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Third Strategic Mandate Agreement between U of T, Ontario government emphasizes experiential learning, labour demands

Performance-based funding not to be implemented for two years due to COVID-19
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The new SMA3 will be active from 2020–2025.GABRIEL CARTER/THE VARSITY
The new SMA3 will be active from 2020–2025.GABRIEL CARTER/THE VARSITY

The Government of Ontario released the third Strategic Mandate Agreement (SMA3) for U of T, which will be active from 2020–2025. The new model focuses on distributing funding based on a university’s performance against a series of metrics that emphasize economic outcomes. 

Under the SMA3, performance-related funding was originally supposed to rise from 25 per cent of provincial operating grants in 2020 to 60 per cent in 2025. However, due to COVID-19, the activation of performance-based funding will be delayed for two years.

Metrics

The new performance-based funding system aims to incentivize universities to direct resources into programs that align with labour market needs, resulting in positive economic outcomes.

Each school has a predicted amount of funding for future years based on 2019–2020 operating grant totals. The performance-based grant makes up most of the funding U of T receives, though the grant each year will depend on its performance against a series of metrics.

By 2025, provincial funding will be largely based on the metrics that control the performance-based grant. These metrics include the graduate employment rate in fields related to a student’s studies, graduation rate, economic impact, and research funding and capacity.

While research funding and capacity has the largest weight in 2020–2021, its weight will change in future years when additional metrics, such as skills and competencies, are evaluated. The metrics aim to guide institutions toward creating initiatives with a focus on specialization and experiential learning.

Goals of the agreement

“Students and their families make significant sacrifices to attend colleges and universities,” a government spokesperson wrote in an email to The Varsity. “They deserve a post-secondary education system that is responsive to demands of the labour market and helps them find meaningful employment in the field of their choice.”

They added that, since the system will use historical data, institutions will not be ranked or pit against each other for funding. Due to COVID-19, universities will receive the full notional amount of funding. The government hopes this will provide universities with a degree of stability during the pandemic.

In the 2020–2021 budget, U of T reported that the changes in the SMA3 “reflected the University’s long-term advocacy for differentiation.” It noted that while the province would determine the metrics, the university would be able to determine total funding from among them.

The budget also noted that, under the agreement, enrolment funding will remain stable as long as the university maintains domestic enrolment within a fixed amount.