Ontario's senior university administrators are going to face their first provincially mandated austerity measure - they'll have to start paying for their own golf and country club memberships.

The Ontario government announced the province's "broader public sector" will no longer be allowed to pay for golf club and gym memberships or season tickets for sporting events, or get lump-sum payment for travel without receipts.

University administrators are included in the group that will be affected, and golf and country club memberships are a common perk given to highly-paid senior university administrators, as revealed by The Hamilton Spectator in 2008 after a freedom of information request.

While today's move is more about politics than sound fiscal policy - the savings are minuscule in relation to the billions of dollars spent by universities each year - it's good public policy.

Taxpayers and students should not be struggling to make ends meet at the same time that a highly paid university president is teeing off at their expense.

With some university presidents making more than a half-million dollars a year, it's about time they started paying for their own tee-off times.

The question now is: Will the government vigilantly enforce the ban or allow universities to continue robbing Peter to pay Paul?

The wage-freeze does not include benefits, which are unregulated. A larger bonus has the same effect on an administrator's bank account as a wage increase, but is allowed.

As well, university foundations can easily be used to continue funding perks for university administrators and, unless the government closes this loophole, it's likely they will. Universities justify some of these perks as the cost of fundraising. Rich people frequent country clubs and the president is able to befriend them to increase donations to the institution.

While this is a sound argument - it's flimsy. The president can pay his own pay.

Universities should think of the claw-back as a fundraiser that will easily pay for a lecturer or two.

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Ending perks received most of the attention today, but the announcement also included bad news for Ontario's research sector. The government is canceling the Premier's Discovery and Catalyst Awards, two of the three awards known collectively as the Premier's Innovation Awards.

These two awards cost the government $2.5-million each year. The $5-million Premier's Summit Award in Medical Research remains.

The cancellation is surprising, as the Ministry of Research and Innovation was one of Premier McGuinity's pet projects. You know money's tight when this is getting cut.

The Ontario government is giving universities time to balance their pension plans.

Ontario's Minister of Training, Colleges, and Universities John Milloy announced today the government will be amending the Pension Benefits Act to grant universities a special exemption to pension solvency requirements, giving them up to ten years to tackle their pension deficits.

Without this exemption, many universities were facing large pension payments that would have come out of operating funds, causing cutbacks in other budget areas.

Ontario universities, especially the larger ones, are facing gigantic pension deficits, which have been placing significant pressure on their operating budgets. This pressure has manifested itself on university balance sheets and been a major factor in a few recent bond rating downgrades.

Recent pension deficit figures are startling. A recent DBRS report of universities that issue bonds provided the following figures:

University of Toronto: $748-million
McMaster University: $373-million
University of Guelph: $165-million
York University: $95-million
Laurier: $27-million
Windsor: $23-million
Brock: $4-million
Queen's: $3-million

Interestingly, the University of Ottawa is reported to have a pension surplus of $112-million. The University of Ontario Institute of Technology has no pension deficit, but was only established in 2002 and does not have the legacy burdens of older institutions.

But the large numbers do not paint the full picture. A per-student calculation is a better way to look at the institution's ability to tackle deficits. For instance,  McMaster University and the University of Toronto are nearly equal (according to their 2009 Common University Data Ontario filings,  McMaster University has 21,971 full-time and 3,215 part-time students. The University of Toronto has 60,848 full-time and 6,281 part-time students).

As briefly noted in March, this is significant for university credit ratings - pension deficits are one of the primary pressures dragging down balance sheets and causing credit rating downgrades. McMaster University's rating was downgraded in March in large part because of pension liabilities.

By granting universities solvency relief, the Ontario government is alleviating this pressure and helping universities weather the effects of the recession.

In return, the government is asking universities to submit a plan to the Ministry of Finance on how they plan to make their pension plans sustainable. Once they do, they will get a three-year reprieve.

I predict the result will be universities declaring plans to switch from defined benefit pension to defined contribution plans  - a contentious issue that will have to be negotiated with labour unions.

If a university (and its labour unions) can reform its pension plan, the government will allow it to amortize its solvency deficits over a period of up to 10 years.

In the short term, the government has relieved a major budget pressure for many institutions. The question is: Is this merely postponing inevitable financial pressures for three years - conveniently beyond the fall 2011 provincial election - or will this give universities and labour groups the necessary time to implement changes to stave off solvency crises and recover from the major hits the recession brought upon pension plans?

Stay tuned, we'll quickly find out.

Ontario's Minister of Training, Colleges, and Universities, John Milloy, announced this week that Ontario will cut 1,000 spaces from its teacher training programs in an attempt to correct an oversupply of unemployed B.Ed graduates.

Cutting enrolment at public universities is one of the few methods available to the government to be seen as addressing this problem. The cutting back of spaces in the province may have no impact on the oversupply of qualified teachers - but it will ensure that more teachers come from privileged backgrounds, with parents who could afford paying for a teacher's degree from elsewhere.

There already exists a market for foreign institutions - especially those in U.S. border states such as New York - offering teaching degrees to young Ontarians who are rejected within the province but whose parents can afford to pay for them to attend out-of-country. The Ontario government has no control over these universities and degrees from "Western Nations" are fully recognized when graduates return to the province in search of a full-time teaching position.

I'm already hearing from contacts that teachers' colleges along the border have engaged in a media buy and are likely to expand their enrolments this September to profit from the increased demand for out-of-province spaces.

There are many interests vested in keeping the status quo.

Students

Despite a glut of qualified teachers applying for a limited supply of teaching jobs (with the exception of certain high-school specializations), the rewards of securing a full-time teaching job more than outweigh the risks of unemployment - especially for those holding undergraduate degrees who find themselves already facing poor employment prospects.

With above-average pay, lots of time off - including two months in the summer - and union protections that prevent all but the absolute worst teachers from being fired, it should not be a surprise that many young people are pursuing a teaching career. It's one of the few career paths that offer job security in today's economy.

Students have little desire - but plenty of interest - to decrease spaces. After all, most people believe they're the exception to the rule and will find their dream job (teaching Kindergarten for many) immediately upon graduation.

Universities

Universities have little interest in regulating the flow of graduates from their programs - once they have the student's tuition and government funding units, their interests are fulfilled.

School boards

School boards benefit from an oversupply of teachers who fill the ranks of their supply teaching availability list.

But here's the twist: School boards are also dealing with a shortage of qualified teachers in specialized disciplines, such as French and high-school science.  While they are able to better balance their budgets by hiring supply teachers - both retirees and recent graduates - because they do not have to pay benefits, they are also forced to spend more money recruiting teachers in specialized disciplines.

Sometimes they are forced to settle for less than ideally qualified candidates to fill positions; for example, having a non-French major who can speak French instructing the subject at the elementary level.

All parties could benefit from a serious plan to address the current imbalance in teaching graduates - both in numbers and qualifications.

A suggestion

The problem of an imbalance between teaching graduates and jobs can be solved by pre-screening candidates entering teachers colleges for jobs at local school boards when they graduate. To gain entrance to teachers' college, a candidate should be required to prove they have a position lined up with a public or private school waiting for them when they graduate.

This would enable school boards to directly recruit undergraduate students in specialized disciplines and for the creation of incentives for these in-demand graduates to pursue a teaching degree. As undergraduate students would require the endorsement of a school board to enter teachers' college, there would be significant incentives for those wishing to teach to be volunteering at primary and secondary schools. This pool of potential volunteers could be the basis of a comprehensive effort to increase educational outcomes at schools in the poorest socio-economic areas of Canada's cities.

Engaging children in Canada's poorest neighbourhoods - with role models attending university - would achieve more to increase the representation of our nation's lowest social classes in higher education than any present government program. This could help address the increasing gap between the well-off and the poor.

Schools would have an interest in "sponsoring" teaching candidates with roots in their local communities. This could also result in more students from rural, poor and inner-city areas, as well as from native reserves, attending teachers' colleges, which could do more than present "access" programs to encourage socio-economic diversity in the teaching profession.

The oversupply problem was not created overnight and it will not be solved with a knee-jerk reaction. The greatest cause of the current crisis was the knee-jerk responses of previous governments to the supply and demand crises they faced.

It is time for a serious review and restructuring of the teaching profession, and the best place to start is revamping the present assembly-line teaching colleges, which are producing too many graduates who are generalists and not enough who are specialists.

The only party with the power and motivation to act is the government.

What do you say, "education premier" Dalton?

Student groups are celebrating a "victory" in Ontario today as the provincial government announced a continuation of the tuition status quo and unveiled some incremental changes to the provincial student loans program.

Unless the definition of victory has changed, I don't see why student lobbying organizations are celebrating. Sure, the announcement today only included one cutback - the debt cap for Ontario's neediest students is increasing by $300 per two-term academic year - but it didn't exactly have a lot of substantive benefits for students, either.

In the context of the province's record deficit, it is definitely good news that student aid was not cut and the government continues to cap tuition. However, this good news should not be construed as anything more than student lobbying groups holding the line until after the next provincial election.

Still, "victory" is not a word I'd use to describe today's announcement. Tuition will continue to increase at more than two times the rate of inflation, and the neediest students are about to carry $300 more in provincial student debt each year. The increase to the maximum amount of provincial student loans is only $320 per academic year - less than the amount tuition has increased since 2005.

There are positive changes in this package. The fact that students can now earn more toward their studies without government claw backs has doubled and been indexed to inflation. There are new grants for part-time students, interest relief on loan repayments for the first six months after graduation, repayment assistance for former students with low earnings, and the Ontario Student Assistance Program (OSAP) formula is being indexed to inflation for non-tuition educational expense.

The battle over the contribution that Ontario's higher education sector will make when the government tackles the deficit has merely been put off until after the 2011 election. If today's announcement is a victory, it is only one battle in a war in which the odds are against the sector.

The provincial Liberals have positioned post-secondary education as an 2011 election issues - it's now time to man the barricades.

Poll: Does keeping Ontario post-secondary tuition increases at 5% for the next two years help students?