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Friday, May 05, 2006

more substance please.

Well, I AM back in Edmonton and slightly busier I usually (so the blog posting action may be a frugal over the next while). I started my new job this week and am enjoying every moment of it. Plus, it's a really nice day outside.

It was interesting to see what the first Budget of the new Conservative Government had in it for Post-Secondary Education.

Though it’s nice to see this government at least talking a bit about PSE issues, I really hope it doesn’t turn in to the same situation which came about with the previous Liberal government (a main course of talk with a side-order of piece-meal change – with the exception being the creation of the Canadian Millennium Scholarship Foundation in 1998, who’s mandate comes up for renewal in 2008 and should cause an interesting amount of debate on student finance issues).

Last week's budget did have some PSE related changes in it, but I can’t see these changes having a large effect on the majority of Canadian students.

- Tax credits for textbooks. Canadians attending university or college can claim an annual $500 tax credit on textbook costs, which translates into a benefit of about $80 a year for a typical full-time student. Though it sounds nice, this doesn’t address the reality that because most students already have enough education credits to cover their limited incomes, these new credits won’t make buying textbooks or any other educational expense easier. Not to mention that if it did, students still have to wait until the following year to receive their miniscule $80 rebate.

- Increasing access to student debt. More people will be eligible for Canada Student Loans because of a reduction in the amount parents are expected to contribute toward the cost of post-secondary education, effective August 2007. This is a shortsighted move which doesn't address the long-term problems caused by students graduating with large amounts of debt. Increasing students' access to loans, and henceforth, debt, doesn't even begin to address the problems facing the student finance system.

-100% Scholarship and Bursary exemption. All scholarship, fellowship and bursary money will now be income-tax exempt, compared to the current exemption limit of $3,000 a year. This tax exemption for all scholarship and bursary money from taxation is negated by that fact that the first $3,000 in scholarship and bursary money is already tax-free, and few students will receive even that much. Even if they did, their other tax credits would likely cover it. This measure will only make a difference for a few super-elite scholarship recipients, and thus cannot be said to be of any benefit to the average student.

Here are some suggestions on what the Tories could add to the budget to make it more effective and positive for Canadian students:

- Create more scholarships and bursaries, which would reduce students reliance on loans, and hence, the creation of large amounts of student debt, instead of raising the amount students borrow for their education.

- Implement the Council of the Federation’s request for an immediate $2.2-4.9 billion injection for post-secondary education.

So, overall, the PSE portion of the budget seems to be a victim of the band-aid reaction of trying to fix things by using the tax system instead of actually facing and dealing with the issue head-on.


Idealistic Pragmatist said...

*applause* Excellent, excellent analysis.

By the way, if you have a chance, I'd be interested in hearing what you have to say about my ancient, but unfortunately still relevant post "the myth of affordable Canadian tuition". (Especially in light of your new job.)

Emilio said...

I agree with you in principle Dave. I think the CPC looks at poll numbers and realizes a very small amount of college students support them at the polls. I'm one of those that do, however I do think more money for post-secondary education is important in this more competitve world. Dave please explain how the Council of Federations spends its money b/c just spending money is not something I like to see?
I am glad they are making it easier for people to get loans. I don't think we should have free University b/c that would cost enormously and no one would take it seriously. I use myself and some friends as examples of people who failed classes and are now smartening up. I don't think people should pay for me to party in school and fail classses. I support more student loans so people have to take responsibility for their own actions but can go to school if they are poor. If people graduate with a huge debt, then they will have to pay it off and will become responsible in a hurry. I think tuition rates should be controlled and we should put more money into research which is important. Helping us with book costs would be good too and I commend the CPC for doing so.
The problem with the Libs and NDP is they think having free University will suddenly create alot of great grads. I think the reverse will happen and people will either slack off in college or academic standards will go down the drain in a socialist system. If people wanna go to University they should either pay themselves or get loans.

interlocutor said...

I don't get what the problem is with free tuition. We essentially have 'free tuition' up to grade twelve, and yes some kids take secondary education seriously and some don't. The one's that don't are held back, suspended, streamed into appropriate programs and, ultimately, if they can't get their act together, they don't graduate and then suffer the consequences.

I just can't accept this simpleminded assumption that if university is free people will take it less seriously. If there are consequences (dean's vacation, expulsion) for tomfoolery, that should be enough to weed out the people who are not performing well. And, more to the point, there are a litany of reasons why people might fail a course that do not fall neatly under the rubric of laziness (illness, death in the family, etc); therefore, there should be (and thankfully there already is) room for appeals, exceptions and, overall, a more finely honed barometer of a student's level of commitment to his or her education.

But why the amount of money alone would be the main indicator of the level of committment a student will bring to their studies is really beyond me. And so it is distressing that this line of thought has public traction (which I fear it does rather widely). And yet it is so clearly a weak and fallacious piece of reasoning.

Were it sound, just for the sake of argument, it would also follow that students whose parents are fully covering their costs will be less likely to take their studies seriously than students working or taking on debt to pay their costs. (To be honest, I have seen some evidence of this, though I have ascribed the genesis of the phenomenon more to the idleness of wealth.) But this is not universally the case, and so generalizing about it is about as dimwitted as asserting that free tuition would turn our universities into havens of carelessness.

I think the worst that would happen is students would have more time to interact with each other (in lieu of work) and would engage in more of that valuable discursive synthesis which occurs out of the classroom (and, to give an inch, it would probably involve the consumption of more beer).

Emilio said...

Its pretty convenient to want free tuition University when you are in school but when you're working its not so good. And to provide free tuition to University would be ridiculously expensive. Think about our tuition rates. It would probabaly cost like 20 billion a year for decent education and how much would be wasted. I don't want to know. Thank god Stephen Harper is dismantling the Liberals instituitional day care before they raise everyone's taxes by 10% or never give us a tax cut. That program would have been so expensive and I see no reason why I should pay if I don't even have kids and if I did, I would never put them in government run day care.

Sean Tisdall said...

I costed universal tuition when the Progressive Canadian Party rolled out a long term loan writeoff as the central economic plank of their 2006 campaign. Based on the numbers the ANDP give for a 30% rollback (240 million) / 10% of the national population / 30% to a 100% rollback = 8 Billion/ Year. If the Federal government wanted to achieve this it could, as the Tories advocated, scrap the GST rollback and still have a billion dollars left over annually to pay down the debt.

Mr. Vargas, I am annoyed when people pull figures out of mid air. I am irked when people deflect from the original point by criticising an unrelated program (I am surprised that you didn't manage to work in the gun registry into your lengthy anti-government diatribe.) And I am most irritated, when free spenders plead poverty!

Emilio said...

Well I disagree with free tuition so even if its possible I don't believe we should have to do it. Enrollemnt would alot higher than you think if anyone can take classes so the cost wil be higher than you think. And I don't think I should pay for others free University tuition when I paid for my own and am paying up the ass every quarter for my chiropractic school. I pay $19,000 a year in tuition and don't believe the taxpayer should pick up that tab. And who the hell is the PC Party of Canada? Daivd Orchard and a bunch of people from the Mulroney days of big government and huge debts who didn't like the COnservative merger

Sean Tisdall said...

1. Any economist will tell you that the additional cost of foregone wages will act as a cost of going to university. Those that have little prospect of increasing their earnings won't go.

2. In countries with free tuition, enrolment is higher. So is job creation, stability, and econommic equality. The increased tax base more than offsets these costs.

3. Well, I don't much like my tax dollars being used to interfere in the domestic affairs of other contries, but at least parliament is allowed a vote on university spending. The arguement that you have the right to veto government by dint of having paid taxes is a presciption for inertia.

4. David Orchard is a Liberal. But it's so nice to see that people don't do any research before slagging him.

5. The PC Party of Canada is Canada's 7th largest party by popular vote. Not bad, considering we only ran 25 candidates. Ah well, there is next time.

6. Brian Mulroney is a card carrying Conservative. So is his old finance minister, Michael Wilson. You're in a party that was created at Mr. Mulroney's impetus. You really have no moral authority criticising his conomic record of government now. Do be good enough to leave that to me.

matt said...

Good analysis. I would add a couple caveats.

First, though the Harper budget won't effect substantive change to the PSE situation, it does remove dumb things about the tax system. Clawbacks to students is absurd. Ditto the textbooks; the tax code incentivized political donations moreso than textbooks. That's stupid.

Also, while increasing access to student debt ain't great, it'll make things more equal across the country re. access to loans. My wife was from BC, and the BC provincial loan program was precisely half as generous as the Alberta one. A bank line of credit was the only way she could afford school. And, in my view, if a non-government actor is the gatekeeper PSE isn't really accessible.

While I heartily support more PSE funding, at every level of gov't, I really like the Rae report's suggestion of loan repayment. It was actually an old CA policy that never got much press, modelled then, as now, on the Australian and now UK experience.

Gauntlet said...

Hey, Dave:

I just wrote an essay for POLS 399 on why the tuition issue is ruining student government.

But let me say this in response to your rightly-praised article.