Higher Education Strategy Associates

Notes for the NDP Leadership Race

As contestants start to jump into the federal NDP leadership race, it’s only a matter of time before someone starts promising free tuition to all across the land.  Now, I’m not going to rehash why free tuition is both regressive and undesirable (though if you really want to take a gander through the archives on free tuition, have a look here).  But I do think I can do some public service by talking about federalism and higher education, or rather: what the feds can and cannot do in this sphere.

The entire Canadian constitution is based around a compromise on education dating from 1864.  Upper Canada came to the Quebec conference with one overriding aim: representation by population in Parliament, so that their superior population would give them the most seats in Parliament.  Lower Canada agreed if and only if a second, local, and equal tier of government was created which would have jurisdiction over education and health, because over-their-dead-bodies were a bunch of (mostly) Orangemen going to get their hands on a hallowed set of (mostly) French catholic institutions.

There’s nothing in there that stops Ottawa’s ability to give money to individuals for the purpose of education.  This is why, despite all the sturm und drang, Quebec never put up a legal fight to the Canada Millennium Scholarship Foundation: Ottawa can give cash to whoever it wants, whenever it wants.  But when it comes to dealing with institutions, their ability to direct money to areas of provincial jurisdiction is subject to provincial veto.  The provinces accept (with limits, in Quebec’s case) that the feds can flow money to institutions for the purposes of academic research.  Hence the Canadian Foundation for Innovation.  They do not accept that it can send money to institutions for operating purposes.

(Historical footnote: there was a period where nine out of ten of them were prepared to accept this.  Back in the mid-1950s, there was a ruse in which the federal government handed tens of millions of dollars every year (a lot back then) to Universities Canada – then known as the National Conference of Canadian Universities and Colleges – which it would then distribute to institutions.  In theory this was a canny work-around to the constitution.  In practice, it stalled because Duplessis blew a gasket and told Quebec universities that if they touched a dime of that money, he’d take it out of their provincial funding.  Pierre Elliott Trudeau then wrote a wonderful article in la Cite called “Federal Grants to Universities” explaining why Duplessis was 100% right and St. Laurent was in kookooland, constitutionally speaking.  It’s a great article, read it if you can.  Anyway, this arrangement lasted into the 1960s, when the feds got out of this arrangement and moved into per-capita grants instead.  And that door is now shut: there is no going back through it.)

Politically, there is a fantasy shared by some on the political left that the federal government can simply re-acquire policy leadership in the post-secondary field by passing an act of Parliament and adding great wodges of cash to existing transfers… with strings attached.  I’ve previously (here) torn a strip off the idea of a federal Post-Secondary Education Act, but let me focus here specifically on the idea that a generalized fiscal transfer could actually affect tuition fees.  Let’s just imagine how that discussion would go.

Ottawa: we want to give each of you money so that you bring your tuition fees to zero.  Quebec and Newfoundland, your fees are about $3000, so we’ll give you that per student…

Ontario: Our fees are $7500 a student or so.  Fork it over.

Quebec and Newfoundland: Hold it.

I could go on here about the nuances of fiscal federalism, but basically that’s the problem in a nutshell (for my American readers: in some less disastrous timeline, Hillary Clinton is facing exactly this problem as she attempts to implement her free tuition promise for public universities). There are ways the federal government could bribe provinces into lowering tuition.  In fact, something like that actually happened in Nova Scotia as a result of the NDP-Liberal budget deal in the minority Parliament of 2005.  But you wouldn’t necessarily get them to lower by an equal amount, and you definitely wouldn’t get them to go to zero because they have vastly different starting points.

So, here’s the quick heads-up to all prospective New Democrat leadership candidates: even if it wanted to, the Government of Canada has no sensible way to eliminate tuition nationally.  If you do manage to form a government, this will be broken promise #1.  So don’t promise it.  Instead, think about ways to support students which don’t involve tuition.  There is a whole whack of things you could do with student assistance instead.  And the best part is: if you use student aid as a tool instead of tuition, you can channel aid to those who actually need it most.

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4 Responses to Notes for the NDP Leadership Race

  1. You say, “the Government of Canada has no sensible way to eliminate tuition nationally.”

    That’s analogous to saying “the Government of Canada has no sensible way to eliminate two-tier health care nationally.” Given that the federal government has effectively done this, despite the fact that health care is a political responsibility, it follows that there are ways it could do so for education.

    The way to do this is to reach an education accord. This can be done either nationally or bilaterally. It essentially takes the form of the federal government saying to the provincial governments “We’ll transfer $X if you implement policy Y.” In practice, we find that provinces often find they can find a way to implement policy Y for much less money than they originally claimed it would cost.

    Legislatively, this would be implemented in a National Education Act, analogous to the National Health Care Act. As you know, this specifies the conditions under which money for education is transferred to the provinces. The provinces are heaily dependent on transfer revenues as a whole, since no provincial government could survive the cuts in service that would be required should they refuse federal education (and/or health care) funding.

    So the scenario drawn out here would not occur, and the federal government has an effective means at its disposal to eliminate tuition fees nationally.

    • Alex Usher says:

      My point is that provinces require different amounts of $X in order to adopt policy Y and none will accept less than the highest amount. So yes, I suppose if the Government of Canada were willing to pay $7500 per student to every province,even those where fees are $3000 or less, this is doable. I think it’s rather unlikely though.

      Yes, provinces can sometimes achieve things for less than they claim. However, in this case, any “savings” which are achieved can only come from short-changing institutions. So the cost of free tuition in this case would mean cuts. Possibly this is an acceptable trade-off; it is not one that defenders of free tuition tend to endorse (publicly at least).

  2. > I think it’s rather unlikely though.

    Yes, but you have no evidence for this, and the existence of the Canada health act speaks to the contrary.

    • Alex Usher says:

      The Canada Health Act does not speak to the contrary in the slightest. Payments to provinces are on a standard per capita formula across provinces. That works because everyone uses health care and so percapita payments make sense. The same is not true of post-secondary. And as I have now explained twice now, a standard formula won’t work here because the amounts required to close the gap are quite different

      Also, medicare was created in a vary different political context. When the principle of federal funding for health insurance was introduced in 1960s most if not all provincial governments were already heading in that direction (IIRC, the feds were basically pressured into the move because ON QC and BC were all preparing to introduce their own programs – and of course SK had already done so). So the feds were knocking on an open door, it wasn’t something they “imposed” on provinces. This is not the case with free tuition. Provincial acquiescence cannot be taken for granted and you need two sides to get an accord. The politics – and hence the finances – matter.

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