The operating subsidy granted by Quebec to universities depends on student enrollment and budget appropriations devoted to universities.
If enrollment decreases, the grant decreases. If budget appropriations increase, the grant increases.
The financial outlook
We present UQAM’s enrollment and grant histories in Figures 1a and 1b. Since 2015, UQAM has suffered a 16% drop in enrollment, which translates into an equivalent drop in tuition fees. Consequently, there is a decrease associated with the operating grant.
Technical provisions shift and spread this reduction over time, but since 2017, its subsidy has decreased by 9% (in constant dollars). This decrease is partially mitigated by the contribution of new funds that Quebec devotes to universities.
As long as the institution does not resume enrollment and the grant rules remain the same, this trend will not change.
Probable causes
The labor shortage is affecting university enrolments. They tend to fall when the unemployment rate is low (and vice versa). The unemployment rate is barely above its historic low (4.2% in March 2023) and UQAM is more sensitive than other establishments to these variations.
UQAM is then doubly affected: the direct decline in registrations, but also the displacement of registrations of students who had UQAM as a second choice to other establishments which also face less strong demand.
This effect is probably stronger among first-generation college students, who have less parental pressure to graduate.
Another plausible hypothesis may affect recent declines in enrollment. The new incentive scholarship program from the Government of Quebec targets sectors deemed to be in need of labor through disciplines that are less present at UQAM. If these scholarships increase enrollment in the targeted programs, then they would cause enrollment substitution to other institutions.
Finally, the opening of an adjacent HEC Montréal campus, which is scheduled for this year, could accentuate the drop in enrolment. Other systematic differences between establishments, which have changed little in recent years, seem to us to be unconvincing in explaining the variations in staff numbers.
The fault of the engineers?
We talk about a disadvantage of UQAM due to provincial subsidy policies that would favor establishments with so-called “paying” disciplines for the purposes of subsidies. These assertions deserve nuance.
Since the engineering and health sciences disciplines are more expensive, they are associated with a higher operating grant per student. By doing so, institutions with faculties of engineering and medicine receive more grants.
To illustrate the impact, we have created a “UQAM 2.0” comprising a faculty of medicine equivalent to that of Université Laval and a faculty of engineering equivalent to the École de technologie supérieure. This UQAM 2.0 then took on a size, in terms of enrollment, between McGill University and Laval University. We then grant it funding under the grant rules of the last 20 years and compare it to other institutions. Figure 2a shows the evolution of the operating grant while Figure 2b shows the grant per student.
Note that UQAM 2.0 rivals the University of Montreal, the champion in terms of grants received. But beware of mirages: this UQAM 2.0 would also have to finance the expenses of two expensive new faculties!
Moreover, the addition of these faculties is sufficient to explain the difference in operating grant with the most advantaged (the University of Montreal), meaning that the performance of UQAM in receiving funds in other disciplines is equal to or better than other establishments.
Finally, it is a French-speaking university that takes pride of place in the list of operating grants received. In short, the idea that UQAM is fundamentally disadvantaged seems exaggerated to us.
It should be remembered, however, that university operating grants do not constitute the full funding of institutions. In a second text, we will also qualify the idea that a linguistic division is a discriminating factor for universities. What should be remembered here is that the labor market is an important factor in explaining the state of university enrolments.