HESA

Higher Education Strategy Associates

Provincial Budgets 2017

Springtime brings with it two certainties: 1) massive, irritating weekend traffic jams in Toronto as the city grants permits to close down Yonge street for a parade to virtually any group of yahoos, thus making it impossible to go from the cities east to west ends and 2) provincial budgets.  And with that, it’s time for my annual roundup of provincial budgets (click on the year for previous analyses – 2016 2015 2014 2013.  It’s not as bad as last year but it’s still kind of depressing.

Before we jump in, I need to remind everyone about some caveats on this data.  What is being compared here is announced spending in provincial budgets from year-to-year.  But what gets allocated and what gets spent are two different things. Quebec in particular has a habit of delivering mid-year cuts to institutions; on the flip side, Nova Scotia somehow spent 15% more than budgeted on its universities.  Also, not all money goes to institutions as operating funding:  this year, Newfoundland cut operating budgets slightly but threw in a big whack of cash for capital spending at College of the North Atlantic, so technically government post-secondary spending is up there this year.

One small difference this year from previous years: the figures for Ontario exclude capital expenditures.  Anyone who has a problem with that, tell the provincial government to publish its detailed spending estimates at the same time it delivers the budget like every other damn province.

This year’s budgets are a pretty mixed bunch.  Overall, provincial allocations after inflation fell by $13 million nationally – or just about .06%.  But in individual provinces the spread was between +4% (Nova Scotia) and -7% (Saskatchewan).  Amazing but true: two of the three provinces with the biggest gains were ones in which an election was/is being held this spring.

Figure 1: 1-Year change in Provincial Transfers to Post-Secondary Institutions, 2016-17 to 2017-18, in constant $2017

Province Budget Figure 1 Year Change Provincial Transfers

 

Now, this probably wouldn’t be such a big deal if it hadn’t come on the heels of a string of weak budgets for post-secondary education.  One year is neither here nor there: it’s the cumulative effect which matters.  Here’s the cumulative change over the past six years:

Figure 2: 6-year Change in Provincial Transfers to Post-Secondary Institutions, 2011-12 to 2017-18, in constant $2017

Figure 2 6 year chage in provincial transfers

 

Nationally, provinces are collectively providing 1% less to universities in inflation-adjusted dollars in 2017-18 than they were in 2011-12.  Apart from the NDP governments in Manitoba and Alberta, it’s really only Quebec which has bothered to keep its post-secondary funding ahead of inflation.  Out east, it’s mostly been a disaster – New Brunswick universities are down 9% over the last six years (not the end of the world because of concomitant enrolment declines), and a whopping 21% in Newfoundland.

The story is different on the student aid front, because a few provinces have made some big moves this year.  Ontario and New Brunswick have introduced their “free tuition” guarantees, thus resulting in some significant increases in SFA funding, while Quebec is spending its alternative payment bonanza from the Canada Student Loans Program changes (long story short: under the 1964 opt-out agreement which permitted the creation of the Canada Student Loans Program, every time CSLP spends more, it has to send a larger cheque to Quebec).  On the other side, there’s Newfoundland, which has cut it’s student aid budget by a whopping 78%.  This appears to be because the province is now flouting federal student aid rules and making students max out their federal loans before accessing provincial aid, rather than splitting the load 60-40 as other provinces do.

Figure 3: 1-Year change in Provincial Student Financial Aid Expenditures, 2016-17 to 2017-18, in constant $2017

Figure 3 1 Year change in student aid expenditures

 

And here’s the multi-year picture, which shows a 46% increase in student aid over the past six years, from $1.9 billion to just under $2.8 billion.  But there are huge variations across provinces.  In Ontario, aid is up 83% over six years (and OSAP now constitutes over half of all provincial student aid spending), while Saskatchewan is down by half and Newfoundland by 86%, mostly in the present year.  The one province where there is an asterisk here is Alberta, where there was a change in reporting in 2013-2014; the actual growth is probably substantially closer to zero than to the 73% shown here.

Figure 4: 6-Year change in Provincial Student Financial Aid Expenditures, 2016-17 to 2017-18, in constant $2017

Figure 4 6 Year Change in Provincial Student Aid

So the overall narrative is still more or less the same it’s been for the past few years.  On the whole provincial governments seem a whole lot happier spending money on students than they do on institutions.    Over the long run that’s not healthy, and needs to change.

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