Canadian universities spend $10-billion annually on research. The federal government is the largest "external" funder of that research, at $3-billion, but the bulk of the financing comes from provincial taxpayers who pay the salaries of professors, many of whom devote much of their time to research.

Individual philanthropic support provides only a small portion of the financing for campus research. And given York University's recent rejection of a $30-million offer from Jim Balsillie's Centre for International Governance Innovation (CIGI), to establish a school in international relations at York, that's unlikely to change any time soon.

This is a sad outcome for York, but the reasons behind the rejection underline a much more disturbing governance dysfunction that pervades most Canadian research universities.

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Three weeks before York university said no to the proposal from Waterloo, Ont.-based CIGI, the academic freedom and tenure committee of the 66,000-member Canadian Association of University Teachers served notice of a motion to censure York, the University of Waterloo and Sir Wilfrid Laurier University in relation to co-operation agreements with CIGI.

CAUT executive director Jim Turk defended the censure motion by saying that "CIGI has no business at the table deciding what areas the [research]chairs will focus on and who should be hired …" This raises the obvious question: If those with the vision to develop and sponsor such a program have no business at the table, then who does?

York's executive leadership supported the $30-million CIGI proposal, which would have financed 10 research chairs and 20 graduate scholarships over a decade (with a matching $30-million from the Ontario government). York provost Patrick Monahan stated, "We believe this initiative held tremendous opportunity and promise for the university. We also believe that, with CIGI's full co-operation … we had developed an academic governance framework that would have provided strong protection for academic freedom and institutional autonomy."

So who killed this generous initiative from the private think tank? Taking their cue from the national union, dozens of York professors argued the proposal threatened academic freedom because it would have given CIGI too much sway in faculty hiring and research plans. On April 2, York's law school faculty council voted against it and the next day the school's administrators caved in to the professors' vote.

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Faculty councils, it seems, are not only opposed to outside funders having input on hiring and research decisions, they're opposed to university presidents and provosts making such decisions without their approval. They also have veto power over the creation or termination of teaching programs. Moreover, tenured professors are free to work on practically any subject, resulting in research that may be relevant only to their personal academic interests, with little or no chance of creating material economic or social value. (Many professors prefer to focus on research, sending their graduate students to teach those lowly undergrads.)

How can it be that, in the name of "academic freedom," those appointed to lead our publicly financed universities are rendered impotent by their own employees? Where else in the private or public sectors do employees decide who else is hired and what the organization delivers, while being free to spend most of their time doing what they choose?

After York's rejection of the CIGI plan, author Thomas Homer-Dixon, CIGI Chair of Global Systems at the Balsillie School of International Affairs at the University of Waterloo, wrote that "protection of academic freedom … won't be any stronger, because neither CIGI nor Mr. Balsillie threatened it in the first place. But we can be sure that wealthy individuals … will now think twice before they contribute financially to Canadian universities."

This is not only a travesty against Mr. Balsillie, co-founder of Research In Motion and a person who wants to strengthen our country's international relations expertise, but also a dreadful signal for Canada's future prosperity.

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The latest available data published by the Conference Board of Canada shows that despite spending the highest share of GDP on government-financed university research, Canada ranks second-last in the Group of Seven for the number of patents per capita. A big reason for this poor performance is the lack of research collaboration between universities and the private sector. But how can that happen when the private sector has, in the words of CAUT's executive director, "no business at the table"?