Edited by Douglas Harbrecht

CANADIAN B-SCHOOL TUITIONS ARE GOING NORTH

One of the great North American business-school bargains is going the way of the slide rule. For years, graduate B-school education in Canada has been available for a song compared to what it costs in the U.S. Provincial government subsidies have kept tuitions well below $6,000 (in Canadian dollars) a year at most schools.

But now, as governments cut their funding, schools are raising their tuitions -- quite sharply in some cases. The prestigious Richard Ivey School of Business at the University of Western Ontario doubled its tuition this year to $8,000 and will be raising it to $18,000 annually for the two-year program by 2000. "If you get out and get a job for $125,000 a year, what's $36,000?," Dean Larry Tapp said on Nov. 3, while launching a new capital campaign aimed at raising $75 million for the school.

Tapp, who maintains that the Ivey school is the best in Canada, admits he's flying in the face of years of tradition. Typically, Canada's egalitarian ethic has kept tuitions among the country's 65 B-schools largely even and relatively low. But he says this has also kept schools from recruiting the best professors, who pursue bigger salaries at name schools such as Harvard or Wharton. By raising tuitions, he'll be better able to pay for quality teachers and draw top students. Says Tapp: "The flat model is badly out of touch with today's reality."

Tapp argues that business schools operate in a "virtuous circle." Schools can charge high tuitions because their degrees are viewed as worth the cost. As they attract the best students and faculty, their graduates obtain the best jobs and highest salaries. In turn, the alumni network further increases the school's attractiveness and broadens its funding base. "To create and sustain the circle," argues the dean, "Canada's business schools must learn to compete."

Tapp, a former entrepreneur recruited to run Ivey in 1995, says his philosophy has not hurt the school's power to attract students. Applications are up 40% this year, with roughly five applicants for each of 140 seats in the first-year class. The school is based in London, Ont., between Detroit and Toronto. Its graduates fill the top ranks of much of Corporate Canada, whose leading lights in turn liberally support it. Tapp says he's looking beyond Canada to draw talented students and professors from around the world.

Even with the price hikes, the Ivey program may still be a good buy compared with schools south of the Canadian border. If the current exchange rate holds, the Ivey program will still cost Canadians less than the equivalent of $13,000 (U.S.) a year when it rises to $18,000 (Canadian) in 2000.

By Joseph Weber in Toronto