Why build half an engineer? [post-secondary funding]

TheGlobeandMail.com – news/opinions/opinion
Published  Jan. 7, 2011.   Todd Hirsch

Economists have long stressed the importance of postsecondary education. We are only as good as we are smart, and if Canada wants to keep up with rising education levels in the emerging economies, we had better get serious about investing in our universities, colleges and polytechnics.

Provincial governments generally believe this, but too often their actions tell a different story. Postsecondary institutions typically have to stand in line with other areas of general program spending, cup in hand, waiting for the surprises that come (or don’t) on budget day.

Is there a better way to fund postsecondary education? A good role model may come from the way Alberta funds something else of critical importance: capital projects.

To its credit, Alberta has come to realize that investments in infrastructure are essential to the economy. Capital spending cannot stop and start with the wild ups and downs of provincial revenue. Half a bridge is useless!

The way Alberta deals with this is to establish a dedicated capital account. The provincial Treasury Board has set up a 20-year capital plan that takes into account all infrastructure needs: highways, health facilities, schools. Money is transferred from general revenues into the capital plan where it is essentially held in a separate account.

Thus capital planning in Alberta benefits from the certainty of knowing how much money is available for years into the future. Despite a $5-billion deficit in general revenues this fiscal year, capital spending programs were unaffected. Because the money is dedicated, the province cannot raid the account (or at least not easily) to cover rising program spending elsewhere.

Postsecondary education is surely just as important as capital spending. If infrastructure is truly considered an investment in the future economy, should we not consider the education of our students just as highly? (Some money from the capital plan does flow to postsecondary institutions for buildings and facilities, but not for programs.)

The difference between postsecondary spending and all other areas of program spending is the timeline. Yes, budget certainty is important for health care, K-12 education, social services too. But postsecondary training generally involves a three- to four-year undertaking.

Canadian universities, colleges and polytechnics are constantly being asked to graduate more students for coming skills shortages. But to do that, the schools need to invest years of time and money to develop programs and graduate students. It’s not like you can simply hit a button and engineers instantly pop out.

Nor is it fair to students who enter, say, a four-year science program because they are told the economy needs scientists, but then see funding chopped in the third or fourth year because of a drop in provincial revenues. This is the same as building half a bridge. It makes no sense.

The issue is not simply more funding for postsecondary education, although that would be welcome – it is certainty of funding. Governments can make well-intentioned promises to maintain funding in the future. But when deficits hit, promises can be broken. That leaves universities and polytechnics in a lurch.

If provincial governments truly believe that postsecondary education is key to competing in the global economy – and they should – then properly financing it is a no-brainer. A separate, long-term postsecondary spending account would help. It’s an investment, not general program spending. And like any good investment, it deserves to be viewed over a long-term time horizon.

Todd Hirsch is a Calgary-based senior economist at ATB Financial. The opinions expressed are his own.

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