Our Schools/Our Selves: Fall 2000

What Should We Spend on Education?
September 1, 2000

Highlights from the Year 2000 Alternative Federal Budget and the Ontario Alternative Budget

The Alternative Budgets

september 2000The Alternative Federal Budget(AFB) is a project of the Canadian Centre of Policy Alternatives and Cho!ces, a Winnipeg-based social justice coalition. It brings together representatives from a wide spectrum of Canadian civil society. Since 1995, the AFB has outlined a strategy that would not only eliminate the deficit, but also generate higher economic growth, create more jobs and achieve greater equality and social justice. The AFB is released toward the end of January/beginning of February, immediately preceding the release of the federal government's budget.

The Ontario Alternative Budget(OAB) is produced by a coalition of labour, social action, community and church groups in Ontario. These groups have come together to develop an alternative to the so-called Common Sense Revolution of the Harris Government, and to demonstrate that it is possible for Ontarians to have an activist government with a human agenda. The OAB is released in the spring, to coincide with the provincial government's budget.( For further information contact Ross McClellan 416-443-7687 ([email protected]), Hugh Mackenzie 416-544-5970 ([email protected], or Andrea Carver 416-441-3714 ([email protected]).

The Alternative Federal Budget Examines Federal Spending on Post-Secondary Education Denise Doherty-Delorme What the Liberals have done in their year 2000 budget

With predictions of $50 billion in surplus funds over the next five years, the federal government had the opportunity to restore funding and revitalise Canada's post-secondary system. Instead, Paul Martin chose to continue to underfund education and to hand out instead more than $50 billion in tax breaks to the wealthy. There is only $100-million/year in the budget for post-secondary education in the Canada Health & Social Transfer (CHST), provided only if the provinces decide to spend it appropriately. In contrast, 6.5 times as much is handed out by the feds for income tax cuts for high-income earners.


Deep cuts over the last decade in federal payments for post-secondary education (PSE) have resulted in a 126% increase in tuition fees, a decrease in number of college and university faculty, a reduction in the range and depth of programs and research capacity, as well as reduced expenditures on crucial infrastructure vital to educational activities, such as buildings, libraries and laboratories. The formula for student loans, interest relief, and income tax credits has generated ever-increasing debt loads, rising from an average $8,675 in 1990 to $28,000 in 2000.

In addition federal funding has been diverted to ill-advised policy initiatives, such as the Millennium Scholarship Fund and the Registered Education Savings Plan (RESP) program. Neither of these address the fundamental problem facing the post-secondary education system - affordable access to college or university. The Scholarship program, because it is not integrated with the provincial student aid programs, is of little benefit to those students who are most in need and the RESP program is only useful to those families who are wealthy enough to afford to have investment savings.


The federal government has no integrated research strategy and has demonstrated a deplorable lack of understanding of the requirements for innovation and knowledge generation. The Liberals failed to provide adequate transfer payments (core funding). They failed to assess properly the impact which the new 21st Century Chairs of Research Excellence and the Canada Foundation for Innovation will have across the entire spectrum of the research enterprise in the university community. This boutique program funding will push the universities to sacrifice humanities and social sciences scholarship, undergraduate education and teaching as a whole. The small increases in the research councils budgets are inadequate to address the pressures which universities face in paying for direct and indirect research costs associated with the new investments in infrastructure and personnel.

The Alternative Federal Budget's Year 2000 Goal for Spending on Post-Secondary Education

The Alternative Federal Budget (AFB) Year 2000 goal for post-secondary education is to increase access for students from all socioeconomic backgrounds, making sure that they are able to complete their studies and graduate without a debilitating debt. In order to facilitate this, the AFB advocates the creation of a National Post-Secondary Education Act and a Post-secondary Education Fund (set at $3.1 billion for 2000) for core funding. The PSE Fund would grow with the national economy which will mean an $800 million increase over the next five years. The National PSE Act would ensure that extra funding will significantly reduce tuition fees across the country. In addition, the AFB proposes to add $0.4 billion in capital spending, financed through a National Priorities Capital Endowment.

All provinces (with the right for Quebec to opt out with compensation) are to adhere to standards of public administration, full accessibility, comprehensiveness, transferability of credits, and mobility with regard to both faculty research and student grants and awards. A widely representative National Advisory Council on Post-Secondary Education and Research will ensure that community needs of access, research and teaching are met by the post-secondary education system.

The AFB will begin the process of replacing student loans with a National System of Student Grants that will be based solely on need, specifically acknowledging students with special needs. The Grants will be fully integrated with the provincial student aid programs and the funding will total $500 million in this fiscal year and will increase by $750 million next year.

Paul Martin and the Liberals had choices when preparing the 2000-01 federal budget. They chose tax cuts for the wealthiest Canadians. Their choices will result in a decrease in public ability to fund health care, education and other social programs. Worse, when the economy takes a downturn, the tax cuts will likely plunge Canada back into a deficit with no public safety net to care for those most in need and no the ability to educate Canadians to prepare for the future.

The Ontario Alternative Budget and Public Education Erika Shaker Since 1995, Ontario's public programs have been crippled by a series of cuts which have had a direct impact on the standard of living of the majority. Public schools, one of our greatest public investments, has been among the hardest hit. Our educational institutions are now less accessible, of a lower quality, less equitable, and less accountable to the public.

Elementary and secondary schools have lost $1.7 billion in core funding since 1995. School boards have been forced to eliminate programs, and to employ "creative" solutions (turning to the corporate sector, or enlisting parents as fundraisers, or charging user fees) to minimize the devastating impact of these cuts on curriculum, class size and teachers' work load.

In spite of Mike Harris' insistence, using spurious research, that lower tuition fees benefit the wealthy far more than the poor, several recent academic studies have substantiated what we already know is happening on Canadian campuses: as tuition fees increase, students from lower-income households are less likely to enroll. They simply cannot afford to go to university.

Within this political context, the Ontario Alternative Budget (OAB) focuses on the needs of the children and youth of Ontario, who have borne the brunt of the Harris government's policies. This is a government that began its regime by de-funding junior kindergarten. Since 1995, income inequality and child poverty have risen substantially due to the assault on public services.

Child Care

The Year 2000 Ontario Alternative Budget recommends an Early Years Program and a massive expansion of Ontario's child care capacity, including staff training and the building of new facilities. OAB would implement a flat rate policy of $5 per day for child care. Thirty percent of child care spaces would be available on a further subsidy basis for low income families or families with more than one child in child care. The province would be solely responsible for child care. Combined with $5 a day reform, the Early Years Program would end up serving 820,000 children -- just under half the total under 12 in the province. This major expansion would be phased in over a six year period for a total cost of $3.9 billion.

Over the next two years, infant and toddler care could be expanded to a new total of 26,090 (an increase of 30% from the 20,300 currently available in regulated care).

School-age child care ought to be increased to 66,000 children between 6 and 12 years, with wrap-around care as an integral part of the program (an increase of 50% from the 40,600 currently in regulated care.)

Elementary and Secondary Education

The Ontario Alternative Budget would immediately restore education funding, allowing boards to maintain programs for 2000-01without running deficits. It would also increase annual funding for elementary and secondary education by $1.7 billion, thereby eliminating the loss in real, per student funding under the Conservative Government. OAB also recommends that an open review process be established for the funding formula for the 2000-01 school year.

The OAB would also allow school boards to raise additional funds beyond provincial funding allocations to meet locally-determined needs. Beginning with the 2001-02 school year, access to the local tax base would be restored, with total revenue from local tax bases capped at 10% of a school board's provincial allocation.

Higher Education

In Ontario, students have become responsible for funding more than 35% of the universities' operating costs. Those students who do attend college or university are now graduating with an average debt load of $25,000, spurred by a 60% hike in tuition fees.

During this time of chronic de-funding of our institutions of higher learning, Ontario' s post secondary enrollment is about to increase by 40% due in large part to the elimination of grade 13.

To provide relief from the prohibitive costs of higher education in Ontario, the OAB is recommending the following measures: the freezing of tuition fees; the implementation of a program of needs-based grants; the creation of grants for students in need to help reduce their debt load; the provision of targeted assistance for students with dependents or special needs; the expansion of interest relief for students; aid to debt reduction for borrowers who have difficulties in meeting debt obligations and the creation of a deferred tax status for interest paid on student loans. These changes would require the government to commit an additional $500 per enrolled student.

The OAB would also reverse the cuts to universities since 1995 by investing an additional $1.2 million in those institutions. The base funding to community colleges, which has been crippled with funding cuts, would be restored to the amount of $400 million.

Denise Doherty-Delorme is a research associate of the Canadian Centre for Policy Alternatives. Erika Shaker is a research fellow at the Canadian Centre of Policy Alternatives and the co-editor of Our Schools/Our Selves.

This article was originally published in the September 2000 issue of Our Schools/Our Selves.