Why Tuition is a Hot Topic in Canada.
It’s rare to go through a calendar year and not have a protest about rising tuition rates somewhere in Canada.
While there is a sizeable contribution from the public sector, tuition rates have increased quite dramatically over the past decade. Enough for the average Canadian to notice.
For a country of approximately 37 million, Canada has a relatively high tuition rate.
About 2 million people enrolled in Canadian universities and colleges either on a full time or part-time basis. In 2016, the average cost for tuition across the country was $6,600. About 46 percent of graduates have a student loan. Average debt at graduation is $23,000.
But what is interesting is the proportion of GDP from all sources spent on post-secondary education is 2.8 percent. Nearly double the OECD average of 1.6 percent.
Despite this, tuition funding is going down.
Tuition funding is going down. The percentage of government funding in the 1960s was around approximately 90 percent. Today, govt funding comprises approximately 57 percent of tuition costs.
Why?
Prior to the Second World War, universities received very little public funding and community colleges did not yet exist. The funding for most academic programs was tied to the church. Private donations guided most of the funding. A very small portion of the Canadian population attended university. The vast majority of students came from the wealthiest families.
Following WWII, grants were provided to veterans for post-secondary. This resulted in a major increase in enrolment rates. By the mid-1960s, nearly all funding for Canadian universities and colleges was provided by federal and provincial governments.
A Cost-Sharing Agreement?
Starting in 1967, federal funding was provided on a cost-sharing model. The provinces made spending decisions and administered the system. The federal government matched their spending dollar-for-dollar. Under this arrangement, federal expenditures on higher education tripled.
By 1977, the federal government abandons the cost-sharing model with Provinces. The feds create the Established Program Financing (EPF), which transfers tax points and cash. Throughout the 1980s, the cash transfers steadily dropped as it was tied to GDP performance.
Despite this, Canada’s public contributions to tuition are still on par with many developed nations around the world.
But, there are some good signs.
Canada’s workforce is among the best-educated in the G7 and the world.
31 percent of Canadians between ages 25 and 65 have a bachelor’s degree or higher. A further 26 percent have some other post-secondary qualification.
The increased educational attainment of women and Canada’s immigrant population has made a significant contribution as well. Since the early 1990s women have accounted for nearly 60 percent of university students. As well, over 40 percent of working-age immigrants have a bachelor’s degree or higher.
Canada also has high completion rates in postsecondary education. In 2012,
57.3 per cent of Canadians aged 25 to 34 had either a college or university
diploma. This is the third highest among OECD member nations behind only South Korea (65.7 percent) and Japan (58.6 percent).
Will the Good News Continue?
In 1992, tuition averaged approximately $2,100 in Ontario. By 2015, this number rose to $9,231 (on average); the highest Provincial increase over the same time period.
University of British Columbia researcher Lori McElroy found that students with little to no debt are more than twice as likely to finish their degree than those with high levels of debt. The completion rate for students with under $1,000 of debt is approximately 71 percent. Those with debt exceeding $10,000 is 34 percent.
And this is why Tuition is a Big Issue.
Despite Canada’s successes in post-secondary attainment at the aggregate, there are concerns about the very real costs that Canadians must pay today. The cost of post-secondary has increased for Canadians quite dramatically over the past few decades. And if the debt of students continues to rise, completion rates may start sliding.
But will it? Post-Secondary education is still highly valuable in today’s economy.
Tomorrow’s is anyone’s guess.
