Well, I don’t think anyone quite expected that.

The quick summary: faced with enormous structural deficits, the Ontario government chose to close the fiscal gap with delays in capital projects, some cross-government efficiency measures and – not to put too fine a point on it – sticking it to public sector workers. The upside is that as a result they managed to avoid program cuts in most areas, which to be honest is a bit of a miracle.

If you look carefully at the budget – check out Table 2.28 – it appears at first glance as if there’s been a budget increase of almost $900 million (about 14%) from last year. But some of that comes from an accounting change which now makes certain tax credits (notably the ones for co-op and apprenticeships) appear as real expenditures rather than tax expenditures. And much of it represents the cost of the 30% tuition refund pledge, to which the Liberals are hanging on for dear life, convinced beyond reason that one day they’ll be vindicated.

The implications for institutions are sufficiently opaque that very different numbers are circulating this morning: the Globe and Mail says 1.9% annually over three years; OCUFA is suggesting the increase is on the order of about 1% per year. There are, however, specified cuts to things like support for international Ph.D. students, international recruitment and study abroad scholarships, as well as a somewhat ominous $120 million in “efficiencies to be announced in early summer.”

The budget makes noises about amalgamating various institutional pension schemes, which is sure to cause political friction. And while the budget is specific in ruling out any changes to existing collective agreements at universities and colleges, it does threaten to intervene in the negotiation of future ones if they feel the results are not “responsible.” As long as universities and colleges can manage any increases from within their own income, government likely won’t act on this threat. More intriguing, perhaps, is the commitment to make the results of all future collective bargaining more transparent. For anyone who remembers how faculty strikes were averted last year at Carleton and Western by deals whose salary terms were never really revealed, this is welcome.

Some will complain that with funding increases held below inflation, this is a “real cut.” But compared to most ministries, PSE did very well indeed. The worry, I think, is that the commitment to reduce health care spending growth to 2.3% per year will prove unachievable. If that’s the case, expect the government to start raiding PSE funds as early as next year.

In short, this is probably as good as it gets. But it’s not over yet.