Ben Eisen, Policy Analyst, Frontier Centre for Public Policy
Not all university students are created equal. While all of them may share the same fear of final exams, they don’t all share the same fear of the tuition bills they are paying.
That’s because tuition levels vary widely from province to province. Full-time undergraduates in Alberta, Saskatchewan and Ontario, for example, pay an average of over $5, 000 per year in tuition fees, while undergraduates in Manitoba pay just $3, 400. In Quebec, tuition fees are even lower - students there pay an average of just $2,300.
An expensive policy
Students (and their parents) love low tuition fees, but they unfortunately represent an inefficient and unnecessarily expensive policy approach for financing postsecondary education.
The development of a well-educated workforce is universally recognized as essential for Canada’s prosperity, and most people agree that a high level of participation in post-secondary education is good for the country. Low tuition levels, however, are unnecessary to achieving that objective because a large portion of the benefits of postsecondary education are experienced by the students themselves in the form of higher expected lifetime earnings.
The financial benefits of a university degree are substantial: we can therefore count on large numbers of young people to recognize it is in their own self-interest to pursue a higher education, even if the tuitions fees are not as low as those enjoyed in Manitoba and Quebec.
In fact, a 2007 study for Statistics Canada examined postsecondary education participation rates across Canada and found they were strikingly similar in Saskatchewan and Manitoba despite the fact they were much higher in Saskatchewan. The analysis showed 76 per cent of young adults in Saskatchewan had participated in some form of postsecondary education, compared to 72 per cent in Manitoba. For university participation specifically, 44 per cent of young people in Saskatchewan had attended university, exactly the same as in Manitoba. Similarly, Ontario actually showed a higher university participation rate than Quebec despite the fact that its tuition levels are more than twice as high.
In short, the evidence suggests that while the cheap tuition offered by Manitoba and Quebec strains government budgets it does little to boost postsecondary participation.
Any proposal to increase tuition rates is always met with howls of protests (often from students themselves), the main argument being that higher tuition will reduce access for young people from economically disadvantaged families. But this issue can be addressed more efficiently by offering targeted subsidies and favourable loans to provide assistance to individuals who have a real financial need.
Targeted subsidies and favourable loans, in fact, would better ensure equality of access, but at less cost to the taxpayer, than low tuitions which subsidize the affluent as well as the disadvantaged.
A regressive subsidy
In fact, the benefits of low tuition levels flow disproportionately to economically comfortable members of society. University students are much more likely to have grown up in affluent families, and have, on average, higher lifetime earnings than people who do not advance beyond high school who, while not pursuing a post-secondary education themselves and do not receive the benefits of low tuitions, are still required to pay some of the costs through higher taxes on their earnings, a regressive subsidy.
Besides doing little or nothing to boost university participation and are an inefficient strategy for ensuring access to higher education, the real effect of rock-bottom tuition in Manitoba and Quebec is to transfer public funds into the pockets of society’s wealthier and better educated. A smarter and fairer policy is to require students to pay similar tuition to that paid in the other provinces, while using scarce public funds where they are really needed.
Ben Eisen is the author of The Real Have-Nots in Confederation: British Columbia, Alberta and Ontario. Visit Frontier's website at [url=http://www.fcpp.org]http://www.fcpp.org[/url].
