Critics debate Tory budget and its plan for postsecondary

Despite large windfalls for Canada’s postsecondary intitutions, Liberal and NDP critics charge that the government could do more for individual students

Thursday, 22 March 2007

OTTAWA (CUP)—The federal Conservative Party’s budget released on 19 March, titled Aspire, calls for $19.7 billion in spending over the next two years and provides many changes to the way that postsecondary education is funded.

However, the equalization program is the largest and most talked-about section of the budget, with a complex agreement allowing each province more choice in determining how much money it gets from the federal government. The program is worth $39 billion over the next seven years, including $12.7 billion next year.

“Through this budget, we are delivering a historic plan worth over $39 billion in additional funding to restore fiscal balance in Canada,” said Finance Minister Jim Flaherty in the budget speech.

Bloc Québecois leader Gilles Duceppe is the only federal leader who says he will support the budget, stating that the equalization program is sufficient for Québec. The Liberals and NDP both oppose the budget.

Liberal Leader Stéphane Dion said that the budget might provide additional support to universities, but it doesn’t do anything to help students.

Denise Savoie, the NDP’s education critic, said that more need to be done to ensure that money dedicated to postsecondary education actually reaches universities. No matter how much the federal government tries to control where the money goes, in the end, Savoie said that an agreement must be made by the provinces.

“There is so much room to fudge, because if it’s not a dedicated transfer we don’t know where it is going,” Savoie said.

Universities, in particular, will benefit from a number of different measures announced in this budget, such as more funding through the provinces and extra grants for research councils.

The budget calls for raising the Canada Social Transfer (CST), a program that provides funds to the provinces for postsecondary education and early development programs. The transfer will increase by $1 billion, to a total of $9.5 billion.

The new CST funding, which is linked to population, will mean that provinces with many universities, like Ontario, will receive a larger slice of the pie. The budget also recommends that the CST increase by three per cent annually.

With the CST, 25 per cent of the money given to each province is earmarked for postsecondary education—$2.4 billion in total.

Phillippe Ouellette, director of Canadian Alliance of Student Associations, says showing exactly how much federal money the provinces should spend on their universities will make the system much more accountable.

“Now students can really point the finger at provinces if tuition goes up,” Ouellette said. “The dedicated transfer [program] is a kind of a macro issue, it’s providing reliable transparent funding for provinces, which is going to force them to improve postsecondary education for students.

“It’s kind of a couple steps away from helping students,” he continued. “But this is one of the major problems in postsecondary education—lack of accountability.”

This sentiment was echoed by Amanda Aziz, national chairwoman of the Canadian Federation of Students.

“I think it’s a positive first step but there is still a lot of work that needs to be done in terms of making sure that money reaches students. The budget was very silent on issues of a national grants system for students.”

A further jump of $800 million in university funding is planned for next year under the CST, following discussions with the provinces on how to make the funding accountable.

However, future spending for universities depends on the current minority government staying in power.

Despite the increased money for universities, critics say that there’s very little in the budget for students themselves.

The budget offers a $500 tax benefit for Canadians who make between $3000 and $21 000. While most university students would fit into this category, the program excludes those taking classes full-time.

Following the speech, NDP Leader Jack Layton said he couldn’t support a budget that doesn’t provide more for students.

“Despite new funding for postsecondary education, working- and middle-class families will pay higher tuition fees and go further into debt for university and training,” Layton said outside the House of Commons.

The government is increasing support for two education savings schemes: the Registered Education Savings Plan (RESP) and the Canada Education Savings Grant.

The amount that people can pay annually into the subsidized savings plans is being increased. The RESP plan is set to receive $15 million in funding next year.

But Don Drummond, chief economist with the TD Bank Financial Group, said he finds most people who benefit from these plans make over $70 000 a year.

“I think it’s sort of perverse as a program,” Drummond said. “People are not aware of it until they see a tax planner—but at the banks we find only higher-income people can afford [RESPs].”

The new budget does give a large boost to Canada’s research sector. A number of research funds and initiatives are being increased funding in this budget, tallying up to $9.2 billion total investment in science and technology. The Canada Foundation for Innovation is getting more money, as is Genome Canada and the Network of Centres of Excellence.

Universities will also see an increase in funding to a program that helps to cover the indirect costs of research, such as laboratory equipment and infrastructure. Flaherty said in his speech that funding for research would improve Canada’s competitiveness.

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