University and College Affordability
How and why have fees increased?
O ne of the most pressing and troubling
issues confronting post-secondary
education policymakers over the past decade
has been the dramatic rise in tuition fees.
Between 1990/91 and 2000/01, average
undergraduate arts tuition fees across Canada
rose by nearly 126%. This has understandably
raised growing concerns about the ongoing
accessibility of post-secondary education.
Despite the visibility of this problem,
however, there has been surprisingly little
research done to fully explain why the costs
of post-secondary education have increased.
While a cursory analysis suggests that
government funding cutbacks are primarily
to blame, some recent attention has focussed
on the internal spending patterns of
universities. In particular, the salaries of
academic staff are often singled out as
contributing to rising costs.
This report1 explores these issues by
examining how and why tuition fees have
increased in the past decade and what impact
this is having on accessibility. What are the
key factors that have contributed to the rapid
escalation of fees? What role have
government funding cutbacks played in this
rise in costs? Have internal university
expenditure decisions contributed to the
problem? What are the effects of higher fees
and what can policymakers do to ensure
greater access to post-secondary education?
The research presented in this report shows
the following:
• Overall, when measured in constant
dollars and per full-time equivalent
student, tuition and other fees paid by
university students rose by 64%
between 1990/91 and 1998/99. Over
the same period and measured on the
same basis, university operating
revenues from governments fell 25%.
• By 1998/99, university students were
paying on average $1,587 more than in
1990/91, when measured in constant
1999 dollars. By contrast, universities
were receiving $2,720 less per full-
time equivalent student from
government operating grants
compared to 1990/91.
• University expenditures on salaries
have not been a factor in driving up
university costs. In fact, spending on
academic rank salaries, measured in
constant dollars and per full-time
equivalent student, was more than
16% lower in 1998/99 than in 1990/91.
This suggests that students today are
paying far more than previous
generations, and are receiving less in
return.
CAUT Education Review, Vol. 3, No. 2 —– 1

• Access to university, as measured as a
proportion of the population
attending, has to date been
maintained despite the higher costs.
However, gaps in participation rates
between low- and high-income
students are growing.
• With some exceptions, much of the
response to rising fees from both
federal and provincial policymakers
has been focussed on increasing
financial options to help students and
their families meet the higher prices.
This response does not actually reduce
the cost of a university education.
How Fees Have Increased
The rapid rise of university tuition fees
throughout the 1990s has been well
documented. Across Canada, average
undergraduate arts tuition fees rose 126%
between 1990/91 and 2000/01 (see table 1). It
is worth highlighting that there has been
some marked provincial variation in tuition
fee increases over this period, ranging from a
low of 46% in British Columbia to a high of
208% in Alberta. As further illustrated in the
table, fees rose another 3% in the most recent
academic year, although tuition remained
unchanged in Prince Edward Island and
Newfoundland, and posted a decline in
Manitoba where the government announced
a fee rollback.
It is also important to note that these figures
refer to the cost of undergraduate tuition

Table 1: Average undergraduate arts tuition, 1990/91 to 2000/01

1990/91 1999/00 2000/01 90/91 to 00/01 99/00 to 00/01
(current dollars) % change
Canada 1,496 3,281 3,378 125.8 3.0
Newfoundland 1,344 3,300 3,300 145.5 0.0
PEI 1,840 3,480 3,480 89.1 0.0
Nova Scotia 1,943 4,101 4,408 126.9 7.5
New Brunswick 1,898 3,329 3,519 85.4 5.7
1
Quebec 902 1,868 1,898 110.4 1.6
Ontario 1,653 3,865 3,971 140.2 2.7
Manitoba 1,415 3,018 2,873 103.0 -4.8
Saskatchewan 1,526 3,164 3,304 116.6 4.4
Alberta 1,244 3,658 3,841 208.8 5.0
2
British Columbia 1,727 2,470 2,520 45.9 2.0
1
Fees for both in- and out-of-province students are included in the weighted calculation.
2
Fees for both public and private institutions are included in the weighted average calculation.
Source: Statistics Canada
2 —– CAUT Education Review, Vol. 3, No. 2
Table 2: University tuition and all other fees per full-time equivalent student,
1990/91 to 1998/99 ($1999)
1990/91 1998/99 % change
$1999
Quebec 1,524 2,318 52.1%
Manitoba 2,352 3,621 54.0%
New Brunswick 2,692 3,740 38.9%
Newfoundland 1,923 3,863 100.9%
Saskatchewan 2,313 3,989 72.5%
Canada 2,487 4,074 63.8%
PEI 2,068 4,223 104.2%
British Columbia 2,837 4,377 54.3%
Alberta 2,055 4,388 113.5%
Nova Scotia 2,656 5,021 89.0%
Ontario 3,241 5,077 56.7%

Source: Calculations based on Canadian Association of University Business Officers, Financial Statistics of
Universities; Statistics Canada

only. Graduate student fees and tuition
charged by professional schools, which are
generally much higher, are not included.
Moreover, these figures do not include other
fees that universities charge and that students
must pay on top of the basic cost of tuition.
Combining these three sets of fees provides a
more complete measure of the average full
“sticker price” charged students.
Using data from the Canadian Association
of Business Officers financial statistics and
information on full-time equivalent
enrolment for institutions included in the
CAUBO survey, we are able to create a better
picture of the total fees paid by students.
Adjusting for inflation, we find that the costs
to students increased by an average of 64%
between 1990/91 and 1998/99. Again, there
are wide variations between provinces as
shown in table 2. Total tuition and other fees
in 1998/99 ranged from an average of $2,318
in Quebec to $5,077 in Ontario. Between 1990
and 1999, tuition and fees rose fastest in
Alberta (114%), Prince Edward Island (104%),
and Newfoundland (101%), while fees
increased more moderately in New
Brunswick (39%) and Quebec (52%).
The Causes of Higher Fees
a) Declining Public Funding
Our analysis confirms that the most
significant cause of higher university fees is
the decline in government funding. Between
1990/91 and 1998/99, university operating
revenues from government sources declined
25% in real terms, or about $2,700 per full-
time equivalent student (see table 3).
As illustrated in the table, by 1998/99 total
CAUT Education Review, Vol. 3, No. 2 —– 3
Table 3: University operating revenues per FTE student, 1990/91 to 1998/99 ($1999)
Revenue per FTE Student
1990/91
Tuition and Fees 2,487
Government 10,894
Bequests & donations 51
Investment income 241
Other 120
Total 13,793
Source: Calculations based on Canadian Association of University Business Officers, Financial Statistics of
Universities; Statistics Canada.
university operating revenues per full-time
student were about 7% less than in 1990/91.
By far, the major contributor to this decline
was the drop in government operating grants.
Only one other source of revenue ―
investment income ― fell over this period,
down by 7.5%. All other revenues rose.
However, these increases were not enough to
completely offset the decline in government
funding.
Tuition and fee increases jumped by nearly
64% between 1990 and 1999, making up about
60% of the losses in government funding in
dollar terms. Fee increases were outpaced in
percentage terms only by the sharp rise in
bequests and donations (133%) and “other”
sources of revenue (83.3%). However, these
latter two items make up a relatively small
proportion of total operating revenues. Taken
together, the increase in these two items made
up just 6% of the total dollar decline in public
funding.
As a result of declining public funding and
rising fees, the composition of total university
operating revenues per full-time student has
shifted. In 1990/91, government grants and
4 —– CAUT Education Review, Vol. 3, No. 2
% change from
1990/91 to 1998/99
1998/99
4,074 63.8%
8,174 -25.0%
119 133.3%
223 -7.5%
220 83.3%
12,809 -7.1%
contracts made up 79% of all operating
revenues. By 1998/99, this had fallen to 64%.
This was accompanied by a substantial
increase in tuition revenue as a share of total
operating revenues — from 18% to 32% over
the same period.
The decline in the role of government
funding has not only driven the rise in tuition
fees, but has also encouraged university
administrators to seek other forms of funding,
in large part through increased private
fundraising. However, this shift toward
private revenue sources has meant less
institutional flexibility over how those
revenues can be spent. Donations are
frequently targeted by donors for limited and
specific purposes, and generally for spending
outside of the basic operating budget. In this
way, greater reliance on private funding
sources means there are fewer unrestricted
resources available for the general operating
functions of the university. Consequently,
private revenues have not been and will not
be a substitute for public funding.
Table 4: University operating expenditures per FTE student, 1990/91 to 1998/99 ($1999)
Expenditure per FTE Student % change from
1990/91 to 1998/99
1990/91 1998/99

Academic salaries 5,871 4,907 -16.4%

Other salaries 4,000 3,660 -8.5%

Fringe benefits and travel 1,524 1,444 -5.2%

Library acquisitions 255 300 17.6%

Supplies, furniture & equipment 1,349 1,478 9.6%

Utilities 444 413 -6.9%

Renovations and space rental 194 144 -25.8%

Scholarships & bursaries 113 325 187.6%

Externally contracted services 251 275 9.8%

Professional fees and insurance 127 193 52.0%

Property tax 41 61 48.3%

Institutional membership fees 66 51 -23.7%

Debt repayments 74 40 -45.9%

Buildings, land & site services 0 48 –

Internal cost recoveries -89 -94 5.7%

External cost recoveries -413 -544 31.5%

TOTAL 13,806 12,701 -8.0%

Source: Calculations based on Canadian Association of University Business Officers, Financial Statistics of
Universities; Statistics Canada.

b) Operating Expenditures $13,806 to $12,701. In other words, the decline

Our analysis of university financial statistics
shows that overall operating expenditures
have not contributed to rising costs. As
illustrated in table 4, total university
operating expenditures, measured in constant
dollars and per full-time equivalent student,
fell 8% between 1990/91 and 1998/99, from
in expenditures was slightly greater than the
decline in revenues.
When expenditures are examined more
closely by category, the only significant
increase over the period in question was for
scholarships and bursaries. This reflects the
increased demand for student financial
assistance in light of higher fees. Interestingly,
CAUT Education Review, Vol. 3, No. 2 —– 5
Table 5: Number and Salary of University Teachers, 1990/91 to 1998/99
Full Professors Associate Professors Assistant Professors
Number Salary Number Salary Number Salary
constant constant constant
$ 1998 $ 1998 $ 1998
1998-99 8,433 $92,154 7,773 $72,080 3,921 $56,046
1990-91 8,559 $94,237 7,626 $74,590 4,770 $56,137

Percentage change -1.5% -2.2% 1.9% -3.4% -17.8% -0.2%

*Excludes francophone universities in Quebec and universities not included in the 1990-91 survey.
Source: Centre for Education Statistics, Statistics Canada

this suggests that increased expenditures on
scholarships and bursaries are partly
responsible for keeping tuition higher than
might otherwise be the case.
In fact, many universities are increasingly
justifying higher fees as a way to build up
scholarship and bursary funds so that these
funds can then be “redistributed” to other
students. This “high tuition/high student
aid” or “tuition subsidy” model of financing
is one that is prevalent amongst private
universities in the United States, but its value
in promoting greater accessibility is limited.
Not all students qualified to attend university
are eligible for scholarships or bursaries, and
this imposes a heavier burden on those from
lower income households. In the end, this
strategy, intended to increase access, may
have the perverse effect of further limiting
participation in post-secondary education
along income lines.
While increased expenditures on student aid
may have had some impact on the jump in
tuition, it is important to note what the data
reveal about factors that have not contributed
to rising costs. It is a popular perception that
spending on salaries for faculty ― protected
6 —– CAUT Education Review, Vol. 3, No. 2
by the tenure system and the principle of
academic freedom ― has been one of the
major internal cost drivers.2 The figures
presented in the table clearly do not support
this view. As shown, spending on academic
salaries per full-time student fell by over 16%
from 1990/91 to 1998/99, or by nearly $1,000
per student.
This is explained primarily by the decline in
the number of full-time faculty as well as a
real (i.e. inflation-adjusted) decline in
academic salaries. As illustrated in Table 5,
the overall number of professors fell between
1990/91 and 1998/99, with the largest losses
occurring amongst the ranks of assistant
professors ― those entering the system. At the
same time, all ranks experienced a real
decline in salaries.
The decline in per-student spending on
instruction is particularly troublesome since it
directly affects the quality of education
students receive. Fewer faculty mean larger
classes, fewer course offering and less contact
with instructors. In short, students today are
paying more and receiving less in return.
The Impact of Higher Fees
The increase in tuition fees over the past
decade and the subsequent rise in student
debt loads has ignited concerns about the
accessibility of post-secondary education in
Canada. However, the impact of higher fees
on the ability of young people as a whole to
attend university is sketchy. On the one hand,
enrolment numbers have levelled off
significantly in 1990s. However, the
percentage of the population with a
university degree has increased. In 1990, 17%
of 24 to 29 year-olds had graduated from
university. By 1998, this had risen to 29%
(Statistics Canada, Education Indicators in
Canada, 1999).
Where the impact of higher fees seems to be
most discernable is in terms of exacerbating
inequalities in access. While overall
participation rates have increased, there are
significant gaps emerging between low- and
high-income students. According to Statistics
Canada, although a higher percentage of 18 to
21-year-olds from each socio-economic
quartile were participating in university in
1994 than in 1986, the disparity between the
participation of the lowest quartile and the
other quartiles increased. In 1986, there was
little difference in university participation
rates between students in the lowest quartile
and the middle two quartiles. By 1994,
however, a gap of 7 percentage points had
emerged. What is alarming is that this gap
appeared before some of the major tuition fee
hikes in the middle of the decade (Statistics
Canada, Education Indicators in Canada, 1999).
In this regard, educational inequality is
increasing.3
Inequality of opportunity to pursue a
university education is not only a result of
rising fees, but is closely linked to a growing
trend toward income inequality amongst
families in Canada. Figure 1 plots the rate of
CAUT Education Review, Vol. 3, No. 2 —– 7
 Table 6: University tuition and fees affordability index*, 1990/91 and 1998/99
Income quintile 1990/91
Lowest quintile 0.14
Second quintile 0.08
Middle quintile 0.06
Fourth quintile 0.05
Highest quintile 0.03
* Tuition and fees as a share of after-tax family income in constant dollars.
Source: Calculations based on CAUBO, Financial Statistics of Universities; Statistics Canada, Income in Canada
1998, cat. no. 75-202, Table 7.2.
increase in tuition and fees and changes in
real after-tax family income over the 1990/91
to 1998/99 period for Canada. All Canadian
families are divided into five income
quintiles, ranging from the 20% of families
with the lowest after-tax income to the 20% of
families with the highest after-tax incomes.
As illustrated, the rise in tuition and fees far
outpaced the increase in the after-tax income
of families. In particular, the incomes of the
bottom 40% of families were actually lower in
1998/99 than in 1990/91.
To explore the issue of educational
inequality further, we have developed an
index that plots the financial capacity of
different family quintiles to pay for the costs
of tuition and fees. The affordability index
expresses these cost as a share of after-tax
family income in constant dollars. The closer
the index is to zero, the smaller the share of
after-tax income is needed to pay for the costs
of university education. Conversely, an index
closer to 1 indicates a greater proportion of
family after-tax income is needed to cover the
costs of tuition and fees.
Table 6 illustrates the affordability index by
family income quintile for 1990/91 and
CAUT Education Review, Vol. 3, No. 2 —– 8
1998/99
0.23
0.13
0.09
0.07
0.04
1998/99. As illustrated, the burden of rising
fees have not affected all families equally. The
20% of families in Canada with the lowest
income saw an increase in the affordability
index from 0.14 to 0.23 during this period. Put
another way, whereas these families would
have had to set aside 14% of their after-tax
income in 1990/91 to pay the costs of
university tuition and fees, by 1998/99 they
would need to devote 23% of their after-tax
income.
By contrast, the richest 20% of families saw
only a modest increase in their affordability
index — from 0.03 to 0.04. Consequently, the
gap in the index between income quintiles
rose significantly over this period, suggesting
a greater inequality on the part of families
from different income groups to finance the
university education of their children.
The difficulty that lower income families
face in saving for their children’s education
was highlighted in a recent Statistics Canada
survey on approaches to educational
planning. The vast majority of Canadian
parents, it was shown, want their children to
attend a college or university, but nearly half
have not been able to set aside educational
 Table 7: Post-secondary aspirations and savings, 1999
Household income
less than $30,000
$30,000-$49,999
$50,000-$59,999
$60,000-$79,999
$80,000 or more
Source: Statistics Canada, The Daily, April 10, 2001.
savings. Not surprisingly, there are
significant gaps between low- and high-
income households. The parents of 80% of
children in low-income households hoped
their children would pursue a post-secondary
education, but less than 20% reported
education savings. By contrast, parents of
95% of the children in high income
households hoped their children would get a
college or university degree, and 63%
reported savings (see table 7).
Conclusion
The rapid rise in tuition and fees over the
1990s has been driven primarily by the
reduction in government operating funding.
Increased operating expenditures on student
financial aid may have also contributed to
increased fees. Contrary to popular opinion,
expenditures on academic salaries have not
been a factor behind the rise in tuition.
It is true that some provincial governments
have frozen and even reduced tuition in
recent years as the economic climate has
improved. However, much of the official
response from both federal and provincial
% of children whose parents % of children whose parents
hope they will attend post- are saving for their post-
secondary institutions secondary education
79.8 18.7
85.8 37.4
90.6 45.6
93.4 52.6
95.0 62.6
governments has been focussed on efforts to
expand the range of financial options to help
students and their families pay for the higher
costs of university education. In recent years,
for instance, the federal government has
introduced the Canada Millennium
Scholarship, the Registered Education
Savings Plan, and the Canada Education
Savings Grant applied to private RESP
savings. Importantly, none of these responses
actually reduce the cost of tuition. In fact,
since the RESP and CESG programs are
linked to the ability of families to save money,
they are really only an option for those with
significant disposable income.
As shown above, the most visible effect of
rising fees has been to unfairly burden lower
income households, a trend that is leading to
greater educational inequalities. In this
context, the rapid increase in the affordability
index amongst the lowest income households
is particularly worrisome and points to
further inequities in accessibility in the years
ahead.
It is not inevitable that university fees
continue to rise. The problem of higher fees is
a political problem, caused by the rapid
CAUT Education Review, Vol. 3, No. 2 —– 9
public dis-investment in post-secondary Ultimately, solving the emerging crisis of
education over the past decade. As such, affordability in post-secondary education will
policymakers can take immediate steps to require action on the part of both the federal
ensure that post-secondary education is and provincial governments. Such efforts will
affordable and accessible to all qualified demand a new and rare spirit of federal-
students: provincial cooperation in order to find ways
to ensure that cost is not a barrier to any
• Increase core operating grants. If qualified student. This is a daunting
government funding cuts are the key challenge. Failing to meet this challenge,
reason why fees have risen, then an however, will mean future generations of
increase in public operating grants is Canadians will have to live with the fallout of
the primary way fees can be frozen an increasingly privatized system of post-
and lowered. secondary education and its import on
educational opportunity and quality.
• Provide needs-based grants. Canada
lacks a national student grant
program and many provinces have
eliminated non-repayable student
grants in recent years. However, the
greater availability of grants based on
income would clearly permit more
economically disadvantaged students
from attending university or college
without the risk of amassing
mortgage-sized debts.

CAUT Education Review, Vol. 3, No. 2 —– 10

 Notes

1. Information on university revenues and expenditures in this report comes from data collected
annually from the Chief Financial Officers of universities and university colleges across Canada by the
Canadian Association of Business Officers (CAUBO). For Ontario universities, information is collected
by the Council of Ontario Universities and subsequently compiled by CAUBO along with reports from
other provinces. The information is prepared and distributed annually in electronic format by the
Centre for Education Statistics of Statistics Canada. Collection and compilation of this information takes
over a year, so that the most recent release covered fiscal years ending in 1999.

2. A recent Ottawa Citizen editorial argued that professors enjoy “generous salaries” that are
accompanied by “equally generous conditions of service.” The editorial writers suggested that the next
time students want to protest against rising fees, they should look at the salaries professors are earning.
See “Prof’s salary 100(000),” Ottawa Citizen, April 6, 2001, p. A16.

3. This conclusion is supported by some recent local studies about the changing socio-economic make-
up of incoming university students. A report prepared for the University of Guelph’s Senate Committee
on University Planning in 1999 concluded that over a ten-year period, “relatively more students from
higher-educated and affluent families chose admission to Guelph than those from lower educated and
low-income backgrounds,” (Sid Gilbert, Ian McMillan, Linda Quirke, and Joanne Duncan-Robinson,
“Accessibility and Affordability of University Education,” University of Guelph: December, 1999).
Similarly, a report to the Senate of the University of Western Ontario found that between 1997 and 2000,
when fees for medical school were deregulated and allowed to rise from $4,844 to $14,000 a year, the
proportion of incoming students from families with modest and low incomes fell dramatically. The
report notes that in 1997, 35.7% of incoming students came from households with incomes less than
$60,000. In 2000, that figure had fallen to just 14.9%. Over the same period, the average family income of
students increased from $84,000 to $140,000 (Medical Students of the University of Western Ontario,
Access to Medical Education: A Proposal to the University of Western Ontario Senate, 2001).

CAUT Education Review, Vol. 3, No. 2 —– 11