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Playing the Guessing Game
February 15, 2008
Alex Usher, Vice President, Educational Policy Institute
Trying to guess what’s going on in Ottawa right now is a mug’s game. Unlike the old Liberal habit of leaking and trial-ballooning every budget line item weeks before a budget, the Tories play budget-making the old-fashioned tight-lipped way. Even the budget’s broad themes are hard to guess at the moment. This is more than a little worrying given the implications of this budget for student aid in Canada, and the very real possibility that over a third of the country’s grants are going to disappear the year after next.
But I’ve been speaking to a lot of people in Ottawa lately and I have developed a theory about what’s going to happen on February 26 when the federal budget is announced. And my bet is most of you won’t like it.
The good news is that one way or another, there will be an announcement that a sum equivalent to the $350 million per year the Foundation is spending on students will be found by 2009 and will continue being distributed to students on a need-and-merit basis. That’s what an all-party resolution of the Finance Committee asked for, and that’s what will be delivered.
But which students? And on what balance of need and merit? Here’s where it gets interesting.
The Government has very, very little fiscal room to move this year and next. Between fears of the effects of the US economic downturn and a strong loonie on Ontario and Quebec and the GST cut announced in the fall, there is very little new money available to government to spend in fiscal 08 or fiscal 09. There is, however, a projected $12bn surplus in fiscal 07, which suggests there is more room to move on a endowment-style spending than there is on program spending. Basic budgeting therefore suggests we’re looking at a Foundation model rather than a program spending model.
But spend it on the existing Foundation? Where’s the political capital in that? Especially when it now seems very likely that the budget will be defeated in Parliament and whatever’s in the budget is going to have to serve as an election platform.
So, a new Foundation then. But how to package it? Budgets need to have themes to hold together their narrative. It’s rare to see budgets without some kind of narrative linking all the big spending items. And the problem is that because education and training have never made it into the governing party’s five priorities, they have no other human capital initiatives to which a student aid-focussed Foundation might be linked.
But they do have some research priorities they could link it to. The Conservatives have an S and T strategy they seem proud of. The one major budget item that has been trial ballooned is an adjustment of the scientific research tax credit. And politically, with Bob Rae writing the Liberal platform, some kind of sci-tech initiative is going to be needed if the Conservatives are going to avoid being painted as the party of the old, resource economy by an opposition portraying itself as the party of the new, high-tech economy. The Conservatives need seats in urban areas to win a majority; being credibly portrayed as old economy could be death for them.
You probably see where I’m going by now. The only real way to link need-and-merit money for students (the government promise) with a sci-tech initiative is to say that this new money should go to exclusively graduate students.
There’s some solid logic here. Lots of people (including yours truly) have stressed the need for Canada to get serious about increasing the number of people in graduate school and in scientific areas in particular. Heck, the AUCC even made the expansion of graduate studies their number one lobbying priority. The Conservatives, I’m willing to believe, genuinely think they might get some applause for this. They’re still spending money on students, only – hey! – this way it serves the national productivity agenda, too! And students are students, right?
Well, no. I think I can speak on behalf of all of my colleagues who have advocated for more emphasis on graduate studies that the idea of robbing undergraduate need based aid funds to pay for some kind of graduate scholarship scheme is really bad policy. Expanding graduate enrolment requires investment in institutions through some kind of per-student funding arrangement. We don’t need scholarship funds as a carrot to increase the demand for graduate studies; we need funds to expand capacity to meet the demand. And we definitely need to maintain or even enhance the amount of grants that are going to low-income college and university students.
If I’m right about this – and Lord knows I’ve been wrong about this stuff before – some very hard questions are going to be asked in Ottawa. Small universities will examine whether or not AUCC’s decision to put research funding first on its lobbying agenda and student aid third had an effect on a government’s decision to take money out of one of their priority areas and into a priority area of the big schools. AUCC will no doubt say that it had three equal priorities this year, not first, second and third priorities, but big school vs. small school tension has been simmering for ages within AUCC and this explanation might not be good enough to placate the smaller schools. Among student groups, questions will be asked whether the Canadian Federation of Students’ strategy of lobbying in favour of a “national system of grants” while simultaneously lobbying against a Foundation whose system provides grants across the entire nation might have been a contributing factor in the loss of a third of the country’s non-repayable aid.
Now it may all be moot, of course. I could be wrong about the government’s intentions. Even if I’m right, the budget is looking almost certain to be defeated on a confidence vote in the first week of March, sending us to the polls on April 14. If the Liberals win, chances are better – not certain, but better - that something closer to the status quo may emerge on student aid.
But it does mean that battle lines are drawn on student aid. In 2004, the Conservative strategy was to promise whatever the Liberals promised on student aid. In 2006, the Conservatives thankfully declined to match the Liberals’ goofy 50-50 plan, but extended Liberal promises about making student loans more widely available to the middle class. Broadly, the two major parties were in the same camp. Now, it looks like student aid might become a partisan issue. From a long term perspective, that would be not just disappointing, but dangerous, too.
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