Hi all. Budget Day was yesterday, and it was a doozy. The HESA Towers team worked late into the night putting together our usual Budget Commentary for you to peruse at your leisure. We hope you enjoy it. But if you haven’t the time to read it in full, here are the five big takeaways.
First, although large spending cuts were previewed, the cuts that occurred could not prevent the government from racking up a budget which in real terms was similar to the one that followed the disastrous financial crash of 2008. So, we have in a sense the worst of both worlds: big program cuts leaving specific groups unhappy while at the same time leaving the government in a parlous fiscal condition and any further deterioration in our economy will probably lead to larger cuts down the road. Not all of this is the Liberals’ fault – they didn’t ask for a trade war with the US. But it’s not as though any other party could be held responsible for the situation, either.
Second, in a very real way, students lost in this budget in a way they have never lost before. The government appears to be yanking $1 billion in funding from grants in the Canada Student Financial Assistance Program (CSFAP) and in the process reducing maximum grant funding from $4,200/year to $3,000/year. That’s huge. That said, the fact that the budget did not spell out the cut suggest either that it was too cowardly to admit this was what it was doing or – possibly worse – that the whole thing was an inadvertent mistake. It’s not as though there weren’t places to cut in the CSFAP: the 2023 decision to eliminate interest on student loans so that new graduates could get “help with the rent” (seriously, that is how it was described in the budget) would have been a much more obvious place to reduce expenditures. Keeping that subsidy while dropping assistance to student trying just to get a foot in the door at university/college is actually pretty grotesque.
Third, universities came out of this whole thing not too badly. The increases to the tri-councils in the 2024 budget came out relatively unscathed, which should be considered a huge victory under the circumstances. The internal talent acquisition piece, while politically a little gauche (why does this government keep describing talent as something that needs to be imported rather than grown? Yeesh.) is a nice chunk of change – roughly $131 million/year for 13 years. It’s better than a kick in the teeth, even if most of the money is likely to end up at just a handful of big research universities. But it’s probably worth remembering, too, that more than half is effectively being paid for out of a claw back from the granting councils’ budgets.
Fourth, as we’ve pointed out before, the economy the Liberals seem to want to build is a deeply twentieth-century one. The idea that we might build a new service-oriented, science-powered economy, a notion that was at the heart of the late Chretien-Martin period, seems like a very distant memory. Tens of billions being spent to “build” Canada, and precious little of it is aimed at knowledge institutions. It’s deeply disturbing and represents the central problem that the post-secondary community must confront over the years to come.
But, that said, there is still a lot to play for. Universities and colleges are seemingly eligible for large amounts of infrastructure funding even if they aren’t guaranteed any of it. The budget sets out large piles of spending on defence and security but there’s little sense of how it will be spent. Experience from the UK, Australia, and Sweden all suggest that there are lots of ways that universities, government, and industry can work together effectively on security files – what we need are policy entrepreneurs who can push the government to spend it the right way.
Ultimately, given how little this government seems to value the knowledge economy, it wasn’t a bad night for universities and colleges (students are another story). It could have been a lot worse. And it could be better still if the sector gets active and creative to capitalize on new opportunities.
4 Responses
What about the massive cuts to international students? What are the revenue implications of those? It feels like dark days at Canadian universities got darker to me.
Hi Alex,
I agree totally. Canada’s economic mindset remains rooted in the twentieth century. Decades of lagging trade diversification and slow high-tech development have left the country struggling to compete globally. Too often, the “no plan” has become the plan, leaving us, as the old adage says, a nation of hewers of wood and drawers of water. Part of the challenge is that there is no national consensus on economic priorities or a coherent long-term strategy.
These structural issues extend into higher education. As John Porter’s Vertical Mosaic highlighted, institutions often reinforce entrenched hierarchies. University governance tends to prioritize short-term stability over long-term innovation, and limited citizen engagement on boards reduces accountability and the inclusion of broader perspectives. This inward-looking approach risks perpetuating both economic and institutional stagnation.
To compete in the twenty-first century, Canada must treat universities, research, and innovation as central to national renewal. Maybe innovation in governance should be included in a ranking. Maybe crisis will lead to change. Maybe we need a rethink on the role of the university. Benchmarking the gems as you mentioned in the piece you wrote on Utrecht, Georgetown and Manchester offers some ideas.
Question—which university globally do you think has the most innovative approach to governance?
The knowledge economy we have funded consistently departs for the USA, they have shown no Canadian loyalty so the government is right to stop funding this.
A further reduction of 50% in the number of international student visas is going to seriously hit many colleges and universities already trying stay afloat with the current levels. The 50% drop is going to create a new level of program cuts and layouts across higherED in Ontario and across Canada.