Every year around this time, I do a simple piece summarizing all the provincial budgets.  I usually wait until all ten are done – so y’all get the full national picture – but unfortunately that’s not possible this year because neither PEI nor Alberta, both of whom quite recently acquired new administrations, are planning on getting budgets out the door before I break for the summer.   So, I figured I may as well get the whole thing – or 8 provinces worth – out sooner rather than later.  Sorry for the incompleteness, but it’s out of my hands.  I’ll try to do an update in the fall after Alberta’s budget passes.

So let’s start, as we usually do, by looking at government transfers to institutions.  Same caveats apply as in previous years: what I am doing here is calculating between what was budgeted last year and budgeted this year.  This is about changes in government intentions as expressed in budget documents and not government actions in terms of real spending (for instance, the fact that the student assistance program in Ontario overspent its target budget last year by about 25% does not show up at all in these calculations).  All figures are adjusted for the consumer price index and expressed in January 2019 terms.

Ready?  Here’s the change in government transfers to institutions.

Figure 1: Change in Budgeted Transfers to Institutions, by Province, 2019-20 vs 2018-19

In five of the eight provinces where we have budgets so far this year, institutions have seen a real cut in total transfers.  In Manitoba and Ontario, these amount to 2.3% because funding was effectively frozen in nominal terms and 2.3% happens to be the inflation rate.  The big cut is in Newfoundland, but this is mostly due to a fall in capital expenditures; operating expenditures were much less affected.  On the other side of the coin, the BC increase of 4.3% is not in fact as impressive as it looks as a good chunk of that money gets immediately eaten up by the increase in the Employer Health tax.  In terms of sheer dollars, the 2.5% increase in Quebec – an increase of over $150 million after inflation – is the most important and from a national perspective wipes out any losses from Ontario.  As a result of all that, what we see is that for the country as a whole, the increase in transfers after inflation is…0.1% (and that will probably turn negative after we get the Alberta budget in the fall).

Figure 2 shows the year on changes dating back to the 2007-08 fiscal year (which was the year the McGuinty government’s increases to budgets in Ontario really kicked in).  From a 15% hike that year, it fell quickly and since 2011 we have been in a pattern where the annual change bounces between 2% and -2%.

Figure 2: Year-on-year change in Aggregate Provincial Funding, 2007-08 to 2019-20

We can also look at the 5 and 10-year picture by province and nationally.  It ain’t pretty.  Among all provinces, only Quebec can claim that present public expenditures in 2019-20 are higher than they were in both 14-15 and 09-10.  And in fact, nationally, we have seen a fall in provincial transfers of 1.7% in real terms.

Figure 3: 5- and 10-year change in Budgeted Transfers to Institutions, by province, to 2019=20

Now, I hate to bring this up yet again but the main thing you should be thinking when looking at these graphs is THREE CHEERS FOR TUITION FEES.  If Canadian universities and colleges had had to live exclusively on public money over the last decade, they’d have been screwed.  All those years of above inflation raises?  The rise in the number of full-time academics?  Fuhgeddaboutit.  All those higher domestic fees, much higher international fees, and much, much higher international student numbers?  That’s what’s keeping the system afloat. 

We hit peak public funding about a decade ago.  If institutions want more than that, they’re going to need to get it from students or other private sources.  If they don’t….well, that’s when the real austerity begins.