Before we were rudely interrupted by the Ontario government doing something both interesting and mysterious on performance outcomes, I promised you all news out of New Brunswick. This matters to maybe fifteen of you, but you know, this blog is nothing if not faithful to geographically micro-targeting higher education nerds. So here we go.

Recall that back under the Conservative government of Bernard Lord, the New Brunswick government introduced a titanically wasteful graduate tax rebate, which was a massive windfall to post-secondary graduates who chose to live in New Brunswick. A few years ago, the Liberal government of Brian Gallant killed that tax benefit, the provincial tuition tax credit and the monthly education amount tax credit, and folded all of that up with some existing grant money to create a “free tuition program” modelled on the program Ontario introduced in 2016.  The program provided grants equal to tuition (up to a maximum of $10,000, though this was rarely reached) for low/middle-income New Brunswick students attending New Brunswick public institutions.

In the provincial election last year, the New Brunswick Conservatives promised to review this program and possibly replace the new program with tax credits again. They renewed this promise in the Throne Speech after they barely cobbled together a government, saying “Your government will undertake an evidence-based review of existing programs supporting post-secondary education and compare and contrast their effectiveness with the canceled broad-based tax credits.”

Now, the government claims to have undertaken such a review. It has not actually published it – presumably because, as I pointed out back here, there was no way on God’s green earth that any fair-minded review could possibly find that tax credits were a better investment than bursaries. However, on the basis of some putative review that may or may not have ever happened, the government’s March 19 budget announced the re-introduction of the tuition tax credits to match the federal ones (not the graduate rebate and not the monthly education amounts) as well as a “renewed” bursary program which by last week had become an “extended” bursary program, which most current recipients will nevertheless experience as a cut.

Confused? You should be, because this is all very weird. There are actually three moving pieces to this announcement: a change to the bursary program, the elimination of a debt relief program, and the re-introduction of some tax credits. The bursary program is being changed in two ways. First, the upper limit of the grants size is being reduced so that the maximum grant for university students can never reach full tuition (which means most people currently receiving it will receive less next year). Second, the program is being expanded to include students enrolled in private, mainly for-profit, institutions. This adds about 20% to the number of possible recipients, which is why the government prefers to portray this as an “extension”, but the whole thing is revenue neutral – basically, poor student loan recipients at public institutions are having their grants cut to fund more grants to poor students at private ones. So at a macro level, it’s actually neither an extension nor a cut – it’s more smushing a square into a rectangle of equal area.

The government is claiming that the two other moves for debt relief and tax credits are linked: it absolutely needed to ditch the current student loan debt relief program on efficiency grounds (which is to say that it was not reducing student debt because eligibility criteria tied to timely completion is so restrictive that few benefitted), and, in its wisdom, the government is replacing this overly targeted, ineffective program with tax credits.

Now, this linkage is strange for two reasons. The first is that the size of the two programs is not the same: the debt relief program costs about $3.3 million per year, and by my calculation a tuition tax credit is going to cost $12 million per cohort (New Brunswick institutions take in $140M in tuition annually, take out maybe 10-15% for international students who don’t file taxes in New Brunswick, multiply that by the lowest NB tax rate, 9.68%, and voila!). The second is that the purpose of introducing the tax credit is completely incommensurate with the rationale for ending the debt relief. If you end a program because it is inefficient and poorly-targetted, replacing it with a program which has literally no targeting at all will either make people think you are either a) insincere/lying about your rationale or b) as dumb as a bag of hammers.  

What could be said in the government’s favour here – although the government itself doesn‘t seem to want to point it out itself – is that students who lose their grant will *almost* get that money back in tax credits. So, if you want to look at net outcomes, poor students in public institutions aren’t going to be much worse off; it’s just that a portion of their money is now arriving in a more opaque and less timely fashion.

If you want to look at this through the lens of winner and losers, here’s how it breaks down. The big net winners are poor students in private institutions. Students with no financial need also win by getting tax credits, though not as much. Poor students in public institutions (who are disproportionately francophone – an important consideration in New Brunswick politics) are small losers, and the big net losers are students with high debts who graduate on time.

(Oh, and taxpayers lose, too. They are now paying more on aggregate for a system which is less targeted & more complicated. This ain’t good policy, which is probably why the government chose not to release its so-called “review”).

If you were so inclined, you could castigate this as a “right-wing” policy, since the winners are the better-off and private post-secondary institutions. And no doubt there is a touch of ideology at work here.  But I think something much more stupid and insidious is at work here. I am not convinced that the New Brunswick Conservatives have much in the way of ideology when it comes to social programs like student aid. Rather, I think this is just a knee-jerk desire to undo anything the previous government did. Because them bad, us good. Hulk Smash. Nyah nyah.

There are democracies where this kind of thinking predominates. Romania, for instance. The Balkans generally, maybe. It’s not healthy, and it’s not a basis for sound long-term policy-making. If that’s where New Brunswick is now at, God help everyone from Campbellton to Sackville.