At the time
this article was written Harvey Hodder represented Waterford Valley in the Newfoundland and Labrador House of Assembly.
This is a revised version of a paper presented to the 23rd Canadian Regional
Seminar held in Halifax in October 2000
Funding of Canada’s post-secondary
educational institutions will be one of the central public policy debates of
this decade. This article looks at how well prepared we are to meet the
challenge of a global knowledge economy.
A recent study by the Canadian Association
of University Teachers (CAUT) charts an alarming decline in federal-provincial
funding for post- secondary education over the past decade. The main highlights
of the study include:
funding for post-secondary education, measured on a per capita and constant
dollar basis, is 14% below the levels of 1991/92 nation-wide. The decline was
greatest in Nova Scotia and Newfoundland. Newfoundland’s per capita expenditure
shows up better than Nova Scotia’s primarily because Newfoundland’s population
declined by about 20,000 during the decade, while Nova Scotia’s population
grew, as did the populations in all other provinces.
among provinces are increasing. Although Newfoundland, the poorest province in
Canada, had the largest decline in per-capita spending for post-secondary
education, it still spends 60% more per capita on university operating grants
than Ontario, Canada’s richest province.
in federal transfers is a major factor in diminishing provincial support for
post-secondary education. Even after the recently announced increases in the
CHST, federal cash transfers remain far lower than in previous years. It is
difficult to determine how much of the CHST goes to post-secondary education.
However, if we assume the transfers are allocated in their pre-CHST
proportions, the federal contribution to post-secondary education nation-wide
has fallen by 34% since 1992 – from $2.9 billion to $1.9 billion. As a share of
the economy, federal cash transfers in support of post-secondary education are
now at their lowest levels in more than 30 years.
bring spending back in constant dollars to where it was in 1991/92 would
require an immediate investment of nearly $2 billion nation-wide, about $40
million in Newfoundland.
A joint study by the Association of Atlantic
Universities and the Atlantic Provinces’ Economic Council (January 2000) points
out that growth in private sector contributions to Atlantic universities do not
make up for the shortfall in public funding. Private endowments to universities
in Atlantic Canada are increasing at just half the rate of increase in other
Canadian universities, adding further to the disparities among provinces in
funding post-secondary education. Memorial University of Newfoundland gets less
that 3% of its revenue from bequests, donations, and non-government grants,
compared to nearly 12% in Ontario, and less than 5% for other Atlantic Canada
Declining public spending and a relatively
low level of private sector endowments have forced universities in Atlantic
Canada to increase tuition and other fees to make up for revenue shortfalls.
Tuition fees in Newfoundland have gone up 300% since the start of the 1990s,
the steepest rate of increase in all of Canada, while tuition fees in Nova
Scotia doubled and are now the highest in the country.
Renewed public investment in post-secondary education is an
economic and social imperative. We ignore it at our peril.
Increasing reliance on tuition fees is
eroding quality and accessibility of post-secondary education. We stand in
danger of reverting to a post-secondary system that only the economic elite can
afford. Reliance by post-secondary educational institutions on tuition fees is
making it more difficult for young people from lower income families to get a
post-secondary education. The CAUT study found that the post-secondary
participation rate of young people from low income families is rising far
slower than the rates for middle and upper income groups. There are more
low-income families in Atlantic Canada than anywhere else in the country.
Even youth from middle income families are burdened
with years of debt after graduation to pay for their education. Student debt
loads have ballooned along with tuition fees. Memorial University’s Student
Union estimates that baccalaureate graduates carry debt loads above $30,000.
The debt is much higher for those in professional and graduate programs that
charge higher tuition and require longer periods of study. There are serious
consequences for any economy that burdens new graduates and job entrants with
heavy debt. One consequence is a significant increase in the brain-drain as
more and more graduates seek higher paying jobs outside the region to pay off
their student debt. Another consequence is that graduates who remain in the
region postpone key personal and economic decisions such as marriage, children,
home-ownership, and other big ticket consumer decisions, which impacts
negatively on the region’s economy.
As government funding falls, universities
are finding it increasingly difficult to recruit and retain good teachers and
researchers. Faculty at Memorial University are paid 20% below the national
average. You cannot recruit and retain competent faculty in a highly
competitive market with a salary gap like that. A recent study by the Atlantic
Association of Universities (AAU) cited the availability of faculty as the most
significant factor impeding growth in program choice and enrollment levels in
Atlantic universities. In addition, universities are increasingly hard pressed
to maintain their existing facilities and meet the demand for new equipment and
Economic growth is increasingly tied to
education levels in the population. The new economy offers enormous
opportunities for economic growth and prosperity, but it penalizes heavily
those who are unprepared to compete. A post-secondary education is no longer a
privilege, but a necessity if individuals, provinces and nations are to compete
successfully in the new economy. Even current job statistics tell the story.
Post-secondary education stimulated job
creation in the economy. In the past decade, 115,000 new jobs were created in
Atlantic Canada for workers with some post-secondary education, while jobs for
workers without post-secondary education declined by more than 80,000.
education reduces unemployment. While the overall unemployment rate in
Newfoundland is more than double the national average, the unemployment rate
for university graduates compares favourably with the unemployment rates for
graduates in Ontario and Alberta.
education increases full-time employment rather than part-time jobs. Since
1990, full-time jobs requiring a university degree increased by 30% in Atlantic
Canada, while other full-time job opportunities declined.
graduates earn higher incomes. The median income for university graduates in
Atlantic Canada is more than double the income of high school graduates or
workers with some post-secondary education, and nearly four times the median
income of high school dropouts.
education is a good investment for the individual and for the state. Throughout
their lifetimes, the higher earnings and employment levels of post-secondary
graduates means that very few of them are likely to require government-provided
income support and most will contribute significantly to government revenues
and economic growth.
Affordable access to quality post-secondary
education is the cornerstone for prosperity in the new knowledge economy.
Higher levels of education generate higher levels of employment and income, and
greater accessibility to post-secondary education generates a more equal and