Finance Minister John Manley made several references to Canada as the Northern Tiger in his Feb. 18 budget speech. This analogy is intended to signal economic growth, as in "Irish Tiger." Ireland, which provides free tuition for post-secondary education and a system of needs-based grants is often held out as a model of economic development. Now that we have had a chance to examine Manley's budget, it is clear he has delivered a "toothless tiger" when it comes to post-secondary education funding. At first glance it is easy to react to the new spending announced in the budget in a positive manner, much as a person dying of thirst in a desert is grateful to see an oasis on the horizon - but the prospect of water is nothing more than a mirage.

Ottawa helps fund health care, social assistance programs and post-secondary education through cash transfers to the provinces under the Canada Health and Social Transfer. Now, in response to the Romanow report, the government is creating a separate Canada Health Transfer. Unfortunately, it has chosen to support post-secondary education and social assistance in a new Canada Social Transfer. We have argued that such an amalgamation of funds prevents the transparency needed to see whether those funds are spent by provincial governments for their intended purposes.

Based on the historical division of the cash transfers between the three components, it appears post-secondary education will actually receive less money over the coming years. An analysis done by CAUT suggests funding for post-secondary education will decrease from $2.8 billion in 2003- 2004 to $1.8 billion in 2004-2005. That's because prior to the introduction of the Canada Health and Social Transfer in 1996, the health share of all cash transfers was 43 per cent. Beginning next year, cash transfers for health care will jump to 62 per cent of the total. Much of the "new" health care funding, therefore, may simply be money that is being reallocated from post-secondary education and social services.

The budget does provide $1.7 billion over the next three fiscal years to support research. This includes $125 million for the granting councils; $105 million, at the end of four years, for 4,000 new graduate scholarships with 60 per cent going to the Social Sciences and Humanities Research Council disciplines; and $225 million annually to help fund the indirect costs of research (about half of what is actually needed).

There is also a one-time adjustment of $500 million to the Canada Foundation for Innovation to fund health research facilities (and which is also credited towards the increase in health expenditures). Even with this funding, post-secondary education remains short-changed as the budget allocations represent about 20 per cent of the funds needed to restore system funding to 1990-1991 levels, after adjusting for inflation.

The money for the indirect costs of research has some very short strings attached to it. These funds are based on an agreement of university presidents through the Association of Universities and Colleges of Canada to triple the extent of commercial research on university campuses. These funds will be tied to commercialization performance outcomes. The budget states the government plans to develop new reporting and accountability mechanisms with post-secondary institutions and will review the program in its third year to ensure that funding is satisfying its objectives "including the commercialization of university research."

One has to question why university presidents have either been silent about the budget or in fact have applauded it. Perhaps this reflects the expressed view of some presidents that the government should "differentiate" between Canadian universities and give more funds to those that "deserve" special treatment. Such differentiation would surely lead to a two-tiered system much like that in the U.S. and would parallel all their negative consequences for quality.

Perhaps it might be useful to remind our university presidents of how their Italian counterparts reacted to cutbacks in government funding: a united stand and a mass resignation. We are all the worse off when some university presidents take an "I'm all right, Jack" attitude.