2007 Legislative Session: Third Session, 38th Parliament
SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS
MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS Thursday, May 31, 2007 8 a.m. Douglas Fir Committee Room Parliament Buildings, Victoria

The following electronic version is for informational purposes only.
The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON 
PUBLIC ACCOUNTS

THURSDAY, MAY 31, 2007

ISSN 1499-4259

[ Page 287 ]

THURSDAY, MAY 31, 2007

          The committee met at 8:05 a.m.

           [R. Fleming in the chair.]

           R. Fleming (Chair): Good morning, Members. I'd like to call the meeting of the Standing Committee on Public Accounts to order this morning and thank everyone for being here.

           You have an agenda before you that requires your approval. If members have any additions or changes to propose…. Otherwise, a motion to adopt is in order.

           Meeting agenda approved.

Appointment of
Acting Auditor General

           R. Fleming (Chair): The next item of business is the appointment of an Acting Auditor General.

           J. Yap: I move that the Select Standing Committee on Public Accounts recommend that Errol Price be appointed Acting Auditor General for the province of British Columbia, effective June 2, 2007, until such time as John Doyle takes up his official duties as the Auditor General.

           R. Fleming (Chair): You have the motion before you. I will just add that in recent conversation with Mr. Doyle, we know that he is expected to begin serving in this position on approximately October 1, so members have an idea of when this appointment would last to.

           C. James (Clerk Assistant and Clerk of Committees): Just on a procedural matter for the members, the committee is recommending the appointment of Errol Price as the acting Auditor General, since the House is sitting. Of course, the House will have to make that motion, which will occur this afternoon — very likely after question period, close to 2:30 this afternoon.

           Motion approved.

Auditor General Report:
Government's Post-Secondary
Expansion: 25,000 Seats by 2010

           R. Fleming (Chair): Report 7, Government's Post-Secondary Expansion: 25,000 Seats by 2010. Good morning, Mr. van Iersel. Nice to have you with us — working you to your second-to-last day. I appreciate you and your team being here.

           We're going to begin, as per usual practice, with you introducing the topic and your presenters. I see Susan Jennings is here and Jacqueline McDonald. Then, Members, unless you want to change our past practices, we will have the government presenters — I know there are a number of witnesses there — after that, and then we will have discussion for both.

           Does that sound satisfactory? Okay.

           Good morning, Arn.

           A. van Iersel: Good morning, Chair, Members, Deputy Chair. I wouldn't have it any other way in terms of working to the final hours. You can rest assured that I'll be working tomorrow as well.

           Chair, Deputy Chair and Members, we are pleased to present to you today our December 2006 report: Government's Post-Secondary Expansion: 25,000 Seats by 2010. With me today are Susan Jennings, assistant Auditor General, responsible for the project in whole; Ms. Norma Glendinning, project director; Ms. Jacqueline McDonald, project leader. In addition, part of the audit team is Mr. Reed Early, who isn't with us today; Ms. Jessica Van der Veen, also not here; but Ms. Amy Hart is in the gallery. Put your hand up, Amy.

           The office decided to undertake this audit, given the importance of post-secondary education and the commitment to create 25,000 seats by the date of 2010. The province, as you know, has set one of its great goals to make British Columbia the best-educated, most literate jurisdiction on the continent — a very admirable goal.

           We looked at the first two years of expansion — 2004-05 and 2005-06 — and reviewed progress in the ministry and seven post-secondary institutions, which represented 58 percent of the planned 25,000 new seats.

           As part of our review, we had hoped to find clear planning, identification of risks, strategies to address them, clear and ongoing communication, careful allocation of resources, close monitoring and reporting of the efforts, and evidence of program adjustments to make sure that, in the end, it was a success.

           We're pleased to find that, overall, the Ministry of Advanced Education and the institutions we sampled were managing the expansion initiative consistent with what we see as principles of good business practice.

           Some changes, however, were necessary, in our view, to ensure the ultimate success of the program. This includes that the ministry review its approach to post-secondary funding to ensure it effectively supports the growth initiative and that the ministry and institutions do a better job of identifying and addressing the risks to success. Other examples of potential improvements include human resource succession plans and enhanced public sector reporting.

[0810]

           Overall in our audit, we made six recommendations addressed to both the ministry and to the post-secondary institutions. The details of these recommendations will be dealt with in our report summary, which will now be provided by Ms. Susan Jennings. If it's the pleasure of the committee, Susan can now take us through those findings.

           S. Jennings: Thank you, Arn, and good morning, Members. I think Arn very nicely captured the essence of our audit of the government's post-secondary expansion plan — what's probably better known to the rest of us as 25,000 seats by 2010 — so I thought I'd

[ Page 288 ]

focus my remarks this morning on the recommendations and how we arrived at them.

           Before I start, I would add that the 25,000-seat expansion plan is a six-year initiative. It started in 2004-05 and was provided with $1 billion in funding from government to support it.

           In this audit we set out to assess how well the ministry and a sample of public post-secondary institutions are planning and managing the government's 25,000-seat expansion initiative. We'd also hoped to be able to comment on the likelihood that the government's target would be achieved. For criteria we drew upon some generally understood and accepted good management practices as they relate to planning, resource allocation, monitoring, reporting and also to communication and coordination.

           We concluded that even though the initiative was behind schedule at the time of our audit, we still thought it likely that a majority of the 25,000 new seats would be filled with students by 2010. There were a number of contributing factors that led us to that conclusion, some of them external. For example, labour market demand for people who are well educated remains strong. As well, population forecasts continue to point to a growing need for post-secondary education, at least during the time period of this initiative.

           However, while the ministry and post-secondary institutions are managing this initiative, there are also opportunities within the system to strengthen their success in meeting the government's target. Those opportunities fall within these six areas corresponding to our six recommendations.

           Two recommendations deal with risk management and two with funding. The fifth recommendation addresses succession planning, so it's an HR management issue, and the last with performance reporting. I'll briefly explain how we came to each of these recommendations.

           In terms of risk management, we had expected that the ministry and institutions would be planning for and managing the key risks to the initiative, and clearly, student enrolment and growth are two of the key risk areas. There are a number of factors that can affect student enrolment. For example, changes in student fees and financial supports such as tuition, loans and student grants is one factor. Fluctuations in the job market can also have an impact. And changing demographics, particularly in the 18-to-24 age group, which is the traditional market for post-secondary education, can also be a factor. As it happens, B.C. has experienced change in all these areas in recent years.

           What did we find? Of the 25,000 seats, the ministry's plan was to fill 7,417 seats in the first two years of the initiative. Just over 4,000 of the 7,000 seats were filled. This softening of enrolment caught the ministry and many institutions by surprise. By softening enrolment we mean that the rate of growth in the number of applications and enrolments slowed compared to previous years. or in some cases declined.

           When we looked closer, we found that risk planning varied across the system. Given this, we recommended that ministries and institutions introduce formal risk management practices or, in some cases, strengthen their risk management practices, the better to address such key areas as softening enrolment. We also recommended that the ministry and institutions work more closely together to identify and address together the factors that contribute to softening student enrolment.

           A second recommendation relates to the issue of funding associated with growth. Here we had expected there would be a good link between the planned objectives of the initiative and the funding to support those objectives. Here's what we learned. Institutions are funded incrementally, primarily through the allocation of new seats. Under the 25,000-seat growth plan, seats were distributed to all institutions based on regional population projections.

[0815]

           What seemed puzzling to us, however, was that some institutions received growth seats even though they had not been able to deliver on their planned growth seats in recent years. What we found was that funding that was intended to be used for growth under the 25,000-seat initiative was being used to cover inflationary pressures on the existing services within these institutions.

           We concluded that ministry funding could have been more effectively and transparently allocated to achieve the 25,000-seat growth objective. We therefore recommended that the ministry fund post-secondary institutions more transparently — in other words, show how much is being provided to meet the 25,000-seat initiative and how much is being used to cover inflationary pressures.

           Still on the theme of funding, we also found that the ministry's costing information — its estimate of what it costs to actually deliver a seat — is not current. For the most part, general-growth seats — these are the seats that are not uniquely targeted for growth, such as computer sciences or nursing — were funded at $7,200 in 2004-2005. That figure is based on historical funding patterns, and it hasn't been reviewed recently to determine if it is still reasonable. At the time of our audit, the ministry did not have a process in place to collect and monitor actual seat delivery costs.

           Given this finding, we recommended that the ministry establish a process to periodically review the actual costs of delivering programs, by institution, and then use that information to better inform its funding decisions.

           I'll move on to human resource planning. We had expected that the institutions would have succession plans in place to maintain the continuity of critical positions. Clearly, it's not enough to have students in place. Those students need qualified instructors, faculty and support services.

           Our findings were that most institutions do not have a succession plan in place, although some were in the process of developing one. Actually, many of the institutions in our sample were experiencing challenges in either attracting or retaining key faculty in some of the high-demand areas. Hence, we recommended that all institutions develop HR succession plans.

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           The last area of focus is on the reporting of results. We had expected that the ministry and institutions would be closely monitoring enrolment, would be analyzing the data over time and would be publicly reporting on the results versus the plan.

           We did find that results were being carefully monitored, but the institutions were weak in terms of trend reporting and analysis. Consequently, we recommended that the ministry require institutions to present, in their service plan reports, their growth targets and actual results over time and explain the variances.

           The six recommendations we made are highlighted, in summary form, on this slide. They're also available in more detail on page 12 of the report.

           In concluding our presentation, we would respectfully ask the committee to endorse our recommendations, bearing in mind, of course, that you will likely want to hear from the ministry first.

           R. Fleming (Chair): Thank you. That's the conclusion of the presentation from the Auditor General. We'll ask to maybe make some computer space, I suppose, for government witnesses.

           Members, I'll ask Deputy Minister Moura Quayle to introduce herself and her witnesses, her team, this morning and call the committee back to order.

           Good morning, Moura.

           M. Quayle: Good morning, Chair, Deputy Chair, Members. I'm pleased to introduce Assistant Deputy Minister Ruth Wittenberg; Joe Thompson, our executive director of funding and analysis; and John Fuller, our director of funding — our money guy.

[0820]

           It's a pleasure to be here this morning. I want to thank the Auditor General and his staff very much for their presentation. I think it sets ours up very nicely, I hope, for the committee to understand our responses.

           Over the past year, in fact, the ministry's post-secondary expansion plan has been scrutinized by the Office of the Auditor General, by Treasury Board, by the Campus 2020 process and also by a funding review that was completed of the college and institute sector. There's been quite a bit of activity around our plan, which we appreciate. So 2007-2008 will be a year of transition as the ministry responds to the recommendations from, actually, all of these various reviews.

           Just a bit of background for you about the ministry. We have an annual budget of $2.1 billion. About $1.6 billion of that budget goes to the operating grants to fund over 190,000 FTE spaces — full-time-equivalent spaces — at the province's 26 public post-secondary institutions. Some of you will know that that breakdown is six universities, three university colleges, 12 colleges, three technical institutes and two institutes with an aboriginal focus.

           From the start of the expansion plan itself we've certainly monitored our progress. We've worked with the colleges and the universities to find out what the underlying causes of their delivery issues were, and then we've taken appropriate action — for example, working with the college sector on a marketing strategy so that students know what the opportunities are.

           In 2006-2007 we implemented a minor reallocation. We reallocated 72 FTEs from the rural college sector to the institute sector. These reallocations were negotiated with and agreed to by the institutions involved.

           I guess one of the things to remember around this whole process is that, from experience in my previous life, enrolment management is both an art and a science. It's very difficult to know if those students will actually come back. You're expecting them to come back, but will they? So very much across our sector enrolment management is challenging for us, which doesn't mean that we can't find — and we are finding — better processes under which to undertake that.

           As you see from the slide, we're actually doing and have been doing the audited FTE reports. For several years we've had multi-year institutional plans, and we've had annual meetings. This past year Ruth and her team have actually focused those annual meetings on planning and priorities, which I think is directly related to the issues we're speaking to today.

           I'd also like to note that this is a plan, and it has to respond to the changing context. Students are dynamic. They're great, but sometimes, as I said, they're unpredictable.

           When we presented our status report to Treasury Board in summer 2006, we proposed a strategy to refocus the plan in response to government's priorities. Treasury Board agreed to the strategy that responds to changing market conditions — in other words, the improving economy, the trades wait-list.

           In 2004-2005 only 197 of some 3,217 new spaces funded were actually filled. The implementation of adding entire new sections and programs, as opposed to just adding a few new seats, really took longer than any of us expected, which in a sense is surprising, because institutions involving people just do not turn on a dime. It really took more time for them to gear up for the expansion, to get the programs in place, to secure the space. We all know the challenges of developing a capital program and finding the spaces for students to actually be in, never mind the hiring of new faculty. I think all of us also appreciate the challenges of going through due process and appropriate process for hiring faculty members.

[0825]

           We really feel that the lag between announcing the intention to start the new program and the actual program delivery may be up to almost a year and a half, as the institutions had to do all those things that I've just spoken about. In that sense the startup lag has really meant that the system has been challenged with actually playing, if you will, catch-up to deliver those spaces so that we can meet our 25,000 target.

           Before we get into how we've refocused the plan, I'd like to provide a little bit of info on the results to date. The utilization results for the past two years, in our opinion, are quite remarkable given the competing opportunities available to potential students in our extremely hot economy. After all, utilization of over 95

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percent in that rapidly changing and dynamic environment should be considered a great success. It's actually an A-plus.

           The results reported to date may also understate actual delivery, because we've had a data capture issue that the ministry is currently reviewing. We really think that that underreporting may be occurring due to a compressed time line for the actual FTE and service plan reporting with what's called our central data warehouse institutions.

           A lot of this has to do with the fact that institutions run on an academic year rather than fiscal years, so they only fully report on activity when the academic year is complete. We've got some data gaps happening, which we're working on understanding. Our estimate is that if '06-07 is actually representative, then the actual FTEs have been underreported by around 700. Those data challenges and the cycles of our different programs continue to be something that we're working with and are aware of.

           I think when it gets to the questions that the Auditor General has asked — can we meet our target, and are the results telling us that the expansion is too big? — we don't think so. We believe the 25,000-seat expansion is still absolutely solid public policy.

           In general, the population aged 18 to 29 is used as a proxy for the potential post-secondary student population. This group is forecast to be greater than it is today for the next ten years. The expansion is really about right-sizing the size of the post-secondary sector for the long term. Of course, the expansion was also required to address that really critical GPA issue, the entrance requirements at university that prevented students from coming into the system. It's really about access to education, which we think is a very strong value held by British Columbia's citizens.

           In terms of risk management you've heard the recommendations. There's no doubt that demographics have played and will absolutely continue to play an important role in any kind of projection of enrolment, so we have to keep in touch with that.

           There is a number of other factors. Urbanization is, for example, a factor. Urban youth are more than twice as likely as their rural counterparts to enrol in university. Continued urbanization is likely to cause some further increases in the demand for university education.

           We've got parental influence — it may be increase too, but influence for sure. Children are more likely to attend post-secondary if one or more of their parents has completed post-secondary. It was interesting to note that in the Campus 2020 report Geoff Plant went to that issue of first-generational learners. That is a flag for us in the ministry and the institutions to work as part of our planning, for looking to the future.

           We've got socioeconomic correlations between family income and university and college participation. We've got labour market demand, graduate student education demand, the financial returns that are evident, and affordability and availability of spaces.

[0830]

           In response to the recommendations on risk management, we absolutely feel there's room for improvement in how we in the ministry and the system work in terms of risk management. We will be working and are working with the institutions to identify and manage the elements which have posed some structural challenges in the plan.

           We will be reviewing detailed enrolment and program reviews at those planning and priority meetings that I mentioned. At that same time we absolutely have on the agenda enrolment management. So the ministry work group will review utilization results and begin consultations with the sector during the summer, as we look at the next year as it comes forward.

           We also are taking action around a capital matching program which will help institutions that have some space challenges. We're looking at reallocation of planned growth based on performance, at working very collaboratively with the college sector on recruitment strategies and absolutely increasing our reporting by institutions to their boards with enrolment results — really giving that a much higher profile.

           In terms of the '07-08 reallocation, what in essence we're proposing is a response that slows the pace of the growth and actually shifts the allocation of some of the seats that were previously allocated to an area where there's more demand. Some of the remaining general growth seats have then gone to new priority programs. New opportunities for aboriginal students are absolutely essential. Addressing the skills training wait-list is, again, one of our top priorities, and increasing the number of graduate seats.

           I think, in this sense, you can see that the plan truly is a plan and that we, in working in concert with our partners at the institutions, have been thinking about and acting on how we can make the plan responsive. Over 1,000 FTEs have been held back in each of the next two years of the plan to create a pool to add fully funded priority seats. As you may realize, for example, graduate seats are $20,000 versus our $7,200 average.

           My colleagues and I believe that this represents an absolutely positive project management response to what we accept as a valid critique in terms of how the plan responds to our context.

           We've established some clear principles as we have thought through that growth allocation. A key one is: "A seat funded is a seat filled." So you have a great image of: "Okay, the dollars are there, and that person is sitting there being active as a learner." In a sense the major change is that we're using a performance-based approach to the growth allocation. We've separated funding for growth from funding for base pressures. So that clear advice that we got….

           We've removed growth funding from institutions that were not meeting their FTE targets and were using the funding to offset the cost pressures. This has made managing to budget for '07-08 and onward extremely challenging for institutions. As you can imagine, it isn't easy to work with an institution that is budget-challenged and has been FTE-utilization-challenged in ways of moving forward.

           Seat growth will only be funded if there's a reasonable expectation that it will in fact be filled. That principle really equates to at least 100-percent utilization in every institution every year.

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           What we have done is suggested that the principle be tempered somewhat to reflect the enrolment challenges, especially in the college sector. In determining the performance thresholds for the FTE growth allocation, utilization rates were set for each sector, based on the information…. What I find fascinating about this process is that we've been learning. We've learned, as have the institutions, about the utilization issues and challenges.

           So we're suggesting that the universities and institutes still be called to the 100-percent utilization, urban colleges and university colleges to 95 percent and our rural colleges to 90 percent. That's the way we're approaching that.

[0835]

           We obviously look at this from a regional perspective. Over half of the previously planned growth was removed from the northern and central interior regions. The northern institutions are to deliver more of the skills FTEs, and I think that really works well. There's capacity and also demand there.

           Mainly due to the concentration of the research-intensive universities in the lower mainland, the graduate seats have been concentrated in that area, with the exception of some graduate seats going to the University of Northern British Columbia. That regional perspective is also something that we're continuing to work with and find very appropriate for us to have a more particular approach for each of the regions.

           We absolutely agree that transparency of our processes can and should be increased. It's extremely important to the ministry to build better working relationships with our sector in order to benefit students. So this process of working with our sector and being more transparent has been going on, actually, for some time.

           I give credit both to the sector in their willingness to engage with us and to my colleagues who have put into action much greater detail on the derivation of operating grants and FTE allocations in the recent budget letters that have just gone out. We've indicated the amount of new funding specifically for collective agreement increases, so there's a real clarity about the negotiating framework piece.

           We've provided systemwide summaries showing allocation of operating grants, FTEs and capital information for each institution. In the past they didn't see, actually, what was up in the neighbouring or allied institution. Now they all see the information.

           Joint meetings with the sector representatives and the Ministry of Finance commenced in 2006, partly as a response to another review. Those meetings, I think, have been very valuable in increasing that transparency not just with our ministry but in working with the Ministry of Finance.

           In terms of the process to determine the recommendation around periodically reviewing the actual costs of delivering the programs, certainly one of the challenges is that actually getting that kind of in-depth program cost and student demand projection centrally — given the literally thousands of programs in our institutions — is beyond us in terms of our capacity, with our 220 or so FTEs in the ministry. We're not convinced that that level of scrutiny is a prudent use of our resources.

           That being said, I think we're looking at some modified block funding to balance the public policy goal of ensuring that a number of high-priority programs are delivered but still giving institutional flexibility and autonomy. We certainly agree that where funding is directed to priority programs — for example, nursing — we need to understand the cost of the program delivery. It's absolutely critical for appropriate funding.

           A good example is that we have just conducted a funding review of the distributed medical program. We're discovering again the learning process about what the costs were when we started that process and what they are now. We even find that we need to review again in another couple of years to ensure that we've got the correct figure.

           We're developing terms of reference for a funding model review. Joe will be the lead on that review. It will be informed by the recommendations of Campus 2020 and the recommendations of the Post-Secondary Budget Review Phase 2. Needless to say, all of the information and learning that has gone on through the process of reviewing the 25,000 seats is going to go directly in to inform how that funding model adjustment or revisiting comes through.

           You heard about the human resource planning recommendation. In this case, it's a bit challenging. Faculty planning doesn't actually lend itself very easily to what one might call a pure succession plan approach.

[0840]

           Future needs for the faculty end up being driven a little bit more by the educational programming as well as by replacement of retiring faculty. With the mandatory retirement piece, that's going to cause even more challenges to our institutions in terms of succession planning, because often — certainly it's my experience as a dean — you look out a good ten or 15 years at when your faculty members hit 65 and you go: "Yippee! Yahoo! There's a space that I can actually look to fill towards a program that is in high demand."

           Just to put on the table that while we can work with our sector in thinking through the human resource planning piece — and we will, through the policy tables that we're developing — it will not be without some challenges.

           In terms of reporting and, in this case, asking for the institutions to present in their service plans…. Certainly, institutions have been and are expected to provide an explanation of the variance between the funded and the actuals over time. But starting in '07-08, institutions may prepare a combined service plan and service plan report document that will include results of the previous year and targets for the upcoming three years. So we'll end up seeing a much better view of that reporting, because in prior years the service plan and the report were actually separate documents. We're now suggesting that we want to be able to see how those fit together.

           The ministry and the institutional service plans and the reports really present information in a clear and transparent fashion, and they'll be augmented by additional planning and reporting information on the institutional websites so we can actually get immediate access to those issues.

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           There were a number of other recommendations that I'll just quickly deal with and then close. The ministry certainly feels that the level of transparency is good but recognizes that…. As you've heard, we're working on consistent improvement. Some of the data information issues are going to be considered in the response to Campus 2020.

           Mr. Plant addressed his attention to that. As a policy ministry we certainly understand the importance of excellent data, and we're working continuously to improve. We do have an information and data management branch. That's their focus, and I think we are actually seeing a lot of progress on that on a regular basis.

           The actions, some of which are already taken, certainly provided greater detail on the derivation of the grant and FTE allocations, similarly indicating the funding and looking at the summaries. Also, we can't forget that student access isn't just about the seat allocation. It's about the capital planning. It's about the student services. It's about the multi-year planning. It's about the constant adjustment in the institutions around the programs and their relevancy to what the students need when they graduate.

           In terms of the bigger picture, achieving the 25,000 seats by 2010 is an absolutely important output for us. The economic and social outcomes of our post-secondary expansion around getting more access for students, training a workforce…. Certainly attracting research is a big part of that. Our graduate student expansion is about that and about the economic advantages of graduate students as commercialization engines. Increasing our aboriginal participation is absolutely key. All of the policy issues are actually wrapped in this plan that we're working with and working with our institutions on.

           I want to thank you very much for the opportunity for the ministry to respond. The reports on and reviews of the 25,000-seat expansion have been critical to the continued improvement of access for students, and that's what we're about.

[0845]

           R. Sultan: I've got a few remarks. I'd like to just preface them by saying that to prepare for this important dialogue, I spent many, many hours reading the estimates — the Hansard transcript of our Chair grilling our Minister of Advanced Education on a huge array of very important issues. I commend the Chair on both his incisive questioning….

           I was also — I shouldn't say surprised…. But certainly I was pleased at the response to this of the minister. He was obviously well briefed and well advised. That brought me up to speed on many of the issues that I think are latent in this report.

           I should also say that my own prejudices derive from having spent five years in the British Columbia university system myself and 15 years in the bowels of a large American university, where I was a member of the tuition policy committee. It was a different world, but one that I think we could learn from.

           With that preamble of my own biases on the table, Arn, on your second-to-last day on the job, I hate to inform you that I find your report disappointing. This is untypical, I think, of my generally admiring reaction to the work of the Auditor General. I'll explain why.

           First of all, to take the big picture, I sense in this report a tendency to further encourage what I would call a top-down approach to advanced education planning in this province. I would say we already have a fair degree of centralization of decision-making in British Columbia. But you really encourage further concentration, I would suggest.

           It's a very supply-driven examination — namely, we've got to get those 25,000 seats, come hell or high water. It's certainly, as befits an auditor, a cost-preoccupied set of recommendations as well.

           While we can appreciate the need for fiscal control and rational decision-making, I fear the academic world isn't quite the same as, say, running an automobile assembly plant, where we have so much per unit coming in and so much we can sell the product going out.

           I guess at the philosophical level, as I see the tug-of-war here between local autonomy on the part of these academic institutions and the need for the government — which is, after all, picking up a huge chunk of the funding, although I was a bit surprised to see we're only funding through this ministry a third of UBC's total budget….

           I thought it would be much higher. It sounds to me like UBC already has de facto a huge amount of autonomy. In this tug-of-war, the tendencies continue to be, particularly in this town, to control from the centre.

           I think this is in conflict with having responsive, demand-sensitive institutions out there responding and adjusting quickly to the latest appetite for advanced education among prospective students.

           I come back to the philosophy that drove the institution I was with for much of my professional life: every tub on its own bottom. If Cap College can make it, good on them. If it can't, sayonara. Survival of the fittest.

           It's a bit rough, but I think it drives excellence. I'm not advocating that, but it certainly is a philosophy that contrasts with one where every cost centre has to be funded. We'd better make sure their inflation pressures are accommodated, and so on, which I think is part of the spirit in which some of your advice is presented.

[0850]

           Turning to the six recommendations just briefly, formal risk identification and management — aside from the perhaps irrelevant observation of its unique use of the words "risk management," I guess we're really talking about the demand for seats, primarily, and the need for the ministry to develop a coordinated response for remediating combined risk factors that contributed to softening post-secondary student enrolments. That's a pretty jaw-breaking phrase for what I guess in the old days I would have called marketing.

           We have to, of course, respond to the marketplace. I'm not sure the ministry is in the best place to do that, being so far removed from the marketplace, sitting over here on the Island.

           Turning to recommendation 3, they don't sufficiently distinguish between the money being spent fulfilling the 25,000-seat expansion goal, as opposed to inflation. I can appreciate, in a sense, the games that have been played as these institutions attempt to accommodate inflation.

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           I think it's quite self-evident from the numbers, though, how much in fact went to increased seats and how much just went to accommodate overhead expenses. I suppose splitting it out in a formal way is harmless enough.

           Recommendation 4. Review the actual cost of delivering programs. Well, as the ministry's response itself indicates: why? Are we going to sit here and say: "Gosh, that English 201 course over at Kwantlen seems awfully expensive per student; maybe we should recommend that they get rid of it"? I don't think academic decision-making works that way or would work very well that way. It would, of course, be a huge consumer of time and cost.

           It's my experience that the faculty knows darned well who's getting the students, who isn't, which courses are oversubscribed, which ones are undersubscribed. This is no great mystery on the ground.

           Whether people in Victoria can second-guess, saying: "There are a lot of under-enrolled classes out there. What are you doing about it…?" Maybe that has some virtue but…. The consequences of that would show up soon enough in the aggregate budget numbers anyway. I'm with the ministry very much on that one.

           Finally, present the service plans, growth targets, actual results over time and explain the variances. Of course. I can agree wholeheartedly. Of course the ministry claims they already are.

           To sum up, I had no difficulty listing 15 big issues that this subject area gives us an excuse to think about. It certainly forced me to think about them.

           Let me just rattle them off. Softening demand, cannibalization between the universities and the colleges, proliferation of institutions.

           Slowness to adjust. Faculties always resist change, and I was no different. Confusing capital budgeting. I can agree that it is confusing. The regional politics that influence resource allocation. The relabelling going on between colleges and universities.

           The degree-stripping advocated by former Attorney General Plant — a recommendation I disagreed with violently and still do. Tuition policy — big subject and a favourite subject of our Chair.

           Government priorities. How do we ensure top down that, damn it, this government's priorities are met — whether it's training nurses, doctors, electrical engineers and what not? Certainly the government has a say, appropriately so.

           Faculty. How do we get faculty? It is indeed more than succession planning. Governance. Are these institutions really up to running their own affairs? I'm not sure. The cost detail issue. I've talked about the 25,000 goal. We've talked about funded versus filled seats.

           Of those 15 items, the report addresses about five of them. There are ten other interesting ones. Of course they weren't within the mandate and the title of the report, so I don't really fault you for not trying to cover the entire world.

[0855]

           My bottom line is that this is a tough one to manage from the centre. This government is pumping a lot of money into Advanced Education — $2.1 billion, $1 in $7 of the money it attracts from the taxpayer. There are rough spots, no question, but by and large, I think the ministry is doing a pretty good job. That's all I have to say.

           R. Fleming (Chair): That felt like being back in estimates. Thank you for that comment. I don't know who it was directed at — Mr. van Iersel, I suppose.

           A. van Iersel: I do believe it was directed at me.

           My preamble would be that I very much respect the views of the committee and the particular member who raised the issues. I will venture forth with some trepidation on my part, given his history.

           Here, again, a couple of things to note from me. First, the report, as noted, was focused at a particular aspect of post-secondary education, which was the 25,000-seat expansion, and there are many. I would agree with many of the issues that Mr. Sultan has raised as important issues that we'd be delighted to look at, at a future time.

           In doing this microcosm — if I can put it that way — of a larger system, I think the report has been beneficial in pointing to some of those things that do need to be looked at.

           On the issue of: are we centralists in terms of recommending…? Here again, we are not so much trying to determine government policy. We are simply trying to reflect on what the intent of a program was and what the success or lack of success was. I think the report fairly does that.

           We should also point out that the recommendations are addressed not only to the ministry but also to the institutions that make up the system as a whole. We are not, in my personal view, suggesting that this is an opportunity to further centralize. I think what we are saying is that there is $1 billion associated with 25,000 seats — $800 million in capital and a further $200 million in operating.

           As you have said yourself, Mr. Sultan, that is a significant sum of money that we feel the government needs to be accountable back to the B.C. taxpayers in regards to getting value for money.

           As auditors, as your Auditor General, we are interested in knowing if we are on the right track in regards to the allocation, the processes for allocating those seats to the right institutions. As we have seen, there have been some hiccups in regard to who got the seats. Some of that is being corrected. We look forward to looking at this again in a few years' time to see how it actually turned out.

           I think that is part of our job — to talk about what happened relative, again, to the priorities that were set.

           As well, we think there are some systemic issues that need to be addressed in the system. One of the things noted in the report…. There are 30,000 faculty that are expected to leave in the coming years. That is a significant number of some very well-educated people that we need to find. In some cases, we need to look at where they would go.

           In our view, I would say it's more a case of alerting the ministry and the institutions to the issues that are

[ Page 294 ]

here and that relate to 25,000 seats but obviously have an implication beyond that. We really recommend that more information be gathered — not for purposes of centralizing anything but for purposes of the ministry — in setting its policy, being better informed regarding the costs that are out there, the actual utilization of the seats, the plans that are or are not underway with respect to the programs and also with respect to the filling of the faculty positions.

           When it comes to my interpretation of what I just heard from Ms. Quayle, I heard more agreement than disagreement, but it's yours to judge more than mine. We will deal with that in a follow-up audit, as I said, at some future time.

           I respectfully ask the member to consider what the purpose of our report is and what we've done relative to that original purpose. I don't disagree with him — to be clear — in regards to the bigger issue that was raised. Again — I've said it three times now — our office would be happy to explore some of those beyond the work we've done here.

           H. Bains: My question would be to the deputy minister. The Auditor General said that in the first two years, only 4,004 seats have been delivered. But your report shows that your total is 4,255. That's a discrepancy of 251 seats. Can you explain how or why those numbers don't match?

[0900]

           M. Quayle: I'm sorry, can you just repeat the different…?

           H. Bains: The Auditor General's report said of the originally anticipated 7,400-some seats that were to be delivered in the first two years, only 4,004 are delivered. But your presentation, on page 3, showed that you have delivered 4,255. That's a discrepancy or difference of 251 more seats delivered than what the Auditor General had found. Why is there that discrepancy? I have a second question after that.

           M. Quayle: I'm going to ask Joe to…. I'm sorry, you're talking about slide 3 and the number that we say is, in fact, actual. Are you talking about '05-06 actuals?

           H. Bains: Actual 2004-05, '05-06 — when you total them, it's 4,255, if I add them correctly. But the Auditor General showed it's only 4,004 in the first two years.

           M. Quayle: Go ahead, Joe.

           J. Thompson: I think the difference is the recalibration of seats. We changed our FTE reporting. In '05-06 we implemented a new form of reporting to better reflect the utilization more consistently across the system. The Auditor General's office report was based on the old reporting methods; the information we're providing is based on the new reporting method. We're using that '05-06 going forward. There was some recalibration in terms of how the FTEs are counted across the system.

           M. Quayle: If you look to page 4, you'll see that we've indicated the results using the old method, and the results using the new method. That's the difference.

           H. Bains: That even confuses further. If the reporting system changes, it shouldn't change actual seats delivered. My interest is: what are the actual seats delivered? The Auditor General found it's only 4,004. Whether you use the new method or the old method, there are only so many seats delivered. Why is there a discrepancy of 251? Is that manipulation of numbers? What is it?

           J. Thompson: No, it's really just correcting the way the system has historically captured the utilization of seats. It's a more accurate representation across the system and more consistent representation across the system. There was some tweaking, if you will. The number is relatively small in comparison to the overall larger picture, but it does reflect a more accurate reporting. The expectation was that there would be some changing to those initial numbers, based on the old method.

           M. Quayle: I think the other challenge is that when we think about seats we actually tend to think about a whole person sitting in a seat, but FTEs are different than that in the sense that some people are part-time, some people take 30 credits. So there's lots of room.

           Help me here, colleagues, but my recollection is that we went through this in our service plan reporting to explain how we had changed our FTE counting methodology to much better reflect a consistency across the whole system between the universities and the colleges — albeit unfortunate to do it in the sense that it ends up causing us to have to count in two ways and explain exactly this kind of question. But from a data-collection standpoint, it was agreed across the board, including lots of consultation with the institutions, that in fact we needed to change our FTE counting methodology. So the plan has had to respond to that.

           H. Bains: So what we once used to know FTE to mean, it doesn't mean anymore. It's different now than what it used to be? An FTE is an FTE. I just don't get it.

[0905]

           J. Fuller: In the system there are probably close to half a million students in terms of head-count enrolments. What we have to do is define which of those students are FTEs, how you calculate an FTE. The FTE count is about 180,000 or 190,000, so what we have to do is determine exactly what we're counting.

           H. Bains: Are you wrong now, or were you wrong before? That's what the question would be. How do we determine that your new calculation is the way it should be calculated, or the old way calculation was the right way of calculation, I guess.

           Everyone in the system knew what the FTE meant. When you talk about spaces, that's space. That's what you are talking about here: incremental new spaces funded and incremental delivered. So I just….

[ Page 295 ]

           M. Quayle: The meaning of FTE hasn't changed. It's our methodology for counting them. Help me here. We didn't used to include…

           J. Thompson: Continuing Ed programs.

           M. Quayle: …Continuing Education programs, and now we do. So it's that kind of a shift. It isn't a change in what an FTE means. It's still full-time-equivalent. But that's one of the challenges of a plan that doesn't talk about head count but talks about FTEs. I think that's inherent in a decision about that that's how the 25,000 would be characterized — as FTEs.

           We've got students that are taking…. Many students don't take a full program because they're working, or they're doing whatever. That means that they don't represent, as a head count, an FTE.

           R. Fleming (Chair): Have you restated the last ten years, then, just to have a comparison of both the old and new methods?

           J. Thompson: No, we have not.

           R. Fleming (Chair): So you're just doing it for the new numbers that align with the expansion?

           J. Thompson: Yes. For '05-06.

           R. Fleming (Chair): You don't have it compared to how the previous method was done?

           J. Thompson: No.

           J. Fuller: But we have gone back to the beginning of the strategic investment plan to recalibrate the FTEs.

           J. Thompson: There was actually quite a bit of consultation. We had a joint enrolment reporting advisory committee, and we worked with representatives from the sector. There is real consensus that we needed to get better, accurate reporting against those FTEs and capture all types of instruction consistently across the system.

           There is a real sense of cooperation and that this was something that we needed to do.

           H. Bains: So your next four years are based on your new way of calculating. Is that correct?

           J. Thompson: Correct.

           H. Bains: I just don't understand the explanation, and I don't think it makes any sense — to me, at least. I don't know about the rest of the members, but I'll leave it at that. I will ask the Auditor General to respond to that as well.

           The next question is: the first two years — about 3,162 numbers of spaces that are short, then you continue on for the next four years. Those are 100 percent. At the end of 2009-2010, you will not be able to deliver 25,000; you will be delivering less — 3,162 fewer spaces than 25,000, that is. Is that correct?

           M. Quayle: Which part are you on?

           H. Bains: Slide 3. If you look at the first two years, '04-05 and '05-06, there are — short of target — 3,020 in the first year, 142 in the second year, and the following four years you are delivering right on target.

           M. Quayle: That's the plan.

           H. Bains: That means there's no catch-up for the ones that you are short in the first two years, which is about 3,162 — right?

           M. Quayle: That's correct.

           H. Bains: That is correct? So it'll be 3,162 seats fewer than 25,000 — that's your final…?

           R. Fleming (Chair): You put a slip year in that's not shown on this slide. Your space initiative is now 25,000 by 2011, and it's not shown on this slide, which is, maybe, confusing the member. Is that helpful, Moura? Because you have another 4,000 seats coming, you've added another year to the plan, and that's shown on a later slide.

           M. Quayle: Yes, that's correct.

           R. Fleming (Chair): You could have changed the slogan to match the new extra year.

           M. Quayle: Academic year 10.

[0910]

           A. van Iersel: I was just going to clarify, as you just did, Chair, that slide 8 shows that the target is actually being met one year later. If you look at the two graph lines, originally the 25,000 was to have been met one year earlier, which gets to those additional seats that won't be caught up until the following year.

           H. Bains: I think I asked Mr. Auditor General to respond to the first question that I was asking David Hall — the difference of calculating FTEs. Whether that's….

           R. Fleming (Chair): Okay. Is there a discrepancy in the numbers or the counting methods you wish to comment on?

           A. van Iersel: Our table on page 46 of the report shows the targets for the first two years by type of institution, and institution detail is based on the old method, the reason being that those historical figures that relate to the start of the plan were never translated into the new method. So that's the basis on which we use the old method.

           In regards to whether the old method versus the new method is a better count, I haven't personally looked at that. That's something I'd need to look at.

[ Page 296 ]

           M. Polak: First, I can't resist commenting on the question from Mr. Bains, only because I remember when I was first elected to the school board and embarked on this wonderful learning experience about the world of FTEs, spaces, students and head counts. I remember our superintendent of the time saying that if you are going to work in education, you need to learn to live with a certain amount of ambiguity.

           It really framed for me what was understandably a challenge for anyone who is not sickeningly immersed in the education world, which is that it sounds so eminently logical to say that a space is a space, but in fact it isn't. Just like a student isn't a student because they may take two courses in this block of time and three in another, and another student or four others may fill that seat during the course of a day. Or one student might fill it for a week full-time every day.

           So the issue of how we count a space — or what we call a space and how we define it — is certainly one that is, thankfully, left to greater minds than mine, and probably most of us around the table, to determine in terms of accuracy. But it is, by and large, an issue not so much of what is the hard-and-fast rule for counting a space. It is about making sure that when you say, "Here are the number of spaces we're talking about. Here is how we've defined a space…." This is essentially what the ministry has done in their report and the Auditor General has done in his report. He has said: "Here is how I define a space."

           I would venture to say that if we had enough different people from the education sector around, which is why you had the committee, you could probably come up with as many different ways of representing a space. In education I think the key thing in terms of accuracy and transparency of reporting is to actually put out a definition that says that this is what we mean when we say it. I completely sympathize with the member's challenge in understanding the problems posed by determining what a space is or, I should say, by describing it.

           I want to get back to some of the comments that were made by my colleague Mr. Sultan, in particular, around recommendation 4, I think it is — reviewing the actual cost of programs and making some determinations with respect to funding based on that. My colleague identified what he termed a cost-preoccupied, I guess, theme with respect to the report.

           My own concern around that recommendation grows out of the psychology, if you will, of educational institutions, such that if one moves to a cost-driven model, it's very much like a meeting that may only really need to be a half-hour long, but if you schedule it for three hours, people will fill up the three hours.

[0915]

           Education is much like that, in my experience, in that if one allows for there to be a largely cost-driven model…. In other words: you tell me what it costs you to deliver that program, and I will fund you for that amount. In my experience, that simply encourages — how can I put this delicately? — people who are very proud of their own educational field to add bells and whistles to a program that really aren't essential to the delivery of the program. It also encourages the maintenance of programs that may not in fact be relevant any longer or even serve the original purpose for which they were intended.

           It's not that the recommendation directly says that that's how one should do it. I'm taking it to a bit of an extreme. But I am somewhat concerned about that as a policy direction. It is, in my view, more likely that we are going to incent institutions to respond, to be demand sensitive…. We're more likely to achieve that if we are to provide a funding envelope and expect that they will respond within that, choosing their priorities, selecting which programs will be delivered and in fact how they will be delivered.

           There are certainly some hard costs, but there's a bunch of it that is really discretionary and I think — to Mr. Sultan's point — is probably more properly left in the hands of those who are faculty and who are experts in their field to determine.

           I'm wondering if I could, I suppose, have a comment with respect to how you would see that resolved. To me it's a contradiction…. I shouldn't say a contradiction, but it's a point of departure, let's say, from the ministry's view and your view.

           A. van Iersel: Yes, I think it's important for our office to clarify recommendation 4. Here again, we shouldn't read into that that we're suggesting that the Ministry of Advanced Education determine what programs are necessarily offered.

           Really what we're saying here is that the Ministry of Advanced Education, in putting together its policies and working with the institutions, really needs to know what the cost structure is. The cost structure is very different from institution to institution — based on whether they're a university, a college, and dependent on where they're located in regards to the north, the lower mainland and so forth.

           As our office looked at this…. We think it's important that when you try to develop policy, you need to first understand the cost structure of what's actually happening in those institutions in terms of what's taking place and what is the cost of that taking place, such that when you apply a block funding, you're well aware of how that may or may not allow a particular organization to pursue a program or not.

           It's not saying that you should centralize. I was trying to be clear earlier, in response to Mr. Sultan, that we're saying we should centralize everything. That's one model. That's not what we're discussing here. It's really better information: what does it cost to deliver nursing in Prince George versus the lower mainland? Is there a difference?

           We think that through better information on costs, the ministry and the institutions themselves will have an opportunity to discuss where programs should be delivered, if there should be differences in the types of funding that should be directed to one institution versus another. It's not going to the point of taking over control of what's delivered at any particular institution.

[ Page 297 ]

           D. Thorne: I'm not sure who I direct this to, actually. I know this isn't a debate. But I think Mr. Sultan has started this off, and we all want to respond to him now, and he isn't one of the people who have presented a report. It's very difficult. Of course, I defer to Mr. Sultan. I do not have his breadth of experience or knowledge. I'll say right off the top — not to his or anyone's surprise — that philosophically I disagree with his philosophy of funding of education, certainly, which I think is the essence of this report.

[0920]

           I think we're pussyfooting around the real problem here, which is the whole funding system and the way we fund courses. I think when a government puts out a decree….

           I guess I'm probably talking to the ministry because they have the enviable job of trying to implement what government says. Sometimes that's very, very difficult, and that's caused by lots of problems and lots of issues, as we know. I think Mr. Sultan has done a really good job of lifting the issues that cause problems in the post-secondary field.

           As far as this report itself goes, I believe, unlike Mr. Sultan, that the Auditor General tried to tackle the problems, and it's a good report as far as it goes. I don't think it goes far enough because the essential problem is funding. I think that touching on…. The lack of transparency around what is inflationary cost and what is new seat funding is a huge issue. That ties in with tuition fees — the fact that tuition fees have almost doubled.

           None of us in this room doubt — whether we want to talk about it or not; it's sort of like the elephant in the room — that when you double tuition fees over a short number of years, it's going to have a profound effect on enrolment.

           I get very concerned when the government that has brought in the mandate to bring in 25,000 new seats…. It's very difficult for universities and colleges to suddenly think: "Oh my God. We have to have 25,000 new seats." Here's this big wall they have to get over in a certain length of time. I think the ministry and the government have recognized that the way we've been trying to do it has not worked. You can tell that by the numbers. It's pretty easy to see.

           It's not rocket science, but I think we have to deal with the core problem, which is the funding of the seats. I don't think there's enough money in the system. I do agree with Mr. Sultan that government can't be expected to do everything, but how are universities supposed to raise funds without becoming fundraising entities? It's very, very difficult.

           Then you get into the next problem, where you have the differences between colleges and universities. As you say, the confusion, which was not helped by Mr. Plant's report…. The whole reason for universities is totally different — if you want to look at why we have universities — from colleges, which are essentially career-training institutes. We are mixing them up, and there is not only confusion in faculties and universities and colleges themselves but out there in the public with students. Students are confused too.

           I think the confusion is huge, and the money issue is huge. The other thing is that I'm not sure we're actually dealing with the future in the proper way. I don't think we're going to have very many…. We talk about FTEs. I mean, Mary is right: it's a nightmare. I did work in education for a while, and — my God — it's a morass.

           It's gotten worse when you talk about colleges and universities and the mixup between them and trying to deal with FTEs. It was easier when it was just continuing education and universities — right?

           I think that we're going to have to face the fact that most of our students in all of these institutions are going to be part-time, and to do more to make it easier for those kinds of students to come to school. We heard a lot about this when I was on the Education Committee last year, the literacy panel — right? There have to be incentives and supports in place that don't necessarily cost the taxpayer a lot of money but make it easier for people to come to school, so we can meet these kinds of quotas and get people educated.

           I think the step of changing 10,000 spaces of the 25,000 to apprenticeship and graduate students is a good start because you're limiting the number of undergrads and putting in some specific things that are very, very necessary.

[0925]

           In some sense, post-secondary education is very market-driven. And as Mr. Sultan says, faculties don't respond quickly. We know that. By the time they respond…. I know the specific example at Douglas College with their habitat restoration program, which my son happened to get caught up in. By the time they responded to the need, the need was pretty much over. The kids who take the course come out of it, and there are no jobs. That's a huge problem.

           R. Fleming (Chair): I'll ask the member to just come to her point.

           D. Thorne: Yeah, I know. I'm sorry. I know I have no question. I just felt absolutely compelled to make that statement.

           R. Fleming (Chair): Comments are fine.

           D. Thorne: I'm like Mr. Sultan on a very small scale — right? I thought the report was good. It did not go far enough around the tuition issue. I appreciate and I thank Mr. van Iersel for that, on his second-last day. I think the ministry is working very hard to try and meet the demands that have been put on them by the government without enough money, as Ms. Quayle has said.

           Thank you for letting me do that.

           R. Fleming (Chair): You're very welcome — the privileges of being a member.

           I have no one else on the speakers list. I wanted to make a….

           D. Thorne: I could go on if you'd like.

[ Page 298 ]

           R. Fleming (Chair): No, that's fine. We have other items on the agenda. I'd like to make a comment, and then Mr. Rustad.

           J. Rustad: Actually, if you want to make a comment first, I don't mind. I'll come after you.

           R. Fleming (Chair): I think one of the issues here…. The report is, I think, a very good and very timely look at how this initiative is working out. Clearly, the ministry has responded and has acknowledged that there are serious problems and that they got it wrong on the regional mix. There have been measures to reallocate those seats now. I think we've seen in the presentation this morning that to get back on track, the goalposts are being moved, both in the methods of counting and also in the year at which they now hope to achieve it.

           I think the question that isn't answered or delved into by the report is whether you can actually call this an expansion plan at all.

           Early in the section of the report, the Auditor General asks where this number fell from the sky — 25,000 by 2010 — and couldn't find a lot of information from the government on that. Presumably, it was driven by B.C. Stats telling us that by 2011 we will have 75,000 more 18-to-29-year-olds. The natural enrolment itself, the status quo enrolment, was somewhere around 25,000. Instantly, that became a slogan aligned to other things happening in 2010, perhaps. Perhaps that is the genesis of it.

           But even at 25,000 new seats, when you expect 75,000 more 18-to-29-year-olds in your population…. That's not ambitious. That's maintaining a one-third participation rate in post-secondary education. That's not meeting what we know we need to do in the overall labour market projections going forward in our economy and in the province's overall growth.

           I think those are the questions as to whether you can actually call this an expansion plan. The other thing, too, is that it is about a 2- or 2½-percent growth rate, if you want to call it that, per year. Now, that's actually a slowing from the last decade, where seat expansion was around 3 to 4 percent per year.

           The most valuable part of the report for the ministry and for us as legislators and for the Auditor General…. His finding was around block funding, and I'm very pleased that the ministry is looking at having a modified, more flexible block funding.

           Institutions do have to manage the budgets they get. The reverse can happen to what Mr. Sultan suggested about us micromanaging whether they offer English 201. The colleges can cancel things like forest technician programs and plastics engineers programs — very specialized, very expensive programs to deliver that lead to 100-percent employment and the development of an industry that we need in the province — because they cost more money per FTE, and that's the problem.

           I think this report is going to serve us well, and I know that administrators have already used it in their dealings with the ministry. That's my comment. I'll ask Mr. Rustad and then Mr. Sultan to conclude for us.

           J. Rustad: Was that a question?

           R. Fleming (Chair): No. That seems to be the trend this morning.

           J. Rustad: If that's the case, you know, in the beginning….

           R. Fleming (Chair): Sorry, that one's already been covered.

[0930]

           J. Rustad: Actually, I have a question at the end of this, so it will be a little bit different than the previous two speakers, but I did want to react a little bit to a couple of comments.

           First of all, when you look at the expansion in post-secondary education, there's no question that the majority of that is driven by the fact that we need a skilled workforce. We've got a huge, expanding economy at this stage. We need to be able to have the skills going in.

           I'll give an example. The Chair has said that we can't really call this an expansion. Well, we've doubled the number of doctors that we're training. That's a 100-percent increase — the first time it's been increased since 1980. I think that's an expansion. We've almost doubled the number of nurses being trained in the area. To me that's pretty significant in terms of an expansion, not just trying to keep the status quo in terms of trying to meet our needs.

           Sorry for the politics on that, but I needed to set the record straight in terms of that.

           The one question I had, and this is to the government side, is around the recommendation that came out with regards to the actual cost of delivering programs in institutions. I actually see that as being a pretty good recommendation coming forward. The rationale behind that, in my neck of the woods, is that we have a college that's delivering trades programs, and we've just announced a 35-percent increase in funding, another 462 seats, which is quite an expansion in terms of meeting some of the trades skills.

           The cost of delivering those seats is quite a bit different than some of the other institutions. I think it's important to be able to measure those costs and also, of course, the success rate around the delivery of those things.

           I'm wondering, in terms of the ministry, in terms of the overall tracking of the cost-effectiveness of delivering a program and delivering a trained seat — I also understand there are other variables, particularly the cost of living and other things that factor into those sorts of things — how you plan to react to that recommendation with regards to the tracking of the expense side of the equation.

           M. Quayle: I think that we already have historically differentiated in terms of the funding for nurses, certainly the funding for the doctors, funding for Double the Opportunity — the computer engineering graduate student funding being quite different from undergraduate student funding.

[ Page 299 ]

           Conceptually, I think we're already there with the fact that we absolutely, at that level, need to recognize what I, in a sense, call "costs of instruction." I think as we develop the funding model, we're going to have to look more into costs of instruction.

           There are drivers at our institutions, quite understandably, and you've pointed that out: "Oh, I've only got X amount of money. It costs a lot less for me to deliver university transfer or art seats than it does for me to deliver my welding seat or my health sciences seat."

           We have to come to a balance. What Mr. Sultan is saying is that we don't want to dive down into the depths of the institutions around the program areas, necessarily, although we might have to do some looking at the costs, as we did with the medical seats, in a very rigorous way.

           I think we are going to have to consider that with our partners, the institutions, as we look at the new funding model, to see how we can sort of balance the autonomy that we want to ensure our institutions have, with our understanding in the recommendations here around what it does cost to deliver these programs, and make sure that the incentives are there appropriately to deliver on our priorities.

           I don't know, Ruth, if you want to add anything to that in terms of how you see the funding model unfolding.

[0935]

           R. Wittenberg: Yeah, this is going to be an interesting challenge, but absolutely we do need to provide some form of differentiation for high-cost programs that are different. There is no doubt that it costs a lot more to provide a trades seat than it does to teach English 101. That is part of our plan around looking at the funding model and how we also create some performance measurements attached to that.

           We're just in our early stages. We're just still trying to figure out how we're going to tackle this. But it is a high priority for us in the division, and we will be working with our partner institutions to figure out how best to accomplish this.

           I'm fully expecting that within the next 12 to 18 months we will be in a position to have a different approach that is transparent but is also recognizing the needs. Some programs cost more than others to deliver.

           J. Rustad: If I may just comment in response to that. There's no question in terms of some programs costing more than others. I was actually thinking more about a specific program in one institution versus the same program in other institutions in terms of those cost comparisons.

           Just to give an example, there's no question that UT courses are often the bread and butter of colleges, but colleges also have to reflect the fact that they have to meet the needs of what's in a community. When you have an expansion, as for example in my area where we have a new university — relatively new; it's only been around for ten-plus years now — it changed the scope of what the college was delivering to the community, and the community has adjusted accordingly.

           One last comment around a comment. There are courses that do get dropped. Unfortunately, things like…. At the College of New Caledonia I think they dropped the forestry engineering program.

           R. Wittenberg: That's right.

           J. Rustad: That really is a shame, because there's a need in there. But when you only have two students, it's pretty tough to justify trying to keep that course going. Often a lot of those kinds of decisions are demand-driven, but as I was mentioning around the finance side, I think that is an important factor. When you're looking at trying to deliver those programs, in my opinion, efficiencies are also important in terms of how things can be delivered and how that can be perhaps built on or expanded on.

           R. Wittenberg: Yes, and certainly we will also try to consider the rural aspects of the top third of the province. There are some significant different challenges for College of New Caledonia, Northern Lights and those institutions that are different than the ones that are existing in the lower mainland, not the least of which includes their student populations. But yeah, we are going to try and recognize those aspects of our funding model if we can.

           J. Rustad: Just as a fun little point. College of New Caledonia is actually in the middle third of the province.

           R. Wittenberg: Right. Okay, I take your point.

           R. Fleming (Chair): He never tires of that correction.

           R. Sultan: Mr.Chair, if the timing is appropriate, I would like to move adoption of the Auditor General's report, Government's Post-Secondary Expansion: 25,000 Seats by 2010, and including the response of the Ministry of Advanced Education.

           Motion approved.

           R. Fleming (Chair): Thank you very much to our witnesses for being here this morning. It's very much appreciated, and I'm looking forward to the follow-up report on this item. Thank you.

           I don't want to say the word "break," but we'll just recess for two minutes.

          The committee recessed from 9:39 a.m. to 9:41 a.m.

           [R. Fleming in the chair.]

           R. Fleming (Chair): We are not going to have a proper amount of time to deal with item 4, so I've asked Mr. Sydor to come back to our next meeting. We will discuss that item fully in our next committee meeting.

[ Page 300 ]

Tribute to Work of Arn van Iersel

           R. Fleming (Chair): As many of you have already commented in your remarks, it is Mr. van Iersel's second-to-last day. Tomorrow is his last day working as the acting Auditor General for the province, and Joan and I wanted to make a presentation to him here at this point on the agenda. If he could just come to the front of the room. Members may wish to say things to him as well.

           Arn, on behalf of all the members of the committee, we want to thank you for your work, your long service. Many of us have only had the pleasure of working with you for a very short time. Others have worked with you for many years as a comptroller general, as a ministry official and in this position as acting Auditor General for the past 11 months.

           I think many of the things that you were able to accomplish in your brief time here will carry on and serve this committee really well into the future. Thank you so much for your hard work and dedication. [Applause.]

           A. van Iersel: Thanks to all of the members. I know I'm not at a mike, but I guess it doesn't matter. I tried to say goodbye last time because I wasn't sure whether this meeting would happen. I'm delighted that it did take place.

           I meant it last time, and I'll say it again. It's been my real pleasure to serve as your acting Auditor General for the past year. It's been up and down for all the reasons you're probably thinking about. But from my point of view, I have no regrets. I did my best, which is my tradition.

           I did think, in my mind, that I achieved some things, with a very supportive executive and staff. I hope I left the office a little bit better than when I arrived.

           I know the office is very much looking forward to the arrival of Mr. Doyle, the permanent Auditor General, and I share in that. I really do, in the sense that I think that's an important step, which is why I chose what I did in February. I have offered that if he wants any advice…. I'm not going to go pushing on him, but I'm happy to talk to him. That's his call.

           As I say, I think we have good things ahead for the office and, hopefully, in support of yourselves. So thank you for the way you conduct yourselves, although I must admit that Mr. Sultan's opening remarks did set me back a bit. Hopefully, there was some recovery during the course of the meeting.

           I do respect each and every one of you and the roles you play. I very much enjoyed it, I must say. The conversations that we had, one on one, with Su-Lin Shum were invaluable to me in learning your perspectives and how the office could be better.

           Thank you very much for this gift. I'm going to have to get some wall space in my house. Thank you very much. [Applause.]

[0945]

           J. McIntyre (Deputy Chair): As the Deputy Chair, I'd just like to add my thanks to Arn. I hope he enjoys this portrait, this artwork, by renowned artist Richard Hunt in Victoria. I really want to thank and acknowledge Arn's long public service here in British Columbia as comptroller general and now as acting Auditor General.

           It's very important, I think, for all of us as legislators to have great support in what we do and to have people that teach us and push us and get us to do our best efforts as well. So I just really want to acknowledge and thank you, Arn.

           A. van Iersel: Thank you, Joan, and thanks to all.

           J. McIntyre (Deputy Chair): We wish you well.

           R. Fleming (Chair): Committee, I thank all of the members for being here this morning, and we just need a motion to adjourn.

          The committee adjourned at 9:46 a.m.

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