Last month’s federal budget comes up short in fixing the funding gap for post-secondary education, according to CAUT.
While the Conservative government is promising to allocate an additional $800 million to the share of the Canada Social Transfer funding devoted to post-secondary education in 2008–2009, this is well below what’s needed to restore funding to 1992–1993 levels, when adjusting for inflation and population growth, says CAUT president Greg Allain.
“It is a significant increase and is certainly welcome, but it isn’t enough to make up for the ground we lost over the past decade,” Alain said, adding that the budget indicates federal support will grow by 3 per cent every year thereafter.
“On balance, it doesn’t match real spending projections. We’re essentially looking at a freeze in spending after 2008 and that means a continuing and growing shortfall in the ability of the provinces to invest in affordable, accessible and high-quality post-secondary education systems.”
Last April, the premiers endorsed a report calling on Ottawa to increase the allocation for post-secondary education by at least $2.2 billion and to set the escalator at 4.5 per cent in subsequent years.
“Regrettably, the budget makes far less of an investment in post-secondary education than what the provinces said they needed,” Allain said.
Block Funding Remains
James Turk, executive director of CAUT, says the Conservative’s 2007 budget also does not adequately address the lack of transparency over how federal dollars are allocated between post-secondary education and social services, and whether provinces spend the money as intended.
Turk says he’s surprised the government didn’t create a separate transfer for post-secondary education as was widely expected, but instead kept intact the Canada Social Transfer, a lump-sum payment to the provinces for education and social services.
“The federal government is not going to seriously address the funding problems of universities and colleges until we have a separate envelope for post-secondary education governed by clear principles over how funding should be spent, as currently exist in the area of health care,” Turk said.
Amanda Aziz, national chairperson of the Canadian Federation of Students, says her organization also is concerned that funding might not reach its intended target without spending guidelines for the provinces.
“At this point there is nothing in place to prevent this funding from being used to pave roads in Nova Scotia or fund the Olympic games in British Columbia,” Aziz said. “The federal government is using an outdated model for funding post-secondary education that has led to 20 years of underfunding.”
In place of a separate transfer, the budget instead provides a nominal division within the CST between money that is supposed to flow only to post-secondary education and money to support social services. The budget says 25 per cent of the CST is for post-secondary education and the federal government will negotiate with the provinces to ensure “accountability” and to “identify priority areas for investment.”
“We believe the priorities should be ensuring federal funding goes only to public universities and colleges and should be used to promote accessibility, comprehensiveness and quality standards that promote academic freedom,” Turk said.
Little Relief for Students
Student groups also criticized the budget for doing too little to help students and families cope with the rising costs of university and college education.
The budget provides $35 million over two years, and $27 million in subsequent years, to fund 1,000 graduate scholarships. The budget also eliminates the $4,000 limit on annual contributions to registered education savings plans, increases the lifetime contribution limit to $50,000 from $42,000 and increases the maximum annual Canada Education Savings Grant — a top-up provided on RESP contributions — to $500 from $400.
“These measures do little to help students in financial need, as most contributions to RESPs are made by upper-income families,” Aziz said. “We would rather have seen an expansion of the Canada Access Grant, which is provided to students on the basis of need.”
Aziz also said she was disappointed the budget contains no plan to replace the Millennium Scholarship Foundation, whose mandate is due to expire in 2009. The CFS has been calling for a national system of needs-based grants to replace what it says is the flawed model of the foundation.
The budget does include a federal-led review of the Canada Student Loans Program to “simplify CSLP instruments, make them more effective, and ensure integrated administration and efficient delivery.”
Targeted Research Funding
The budget serves up a mixed bag for Canada’s research community. There is $510 million for the Canada Foundation for Innovation and $105 million in 2007–2008 in matching funding to support “centres of excellence in commercialization and research.” Annual funding for the indirect costs of university research was raised by $15 million. An additional $85 million annually in new funding for the federal granting councils was also announced, but the new money is for research targeted to specific project areas and disciplines — energy, the environment, information and communications technologies, health sciences research, management, business and finance.
“While CAUT is pleased to see increased research funding, we believe the research community and not the government should be setting research priorities,” Allain said.
RRSP Age Limits Raised
Other initiatives announced in the budget include a plan to raise the age limit from 69 to 71 for converting a registered retirement savings plan and a registered pension plan. Currently, RRSPs must be fully converted to a registered retirement income fund or used to purchase annuities by the end of the year in which an individual turns 69. Similarly, RPP payments must begin by the same time. This is significant given the end of mandatory retirement in most provinces now.
Modest Funding for Child Care
On the personal tax side, the budget unveiled a new $2,000 tax credit for families, who will receive up to about $310 of additional income tax relief for each child under 18. However, because this is a non-refundable tax credit, families whose incomes are so low that they don’t pay taxes will not receive any benefits.
Additionally, $250 million is being transferred to the provinces this fiscal year to help finance more childcare spaces. In future, the annual funding will be rolled into the CST. This funding comes after the Conservatives cancelled the $1.2 billion childcare plan of the former Liberal government that was to start April 1, 2007.
Code Blue for Child Care, a coalition of groups advocating for a pan-Canadian childcare system to which CAUT belongs, says while the Conservative reversal on direct transfers to the provinces is a welcome step in the right direction, the amount of money being offered is nowhere near what is needed to build a universal, accessible and high-quality system.
A Pre-Election Budget
CAUT’s James Turk said the budget amounted to a broad mix of new funding, tax cuts and debt reduction initiatives likely designed to lay the groundwork for the next federal election.
“For post-secondary education, however, there is actually very little until next year when the additional $800 million will be transferred to the provinces,” Turk said. “And the new money doesn’t restore losses over the last decade. Overall, the budget has taken a tentative first step, but has failed to fix the funding gap facing Canada’s universities and colleges.”