|
The Biggest Decision of the Year
November 23, 2007
Alex Usher, Vice President, Educational Policy Institute
You’ve heard us at EPI say it over and over again for the past two years: Canada’s student aid programs are sitting on a ticking time-bomb. We have suggested that there were a number of potential crises lurking in the system, but one of them lurked much larger than the others: the planned expiry of the Canada Millennium Scholarship Foundation’s mandate on January 4, 2010.
In public at least, the Government of Canada has been thunderingly silent about what will happen after the Foundation gives out its last need-based grants just fourteen months from now (though the Foundation is set to live until early 2010, its schedule of payments means its last batch of need-and-income based grants will be announced in early 2009). This, not surprisingly, scares the bejesus out of some student groups, who rightly fear the consequences if a third of the country’s grants simply disappear and are not replaced.
But behind the scenes, things are moving, and there are some nasty internecine fights going on among the main players. While it is still too early to tell how things will play out, here’s a handicapper’s guide to what’s going on behind the scenes.
There are two basic antagonists in this story: the Foundation itself, and the department of Human Resources and Social Development, which runs the Canada Student Loans Program. Both are effectively competing for the favour of the Department of Finance, the Privy Council Office (PCO), and the Prime Minister’s Office (PMO), in whose hands collectively the fate of the Foundation rests.
The argument does not appear to be fundamentally about whether or not to replace the $350 million/year in grants. Word on the street in Ottawa is that – one way or another – the money will be found. The argument is about who gets to spend this money and under what conditions.
The Foundation, not unnaturally, believes that it has done enough good work over the past eight years to warrant having its mandate renewed and its staff and board directors have been assiduously putting that case to Ottawa decision-makers for the past several months.
Opposing them, in a passive-aggressive kind of way, is HRSD, for whom the existence of the Foundation is a standing rebuke. When the Foundation was announced back in the fall of 1997, it was widely seen as a bit of a slap in the face for the department. After all, didn’t they already run a student aid program? Why would the PMO set up a whole other organization to do this unless they fundamentally distrusted HRSD?
There were in fact good reasons to set up an independent Foundation which had to do with the Financial Administration Act and the fact that the Government of the day wanted to spread its $2.5 billion investment over 10 years, which would have been impossible through HRSD. But even if no slight was intended, HRSD felt it as such and have seen the Foundation as a rival to be killed off at the earliest opportunity. Foundation staff, for instance, still recall with fascinated horror a social event in Ottawa several years ago in which a slightly inebriated CSL employee greeted a Foundation employee with the immortal greeting: “you guys are done and your money is ours!” Even if that’s not HRSD’s officialposition, you can bet it’s a sentiment widely shared in the department.
So here we have two organizations each fighting their corner to be the ones eligible to distribute all this new money. But how is it playing out among those who matter?
The Department of Finance has always been partial to the Foundation because it is seen as less bureaucratic the HRSD and its research program is greatly appreciated. On the other hand, rumour has it that some of the Foundation’s lobbying may have rubbed the department the wrong way.
PCO has never liked the Foundation. Indeed, when Prime Minister Chretien first announced it, he deliberately did an end run around PCO so that they couldn’t use the armory of fed-prov arguments against it. With the Prime Minister’s recent announcement that he wants to give all provinces (but most especially Quebec) the right to opt-out of any new social program, PCO will have new ammunition to argue the case against the Foundation.
PMO is a more difficult conundrum – nobody knows what those guys are thinking. But we do know that education is not one of the Prime Minister’s five priorities, and that people around the Prime Minster have a laser-like focus on the median, middle-class voter. They might not be so keen to support a Foundation that has its own laser-like focus on low-income students. It may well be that any new budget allocation – whether it goes to HRSD or the Foundation – might come with instructions to keep it focused on the middle class.
Key to any solution, of course, is the views of the provinces. Without exception, provinces hated the Foundation at its inception. All have since learned to live with it and a number of provincial student aid departments probably now prefer dealing with the Foundation to dealing with HRSD. For long-standing constitutional reasons, it’s unlikely any province will officially go on record as saying “the Foundation must stay.” But outside of Quebec, there won’t be anyone actively trying to kill the thing, either.
The final factor at play is timing. The working assumption of all parties is that there will be an announcement one way or the other in the next federal budget. That’s all well and good, but there’s at least an even chance that the next budget will trigger a confidence vote and then a general election, for reasons that have nothing to do with student aid. If a $350 million hole in the country’s student aid system results from a budget failure, it seems likely that student aid will be a major issue in the next election. With public finances in their current healthy state, the likeliest outcome is that the main parties become engaged in a bidding war on student aid. Which, provided the result is not more wasteful tax-credits or other across-the-board measure, has to be a good thing.
This one still has a long way to go before it plays itself out. The next four months promise to be very interesting indeed.
|
