HESA

Higher Education Strategy Associates

A Mediocre Crop of Provincial Budgets

As you all may remember, we here at HESA Towers like to do an annual round-up of how PSE and student assistance has fared in provincial budgets.  It’s been a bit difficult this year, what with Ontario taking its sweet time to table a budget, and Quebec tabling one in March, but failing to pass it before the election was called.  Since the latest betting is that Quebec won’t actually put a budget together until sometime in July (fully 21 months after the last one), I thought we’d put together a 9-province review right now.

(A couple of small methodological notes here: when we look at year-on-year changes, we’re comparing budget-to-budget, not budget-to-actual or budget-to-forecast.  Also, we’re displaying amounts in real [i.e. inflation-adjusted] 2014 dollars.  Got that?  Off we go.)

Let’s start with Student Aid.  Student Aid budgets went up again nationally this year, but only by a very slight 1%, with most of that increase coming from Alberta.  In most provinces, very small real decreases are what’s on the menu (caveat here: take the New Brunswick number with a grain of salt.  Their budget presents student aid data in the most ludicrous & opaque manner possible, so there’s been some guesswork on our part.  We could be off a couple of million).  But still, that’s up 24% in real terms compared with 2011-12, mostly because of the freakishly large increases in student aid spending in Ontario due to their tuition rebate.

Changes in Student Aid Expenditure (Canada Sans Quebec), Budget 2013-14 to Budget 2014-15, 2014 Constant $

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As noted last year, be careful in interpreting Figure 1: student aid is meant to be counter-cyclical.  As student incomes rise, need goes down, and so too would aid expenditures.  So a declining budget may just mean that governments are projecting (based on trends seen in their own program files) that students might be slightly better off this year than last.

Now, the big one: PSE operating grants.  Taking inflation into account, this year’s increase in operating grants in the 9 provinces was… $7 million (or, roughly 0.066%).  Seriously, it’s that on the money.  If you’re wondering why the Nova Scotia number looks so large (a 9% increase), it’s mostly due to jiggery-pokery, and the timing of payments to certain universities in the previous year – the actual number is somewhat smaller. 

Changes in Operating Grants (Canada sans Quebec), Budget 2013-14 to Budget 2014-15, 2014 constant $

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Looking at the transfers over a slightly longer period, we see that provincial funding to institutions is up slightly in nominal terms, but down 3% in real dollars since 2011.  Over that period, provinces have, on the whole, tended to be more generous to students than universities, as the figure below shows.

Increases in Funding to Operating Grants and Student Aid (Canada Sans Quebec), Budget 2011-12 to Budget 2014-15, Nominal $

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Basically, this year’s budgets are stand-pat for higher education, keeping up with inflation but no more.  But since higher education costs – notably faculty salaries – tend to increase faster than inflation (see a longer explanation here), cutbacks in non-salary items are baked-in for the coming year, and likely for several more years to come.

That is, unless salary increases start to come down a little.  Don’t hold your breath.

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