Universities promise to “[e]nsure students graduate with the knowledge, skills and experience needed to thrive in the workplace and be successful global citizens.” (COU 2017). However, it is not obvious that they deliver upon this promise. The incentives within the university system, such as they are, tend to reward research, reputation-seeking and keeping students satisfied. Yet the status quo may no longer be sustainable. Demographic change threatens to undermine the present model of university funding. Technological change and other factors have the potential to radically change the demand for university education. Canadian universities need to be able to adapt to new conditions to survive and thrive. This paper outlines the economic and political forces that lead the Canadian university sector to underachieve, especially when it comes to teaching and student learning, identifies pressures on the system and discusses reforms that could alter the incentive structure within the university system.