A Great Cause

As his term as president of the University of Toronto comes to a close, David Naylor talks about the past eight years and what he plans to do next.

What has brought you the greatest satisfaction during your eight years as president of U of T?
No one thing trumps the others. Mostly I feel a tremendous sense of gratitude to many fine people – faculty, staff, students, alumni and friends of the university – who pulled together to make a great deal of positive change in a difficult fiscal climate.

A list of recent priorities at U of T might include student experience and accessibility, research and innovation, the tri-campus system, alumni engagement, fundraising and capital renewal. Are there other, less visible, things that have mattered to you?
Celebrating our faculty and staff is one. There has been a sustained effort across the university to nominate our faculty for both national and international awards in teaching and research. The results have been excellent, and Vice-President Paul Young and his team in the office of research and innovation have been particularly effective with nominations for international research prizes. Similarly, from the office of Angela Hildyard, vice-president, human resources and equity, and throughout the entire organization, there has been an overdue push to recognize the commitment and creativity of non-academic staff.

We’ve been fortunate to get several new schools up and running in key areas such as global affairs, public health, public policy and the environment.

Cheryl Misak, former provost, and Jill Matus, vice-provost, students and first-entry divisions, catalyzed a complete overhaul of our student recruitment strategies. Our story is better, we’re telling it better and the results are better.

I could go on, but mentioning just a few names already feels wrong. The basic point is that literally thousands of great people inside and outside the university put their shoulders to the wheel with a view to moving the whole enterprise forward. It’s been an amazing collective effort.

Many measures suggest that U of T’s global standing has risen in recent years. From your perspective, what is the university’s most important measure of success?
There isn’t one. A big research-intensive university like ours has a multi-dimensional mission. Focusing on one measure ignores too much of what we do. There’s also no easy or widely accepted way to synthesize those dimensions into a single measure – notwithstanding all the league tables and rankings that get published these days.

What are the biggest challenges facing U of T? Have they changed while you were president?
I’ll start with a caveat. All three levels of government have taken some bold decisions in recent years that were very helpful to the university and our partners, such as the academic hospitals and MaRS. I’d be remiss not to thank our friends in government in Ottawa, at Queen’s Park, and in the city halls of Toronto and Mississauga for their support. And let me also acknowledge the very fine work done by Judith Wolfson, our vice-president, university relations.

That said, the biggest challenge we face is short-termism in policy-making by modern governments. This isn’t a partisan issue. Politicians are responding to what the polls tell them. And there’s something amiss when the ticket to public office seems to be a combination of wedge politics, quick wins for interest groups and frenetic activity on social media. We still lack a coherent plan for higher education in Ontario, with corresponding revisions to funding mechanisms. We still need new policies for tuition and student aid that focus on evidence and results.

As well, unlike in many OECD countries, research operating grants to Canada’s major universities leave a substantial fraction of the costs uncovered. We urgently need a co-ordinated federal-provincial strategy for research and innovation. That strategy should include a commitment to independent basic and applied research, ongoing infrastructure renewal, coverage of the actual costs of research grants, more research fellowships for domestic and international graduate students, and, ideally, an excellence fund to support globally competitive universities.

Frankly, other nations and sub-national jurisdictions have done far better on all those fronts. And it is only a matter of time until Canada pays a serious price for this ongoing and apparently willful neglect.

Improving the undergraduate student experience at U of T has been one of your priorities. Are you happy with the progress thus far?
Yes, with some riders.

There’s been a concerted effort to address the student experience at all levels of the institution, and obviously students themselves have played a big role in shaping change. We’ve seen reliable evidence of improvements: excellent domestic applicants and more out-of-province students; dramatic growth in the numbers of highly qualified international students; growth in participation in small classes; more use of technology in pedagogically rich ways; better results on student survey data; fabulous participation in extracurricular activities; and high retention and completion rates.

On the other side of the coin, we desperately need more residence beds on all three campuses. That’s in the works, but we lost time with the fiscal crisis. Overall staffing for student services is too thin, and we need more faculty in the undergraduate-intensive divisions.

In short, the progress is very encouraging, but there is a lot left to do.

While you were president, the percentage of the university’s revenues derived from tuitions and private sources exceeded government funding for the first time. What does this signify to you?
First, a reality check: The university has developed and implemented a budget model that was recognized in 2013 with a gold medal for public sector leadership by Deloitte and the Institute of Public Administration of Canada. Vivek Goel, former provost, and Safwat Zaky, former vice-provost, planning and budget, were among the key architects. The success of this model has depended on the ongoing efforts of every academic division and the excellent central teams led superbly by Scott Mabury, vice-president, university operations, and, until very recently, by former provost Cheryl Misak. There’s no doubt that, at all levels of the institution, we’re now squeezing more value out of every dollar of revenue from every source.

The real problem is simple. Governments aren’t doing their share. Ontario’s spending on health care and K-12 education tracks closely to the national average of the other nine provinces. Not so for higher education. We’re still dead last in per-student funding in Canada, and in the lowest decile for all provinces and states in North America.

As I mentioned earlier, we’re also heavily subsidizing peer-reviewed research grants in a way that universities in other countries and even in this country are not. The details are convoluted, but as matters stand, small universities make a profit by hosting federal research grants, while strong performers such as U of T lose out thanks to a bizarre funding formula that punishes excellence. In fact, U of T subsidizes federal research grants to the tune of about $75 million per year – a costly penalty for our success.

How do you respond to the continuing concerns about tuition levels and student debt?
This is a perpetual hot button issue. As I’ve said, Ontario’s universities receive the lowest level of per-student public funding in Canada – about half the level of support in Alberta or Saskatchewan, even after their recent sharp cutbacks. This institution and the student experience would be in free-fall without increases in tuition revenues.

Roughly half of the domestic undergraduates at U of T receive assistance that does not require repayment from the province or from U of T. As a consequence, the average tuition paid by this group is less than half the posted rate. Much of that internal aid comes from tuition dollars recycled from those who can afford to pay full tuition, in the same way that government grants are funded by progressive taxation.

This explains why freezing tuition or eliminating tuition is hugely regressive. It’s counter-intuitive, I know. But that’s the reality.

Fortunately, per-student debt levels in Canada are much lower than in the United States. Half of U of T’s undergraduates finish without owing a cent to the government of Ontario. Average debt levels for those who do graduate with student loans from the province are at the lowest level in a decade. And yes, it’s not fair for some students to graduate with very high levels of student debt, even if the averages are falling. But that won’t be remedied by freezing tuition fees.

U of T has also worked hard to ensure that rising tuitions do not bear heavily on lower-income students. Since 2005, for every $1 that tuition has increased per domestic undergraduate, the university has increased its needs-based student aid by $1.07. The number of students receiving needs-based aid has also increased. In other words, we’re still meeting our commitment to access and to enrolling all qualified students, regardless of means.

Last, I should warn that this tuition-recycling model will be sustainable and equitable only if the government of Ontario meaningfully enhances its bursary system. And at some point, provincial politicians must bring levels of per-student funding closer to the national average. That’s the real key to letting students and universities break out of the ongoing cycle of tuition increases.

We’re still dealing with the aftershocks of the financial crisis of 2008. Locally, one thing that happened was a change in the way U of T handles its investments. How have these changes positioned the university to respond to potential future shocks?
U of T Asset Management (UTAM) was incorporated as a U of T subsidiary more than a dozen years ago. The idea was to emulate structures and strategies at private universities with much larger endowments. However, UTAM never had the scale to do what it was trying to do; nor, in recent years, was it taking full account of interlocking risks in its portfolio. The result was an unacceptable level of loss during the 2008–09 fiscal crisis.

Following an expert review led by the Hon. Hal Jackman and Larry Wasser, the university greatly streamlined UTAM’s governance, and, guided by Cathy Riggall, former vice-president, business affairs, added various checks and balances. For example, the actual investment strategy is shaped by a blue-ribbon investment committee that works directly with the university’s president. The allocation of assets is more appropriate, leverage has been eliminated, interlocking risks are closely monitored and contained, management fees have been trimmed and the net returns have improved. There’s more to be done, but we’re in a better place now.

UTM and UTSC have grown tremendously in recent years. Can you comment on the evolution of the tri-campus system?
Over the past 25 years, as UTM and UTSC have expanded, their impact and autonomy have grown apace. Those campuses today each have more than 11,000 students, and combined they have several hundred graduate students in a range of disciplines. Thus, as the Towards 2030 report emphasized, the east and west campuses are no longer outposts of Arts and Science on the downtown campus – a fact underscored by the inception of a full-fledged medical academy on the Mississauga campus in 2011 and the new PhD program in environmental science at UTSC.

Massive investments have been made in new facilities to catch up with enrolment growth. Each campus has many distinctive programs, with more in the works at both the undergraduate and professional master’s levels. Major governance changes are being implemented, again with a view to more autonomy while maintaining tri-campus co-ordination. Led very effectively by Vice-Presidents Franco Vaccarino and Deep Saini, and Saini’s predecessor Ian Orchard, the faculty and staff have kept both campuses moving forward brilliantly.

Today, I believe there is much wider recognition that the tri-campus system is a strategic asset that benefits the entire university community.

U of T is in the midst of a historic $2-billion fundraising campaign. Why is private support important for the university?
I’ve already noted the indefensible levels of per-student funding provided by the government of Ontario. In that context, we’d be in a real straitjacket without philanthropy as a catalyst for excellence and innovation at the university. Of course, philanthropy has been part of the university’s fabric for well over a century, but the need and impact have never been greater. Vice-President David Palmer and his team in university advancement have worked tirelessly to mobilize fundraising all over the institution. And the $1.35 billion raised to date has accordingly improved every part of the university. Student scholarships and bursaries, research programs, endowed chairs and professorships, student services, scores of big and small capital projects, extra-curricular activities and athletics – anywhere you look, philanthropic support from our alumni and friends has made a significant difference. I’m deeply grateful to our donors for their vision and generosity, and I’ve really enjoyed working with them over the last eight years. Of course, the hardest part of the campaign is the last 30 per cent, but I am confident that, before too long, we’ll see President Gertler announcing the achievement of that $2-billion milestone.

Can you share some thoughts on academic leadership?
I have only one thought and it’s hardly original. In a place as strong as U of T, much of a dean’s or president’s role is to set a broad framework and tone, and then work like crazy to cheer on and support people who want to do good things – or at least mitigate disincentives and try to remove obstacles in their way.

The Towards 2030 exercise turned out to be very helpful in framing an agenda. And early on, we implemented a new budget model that yielded huge dividends for distributed leadership. It gave academic divisions better information and stronger incentives to reward creativity and fiscal discipline. That model also generated enough central funding to reinforce university-wide priorities and support exciting initiatives that bubbled up on a more ad hoc basis.

One other thing: When you end up in some role with a fancy title, it’s often more important to be lucky than smart. I can’t say enough about my good fortune to work throughout the eight years with such great vice-presidents and an excellent team extending from Simcoe Hall into the entire university. I also won the lottery every day that the outstanding staff in the president’s office put up with me.

What will you miss most about being president?
As the cliché goes, it’s all about the cause and the company. What could be more inspiring than to be engrossed 24/7 in a place focused on higher education and advanced research? There are sometimes ugly things to manage, but it’s easy to keep going when the ideals of the organization are so high and so important to successful societies. I’ve also had the privilege of meeting literally thousands of exceptional individuals who are part of the university’s community – faculty, staff, students, alumni, supporters and partners. It’s their company above all that has made the presidency such a wonderful journey over the last eight years. I’ll miss those daily interactions a great deal.

What’s next?
Back to the ranks as a professor of medicine… I’ll retool in one or two new research areas, and pick up some time-limited assignments in different sectors and places. I’ve loved the open-ended and totally unpredictable challenges of the last eight years. But I’m looking forward now to what some might call a balanced-portfolio life rather than all-consuming responsibilities centred on one role.