Pioneers shiver as IT venture goes bust

August 31, 2001

Canadian higher education's small private sector suffered a set-back this month after a high-tech provider went into receivership.

Halifax-based ITI Education Corp, which runs seven colleges in Canada and three in the US, failed to negotiate a C$10 million (£4.5 million) loan with the Nova Scotia provincial government. It then lost the confidence of one of its parent companies, Torstar.

Just weeks earlier, ITI, which bills itself as "the postgraduate e-business school", announced it had to let go of its money-losing US schools and that revenues had declined 10 per cent from the year before.

Until recently, Canada's small higher education private sector had been on a roll. Last year Ontario passed legislation allowing private universities to set up shop. In February, Alberta followed suit and in the summer, New Brunswick gave the online Lansbridge University degree-granting status.

This momentum, however, has stalled. Fees at private colleges such as ITI are three times higher than at the average university. And the sluggish IT sector has put paid to the technology-dominant colleges' boast that graduates can expect to land good jobs.

Two major private universities in the planning stages, one in Ontario and the other in British Columbia, have been conspicuously silent over the past year. After ITI's meltdown, which has left 1,337 students across Canada in limbo, further suitors may be scared off.

Lansbridge University provost John McLaughlin is not letting ITI's situation, nor the fact that the university's former parent company sold most of its majority interest, change his course. "We have sufficient funds to operate and expand," Dr McLaughlin said. His college offers MBAs to 100 business people and it hopes to increase that five-fold this year.

Canadian Association of University Teachers executive director Jim Turk said, however, that there was likely to be consolidation among private education providers. And he believes provincial legislation allowing private universities does not help Canada protect its public system at international trade tribunals. "That will put Canada in a weaker position to set its own education policy," he said.

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