Performance-Based Funding Model for Ontario Universities and Sustainable Development Goal 4: Tensions between Federal and Provincial Policies

This study examines the tensions between Ontario's Performance-Based Funding (PBF) policies and the United Nations Sustainable Development Goal 4 (SDG 4), focusing on how the PBF model impacts higher education institutions' (HEIs) ability to promote inclusive and equitable quality education. PBF policies, which tie funding to economic-based performance metrics such as graduate employment rate, employment earnings, and graduation rate, create significant challenges. These metrics often prioritise economic outcomes over inclusion, undermining equitable access to quality education and exacerbating inequities for underrepresented groups. Drawing on theoretical frameworks on New Managerialism, Principal-Agent Model, and Resource Dependency Theory, this qualitative case study employs semi-structured interviews with administrators and faculty members from Ontario’s U15 group of research-intensive universities, alongside document analysis. Findings reveal that stable and reliable funding is essential for universities to contribute meaningfully to SDG 4. The PBF model's emphasis on performance metrics risks lowering academic standards, institutional autonomy and academic freedom, increasing class sizes, and decreasing per-student funding. The study highlights the need to recalibrate PBF policies to align performance metrics with the broader mission of higher education and SDG 4. Recommendations include increasing stable provincial funding, halting PBF policies for 3 to 5 years and revising metrics to balance economic and equity-based outcomes. Ultimately, this research advocates for a balanced approach that supports equity, inclusivity, and academic excellence, enabling Ontario’s universities to advance their critical role in fostering equitable and inclusive quality education.