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CANADA: McGill fined $2 million for MBA fee hike

The province of Quebec has levied a C$2 million ($2.05 million) fine on McGill University recently over the university's decision to set tuition rates for its business school that far exceed the province's low fees.

McGill took the decision in September 2010 to significantly increase tuition and fees for the MBA at its Desautels Faculty of Management.

For the 2010-11 academic year, its $32,500 price tag is nearly nine times more expensive than most of the other full-time masters programmes at the university. McGill says this move was necessary in order to keep the business school competitive.

Quebec Minister of Education Line Beauchamp followed through on the "financial consequences" with which she had threatened McGill a week earlier. The fine was calculated on the number of students enrolled in its MBA programme and will be deducted from the $11,000 per-student subsidy the government provides.

In a statement, the day after the 14 March fine was issued, McGill said it was "perplexed and disappointed" with the response from the government. "This action puts an arbitrary, elective and unprecedented exercise of authority of government as a priority over demonstrated quality and program performance," adding that the fee rise, which they say has been buffeted by student assistance, has allowed the business school to better its facilities, improve student-teacher ratios and bring in top-level professors.

The sticking point has been that tuition on 'regular' programmes has been kept low in order to fulfil an education policy that guarantees broad access to postsecondary education for all provincial residents.

The reaction from McGill's MBA students has gradually improved from earlier in the academic year, with many now acknowledging that the increased tuition will help enhance the programme's quality through investment in higher calibre faculty and facilities.

Said Pat Tenneriello, MBA Student Association head: "Everything McGill does, they try to be the best at. In order to keep that going, they had to move to a self-funded model."

By adopting the self-funded model, however, the management programme is now no longer dependent on provincial funding - and can avoid its regulations.

According to members of the faculty, these regulations have been "the single most significant constraint on our ability to sustain and enhance the quality of our MBA programme and deliver high-level student services."

Instead, it can keep pace with competitive tuition rates charged by other elite programmes in North America, like the University of Toronto's Rotman School of Management, which charges two-year tuition of more than C$80,000.

And it helps fund the newly designed and integrated MBA curriculum that was launched in the autumn of 2008.

There is no denying that these changes have begun to bear fruit already. The Desautels programme jumped 38 spots from 95th to 57th place in the 2011 Global Financial Times MBA Rankings. It is also among the top 15 programmes internationally in terms of placement three months after graduation.

Commenting on the rankings, Ron Duerksen, director of marketing and communications at Desautels noted: "While we are encouraged that we are moving in the right direction, we will not stop here and we should not believe that rankings tell the full story of all that we do. Our goal at McGill is to have one of the very top business schools in the world."

The move by McGill has given organisations like CREPUQ, the association of presidents of 18 universities in Quebec, an opportunity to encourage the provincial government to rethink its policies towards longstanding low tuition fees and address problems associated with chronic underfunding within the province's higher education sector.

Last week, the Board of Trade of Metropolitan Montreal chimed in, also urging the government not to lose sight of the goal to invest in the province's higher education sector by implementing strategic tuition increases.

"The stakes are high, the choice is clear. Quebec cannot lose ground," said board president Michel Leblanc.
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