Budget 2019 Q&A with Demetrios Nicolaides, Minister of Advanced Education

The United Conservative party unveiled their first provincial budget on October 24 which had significant impacts on the Ministry of Advanced Education in Alberta.

The Gateway interviewed Demetrios Nicolaides, Minister of Advanced Education, to see his reaction to Budget 2019, how some of the percentages for cuts were determined, and if the overall budget for the Ministry of Advanced Education was skewed towards trades and skilled workers over academic or non-professional programming.

These interview responses were edited for clarity and brevity.

The Gateway: How do you feel about the budget overall?

Nicolaides: Overall, the budget presents a balanced plan to return us to a balanced budget scenario and help get our province on the right track.

The Summer Temporary Employment Program (STEP) was cut by Budget 2019. The budget said this was simply a cost-saving measure for the province. Were there any other reasons for the elimination of this popular program?

It undoubtedly was a very difficult decision to look at cancelling the STEP program. It is important to know that ensuring young Albertans have access to job opportunities is crucial. There is a federal equivalent program that exists which continues to provide young Albertans with temporary employment opportunities. Furthermore, the new youth minimum wage also helps and incentivizes businesses to hire young Albertans and young workers.

Are there any plans to establish a replacement to STEP or a different program to enable student temporary employment?

It is something being evaluated and explored. It is not something I can speculate about.

The budget lifted the tuition freeze and created a new cap on tuition at seven per cent, per year for the next three years to be applied by each institution. Why was the number seven per cent chosen as the new cap?

We looked at where Alberta tuition is with respect to the Canadian average. Obviously we did that because my priority is to ensure tuition continues to remain affordable. It is also one of the reasons why we maintained a cap. That number was chosen because if we apply the seven per cent increase — assuming that we hit the maximum each and every year, which may not happen, and that the average tuition increases by inflationary levels at two per cent — it keeps Alberta inline with the Canadian average. It is done in a way to ensure we remain competitive and that tuition remains affordable.

Some critics are saying that by comparing Alberta’s tuition to other provinces, you are actually removing part of the advantage Alberta has in attracting students to university, especially those who come from other provinces. Will this seven per cent increase detract from the benefit of Alberta having generally lower tuition than other jurisdictions in Canada?

No. I don’t believe so. In that regard I have been concerned with the low post-secondary participation rates in our own province. It is stagnant. In fact, if you look at the past years — particularly the years when the tuition freeze was in place — enrolment in our province actually decreased. There are less people enrolled in post-secondary education today than there were when the tuition freeze began. The percentage of people participating in post-secondary hasn’t increased at all. So my priority is we are creating a financial stable system that is serving Albertans and providing educational opportunities for Alberta youth right here at home.

The government is cutting the Campus Alberta Grant, the main way government distributes funding to help support academic programming at institutions across the province, by five per cent overall. Each institution is facing a different reduction based on their “fiscal capabilities.” The U of A will have a 6.9 per cent cut. How was each universities share of the overall cut determined?

The reduction to each institution was determined according to past surpluses and the institutions ability to bare. As you can imagine a five or seven per cent reduction for some of our smaller colleges would cause incredibly significant problems for them. So we have tried to balance the reductions based on those two criteria.

We have looked at a five year average of institutional surpluses. What we have found is that overall the system on average generates approximately $250 million in surpluses. Our calculation to apply the reduction to the institutions in the differential manner is being done only for this year.

So what will the plan be for the Campus Alberta Grant for the next couple of years?

It is a little to early to say. I can confirm that we are moving to a new funding formula for our post-secondary institutions; that will be largely outcomes based. This will give institutions a little more clarity as to what their funding will be over a longer period of time, rather than having them wait year by year.

On the note of performance-based funding, which was a recommendation in the MacKinnon Report, how will programs that do not directly lead to professional or specific employment fit into this proposed financing formula?

On a whole, we have not finalized any of the metrics we might use. Budget 2020-21 will reveal all this. I absolutely will consult with students and our institutions before we finalize those metrics. For the sake of an example, we could look at a metric like graduation rates. We would discuss with an institution of how we would look at a graduation rate. We would determine whether we look at it on an institutional or program basis. We still have some work to do with our institutions with how to best align these metrics.

Budget 2019 also created the Skills for Jobs Task Force, a $1 million review on how vocation training and skilled trades could better prepare Albertans for employment. Will this task force explore programs outside of skilled trades?

We have asked the task force to look at ways in which the apprenticeship model could be expanded into new educational areas. So for example, we have asked the panel to look at whether the apprenticeship model could apply to areas like coding, artificial intelligence, banking, or other emerging fields like green technology. As a whole, the task force is indeed looking at a wider application and expansion of the apprenticeship model of educational delivery.

In the arts and humanities, many who pursue degrees search for jobs within the civil service. However, with this budget the government has said there is a hiring restraint. What kinds of employment opportunities do you see for those students?

It is important to note that we are experiencing a jobs crisis, which is why our government has made getting Albertans back to work our main priority. We have close to 200,000 Albertans that are out of work and moreover, our youth are the ones who have been most affected by the downturn. We have one of the youth unemployment rates in decades. We are acutely aware of the jobs crisis that exists today in our province. All ministries are looking very closely at steps we can take to help create jobs and return investment to this province.

Many have said the budget this year for post-secondary education is skewed unequally towards skilled trades and vocational programs, and not to strictly academic programming, which all are a part of advanced education. Do you mind commenting that?

There have been a number of commitments made in respect to strengthening our skills for job agenda. That is designed to address two problems that we are experiencing in this province. The first is that we are experiencing a high youth unemployment. Secondly, there is a growing retirement of workers in the skilled trades. The department of labour estimates that 3,000 people retire from skilled trades every year, and they will continue to do so until 2025. At that point we will get to a point where we have 50,000 less skilled workers. For our economy to continue to operate and function, we need to train the next generation of skilled workers.

Also, we are looking at expanding the apprenticeship model into new areas that aren’t traditionally defined as skilled trades or academic pursuits to be part of a vocational program, like artificial intelligence or coding. We believe there is an opportunity to create a stronger connection between those areas and the labour market.

If you had to characterize the budget in one word, how would you?

I would categorize it as balanced. We’ve increased spending to departments such as community and social services, careful to protect and support some of the most vulnerable in the form of transit passes for low-income people, and at the same time making modest reductions to government spending at 2.8 per cent overall. That way we can get our spending under control and protect the most vulnerable in our society.