How will the UCP government’s cuts affect students?
The United Conservative Party (UCP) released its first budget on Oct. 24th. The focus on balancing the budget by cutting spending marks a drastic departure from the previous New Democratic Party (NDP) government’s approach.
The budget has triggered outrage in the province, even though the UCP won a strong mandate to govern in last April’s provincial election by capturing almost 55 per cent of the popular vote, and 63 seats out of 87 in the legislature.
The NDP were elected into office after a devastating crash in oil prices. They responded to a rapid loss of government revenue, due to lower energy royalty income, by borrowing money to maintain spending on social services. The unfortunate trade-off of this approach was the ballooning of the province’s debt, which went from approximately $12 billion to projections of $100 billion in the coming years.
The centerpiece of the UCP’s budget plan is a tax break for corporations that will see the corporate tax rate fall from 12 per cent to 8 per cent by 2023. Ideally, this move will stimulate business growth in the province. However, this new tax income shortfall, combined with decreased oil and gas royalty revenue, will cause the UCP government to rely heavily on spending cuts to bring the province’s budget back to surplus.
One of the areas hardest hit by budget cuts was the area of advanced education. Post-secondary education is projected to have $338 million shaved off of its budget over the next four years. This accounts for an approximately 12 per cent reduction in the department’s budget.
Because of these cuts, post-secondary students will likely see tuition raised by as much as 7 per cent per year, to a maximum of 21 per cent over the next four years.
From the Perspective of Government
According to Alberta’s Minister of Advanced Education, Demetrios Nicolaides, cuts to post-secondary are necessary to getting the province’s financial house in order.
“I recognize this is challenging, and we’ve had to, as a government, make some very challenging and difficult decisions,” said Nicolaides.
The UCP decided to make extensive cuts to advanced education after the findings of the MacKinnon Panel’s report, which identified post-secondary education as an area where cuts would be necessary.
“They demonstrated that post-secondary spending is quite high with respect to other comparative provinces and it’s simply not sustainable,” said Nicolaides.
The overall news for post-secondary students is bad, but there are some focused investments by the government in a few areas.
The government will make a number of investments into a variety of trades-related programs. The province will spend $2 million in scholarships for high school students who show promise in the trades, $2 million for post-secondary students with developmental disabilities, $11 million for students participating in the apprenticeship dual credit program, and $10 million to a group called Women Building Futures that encourages women to explore careers in the trades.
“This focus on apprenticeship learning and the skilled trades is critical in giving young Albertans the educational opportunities they need, and it’s critical to helping us restart our economy,” said Nicolaides.
From the Perspective of Students
Garrett Koehler, Chair of the Board of Directors of the Alberta Students’ Executive Council (ASEC) is disappointed with the cuts. He cautions the government on its approach to post-secondary education.
“Unfortunately, we understand that it’s going to have huge implication on students,” said Koehler.
“We see them as huge detriments to student success and access to post-secondary education.”
While the cost increases for post-secondary students will be extensive, there are pockets of good news out of the budget from AESC’s perspective.
Trade schools like SAIT will benefit from investments by the UCP government for skilled trade students. Also, programs put forward by ASEC to help students affected by sexual violence, and increased funding for mental health, will remain intact.
Although ASEC isn’t happy with the budget, they will continue to work with the government, so they can be productive stakeholders in the conversation.
“We’re not going to be students banging our drums, complaining, we’re going to be putting forward thoughtful policy recommendations,” said Koehler.
From the Perspective of the Opposition
When it comes to advanced education and other social services, former NDP finance minister Joe Ceci is highly critical of the UCP cutting spending in order to fund corporate tax breaks.
“There’s absolutely no reason why student education should become more expensive – it’s an ideological choice of this current UCP government,” said Ceci.
From his perspective, post-secondary students are paying more for tuition because the UCP has to pay for what he calls the “no jobs corporate tax handout.”
To illustrate his point, Ceci cited the recent news of Husky Energy laying off hundreds of workers in Calgary, despite the UCP lowering corporate taxes.
To Ceci, this budget is dishonest, because he believes people aren’t getting what they hoped for when they voted in the UCP.
“What they’re getting is increased costs and services all over the place,” said Ceci. He pointed to the UCP government offloading costs on municipalities and universities. These will have to recoup their cost through higher taxes and tuition increases.
Putting it all Together
It’s uncertain what the long-term effect of these policy changes will be. One thing is clear, post-secondary students will be disproportionately bearing the brunt of bringing the province’s budget back to balance.