Student and faculty groups say this year's federal budget missed the opportunity to tackle the key challenges facing Canada's post-secondary education system.

CAUT president Loretta Czernis said there was "nothing in the budget that provides any relief to students and their families struggling with record-high tuition fees and battling the debt beast. There's no commitment from Ottawa to ensure better funding of universities and colleges."

George Soule, president of the Canadian Federation of Students, says the lack of attention to post-secondary education runs against promises that Prime Minister Paul Martin made on the campaign trail last year.

"During the election, Paul Martin promised to restore core funding by creating a dedicated transfer payment for post-secondary education of $7 to $8 billion," Soule said. "He broke that promise with this budget."

Czernis likewise spoke critically of the government's failure to keep its promise.

She says the federal government should have followed the advice of the finance committee that recommended Ottawa create a separate funding envelope for post-secondary education.

Unlike the health deal, the federal government currently provides transfer payments to the provinces for post-secondary education and social services in a block fund, a process that critics argue lacks transparency and accountability.

"Without a dedicated transfer, we have no idea how federal funds intended for post-secondary educations are actually spent, if spent at all," Czernis said. "A separate post-secondary education fund directed to reducing fees, providing more spaces for students, repairing our campus infrastructure and making sure there are enough full-time staff has to be a priority. By this measure, the budget has failed Canadians."

The budget did provide new funding for research, including $15 million extra a year to support the indirect costs of university research, boosting the total annual contribution to $260 million.

But Czernis said the increase won't keep pace with rising costs and is so small that the federal contribution toward indirect costs will fall below the current level of 26 per cent.

The Feb. 23 budget also pledged more cash for Canada's three granting councils - $32 million each for NSERC and CIHR, and $11 million for SSHRC. But Czernis added this doesn't take into account the government's expenditure review exercises that will cut about $4.5 million from SSHRC and more than $10 million from NSERC. CIHR is protected for now from the exercise.

"The small increases set aside for the granting councils will offset the expenditure review cuts to SSHRC and NSERC, but it's too small a financial commitment to meet Canada's real research needs," Czernis said.

Soule, meanwhile, says he was shocked that the federal government, despite enjoying healthy surpluses, did not do more to address the issues of rising fees and student debt.

"Federal funding for post-secondary education is a priority for Canadians," Soule said, citing a recent Ipsos-Reid poll in which Canadians listed post-secondary education as their first choice for federal spending after health care. "Unfortunately, it appears it is not a priority for the Prime Minister."