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CAUT Bulletin Archives

February 1999

CAUT Joins in Unveiling Alternative Federal Budget

It's a crisis CAUT has witnessed firsthand. Across the country, Canada's post-secondary education system is struggling. Deep cuts in federal transfer payments and provincial cutbacks have resulted in average tuition fee hikes of 55 per cent since 1994. Underfunding has also led to cuts in college and university faculty, a reduction in course offerings, less public funds devoted to research, and fewer resources for libraries and laboratories.

At the same time, last year's federal budget diverted badly-needed resources to the Millennium Scholarship Fund and increased tax expenditures, initiatives that do not address the fundamental problem of declining public investment in Canada's post-secondary education system.

In anticipation of this year's federal budget, a group of national and community organizations, including CAUT, unveiled an alternative federal budget that offers a radically different set of choices and priorities. The AFB (Alternative Federal Budget), coordinated by the Canadian Centre for Policy Alternatives and CHO!CES: A Coalition for Social Justice, is a comprehensive document designed to show there are credible alternatives to the current government's fiscal and monetary policies.

The centrepiece of the AFB is the proposal to eliminate the Canada Health and Social Transfer, the block fund that Ottawa allocates to the provinces for health care, post-secondary education and social assistance. Instead, separate national investment funds for health care, post-secondary education, income support, child care, housing, and retirement income are created.

The AFB's post-secondary education fund has as its goal to increase access to universities and colleges for students from all socioeconomic backgrounds. The PSE fund increases spending by $1.5 billion over current levels, to $4 billion in 1999, and will grow in future years with the national economy. The new fund is also accompanied by a National Post-Secondary Education Act which commits all provinces (with the right for Quebec to opt-out with compensation) to uphold the standards of public administration, full accessibility, comprehensiveness, transferability of credits, and mobility with regard to both faculty research and student grants and awards.

Even with the increased spending of $19 billion on education and other social programs, the AFB projects a balanced budget over the next two years. Two-thirds of the new spending is financed by the government's projected surplus of more than $15 billion in 1999, and the rest is paid for from the extra revenues projected as a result of faster economic growth.

Nearly 200 economists and academics endorsed the AFB and the macroeconomic framework was validated by the independent economic forecasting firm Informetrica.

The message of the AFB is that budgets are about choices between different economic and social priorities. For the alternative budget the priority now is on rebuilding Canada's badly damaged public programs and services.

Copies of the fifth annual Alternative Federal Budget are available at