2009 BC Budget backgrounder
The provincial government has tabled an update of its February 2009 budget. The revised budget highlights some remarkable changes in BC's fiscal conditions. Prior to the February budget, the BC Liberals were optimistic that the province's economy would side-step the effects of a global recession. Call it a convenient way to present a rosier picture to voters prior to the election or call it profound incompetence, the changes in BC's fiscal realities have left the provincial treasury deeply in the red.
The Minister of Finance is hoping to convince British Columbians that his revised budget reflects the best approach to planning BC's future. However, in a poll conducted by Ipsos Reid, the results indicate that a strong majority of BC voters expected the revised budget to make a determined effort not just to protect existing public services, but also to invest in the renewal and expansion of those services. The poll showed, for example, that over 85% of respondents wanted the government to invest in post-secondary education programs to help BC make the transition to new skills and career options.
Unfortunately, those priorities did not make their way into the government's revised budget. Post-secondary operating grants were effectively frozen with institutions receiving no increase to cover even basic inflation increases or to provide new funding for expanded program offerings. In aggregate, post-secondary institutions had a funding deficit of more than $285 million in the current budget year. Over the next three years, that aggregate financial position will only record a modest surplus of less than $50 million, effectively leaving the entire public system close to $230 million short of breaking even over a four year period.
As well, the Ministry of Advanced Education continues to forecast increases in enrolment even though the funding for those enrolment increases is not keeping pace with the demand. The effect of that gap is that per-student funding for post-secondary institutions continues to decline. In real terms, after taking the impact of inflation into account, the declines in per-student funding mean lost opportunities for both students and institutions.
The Ministry's Service Plan acknowledges that its enrolment forecast falls far short of what it should be. The Service Plan admits that in the last fiscal year, its estimate for enrolment was half the actual level of student enrolments. That shortfall in the forecast leaves institutions struggling with more students, a process that leads to longer wait lists to access preferred course options.
The provincial government's budget update also includes a significant shift in tax policy, one that will see close to $1.9 billion in business taxes shifted to individuals. The tax shift comes as a result of the proposed Harmonized Sales Tax (HST). Opposition to the proposed tax shift is beginning to emerge in many communities across the province. To what extent that opposition will force the government to reconsider its approach is unclear at this point. However, as the Legislature begins its Fall sitting and Legislative Committees-like the Standing Committee on Finances and Government Services-begin the process of gathering public input on the priorities for the February 2010 provincial budget, the opportunity for activists within the labour movement and the broader community to make the case for more meaningful tax reform in BC will hopefully gather momentum.
The polling data collected by Ipsos Reid in its mid-August poll will provide an important starting point for that broader public debate. For a complete copy of the Ipsos Reid poll, click here.
Colleges, Universities and Institutes: Revenue, Expenses and Surplus/(Deficit)
Ministry of Advanced Education Operating Grants to Post-Secondary Institutions
Total Operating Grants ($000)
Total Student FTE
Per Student Funding
The Federation of Post-Secondary Educators of BC is the provincial voice for faculty and staff in BC teaching universities, colleges and institutes, and in private sector institutions. FPSE member locals, represented by Presidents' Council and the Executive, represent over 10,000 faculty and staff at 18 public and 12 private sector institutions.