien/170623/dq170623c-eng.htm on October 29, 2018.

30 The Conference Board of Canada, Public R&D spending, n.d. As accessed at: https://www.conferenceboard.ca/hcp/Details/Innovation/publicrandd.aspx on October 29, 2018.

31 The Conference Board of Canada, Innovation, May 2018. As accessed at: https://www.conferenceboard.ca/hcp/Provincial/Innovation.aspx on July 30, 2018.

32 Government of Alberta, 2015 Campus Alberta Planning Resource, 2015, p. iii. As accessed at: http://advancededucation.alberta.ca/media/475312/capr-executivesummary-2015.pdf on July 30, 2018. Taken verbatim where possible.

33 Brookfield Institute, Future-Proof: Preparing Young Canadians for the Future of Work, March 2017, p. 15. As accessed at: https://brookfieldinstitute.ca/wp-content/uploads/FINAL-FP-report-Onlinev3.pdf on October 29, 2018.

34 Ibid, p. 16.

35 Abacus Data, Work Integrated Learning and Post-Secondary Education: What Students Think, Fall 2016. As accessed at: http://bher.ca/wp-content/uploads/2016/10/What-students-think.pdf on October 29, 2018.

36 Business Council of Canada, Developing Canada’s Future Workforce: A Survey of Large Private-Sector Employers, March 2016, p. 6. As accessed at: http://thebusinesscouncil.ca/wp-content/uploads/2016/02/Developing-Canadas-Workforce-March.pdf on October 29, 2018.