Canada West Foundation Blog

By: Tom Carson, Director of the Manitoba Office

Manitobans head to the polls on Tuesday, October 4, 2011, and with only 169 days to go it is not surprising that the budget tabled on April 12 seemed designed both to benefit the largest number of interests and to create the least possible controversy.

On the revenue side, no increases are planned for major corporate or personal income taxes and expenditure increases will be sprinkled across many sectors, reaching a very broad public. These increases include the freezing of administrative costs for the regional health authorities and tying tuition increases to the consumer price index (CPI).

However, there was also some disappointment, especially for those who viewed the budget through a lens where the economy and our future spending ability is of preeminent importance. While the minister stated that overall expenditures were expected to rise by 2.3%, year over year, spending on core programs actually rose by 4.89%.

Going into the preparations for this budget, consultations generated a few hot points:

• The Business Council of Manitoba had what seemed to be an unprecedented recommendation; in recognition of the serious impact that Manitoba's infrastructure deficit has on the economy, the leaders of Manitoba's business community actually recommended a 1% increase in the provincial sales tax to be applied for a ten-year period and used only for infrastructure expenditures. This was seen as an opportunity for municipalities to deal with their infrastructure problems with a revenue source that actually grows with the economy.
• The government responded with a commitment to spend the equivalent of one point of the provincial sales tax on municipal infrastructure and public transit. This looks like a bigger commitment than it is. Rather than being incremental to current infrastructure spending, this commitment blends current grants for infrastructure and public transit. While blending both grants identifies a secure and growing source, for the City of Winnipeg it would represent an estimated 9% increase from funds they already receive. Winnipeg will benefit by having this increase funded from a growth stream, whereas previously approximately 50 to 60% was funded in this manner. Over time the value of that growth will become more obvious, however, it is not a substantial investment and will not contribute significantly to correcting the infrastructure deficit.
• Comparatively, Manitoba's universities have been both underfunded and, due to a decade-long tuition freeze which ended in 2009, prevented from using tuition increases as a means to help balance their books. The government has committed to increased grants of 5% over the next three years and has reinstituted a tuition freeze, although this time tying it to growth in the CPI. Although this commitment is not enough to bring them on par with the support received in most other provinces in Canada, it does at least begin to reflect the importance of universities to our provincial economies.
• For those hoping that the budget would reflect a major commitment to cut spending, the tone of the budget speech demonstrates that it was clearly not something the government wished to lead with. The publicly stated commitments to restraint are quite narrow—they are striving to negotiate a 0% increase for the general civil service, freeze discretionary salary and operating expenditures, maintain last year's reduction in ministerial salaries and carry on a freeze on salaries for members of the legislative assembly along with their staff. They will be attempting to freeze salaries for senior management in the regional health authorities and generally seeking ways to foster innovative, cost-effective services. (Government will likely also expect all public-sector employers to seek the same wage freeze—presenting an interesting dilemma for university administrators).
  
  

The question yet to be answered for Manitobans is whether the right policy choices are being made through the current budget. Were there alternatives which could have resulted in balancing the budget more quickly? If these choices were not made in this budget, will it be incumbent on the government formed after October's general election to initiate them?

It might be tempting to say that no government going into an election would choose to add 1% to the sales tax or to introduce themes of restraint and program redesign. However, Saskatchewan is also heading into an election in November of this year, and unlike Manitoba and most other provinces, has already posted a surplus. Both provinces saw greater revenues last year and both spent more than they had budgeted in 2010/11. Saskatchewan's revenues and expenditures have grown significantly more than Manitoba's, but their treatment of the budget challenge in 2011/12 is quite different despite the upcoming elections. While Saskatchewan plans to be spending 5.48% more than their printed estimates of last year, they will be spending 2.45% less than their actual previous year expenditures. And the untouchable—spending in the Department of Health will actually be reduced compared to the previous year.

Now, that would have raised eyebrows amongst those looking for more attention to the bottom line in Manitoba!

Students:
Since exams will be wrapping up soon and summer is just around the corner, put one of your most prominent skills to good use and write us an essay! This time, however, you’ll have a chance to receive more than good marks—there is $10,000 in prize money to be won:

• First prize: $5,000
• Second prize: $ 3,000
• Third prize: $2,000

This year's essay question is: What is the most important thing western Canadians need to do to ensure that the West remains a great place to live in the 21st century?

The best essay will have a clear position that displays strong arguments, solid evidence and research.
Once complete, mail your essay to roach@cwf.ca with “Jim Hume Essay Contest” in the subject line. To read the rules for this contest or to view past winning essays, click here.

We look forward to hearing your vision for western Canada. Good luck!

The Jim Hume Student Engagement Program encourages young people to become engaged and contribute to debate on public policy issues of importance to the future of western Canada and all Canadians.

by Robert Vineberg, Research Fellow

On November 4, the Association of Universities and Colleges of Canada (AUCC) announced that a delegation of fifteen university presidents will undertake a seven day tour of India to promote Canada as a destination of choice for Indians who wish to pursue post-secondary education abroad. This is good news for a number of reasons. First, until now Canadian universities are, for the most part, unknown in India.  According to the AUCC, only 3,000 Indian students chose to study in Canada in 2008. By comparison, in 2007, over 63,000 Indians chose to study in Australia.

Why the huge difference? Certain factors are beyond our control. Australia is closer to India and its climate is milder. But the major reason is that Canada has never gotten its act together to effectively promote Canadian universities as a desirable destination for Indians. To their disadvantage, too many Canadian universities have regarded their competition for foreign students to be other Canadian universities, leaving Canadian universities to promote themselves, individually, without the critical mass that comes through collective promotion.  In reality, the competition for all Canadian universities is other countries, such as Australia. The Australian universities and the Australian government learned several years ago to promote the country of Australia as a desirable place to study, not a specific university, and the results have been fantastic for Australia. It also recruits many of its best immigrants from the ranks of its foreign students.

This is why the delegation of fifteen universities working together to promote education in Canada is good news. We need to beat the Australians at their own game by promoting the value of a Canadian degree from any Canadian university. The Canadian government recently caught up to the Australians by changing immigration regulations to allow foreign graduates in Canada to apply for immigration from inside Canada, as foreign graduates can do in Australia. Now is the time for Canadian universities to catch up to the Australians as well. By promoting a degree from Canada rather than a degree from Alberta or McGill or Manitoba, we will attract more of the best foreign students.  Some may want to stay in Canada and many will return to careers in their home countries but, either way, Canada and the foreign students stand to benefit.

Let us hope that this delegation of university presidents to India will be the start of a new, coordinated, approach to promoting a Canadian post-secondary education to the world.

The United Way of Winnipeg just released a report which other western provinces should study carefully. Entitled Eagle’s Eye View Second Edition, it updates an earlier 2004 report.  An environmental scan of the aboriginal community in Winnipeg, one of its objectives is to inform and influence policy in the public, private and voluntary sectors.  With its focus on Winnipeg, it neither describes the circumstances of aboriginal people throughout the Manitoba nor through the West. Nonetheless it is a useful document for western observers.

The media response on Thursday, June 24, 2010 was two draw out four bullets of good news and three bullets of bad news.  Those positive bullets briefly outlined improvements in employment, incomes, numbers of homeowners and reductions in the number of single-parent households. The bad news focused on a loss of native languages, the earnings gap and high rates of child poverty. The headline was “City aboriginals making gains” and, yes, it is important to underscore those markers of progress.

However, the pressure on a society to improve public policy seems inevitably to be proportional to the size of the fire on the burning platform. These first media stories might well leave the reader with the impression that since things have improved over the past decade all we need to do is to wait for another census or two and before long things will be substantially more equal.

But if you look more carefully at the numbers, you can see more clearly the pressing need for western Canadians to consider the policy that influences the trajectory of aboriginal people:

• Aboriginal unemployment (that is, the inability to get a job for those searching for one) dropped from 25% to 12% between 1996 and 2006 compared to the general population of Winnipeg where it dropped from 7% to 5%.  While it is a significant gain to reduce aboriginal unemployment in the city by more than a half over a decade, aboriginal people were still more than twice as likely to be unemployed.
• The proportion of Aboriginal people living below the poverty line dropped measurably from 75% to 62% between 1996 and 2006 compares to a drop from 21% to 17% in the general population. These data suggest that the significant improvement in employment over the past 10 years has not been associated with the kind of employment that generates salaries adequate for raising a family.  Aboriginal people are still more than  three times as likely to be living in poverty in Winnipeg.
• The aboriginal population 15 years and over who have achieved a high school certificate or higher education attainment, grew from 38.2 % to 60.2 % between 1996 and 2006. While this is a significant achievement, it also means that 39.8% of aboriginal people over 15 years of age have not gotten grade 12 or any postsecondary training. This compares to 21.5% in the general population. In other words, over that period, aboriginal people are almost twice as likely to have an education level that presents a barrier to meaningful employment.

Education is the most important policy instrument we have for improving employment, reducing poverty and strengthening the present and future economy of Western Canada.  Canada’s education systems, widely believed by most Canadians to be amongst the most important of our social programs are not yet robust enough create equitable results.

Tom Carson is the Director of the Canada West Foundation’s Manitoba Office.

Posted by: Tom Carson