University mergers suggested for N.S.

Four ofNova Scotia's smalleruniversities should consider merging withlarger onesas a cost-cutting measure, but there's no need to merge all 11 into a single provincial university, a consultant says.

Tim O'Neill's report intothe province's post-secondary school systemwas released Friday in Halifax.

O'Neill said change is necessary, but herejected closing any campuses or creating a single University of Nova Scotia. He said that may save money in the long run, but the up-front costs would be too high.

Instead, O'Neill recommended "modest" and "strategic" change, such as merging Mount Saint Vincent University in Halifax and Nova Scotia Agricultural College in Truro with Dalhousie, which is much larger.

He noted the financial troubles ofNSCADUniversity, the art and design school in Halifax, and said it should consider a merger or internal restructuring. O'Neill said mergers should be initiated by the schools themselves and not the government, should mergers become necessary.

"They have a range of mechanisms, everything from cost containment to alignment or merger with another institution and a number in between," he told reporters on Friday.

"I think the challenges are significant, but they're not insurmountable."

O'Neill, a former Bank of Montreal executive, was hired to find a way to make the province's 11 universities more effective and sustainable. His 188-page report calls for expanded collaboration between the government and the universities to address declining enrolment.

"The primary 17-29 age cohort is shrinking more sharply in Nova Scotia than in many jurisdictions, and this trend is expected to continue over the next 25 years," the report states.

O'Neill said universities are independent organizations, and he's presenting options for them to consider.

"I think it's appropriate to make suggestions for how the institutions might proceed and then leave it to them to decide precisely how they will deal with those challenges," he said.

"They were going to be there whether I did a report or not."

Tuition hike

The province spends $350 million a year supporting the schools. However, the cost of a university education in Nova Scotia remains one of the highest in the country, despite a three-year freeze on tuition.

O'Neill said the cash-strapped province has to allow tuition to rise because it cannot afford to pay for all of the programs.

"They should be allowed to increase at some positive rate that may be capped, which is what other jurisdictions are doing," O'Neill said.

At the same time, he added, the province can increase accessibility to higher education byraising or eliminatingthe cap on student loans and increasing the bursaries it provides tothe students who need the greatest financial assistance.

The economist said Nova Scotia's student assistance program was "one of the weakest in the country."

"If we really want to target students with financial challenges, this is a far more effective tool than a broad tuition policy, which affects everybody equally," said O'Neill.

There are more than 40,000 university students in Nova Scotia. The averageundergraduate tuition in Nova Scotiais $5,495 the third highest behind Ontario and New Brunswick.Graduate students in Nova Scotia pay the most in Canada.

Reaction to report

Within minutes of O'Neill's news conference, Liberal education critic Kelly Regan said the report had laid "a smokescreen" for an imminent hike in tuition, something the governing NDP had railed against while in opposition.

"They can hold up this report and say, 'Well, we didn't want to increase tuition fees, but now, we're going to do it, and this is why we're breaking our promise,'" she said.

St. Francis Xavier University president Sean Riley said it appears that universities will be tightening their belts for the foreseeable future.

"This is an environment of restraint, and that will go on for several years," Riley told reporters. "But it won't be the same environment of the last three years, and we will be certainly reducing the rate of growth in the anticipated revenue."

Premier Darrell Dexter said the government would study the recommendations. He said the government would not force a merger but will boost assistance for low-income students.

"There's not going to be anything that's off the table with respect to these negotiations," he said.

Dexter said the government would consult with post-secondary administrators and student groups ahead of concluding the next funding agreement with universities, due next spring.