Yesterday was one of those days when I completely lucked out. There I was, having just published a piece on possible scenarios on what the Ontario government might do in post-secondary education, when suddenly various news outlets began reporting that a new tuition framework was due to be announced later this week. And it was a doozy: according to the report, the Conservative government was planning on reducing tuition in all regulated programs (ie. excluding international students and the graduate and professional programs which already have high tuition) by ten percent.
It’s always good to look mildly prescient.
For some on the left, this move seems deeply puzzling: they’d been convinced that the Ford government would deregulate tuition instead. But anyone who thinks the Ford government – or, pretty much any conservative government in Canada these days – are fans of the market are living at least a decade in the past. Modern Conservatives do not care about the market. They care about increasing middle-class purchasing power, and they prefer to achieve it by lowering taxes if possible, but also by reducing the cost of living in various ways. Hence tax credits for your kids’ skating lessons, cheaper beer, cheaper hydro, whatever. Bringing tuition down is of a piece with those moves (idle aside: one wonders if the left, which defines itself in opposition to Ford, now suddenly discovers fees have their uses).
Anyways, assuming the news reports are correct, this policy is disastrous in so many ways it’s hard to believe anyone in the Conservative government grasps the implications. Let’s look at what the policy actually does.
1) It takes about $500 million out of the system – and that’s only the start. Total tuition in Ontario – at universities and colleges combined – is a little short of $7 billion. But some of that money is exempt from the cut (international student fees for instance); it’s hard to tell exactly how much is “in”, but my semi-informed guess would be that about $2 billion worth is excluded from the policy, so call it a $500 million cut in total, split 70-30 universities to colleges. But remember – that’s only a first step. There are still almost certainly operating grant cuts to come as well.
2) It almost exclusively benefits higher-income students. Remember, Ontario already has a targeted free tuition program which it tuns through the Ontario Student Assistance Program (OSAP). For the couple of hundred thousand students who receive this benefit, reducing tuition makes little difference since their fees were covered anyway (caveat: because the program only covers “average” tuition, low-income students in programs like business and engineering may in fact see a reduction in fees paid). Money that in theory should go to these students will instead go to reducing OSAP expenditures. On the other hand, students from families making over $110,000, who receive little or no grant to offset tuition, will get 100% of the benefit (minus the value of tax credits, see below). In Conservative terms, this is a move that benefits the elite at the expense of ordinary Ontarians.
3) To some degree, it delivers a windfall to the federal government. Reducing tuition reduces the cost of providing tuition tax credits. That’s $90 million of tax credits Ontario students won’t get and the Government of Canada won’t have to pay out.
4) It hits colleges harder than universities, and small-town universities harder than the elite research universities. Now, here’s the interesting piece. Institutions are not all affected equally by this policy. Universities and colleges who have a lot of international students and professional programs will be affected considerably less than those who do not. Very roughly, U of T will probably see this as about a cut in income worth about 2% of its budget because well over 50% of its tuition revenue is exempt from the cut; but places like Algoma or La Cité will likely see falls of around 5% in income because they have so little policy-exempt income. Intriguingly, Nipissing University, which is in Finance Minister Vic Fedeli’s riding (and whose largest auditorium is named after Fedeli’s father) will almost certainly be among the worst hit.
So, why might the Tories be pursuing a policy which seems to go easy on “elites” and hard on “ordinary Ontarians” and the institutions that serve them? Apart from the “pocketbook” angle noted above, there is another possible angle. If the government is, as I suggested yesterday, planning to eviscerate student aid in the coming budget, then they can still claim a “pro-student” mantle by saying “well, hey, we cut tuition, what more do you want?”. This of course would be disingenuous in the extreme: student aid protects the vulnerable, cutting tuition mostly benefits the rich meaning such a policy would be doubly regressive. Intriguingly, the Canadian Federation of Students–Ontario, which historically would jump for joy at tuition cuts, was quick yesterday to tell students not to celebrate until the fate of OSAP was clearer.
All in all, there seems to be very little upside to this policy. After all, if student groups don’t give the government approbation then there isn’t even a crass political upside to the whole thing (unless sticking it to pointy-headed intellectuals is a goal in and of itself). One hopes there is still time for the Tories to re-think this one before an official announcement occurs.
Tweet this post
I can hear the chants of “early retirement” and “buy out package” from the over-60 set in my department…
“Modern Conservatives do not care about the market. They care about increasing middle-class purchasing power, and they prefer to achieve it by lowering taxes if possible, but also by reducing the cost of living in various ways.” That’s false despite the trivial (and sometimes false) populist examples that the author uses. When did Conservatives ever lower hydro costs with their inevitable privatization schemes??? First of all, Conservatives have never cared about the market as such and were historically the supporters of tariffs, a big military, and a version of the welfare state that favoured the better off. What Conservatives care about is helping the rich at the expense of the poor and privatization and deregulation (though not necessarily market choices since they are happiest in supporting the monopolies and oligopolies who fund them). While neoliberalism’s redistribution of wealth to the wealthy has mostly been at the expense of the lowest income people, the middle class has also seen their share of income reduced and dramatically so. The American economy doubled in size from 1980 to 2015 but the top 10 percent of income earners soaked up 70 percent of the increase while “even after taxes and transfers, there has been close to zero growth for working-age adults in the bottom 50 percent.” (Thomas Piketty et al) That said, conservatives/neoliberals need to make it look like they are looking out for the middle class. So they might defund state universities while controlling tuition. In the long run, that would also benefit private universities because a shitty set of public universities, like the shitty set of underfunded public schools in the US and UK, cause folks who really can’t afford it (the middle class) to send their kids to for-profit schools so that they get an education. That’s also why in two-tier medical systems some middle class people spend their savings on private medical plans. In short, Conservatives add to the costs of being or pretending to be “middle class” while fooling people, including the author of “Speak of the Devil” to miss their real goal which is to help the rich.
Today, the provincial government’s contribution to universities is at historically low levels relative to other sources of income. By lowering tuition, does the government not raise its own relative power over universities (albeit, as you note, disproportionately the smaller universities)?