Higher Education Strategy Associates

Category Archives: government funding

March 02

Bravo, New Brunswick

Readers may remember that about this time last year, I was giving the Government of New Brunswick a bit of stick for a botched student aid roll-out. Today I am pleased to give credit where it is due, and congratulate the folks in Fredericton for fixing the problem and developing a much better student aid system.

Let’s go back 12 months to pick up the story.  In February 2016, the Ontario government had come up with a fabulous new system which basically made a promise of grants equal to or greater than average tuition for students from low to mid-family incomes.  At family incomes above that, students received a declining amount of money out to about $110,000 at which point the grant flattens to a little under $2,000 (a remnant of the government’s ludicrous “30% tuition rebate” from 2011) and then falls to zero a little over $160,000.  With a bit of clumsiness this eventually, sort of, got branded as “free tuition for low- and middle-income students, which it isn’t, quite, but close enough for advertising.  Cue what is seen to be a major policy success.

It was such a success that New Brunswick decided to copy it later last spring.  Like Ontario, they built on the change to Canada Student Grants and eliminated some of their own tax credits (including the egregiously wasteful graduate tax rebate) to fund a “Tuition Access Bursary”, which guaranteed a grant equal to tuition (up to a maximum of $10,000, which was more generous than Ontario) for students from families making under $60,000. Which is great, right?  Well, yes, except the problem is, there was no phase-out for the grant.  At $59,999 in family income, there you were raking in $6500 or so in grants and at $60,001 you got $1200 in grants (the federal middle-income grant) and that’s not great social policy.  Making it worse was the fact that families in that $60K to $70K would also be losing a lot of money in tax credits that both the federal and provincial governments were ending in order to pay for this new benefit; my back-of-the envelope calculation was that in this range, parents were going to be about $1,200 worse off as a result of the change.

In any case, because I and others pointed out this flaw, the government after a brief period of defensive blustering decided it was best to go back to the drawing board and revisit the formula.  They did so and last week came up with a new “Tuition Relief for the Middle Class”, which basically involved taking a sliding declining scale of grants for families earning between $60-100,000 onto the existing Tuition Access Bursary (which has been renamed the “Free Tuition Program”).  Arguably, the New Brunswick program is now somewhat better than the Ontario program because 1) it’s not just “grants up to “average” tuition”, a caveat which I suspect is going to leave a lot of people slightly cheesed off when the program starts and 2) It still manages not to subsidize people up to that absurdly high $160K + threshold that Ontario insists on maintaining.  Ontario gets points for making its aid portable, though – New Brunswick’s program is only available to students who study in-province, which I think is a shame.

The announcement – which you know, hey guys, it’s a good news story! – was marred somewhat by some media sniping about how the number of beneficiaries is about 30% short of what was estimated last year.  To me this is neither here nor there: government cost estimates on year 1 of a new program are often a matter of throwing numbers at a dartboard.  The good news is that there is still money to either raise the entry threshold for the Free Tuition Program or (better still) expand the debt relief program or top up the amount of money available to high-need mature students and parents through the New Brunswick Bursary Program.

Now, all we need for this to be perfect is for New Brunswick to come up with a smart, credible monitoring program to examine the effects of these changes on participation over the next few years.

(New Brunswick folk: that’s on the way, right guys?  Right?  Well, you know where to find me if you need a hand…)

Anyways, as I say, credit where it is due.  Well done, New Brunswick.

April 12

Going Overboard on Basic Research?

I’m getting some worrying vibes from the new federal government.  It’s nothing I can directly put my finger on (other than some annoying Ministerial tweets last week which seemed to claim that any money put into PSE infrastructure is ipso facto about “innovation”) but I get the sense that the new government is in danger of making some real mistakes with respect to innovation policy.  Specifically, I’m worried that in the rush to repudiate the Harper legacy in all things science, they may end up with an innovation policy that takes us back to the naïve 1990s.

What do I mean by this?  Well, in the late 1990s, when the Chretien government began seriously investing in research (after having initially slashed the bejesus out of it in the 1995 Budget), their rationale went something like this: growth requires innovation, research is the wellspring of innovation, therefore:

      $ to universities for research → a miracle occurs → productive high-tech economic future

And on that not very sophisticated basis, billions were spent.

Now, without denying some good came from this, I think it’s fair to say that this is a pretty limited view of how innovation works.  For one thing, there’s an implicit suggestion that innovation is about “new discoveries” being turned into “new products”.  And while that is one type of innovation, it is far from the only one.  What about process innovations or business model innovations, to name but two?  Why focus on the “big breakthroughs” when so many incremental innovations are possible?  Why focus on only one part of the value chain (and possibly not a part Canada is particularly good at) when there is value in so many others?

To put this more bluntly, to assume that basic research is the only type of research an innovation policy should fund is crazy.  Serious countries understand this.  It’s the reason, for instance, that Germany, besides funding its universities and the Max Planck institute, also funds the Frauenhofer Institutes, which is one of the world’s greatest performers of applied research.

Over the course of the last few years there have been many complaints that the Harper government focused too much on applied research.  True, all granting councils (but especially CIHR) were pulled in the direction of having grantees justify their funding in terms of “immediate benefit” and finding commercial co-partners, etc, and for the most part this idea of injecting some “appliedness” into basic research funding was bad policy.  But the fact is that the actual amount we spend on research which is exclusively applied in nature – that is, Frauenhofer type-stuff, or programs like the Industrial Research Chairs – is actually pretty small.  The revamp of the National Research Council was a stab in a Frauenhofer direction – albeit a somewhat clumsy stab, with over-inflated expectations of quick success.  But now even that’s been thrown into question, the revamp now “suspended” pending the outcome of a review of the government’s review of its basic science policies. 

To be clear, it’s not that the government has yet made any definitive false steps.  But rhetorically it seems to be backing itself into a corner in terms of thinking of innovation exclusively in terms of basic research plus maybe funding some exciting business/university co-location spaces (an idea which I think we could also describe as being less-than-fully-baked, as I explained back here.  That would be a bad mistake.  What Canada needs is a full-spectrum innovation policy, one which doesn’t put all its eggs in the new discoveries/new products basket. 

Or, to put it another way: yes to basic research, but stools need more than one leg.