MCU published the Ontario university and college SMA3s on November 26, 2020. These documents described the targets that had been negotiated individually with the MCU and each institution, as well as the weighting of each PBF metric over each year covered by SMA3. Unlike most other PBF programs, each metric must be within a permitted minimum and maximum for each of the five years (With the exception of the skills & competencies metric, which will be uniformly weighted at 5% starting in 2022–23 for participation and posting of results online.)
At the government’s discretion, institutions will have an opportunity to adjust metric weightings once during the SMA3 cycle. The SMA3 technical manual (MTCU, 2019, p. 13) indicated that institutions will be assessed annually based on performance against institutional-specific targets.
Targets will be updated annually.
The three most recent data points will be averaged to set the funding targets and for percentage-based targets, the smallest absolute (positive or negative is considered positive) annual variation between each of the three years will be added to the most recent year’s value.
MCU’s technical manual (MTCU, 2019) described how the ministry will also set bands of tolerance around targets to help mitigate against small year-to-year variances in performance (noting in the anomalies section that the bands will be rounded up to 1% should calculation yield a smaller value). These bands of tolerance will be set using the average annual percent change from the three most recent years of data.
Each institution will receive 100% of the funding for a PBF metric by meeting or exceeding its allowable performance target through the formula: target – (target * band of tolerance). The target minus the band of tolerance is how each allowable performance target is set.
target - (target * band of tolerance)If the target is not met, partial funding, commensurate with actual performance, will be received (MTCU, 2019, p. 13). The unspent provincial funding associated with underperformance makes fund redistribution possible, which is new to PSE funding in Ontario.
If targets are not met and an institution’s metric funding is reduced, any funding made available through underachievement by institutions will be redistributed to all institutions that have earned 100% on the same metric. As nine metrics are common between colleges and universities it is possible that these potential redistributions of funds will be redistributed from both colleges and universities to colleges and universities equally.
As the no-less-than 1% tolerances will also account for historical variations the likelihood of an institution underperforming a target appears to be low, given consistent circumstances. This conclusion was shared by industry analyst Alex Usher (2020) when his Higher Education Strategy Associates consultancy reviewed the SMAs and technical manual.
The COVID-19 pandemic should prove to be the type of unprecedented circumstances that affect institutional performance, and it should be interesting to see what information the MCU or Ontario colleges and universities make public about under-performance-based fund redistribution calculations for the 2020 and 2021 exempted performance funding metrics.
On December 1, 2020 I published the following dashboard, which includes the averages of weights on page 1 and all university metrics weights on page 2.
Ontario Ministry of Training, Colleges and Universities. “Ontario’s Postsecondary Education System Performance/Outcomes Based Funding – Technical Manual.” Ontario Ministry of Training, Colleges and Universities, September 2019. http://www.uwindsor.ca/strategic-mandate-agreement/sites/uwindsor.ca.strategic-mandate-agreement/files/performance_outcomes-based_funding_technical_manual_-_v1.0_-_final_september_419_en.pdf.
Usher, Alex. “Ontario’s PBF System: Much Ado about Nothing.” HESA (blog), December 2, 2020. https://higheredstrategy.com/ontarios-pbf-system-much-ado-about-nothing/.
