The Path to Enhanced Funding

1. The Path to Enhanced Funding Privatization?

2. Current Business Model • The bulk of Faculty funding is derived from funding based on FTE enrolments in traditional degree programs (Core activities) • Students are either “regulated” (funded by tuition and the MEQ) or “private” funded only by tuition

3. “Non-traditional” revenue sources • Alumni Annual Fund • Executive Institute* • IMPM* • MBA Japan • MMM • MBA3 • Miscellaneous • CIMS Overhead • Overseas Programs • Other

4. Highlights of Current Funding Situation • Regulated Students ($Sent by MEQ) all domestic students in traditional degrees (e.g. BCom, MBA, Ph.D.) • University receives $10,419 for a regulated FTE Masters Student and $5,913 for an FTE undergraduate in Management • Faculty receives ~$7,200 for a regulated FTE Masters student and ~$4,100 for an FTE undergraduate

5. Highlights of Current Funding Situation (cont.) • Private Students: International students and students in private degrees (e.g. Master of Mgmt.) • University receives $20,000 for a privatized FTE MBA Student and $15,000 for an FTE undergraduate in Management • Faculty receives $8,520 for a private FTE MBA student and $6450 for an FTE undergraduate • “Clawback” is 57% (includes scholarships and capital grant of 11.25%)

6. Highlights of Current Funding Situation (cont.) • Mixed students (e.g. MBA3) • Students pay regulated tuition plus a service fee. • Regulated tuition is clawed back by the university at standard rate (~30%) • A service fee is collected which is not clawed back. • “Under the radar” from the point of view of the MEQ

7. MBA Tuition at Canadian Schools

9. BCom Tuition at Canadian Schools

10. McGill Issues re Privatization • Permitted in QC only for international students in Management and for private degrees • Full privatization of Faculty may be allowed (implementation entails financial risk) • “Under the radar” is tolerated • Access to university education is a perennial political issue in QC • McGill has been audited by the MEQ when it privatized international students in all Faculties • Recent Le Devoir article targeted McGill

11. Relevant Experiences Elsewhere • Ontario professional schools allowed to raise tuition and maintain base govt. funding (“double dipping”) • BC MBA raised tuition to $28,000 and was faced with a lawsuit by students • Law students in Manitoba voted by referendum to raise tuition • McGill law students may be asked to sign a “social contract” to give up to 5% of their income to the school for several years

12. Needs for Privatization • Need enhanced facilities • Need enhanced teaching –outstanding across the board • Need enhanced service • Facilities require investment • Service and teaching enhancement implies investment and has a learning curve

13. Some Options (non-exclusive) • Continue as is + cut costs • Increase revenue through non-core activities • Increase enrolment in core programs • Expand core activities with a service fee like MBA3 (“under the radar”) – e.g. MBA service fee for all by referendum • Expand offering of private degree programs which offer Master of Management (like MMM or IMPM or MMFS)

14. Some Options (cont.) • Develop new private degrees like EMBA or BBA • Offer new programs overseas (like MBA Japan) • Target full privatization and then unilaterally declare Faculty private • Negotiate with MEQ for a step by step privatization process of the Faculty • Establish accredited degrees in another province/state/country and offer them in Montreal or elsewhere