The Liberal Record

Though the writs won’t be issued for another few days, we are already deep into the election run-up. Over the course of the next few weeks I will be giving you some analysis of the various party platforms with respect to higher education. However, before we get to platforms, it’s worth taking a look back at the record of the current government.

To break down their performance, let’s start by examining whether the Liberals actually delivered on their promises from 2015, which I outlined four years ago here and here. Essentially, the Liberals made three key promises:

Raising the repayment threshold on Canada Student Loans from $20,000 to $25,000.

  • This was done in the first budget.

Eliminating the monthly education and textbook tax credits and using the funds to increase student assistance.

  • They certainly did the first part of this, eliminating about $900 million worth of tax credits and putting – in theory at least – about half of that money into increasing grants for full-time students in the 2016 Budget (the 2016-17 Canada Student Loans Annual Report says costs increased by $285M which suggests the grants might not cost quite as much as expected). The other half was delayed because the savings from cutting the tax credit take a few years to realize because of the carry-forward provision. As it happens, no second installment on this promise ever came through, though the Liberals did throw money towards student aid in other ways (see below).

An “Innovation Agenda” which involved an extra $600 million over three years for an “Innovation Agenda”, which would “significantly expand support to incubators and accelerators, as well as the emerging national network for business innovation and cluster support”.

  • Though they didn’t use the term at the time, this is the promise that became the “Supercluster” initiative, which I have written about at length (here, here, here, and my favourite here). Liberals will doubtlessly tout the fact that instead of allocating $600 million to this project, they have allocated $950 million and deserve credit for fulfilling 158% of the total. However, they also promised that $600 million would all be spent by the end of this fiscal year. Given the delays in selecting the five clusters (which took until February 2018), the further delays in signing agreements with the new cluster entities (late 2018), and then the turnaround time for those entities to set up their own competitions to distribute funding, very little has actually been done. By my quick check of the five cluster websites, only $77 million in projects had been announced, of which somewhere in the neighbourhood of $27 million comes from the Superclusters themselves. That means, in fact, less than 5% of what the Liberals promised has actually flowed into the hands of anyone actually doing work.

But of course, the Liberal record isn’t just their record of doing what they said – they also did a lot of stuff over the course of four years that was never in their original plan, the main bits being:

  • An enormous amount of money into basic research, starting in 2016 when they bumped the granting council budgets by $95 million. They then committed another $1 billion or so over four years (details on page 3-4 here) after the Fundamental Science Review, though in reality less than half of this amount has been disbursed;
  • A simply ginormous amount of money into research infrastructure. A couple of billion announced in the “stimulus” budget of 2016, and then permanent funding for CFI at a level of $462 million per year –more than anyone asked for and frankly a bit absurd given the problems in funding basic research;
  • A commitment of an additional $1.8 billion over six years to increase funding to provinces through various Labour Market Transfer Agreements (arguably some of the best-spent and least-trumpeted money the government has spent);
  • $225 million for the Future Skills Centre. The less I (or anyone, really) says about this, the better, frankly (but commentary here, here and here if you want it);
  • A promise to create the Canada Training Benefit (read all about it here), which may or may not happen if the government changes at this election;
  • A lot of small stuff on student aid – more aid to adult students, students with dependents, part-time students, plus a reduction in required student contributions;
  • One really big thing on student aid – namely, the elimination of interest during the 6-month post-study grace period, and the reduction of interest to simple prime (from prime plus 250 basis points) on all loans, including those that have already been contracted;
  • A wildly half-baked funding announcement for international student mobility (it took six months from the time the budget was announced to actually properly announce the initiative and to back-fill a “strategy” document to make it look as though there was some coherent thought behind it); and
  • A clutch of other initiatives really too long to go into, but funding for MITACS and work-integrated learning generally is probably the biggest piece.

So how to evaluate all this? Well, they really didn’t execute on their promises very well. They made three promises but only fulfilled one of them to the letter. The Superclusters will eventually get more money than promised, but the execution to date has been pretty slipshod (a comment one could equally make about FutureSkills). One could, if one was being generous, claim that they followed through on the spirit of their student aid promise in the sense that the monies spent on the reduction in loan interest costs will be something similar to what a second instalment of grants would have cost. However, the original promise would have made a much bigger difference to access, so in my mind, this is an unfortunate change of plan.

On the other hand, the Liberals went well beyond their election promises in a number of areas: notably skills, research infrastructure, and money for the granting councils. What they did in these areas was less revolutionary than their spin doctors like to claim (big numbers, sure, but spread out over a very large number of years), and there’s a good argument to be made that in some areas it simply was not enough. That said, it was still above and beyond anything that was promised, and that’s a big plus.

Maybe the best way to sum up the Liberals’ approach is this: they instinctively like being the party of the new economy and as such find ways to spend money in ways they think will both make the sector happy and will look good on media releases. But they have short attention spans and, I would argue, nothing resembling a sensible theory of how various public investments work to improve the economy. The result is a willingness to spend money, but on whatever the flavour of the month is rather than in a sustained, coherent fashion.

But the important thing to take from all this is that whatever is in the Liberals’ platform (which I will be analyzing when it comes out in a couple of weeks’ time) probably won’t be a good guide to how they will act in office. They’ll have new ideas every year, some good, some kooky/wasteful.

Is that good? Bad? You decide.

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One response to “The Liberal Record

  1. Just got to reading this.

    “A simply ginormous amount of money into research infrastructure. A couple of billion announced in the “stimulus” budget of 2016, and then permanent funding for CFI at a level of $462 million per year –more than anyone asked for and frankly a bit absurd given the problems in funding basic research”.

    Note, that the $462 million/per year is based the average CFI allocation for the prior 5 years. This is not therefore new money but a stabilization of an erratic and basically inefficient budget mechanism that led to feast and famine and lack of predictability. So a good move (that many of us asked for) but not an increase in spend. The great thing about CFI is that it consistently leverages provincial dollars 1:1, something few other programs have achieved (though you could say your favourite new francophone university in Ontario would fit that bill).

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