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Higher Education Strategy Associates

2013-14 Provincial Budget Analysis

The last of the provincial budgets was delivered last week, so it’s time for a quick analysis of spending on operating funding for universities and colleges.

Some important caveats on this data: Budgets often have only a vague relationship with what actually gets spent.  Last year in Quebec, for instance, what eventually got allocated to institutions was a good $120 million less than what was budgeted.  So numbers for 2013-14 need to be viewed as provisional.  And to be consistent, if you’re going to analyse a set of budget figures, you need to compare them to the previous year’s budget, which can be equally unreliable.  On top of all this, governments change their reporting systems periodically, which means you have to do a lot of irritating hunting around to try to get something comparable.

For instance, if you look at the material distributed by the Government of Ontario in last week’s budget lock-up, they claim a $22 million increase in transfers to institutions; if you compare it to what they said they would spend in their last budget, they’re down by $68 million.  In Quebec, operating grants are reportedly set to increase by about 1%, despite last year’s mid-year cut.  $30 million of that make-up can be explained by the government’s sticking to its investment plans; as for the other $150 million, I can’t explain it at all, and nor can anyone I’ve spoken to in Quebec.  Mysteries abound.

Lastly, it’s worth remembering that “total operating grants” (I’ve excluded capital funding here) is a different figure from “formula funding” – governments seem increasingly keen to give money for specific purposes outside the formula (in Ontario, for example, 25% of the announced “increase” was for a special fund for student mental health).  There is little predictability for institutions around these funds.

Enough banter.  Here’s the chart:

Change in Provincial Operating Transfers to Institutions, Budget 2012-13 to Budget 2013-14

 

 

 

 

 

 

 

 

 

 

 

 

Six of ten provinces had cuts, albeit mostly relatively small ones; Saskatchewan is the real outlier here, where the good times, seemingly, continue unabated.  Nationally, we appear to have had an absolute net decline in provincial operating funding of about $120 million, on a total expenditure of $16 billion.  That’s a fall of 0.7%, or 1.7% in real (after-inflation) dollars – more if you don’t believe the Quebec figure.  That’s the third year in a row we’ve had a fall in real expenditures (-1.6% in 2011-12, -0.27% in 2012-13), but I believe this is the first time since the late 1990s that we’ve had a national fall in nominal dollars.

What’s in the future?  Well, we might not see another nominal decrease next year, but if you look at the underlying budget fundamentals in the provinces, I can’t see institutions getting increases over inflation until 2016-17 at the earliest.  Better hope those international students keep coming.

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One Response to 2013-14 Provincial Budget Analysis

  1. Pingback: Feed the Students, Starve the Schools? | HESA

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