Influx of International Students pays off for Conestoga College Boss
Awash in revenue generated by 30,395 international student permits, Conestoga College Board rewards President with $85k raise and a term extension
“Governance” isn’t a very contentious topic. It would be difficult for a “Hollinger” to happen in this era, as a new generation of Directors (public or private) seem to have universally embraced the notion that there’s only one kind of “governance,” and that’s “Good Governance.”
Whether we credit the media, the Courts, The Institute of Corporate Directors, our business and law schools, various securities commissions or a legion of Institutional Investors matters not. There’s an accepted wisdom, and we’re better for it.
That’s not to say that there’s only one approach to governing a high profile institution, as we saw last year when a lobby group called SHARE pushed Canada’s banks on a resolution involving racial equity audits (see prior post Five banks, two starkly different choices on racial equity audits, Mar 4-23):
I wouldn’t have thought that Canadian bank CEOs and their Boards of Directors could wind up in two starkly different camps when it comes to “third-party racial equity audits,” but that’s exactly where things have landed, so claims a press release from a group calling themselves the Shareholder Association for Research and Education (SHARE). What does it say about the state of corporate governance and freedom of thought in Canada when highly experienced and considered people, in truly good faith, arrive at the opposite outcome on what may well have been the most difficult decision they’ve ever faced as a governing body?
Today’s topic is a bit different, however. I’ve been thinking about “governance” in the context of the huge influx of International Students over the past few years.
Whatever funny business has been going on, it wasn’t a secret to hundreds of politicians, public servants, private business owners, administrators and College governing Boards. Some of these folks are elected, which brings its own potential motivations (see prior post Liberals go hog wild on immigration, hoping to secure victory in 2029 and beyond, Aug 21 -24), but a bunch of others — our own neighbours — have a fiduciary obligation to the Institution or business they oversee. What if their fiduciary obligation to XYZ College was at odds with what was good, at least in the near term, for our Country?
I commend Conservative MP Arpan Khanna for his recent video outlining how Justin Trudeau has undermined the long-standing Canadian consensus around “immigration.” In his well-sourced portrayal, Mr. Khanna reminds us of which post-secondary institutions recruited the most international students in 2023. Kitchener’s Conestoga College Institute of Technology and Advanced Learning topped the list, with 30,395 permits granted.
There was a time when the “International Student” label applied to some of the “best and brightest” candidates that a Canadian university could attract. When I was a student member of the Board of Governors at UWO, our President spoke of these young “foreign students” in the most glowing of terms. Western had to compete with many of our country’s best schools to secure these promising future researchers, musicians and mathematicians.
At some point over the past 35 years, most of our post-secondary institutions came to rely far too heavily on the high margin revenue that international students provide. As a taxpayer, I suppose I may have benefitted via a lower annual subsidy. It’s also true that in the absence of that additional revenue, schools would have had to make up the difference via increases to domestic tuition, larger class sizes, stretching the maintenance budget and/or lower salaries and travel budgets for Profs / TAs / Administration types.
Heck, they might have had to get rid of academic sabbaticals.
The situation at places like Conestoga College looks different than the traditional approach, and warrants some soul-searching on that school’s part. From the perspective of its Board of Governors, I suspect they’re proud of their track record. These bullets are drawn from a March 2024 release about the 2022-23 Key Performance Indicators (KPI) data released by Colleges Ontario:
Conestoga boasts the top graduation rate of all Ontario colleges at 72.9 per cent, ahead of the provincial average of 65 per cent.
Within six months of graduation, 90 per cent of Conestoga graduates were able to find employment, and more than 80 per cent of graduates reported they were very satisfied with their experience at Conestoga.
More than 92 per cent of employers report being “very satisfied” with Conestoga graduates, in line with the provincial average of 91.8 per cent.
Savvy folks that they are, and that’s a compliment, Conestoga also commissioned an Economist to analyze the economic impact of their good work. Adapting for Prosperity III: Addressing Critical Needs. Highlights of the study:
Conestoga graduates add more than $6.2 billion annually to the province’s economy, nearly a three-fold increase from $2.3 billion reported in 2017.
The employment rate of Conestoga’s international graduates is virtually the same as domestic graduates: 84.8 per cent and 85.9 per cent, respectively.
More than 5,200 Conestoga graduates are local entrepreneurs, and across Ontario more than 7,700 businesses are owned by Conestoga alumni.
That all may be true, but for Conestoga to have recruited more than double the number of International Students than the #2 school, B.C.’s University Canada West (a mere 13,913 permits in 2023), just doesn’t jive with the other elements of the school’s narrative. More important than that narrative is the impression that taxpayers are left with when the Conestoga Board coincidentally increased President Dr. John Tibbits’ salary by more than 20% during that same year, to $494,716, before benefits (according to the Ontario Sunshine list).
I’m all for “pay for performance,” and I’m sure that the Conestoga Board had their reasons for the $85k bump after many years of flat Presidential comp. Perhaps it had nothing to do with the massive revenue increase that followed all of the additional International Students that Dr. Tibbits and team put on the books. I suppose the Deputy Minister of Colleges and Universities could requisition the relevant Board minutes, just to confirm that second point.
In a world where you get paid based as much on comparables as personal performance, the challenge this presents, however, is that ~$500,000 is about 70% more than what Ron Mckerlie, Mohawk College’s President, makes; it’s also higher than the $456k the President of McMaster was paid in 2023. Over at Queen’s University, the President of that internationally-recognized institution is pulling in just $418k plus benefits (such as use of a home on campus, I believe). If I’m the President of Western, which is a massive academic and research business, should I feel good to know that my $484,000 salary is on the low end of one particular entrepreneurial community college a few miles up Highway 7?
Of Ontario’s $10 billion Provincial Budget deficit, $85,000 is a drop in the bucket. Except that this new figure will send a sign to every compensation consultant advising the Board sub-committees of every other Ontario post-secondary institution. Just as with public company compensation disclosure, transparency tends to drive salary inflation. Or worse, it’ll encourage some other enterprising Administrator to search out his/her own 30k of students in the hopes of reaping a similar financial outcome.
As Mr. Khanna’s presentation makes clear, this is merely one part of a major screw-up. Students aren’t well-served, and a byproduct of this fiasco is that IRCC is stuck dealing with a massive 324% year-over-year spike in asylum requests from individuals who originally claimed to be coming to Conestoga to study.
As reported by CTV News Kitchener last March, Immigration Lawyer Elizabeth Kim explained “one theory she has for the increase in asylum claims in Waterloo Region is the increased cost of living. She’s had clients who cannot afford to pay for tuition and for the cost of living on their own, so they’re forced to drop out of school, meaning they no longer have student permits.”
Why ever would a College recruit a student who didn’t have the financial resources to pay for their time abroad? The U.S. government forces it’s own post-secondary institutions to validate the personal financial situation of a foreign student prior to being granted an F-1 Study Visa, which is checked separately by the U.S. Homeland Security Officer upon arrival at the U.S. border.
Whether or not the Conestoga Board supported the huge ramp in international student recruitment, there appears to be a dark underbelly to management’s overzealous approach to Prime Minister Trudeau’s study permit bonanza — all of which led to an outcome that’s unworthy of an $85,000 raise, and certainly appears unsupported by peer compensation data.
MRM
(this post, like all blogs, is an Opinion Piece)