The big news in Canada last week was the unveiling by the governing Liberals of a “National Housing Strategy”. Housing is a good policy file to watch for higher education policy types, because housing and higher education share a lot of qualities.
This might not seem like an obvious policy analogy, but hear me out. Shelter, like higher education, is often viewed as a “right”, but it’s one where the base assumption is (in North America, anyway) is that it is not 100% state-financed. It’s a good with both private benefits and public spillovers (though somewhat fewer of the latter than education). They are also both major purchases which only happen once or twice in a lifetime – purchases for which families are able to plan and save for years in advance. They are also both highly differentiated goods: housing is not housing – a place in Point Aux Trembles is not a place in Westmount, a degree from Eastern Kentucky is not the same as a degree at Harvard. Surely similar enough to warrant some attention.
In any case, the National Housing Strategy announced last week was, stripped to it essentials, a two-prong affair. The first is a “National Housing Co-Investment Fund” – a mix of billions of dollars in both loans and grants (and which will involve “partnerships and investments from” provinces/territories, municipalities, non-profits, co-operatives and the private sector) for the repair of existing social housing and creation of new units. The second is a Canada Housing Benefit, to which provinces will be “invited to participate” (seeing a pattern here?), designed to provide a set of monthly benefits to low-income Canadians struggling to make rent. There is a bunch of other stuff – a commitment to using green building materials, taking a “rights-based approach” to housing, ensuring some of the money goes to tenants with disabilities, that some units go to survivors of violence, etc – but at heart it’s just two big pots of money, one for infrastructure and one for income support.
I think we can take two sets of PSE-related lessons from this: one from the proposal itself and one from the reaction to the proposal.
First: it says something about the state of Canadian federalism that the feds feel this comfortable reaching this far into provinces’ back yard, and that to date provinces are not yet raising holy hell about being told they have to contribute to a federal initiative, which is for the most part their jurisdiction. This is not so much the case with the construction side of things – apparently the way we now do infrastructure in this country is through a whole series of ad-hoc cost-sharing deals led from Ottawa.
But on the Housing Benefit: that’s a major recurrent expenditure which interacts directly with provincial social assistance programs. And the feds are saying “provinces must contribute”? This is maybe the biggest deal in fed-prov fiscal relations in 25 years. It’s as if the feds, when they upped their contribution to the Canada Study Grant a couple of years ago, told the provinces they had to contribute to that as well.
Might this aggressiveness signal a new willingness to get involved in other areas of provincial jurisdiction, including PSE? Possibly, though I wouldn’t place a huge bet on it. The constitutional line around education is a little thicker than other areas (section 93 of the constitution is specifically devoted to it), and this government has a lot of other big agenda items on its plate right now. There just isn’t a lot of policy “room” right now. But assuming this initiative doesn’t end up in a lot of bickering over details with recalcitrant provinces, then I imagine that in a possible second Liberal mandate, we could conceive of a somewhat more active federal presence in higher education.
Second: the reaction to the proposal from the various parts of the political spectrum have been flat-out hilarious, from a PSE perspective. You’ve got the left cheering up a storm because of the way the money is targeted directly at low-income Canadians (this interview with economist Armine Yalnizyan is fairly representative, I think), with the only real criticism being that they’d like even more money spent on these programs. From the right, you have the criticism that the federal focus is too narrow because it is only low-income people who will benefit, and how about helping the middle-class with affordable home ownership?
This is hilarious because these positions are the exact opposite of the left and right’s default positions on subsidy to post-secondary. The left goes bananas if PSE subsidies do anything but lower tuition (i.e. subsidies for all without reference to income or need), while the right generally prefers not to subsidize what it sees as private goods (though in Canada this preference has weakened over the last couple of decades).
There is no good explanation as to why so many people seem to hold contradictory positions on PSE and housing. Shelter and education are both “rights”, but possession of housing and degrees also bring substantial private benefits. There is no earthly reason why one should hold different positions on how to subsidize the two goods. Yet, contradiction abounds.
This does not say good things about our culture of policy analysis, let’s just leave it at that.