The Coming Debate: How Should Higher Education Be Financed?

A STUDY released by the United Nations has rated Canada number one among countries people would choose to live in. There were many reasons listed for Canada's high rating, but among the major reasons was the generosity of Canada's social programs. We Canadians ourselves often point to the attractiveness of our system of universal health care. Indeed, since the end of World War II, we have considered our nation's advanced social service programs a sacred trust. Canada's education system is another important attraction for people choosing Canada as a place to live. Canada spends 7.2% of its gross domestic product on education. That's more than any other industrialized country. Canada is also near the top of the industrialized countries in university and college enrollments. One-third of Canadians between the ages of 18 and 24 are university students. That is double the rate of a decade ago. The number of Canadian students clamoring to receive a higher education today is so great that post-secondary institutions are able to accept only a small percentage of applicants. For instance, the University of Alberta last year accepted slightly less than half of the 14,441 students who applied. Only 6,628 of these applicants were admitted. The same situation is occurring in all provinces. In Ontario 130,000 students applied to the province's 23 community colleges, though there were spaces for only about 75,000. As I was preparing this column, the federal minister of human resources, Lloyd Axworthy, tabled in Parliament his sweeping proposals for the funding and restructuring of the federal government's social programs. Axworthy's review of social policy covered part of the $38.7 billion the federal government will spend directly or indirectly on social services this year. The review document, a policy paper titled Improving Social Security in Canada, took months to prepare and deals with welfare, unemployment insurance, loans to students, and the financing of postsecondary education. Other social programs -- such as medicare, seniors' pensions, and social spending on Natives -- will be dealt with in subsequent policy reviews. A cacophony of condemnation greeted the release of Axworthy's policy review. The area that has occasioned the loudest cries is the restructuring and refinancing of postsecondary education. Currently the federal government accounts for one-half of the $16 billion spent on higher education in Canada. Under a complicated agreement on the financing of postsecondary education negotiated with the provinces in 1977, Ottawa ceded to the provinces a greater percentage of personal income tax revenues (worth $3.5 billion today) along with annual cash transfers of $2.6 billion with no strings attached. It is this latter amount that the federal government wants to phase out by 2006. This action will mean a radical shift in the financing of postsecondary education, which immediately alarmed not only provincial governments but also college and university administrators, faculty members, and students. The discussion paper is vague on how postsecondary funding should be changed. It sets out options for change in the hope that widespread discussion will provide the government with sufficient feedback by next February to provide Ottawa with a plan of action for serious negotiations with the provinces. Several of the suggestions for refinancing postsecondary education are not new. One suggestion is to put the $2.6 billion into a new system of financial aid for students. Students would be able to borrow from the federal government for the total cost of their university education. The idea is that universities would raise their tuition dramatically to pay for the largest portion of their costs (although at some universities tuition already pays for as much as 37% of costs). The provincial governments would decide what tuition fees universities could set. This change would make students responsible for paying for the largest share of their university education. …