Privatized universities praised as viable enterprises

Marketing institute examines possibilities

William Wolfe-Wylie, CUP Atlantic Bureau Chief

SACKVILLE, N.B. (CUP) — Students as clients, external relations as marketing, degrees as product. To some students, this is just a reiteration of the current state of affairs in post-secondary institutions across Canada, but to Kevin Ogilvie, former president of Acadia University, universities could be viable private enterprises, and he has published a report detailing how the transition might take place.

The report, titled “From Public U to Private U: an Atlantic Canadian Opportunity,” was published in September 2005 by the Atlantic Institute for Market Studies.

The report cites the prominence of such institutions in the U.S., U.K., and Asia, as well as Canada’s ready acceptance of private nursery schools and K-12 private schools as evidence that private universities will also be accepted in Canada.

“A private university that was perceived to have a brand identity of developing trained, literate and creative minds would command a high premium,” wrote Ogilvie.

But according to the report, the main obstacle facing the establishment of a strong, marketable, private university is the current university structure’s addiction to government funding and public opposition.

Ogilvie noted that prior to the 1950s, there was little to no government support at all for universities and that they were, for all intents and purposes, private institutions.

By the 1970s, however, up to 70 per cent of a university’s annual operating budget was made up of government grants and contributions.

“As the 1990s unfolded, however, ‘shocked and appalled’ best describes the general academic reaction to frozen, then reduced, government grants. Tuitions began to rise faster than inflation,” wrote Ogilvie.

The report examines six Atlantic Canada universities as case studies for how the transition to private institutions might be effected. The report concludes that each of the six universities are only capable of making the transition in a limited capacity given their current structure and leadership.

He noted that in order to privatize any of the small Atlantic Canadian Universities, tuition would need to rise to between $10,000 and $13,000 per year or endowments would need to rise to between $300 and $500 million.

By contrast, Mount Allison University’s current endowment is approximately $80 million and tuition is $6,100.

Mount Allison University is praised in the report for a beautiful campus, annual recognition in the Maclean’s magazine university rankings and a lengthy history. The report criticizes Mount Allison, however, for its reliance on Atlantic Canada for its student base, as well as an apparently unstable administration and lack of direction.

St. Francis-Xavier University is praised for its steady growth, both in size and reputation, but is criticized for the level of control the Roman Catholic Church plays in the school’s administration as it “constitutes another direct authority with regard to the question of a ‘private’ university.”

The other major obstacle to privatization, the report notes, is in the current reluctance of university administrations to begin the process. Ogilvie admitted that in the first few years of the transition, enrollment would likely drop sharply at those schools and unionized staff and faculty groups would cause labour disruptions.

But the report also notes that “first mover” status would give the first university to undergo such a transition a competitive edge among investors.

Indeed, the report says that the only way privatization will occur in the near future is if “the university is in serious financial difficulty and going private is generally conceded as the only way out, or where a major benefactor can be secured who has deep pockets and is prepared for a long fight.”

Ankit Kapur, Mount Allison University Student Union VP Academic, believes that the privatization of universities would lead to a conflict of interest and that a private university cannot be compared to a private high school or elementary school.

“A university has a larger, more complex infrastructure than a high school or elementary school,” said Kapur.

He went on to note that a lot of American students come north to study in Canada because the government investment in university means increased affordability even when accounting for international student fees.

Ogilvie concluded that there is not more than a limited chance that any Atlantic university will make the jump to private university in the near future.

“In Canada, there is little interest or will on the part of any of the six [universities] to move in that direction.”





Volume 93 • Issue 16	The Official University of Manitoba Students' Newspaper Website	December 7, 2005

Home About Us Advertise Contact Staff Current Issue PDF Employment Letters to the Editor Meet the Staff Online Archives Personals Volunteer	Font Size Respond Email Print-Friendly Privatized universities praised as viable enterprises Marketing institute examines possibilities William Wolfe-Wylie, CUP Atlantic Bureau Chief SACKVILLE, N.B. (CUP) — Students as clients, external relations as marketing, degrees as product. To some students, this is just a reiteration of the current state of affairs in post-secondary institutions across Canada, but to Kevin Ogilvie, former president of Acadia University, universities could be viable private enterprises, and he has published a report detailing how the transition might take place. The report, titled “From Public U to Private U: an Atlantic Canadian Opportunity,” was published in September 2005 by the Atlantic Institute for Market Studies. The report cites the prominence of such institutions in the U.S., U.K., and Asia, as well as Canada’s ready acceptance of private nursery schools and K-12 private schools as evidence that private universities will also be accepted in Canada. “A private university that was perceived to have a brand identity of developing trained, literate and creative minds would command a high premium,” wrote Ogilvie. But according to the report, the main obstacle facing the establishment of a strong, marketable, private university is the current university structure’s addiction to government funding and public opposition. Ogilvie noted that prior to the 1950s, there was little to no government support at all for universities and that they were, for all intents and purposes, private institutions. By the 1970s, however, up to 70 per cent of a university’s annual operating budget was made up of government grants and contributions. “As the 1990s unfolded, however, ‘shocked and appalled’ best describes the general academic reaction to frozen, then reduced, government grants. Tuitions began to rise faster than inflation,” wrote Ogilvie. The report examines six Atlantic Canada universities as case studies for how the transition to private institutions might be effected. The report concludes that each of the six universities are only capable of making the transition in a limited capacity given their current structure and leadership. He noted that in order to privatize any of the small Atlantic Canadian Universities, tuition would need to rise to between $10,000 and $13,000 per year or endowments would need to rise to between $300 and $500 million. By contrast, Mount Allison University’s current endowment is approximately $80 million and tuition is $6,100. Mount Allison University is praised in the report for a beautiful campus, annual recognition in the Maclean’s magazine university rankings and a lengthy history. The report criticizes Mount Allison, however, for its reliance on Atlantic Canada for its student base, as well as an apparently unstable administration and lack of direction. St. Francis-Xavier University is praised for its steady growth, both in size and reputation, but is criticized for the level of control the Roman Catholic Church plays in the school’s administration as it “constitutes another direct authority with regard to the question of a ‘private’ university.” The other major obstacle to privatization, the report notes, is in the current reluctance of university administrations to begin the process. Ogilvie admitted that in the first few years of the transition, enrollment would likely drop sharply at those schools and unionized staff and faculty groups would cause labour disruptions. But the report also notes that “first mover” status would give the first university to undergo such a transition a competitive edge among investors. Indeed, the report says that the only way privatization will occur in the near future is if “the university is in serious financial difficulty and going private is generally conceded as the only way out, or where a major benefactor can be secured who has deep pockets and is prepared for a long fight.” Ankit Kapur, Mount Allison University Student Union VP Academic, believes that the privatization of universities would lead to a conflict of interest and that a private university cannot be compared to a private high school or elementary school. “A university has a larger, more complex infrastructure than a high school or elementary school,” said Kapur. He went on to note that a lot of American students come north to study in Canada because the government investment in university means increased affordability even when accounting for international student fees. Ogilvie concluded that there is not more than a limited chance that any Atlantic university will make the jump to private university in the near future. “In Canada, there is little interest or will on the part of any of the six [universities] to move in that direction.”


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