Ontario colleges and universities could lose as much as 60 per cent of their funding if they fall short of performance targets under changes in the works for the post-secondary sector, Thursday’s provincial budget revealed.

The government is also looking to help universities cut costs and bring in new hires by amending rules that currently allow professors to teach courses and earn a salary, but also collect a pension.

Finance Minister Vic Fedeli told reporters that “we listened to the students, and put students first” with a 10-per-cent tuition cut for this fall, and a tuition freeze for 2020-21.

The province has said post-secondary institutions will have to absorb the decrease in tuition revenues.

NDP Leader Andrea Horwath accused Premier Doug Ford of “keeping post-secondary institutions under his thumb by threatening to withhold 60 per cent of their funding.”

She said colleges and universities are “going to be very, very concerned” about Thursday’s budget, noting they are receiving $700 million less in funding for the next school year alone.

Provincial post-secondary funding is currently $12.1 billion, which drops to about $11.4 billion for 2019-20.

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Budget documents say the current “strategic mandate agreements” for all 45 colleges and universities will need to be renegotiated next year, and that Ontario “will become a national leader in outcomes-based funding by tying 60 per cent to performance by the 2024-25 academic year.”

Such funding is currently less than 2 per cent of post-secondary operating budgets. But starting in 2020, the agreements “will tie 25 per cent of funding to performance outcomes, and this proportion will increase annually by increments of 10 per cent for three years and 5 per cent in the last year until it reaches a steady state of 60 per cent in 2024-25.”

But instead of assessing colleges on 38 “metrics” and universities on 28 — on possible measures such as graduation rates or employment rates three months after earning a degree — the province will whittle that list down to 10.

Chris Cochrane, a political science professor at the University of Toronto Scarborough, called this a “significant change” and said “the full significance won’t be known until we hear what those 10 indicators actually are, and how much flexibility institutions will have to weight those indicators in their performance assessment.”

The Ontario Confederation of University Faculty Associations said schools don’t need target funding, they need more core funding given this province spends the least.

“Performance-based funding pits one university against another and generates inequities across the university system,” said president Gyllian Phillips, adding such measures typically don’t lead to improvements.

The Ministry of Training, Colleges and Universities will also begin consultations on the issue of long-serving professors, with budget documents noting that “studies have shown the average age of retirement among professors is on the rise … suggesting that employees are remaining in their positions longer and limiting turnover that would bring in earlier career professionals with new teaching methods and increase diversity.”

This “has cost implications, as these employees tend to be paid the highest salaries and benefits, and in some cases, are drawing salary and pension payments at the same time.”

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The government will soon amend post-secondary legislation to allow such changes and “will consult with the sector on how best to achieve these outcomes.” All options are on the table, including banning them from continuing to teach if they are receiving a pension.

While the rules aren’t the same at every university, this generally becomes an issue when professors hit 71 years of age and continue to work, as they have to begin receiving their pension at that age.

Cochrane called this is a tricky issue and said it “will be hard for the government to orient the discussion around age, as they did in the budget, given they can’t discriminate on that basis.”

David Lindsay, head of the Council of Ontario Universities, said they “will continue to work with government and employers to ensure responsible spending, improved efficiency and modernization.”