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EDUCATION – Deeper deficits spurred by increases in public school spending

schools-busesBy CHARLES LAMMAM
and HUGH MacINTYRE
The Fraser Institute

With governments across Canada preparing to release their budgets, Canadians can expect headlines announcing new government spending on this or that initiative. But in all the hoopla, what is often overlooked is the harsh reality that governments do not have a bottomless pit of tax money to spend. This point is particularly relevant as governments across the country struggle with chronic budget deficits, spending more than their revenues allow.

The fact is, spending choices in one area invariably have broader effects on a government’s bottom line. Take spending on K-12 public schools, for example, a major expense for provincial governments.

From 2004/05 to 2013/14 (the last year of comparable data) total provincial and territorial spending on public schools increased from $44.3 billion to $62.6 billion. That’s an increase of 41 per cent.

Provincial governments have been spending more money to educate a smaller number of students

However, as spending increased over the decade, enrolment in public schools fell by four per cent. Indeed, provincial governments have been spending more money to educate a smaller number of students.

In fact, spending on public schools has outstripped both enrolment changes and inflation (the rise in overall prices). As a result, spending on public schools per student has increased significantly between 2004/05 and 2013/14. After accounting for inflation, per-student spending is up to $12,427 from $9,876 a decade earlier.

As a recent Fraser Institute study shows, the increase in spending over and above enrolment changes and inflation has had adverse effects on government finances, spurring deeper budget deficits in many provinces.

Had governments across Canada increased their spending on public schools since 2004/05 simply to match enrolment changes and inflation, they would have collectively spent $12.7 billion less in 2013/14. With these savings, the fiscal situation in many provinces would have been markedly better.

In highly indebted Ontario, the provincial government would have saved $5.2 billion in 2013/14, cutting the deficit in that year in half.

Strikingly, Alberta’s $302 million deficit in 2013/14 would have been a $1.4 billion surplus had the government restrained spending on public schools to match enrolment changes and inflation. Prince Edward Island would have also enjoyed a surplus rather than a deficit in 2013/14.

In Quebec, the provincial government would have saved $2.8 billion in 2013/14 if spending on public schools had been restricted to changes in enrolment and inflation. These savings would have essentially allowed the province to balance its budget two years earlier, saving Quebec taxpayers from the burden of billions of dollars in new debt.

Of course, public school spending is just one line item in the budget of provincial governments. But these examples illustrate how spending decisions in one area can have broader effects on a government’s bottom line.

The failure to restrain increases in public school spending has had significant consequences, as provincial governments have run deeper deficits and increased the debt burden on future generations.

Charles Lammam is director of fiscal studies and Hugh MacIntyre is a policy analyst at the Fraser Institute. The study, Fiscal Consequences of Higher Spending on K-12 Public Schools in Canada, is available at www.fraserinstitute.org.

© 2017 Distributed by Troy Media

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About Mel Rothenburger (4595 Articles)
ArmchairMayor.ca is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At ArmchairMayor.ca he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

1 Comment on EDUCATION – Deeper deficits spurred by increases in public school spending

  1. Education dollars continue to be thrown at the system but until the product is dramatically altered there will continue to be “just dollars thrown” to quiet the electorate. The entire curriculum must be changed to produce students who know how to read, write and calculate but whom also are aware of the reality of life, not the chinese dynasty’s and stuff like that which you can read up on when you get a library card and the curiosity to wish to know stuff like that, say like when you are 50……..from K to 12 real life should be taught, sex ed, how to play the stock exchange, what to do about the homeless, how to feed masses of people, how to govern and how to be an educated voter, in other words, from K start readying the student to be an aware adult with a job, go back to streaming trades worthy or profession worthy, it IS possible to tell the difference.

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