Hot! Canada’s made a choice: health, not education – commentary
Sep. 12 2012.   Jeffrey Simpson

An incremental but fundamental change happened in Canada within the past decade. As a country, we began spending more on health care than on education. And with an aging population, the skew to more money for health relative to education will continue.

From 2000 to 2010, public spending on health-care spending grew by 2 per cent more each year than spending on education – K-12 to postgraduate university study. That’s not much of a yearly difference. Stretched over a decade, the gap becomes quite wide.

Canada, as the Organization for Economic Co-operation and Development reported this week in a study of education systems in member countries, has a very good education system. Our population is better educated than most. We send a higher share of people to postsecondary education than almost any other country. Our primary and high-school students score very good results relative to the other Western countries (except Finland) in international examinations of what students know.

A dollar spent in one place, however, can’t be spent in another. If more money is diverted to health care, that money can’t go to education, or any other program. Think about it: Canada’s prosperity depends on an even better educated work force rather than more money for health care, but the country, perhaps without being fully aware of the choice, has decided that’s where we’re going. The consequences are ominous.

The OECD report underscores this choice without naming health care as the reason. Between 2000 and 2009, Canada was one of the very few countries where the share of GDP spent on education didn’t change. In most countries, the share went up. In Canada, it remained the same – while the share (public and private) devoted to health care continued to climb.

This week, the Canadian Centre for Policy Alternatives issued a breathless report restating the obvious: University students’ fees have gone up much faster than levels of government support for universities. Among some students, especially in Quebec, higher fees are anathema because they supposedly deter access and thus hurt equity.

The OECD, however, says: “OECD countries in which students are required to pay tuition fees but can benefit from sizable financial support do not have below-average levels of access.” That finding would include Canada.

Figuring out how to measure who gains from higher education is a fiendishly complicated business. Clearly, society benefits in many ways from a better-educated population (not just university education), and so do the individuals who’re educated. How much of a benefit to assign to both is not easy.

The OECD has made a stab. It says the “net public return” on an investment in university education is $100,000 (U.S.) for men. But the gross earnings premium for an individual with university education is $340,000 for men and $235,000 for women across the OECD. In other words, the private premium is three times for men and twice for women compared with the public gain.

You can play with these figures of private and public gain endlessly. Suffice it to say that the higher up the educational ladder you go, the more private gain you earn. And thus the future gainer should pay for a reasonable share of his or her higher education.

Except, an anomaly shows up in Canada that caught the OECD’s attention. More people with PhDs in Canada than in other countries don’t cash in on their degrees but rather fall into low-income categories. Either they can’t get jobs or they get low-paying ones, or they’re immigrants who struggle after university. We’re apparently an outlier in this area.

Despite this blip, investments in education aren’t just useful, they’re essential for human development, economic competitiveness, a flourishing democracy, individual fulfilment and raising the productivity on which depends the country’s long-term ability to finance government programs, including health care.

We’ve made the collective choice that we’ll spend more public dollars on health than on education, and this trend, as the population ages, appears set to continue.

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