Good morning all. Here’s your 2019 Budget Commentary ready for your review, brought to you through a globe-spanning collaboration between the team at HESA Towers and your humble correspondent pulling an all-nighter in the Arbat. We hope you enjoy it.

As has usually been the case with budgets in this government, Budget 2019 is largely friendly to PSE with mostly good intentions but often only half-thought through ideas on implementation.

Let’s start with the unambiguously good investments; namely, those for Indigenous students.  The fact that PSSP is getting a boost and that Métis and Inuit students are getting their own dedicated funds for the first time is great.  Perhaps more intriguing is the idea that over the longer time there may be dedicated funding for First Nations Post-Secondary institutions, though as the Liberals have already discovered, attempting serious negotiations on funding models with Indigenous groups is rarely a quick process.  The new research funding lines for individuals (scholarships, parental leave) also all seem pretty sensible, as to the accessibility changes to the Canada Student Loans Program.

The Canada Training Benefit is an idea everyone should want to like.  We have a problem with adult training in Canada: we simply don’t do enough of it.  Everybody knows the key barriers are time and money, and the CTB deals with both those problems by building proven existing tools which do not require the construction of large new delivery systems.  They have even (for a change) built in a phase-in period to hopefully catch and fix many of the obvious pitfalls related to fraud which have often hit new programs in the field, such as in Singapore and the UK.  This should be a slam dunk.

But.  But.  There’s something that doesn’t feel quite right about it.  It’s not just that the benefits will likely skew wealthy, with individuals from middle- and upper-middle class families likely to take-up more than the working poor.  That can eventually be fixed or mitigated in much the same it was with the Canada Education Savings Grant: by jacking up match rates for lower-income workers.  No, the problem lies in two other separate directions.

First, precisely because the program is based on existing instruments (the tax system, EI) it has naturally taken on some of those instrument’s attributes.  EI is a really handy way to solve the time problem, but it is totally unable to help individuals who want to take a course on evening or weekends.  It only works for education based on discrete weeks of time.  Will anyone want that?  Hard to say.

But second, I think perhaps it may be too modest.  The government itself is projecting very low take-up rates (between 2-6% depending on what assumptions you use about how people will use them) and I suspect they are right: the money simply isn’t big enough to get people into courses.  I think a richer program offering $500 or $1000 per year would have made a much bigger dent in the public consciousness. 

The program could of course end up being a runaway success – in fact, I hope it does.  But I worry that the compromises on size and program design made to get it to fruition may limit its popularity and effectiveness.

But then of course we come to the weird stuff.  The internationalization program with the incredibly weird spending pattern.  The Naylor backlash in research, which suggests that whatever governments say about their deep commitment to peer-reviewed basic research, they are addicted to niche/boutique one-off research expenditures.  They need their fix.  So much so that they want to have a dedicated fund for niche/boutique hits.  It’s bananas.  David Naylor must be having conniptions.

And then there is the tom-foolery with interest rate relief in Canada Student Loans.  The change to zero interest accumulation during the 6-month post-study grace period is 0% about policy and 100% about trolling the Ford government, which changed its own policy in the area in the opposite direction two months ago.  And as for the reduction in student loan interest on all outstanding loans?  Pure politics.  There are dozens of ways to spend that money in education that would promote access, but this doesn’t do that.  This is fundamentally a transfer aimed at people with debt in their late 20s and early 30s, a key pro-Trudeau demographic in 2015 whose enthusiasm for the Prime Minister has waned over time.  It’s a bribe, and an expensive one: in fact, its net cost is roughly the same as the next two largest education-related investments (CTB and Indigenous education) combined.  There were other ways to spend that money.  Opportunity costs matter.

Overall, this budget probably deserves a B to a B plus.  Good thoughts, less than entirely joined-up thinking.  From this government, that’s the usual.