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Sean Speer: It’s time to end tuition subsidies

Commentary

This week, York University suspended three employees—including Lesley J. Wood, a former chair of its sociology department,—in light of criminal charges in connection to hate-motivated vandalism at a Toronto Indigo store. 

It’s not the first time that York University has been in the media since Hamas’ terrorist attacks against Israel on October 7. Last month its student unions issued a statement of solidarity that described the attacks as “necessary and justified.” The university’s administration eventually condemned the statement and threatened to revoke the student unions’ status in the face of growing political pressure from the Ontario government. 

Although York University has arguably been home to a more radical response to the Israel-Hamas war than many of its peers, it has certainly faced stiff competition. Students and faculty members at universities across the country have been at the centre of some of the most extreme and offensive expressions of support for Palestine including what has often bordered the increasingly invisible line between anti-Zionism and antisemitism. This has led to growing criticism of Canada’s university sector and emerging questions about the role of democratic accountability for institutions that remain dependent on public funding. 

In this context, University of British Columbia law professor Camden Hutchison has published a thoughtful essay at The Hub that raises alarms about creeping political interference in universities that, in his view, represents a threat to academic freedom. Even though he characterizes pro-Palestinian activism as “simplistic”, “tendentious”, and even “morally repugnant”, he argues that, as a matter of principle, it’s wrong for universities or the government to limit non-violent ideas or speech on campus. As he puts it: “I have viewed the policing of Pro-Palestine expression with concern…To regulate expression on sensitive or controversial topics is to undermine the purpose of the university itself.” 

Hutchison’s principled defence of academic freedom is well-taken. It’s a useful rejoinder to those—including some conservatives—who inconsistently lament a lack of free speech on campus in some circumstances and then call on politicians to intervene in response to speech that they don’t like. The application of a political lens to faculty hiring or the selection of research topics would represent a threat to the truth-seeking mission of universities. It would necessarily politicize knowledge, impede the development of new ideas, and ultimately undermine intellectual progress itself. 

Yet there’s a third option between politicians excessively reaching into universities on one hand, and taxpayers continuing to subsidize counterproductive radicalism on the other hand. Canadian governments should start to ween universities off subsidized tuition rates with the goal of closing the gap between the true cost and market price of post-secondary education. 

Requiring students to assume the full cost of their university education would have several upsides, including: delivering on egalitarian goals about university access using far more efficient policy means, requiring students and universities to internalize the costs of their educational and research choices, and ultimately solving for the democratic tension inherent to notions of academic freedom in a publicly-funded model.  

Why and how much do taxpayers subsidize Canadian universities? 

Before considering the arguments in favour of lowering and even eliminating subsidized tuition rates, it’s worth a brief primer on how and to what extent universities in Canada relies on public subsidies. 

The case for public support for post-secondary education is primarily rooted in what economists refer to as “positive externalities.” The basic idea is that the benefits of university education aren’t merely internalized by students or professors. They’re believed to spill over into the broader society in the form of a more educated and productive workforce, scientific and technological breakthroughs, and even a more informed and better-functioning democracy. As a result of these spillovers, government subsidies partly collectivize the costs for students attending universities and for the administrators who operate them. 

Public subsidies come in different forms including regulated tuition rates, general operating funding, student grants and loans, and research funding. Government funding represents roughly half of total university revenues. Tuition payments are responsible for about one-third

Statistics Canada data show that, in constant dollars to adjust for inflation, average tuition rates for Canadian students have generally been flat or even falling over the past five years. This is due in part to a mandated 10-percent tuition reduction in 2019-20 and a subsequent four-year freeze in the Province of Ontario. 

The average undergraduate tuition rate this year nationwide is $7,076. The highest rate was in Nova Scotia at $9,575. The lowest was in Quebec at $3,461. The level of public subsidy embedded in tuition rates not only varies across provinces but it also differs across fields of study.  

It can be difficult therefore to pin down precisely the gap between the actual cost per student and the subsidized price. The Quebec government’s recent announcement to raise out-of-province tuition rates from $8,992 to approximately $17,000 per year provides a rough sense. The government claims that the previous tuition rate amounted to a $110 million annual subsidy to non-Quebec students. These figures are consistent with a new Ontario government report that estimates the per-student operating subsidy for the province’s universities in 2021 was $8,350. Even if one believes that these figures are somewhat overstated, they signal directionally the extent to which taxpayers are subsidizing tuition rates for domestic students. 

Why revisit tuition subsidies?

Last month, a “blue-ribbon panel” appointed by the Ontario government to provide recommendations on improving the financial sustainability of the province’s post-secondary system released its report. The report contained a series of recommendations including boosting public funding and permitting universities and colleges to gradually raise their tuition rates. Yet it also observed the following: 

…the panel noted that some of the submissions received argued for an unfettered approach to setting tuition fees that would be reflective of market demand and competition for high quality students. This approach would have to be mitigated by a far greater investment in institutional student assistance. For the most part, the panel elected to err on the side of caution.

There’s a good case, however, that moving to a more market-based tuition model is actually a sensible policy step. There are various arguments in its favour—including three outlined below: (1) subsidized tuition rates are regressive, (2) the positive externalities of university education and research are overstated, and (3) moving to a market-based model strengthens the principle of academic freedom. 

Subsidized tuition rates are an inefficient means of achieving the egalitarian goal of removing financial barriers to low-income students attending university. As economist Stephen Gordon has observed, the current model of subsidized tuition rates is highly regressive—it disproportionately benefits students from high-income households for whom tuition rates aren’t a barrier to accessing university education. It would be a far more efficient and equitable use of scarce public resources to permit tuition rates to rise to levels commensurate with a university’s actual per-student costs and then target low-income students with a mix of government and institutional grants to reduce their market price. The net effect would be to rationalize public funding for universities along more progressive lines. 

The positive externalities of higher education are overstated on two grounds. First, the financial benefits for individuals of attending university greatly exceed the costs. Although the market returns for university education vary across fields of study and may even be stagnating overall, they’re still significant. The median annual earnings for someone with a bachelor’s degree or higher in Canada are roughly 50 percent more than for someone with only a high school diploma. There’s even new Statistics Canada research that shows there was a huge educational premium for how people fared during the COVID-19 pandemic. The key point here is that university graduates internalize a lot of individual benefits and therefore there’s a strong case that they ought to assume responsibility for most of the costs too. 

Second (and relatedly), it’s far from obvious these days that universities are producing broad spillovers that justify the current levels of public subsidization. It’s not to say that there’s nothing productive occurring on university campuses. But there are reasonable questions to ask in light of what we’ve witnessed in the past several weeks.

Take Professor Lesley J. Wood for instance. She received a base salary of more than $160,000 in 2021 which amounted to roughly 2.4 times Canada’s median household income. She also presumably receives generous health and pension benefits as well as publicly-supported research funding for her work on left-wing protest movements such as the 2014 book on protest policing which is described as “an activist’s guide to understanding the militarization of the policing of protests.” 

One may even agree with the book’s conclusion that “neoliberal transformations of political and economic systems are militarizing the policing of protest” and still have doubts that her scholarship is producing positive externalities that warrant public subsidies. It’s hard to argue for instance that such research contributes to broad-based knowledge or progress. Instead, it’s a highly debatable and doctrinaire left-wing argument that Woods and others are free to make, but it’s not clear why the rest of us should subsidize it.

The same case extends to a lot of current academic research. It seems clear in recent weeks for instance that parts of critical theory scholarship have contributed to an intellectual paradigm about the so-called “oppressed and oppressors” that not only fails to produce positive externalities but arguably creates negative ones in the form of radical ideologies that can lead to social disorder, criminality, and even acts of terrorism. Universities should be free to offer such courses and programs and students should similarly be free to pursue them. It’s just that they should probably be responsible for figuring out how to pay for them themselves. 

As I’ve previously written, university scholars don’t have a positive right to publicly-subsidized employment or research and universities don’t have a positive right to their current levels of public funding. There’s nothing sacrosanct about the current funding model. It’s evolved over time as an expression of politics.

Which brings us to the inherent tensions of democratic accountability in a publicly-subsidized university model. As long as university students benefit from subsidized tuition rates and their professors benefit from subsidized employment and research, there’s a case that taxpayers ought to have a voice in what’s produced in their name using their tax dollars. The mechanism for expressing such a voice in democratic societies is politics. Yet, as outlined earlier, one can accept that there are legitimate problems with subjecting university teaching and academic research to majoritarian politics. 

If Wood taught at a privately-funded university and wanted to study how left-wing protestors can evade law enforcement, one might think she’s an ideological lunatic, but, as long as she wasn’t breaking the law, our personal opinions wouldn’t matter. Students would be free to self-select into her programs and courses and taxpayers for which they’d fully cover the costs and in turn taxpayers wouldn’t be expected to fund her scholarship. 

That strikes me as the best means to ultimately resolving the problem that Hutchison rightly identifies in his article for The Hub. As long as taxpayers are footing a considerable share of the bill of post-secondary education, there will be these inherent tensions between the principles of democracy accountability and academic freedom. The solution, in my mind, is to extract, as much as possible, the government from the business of ideas and scholarship. That means putting an end to subsidized tuition.

‘The news industry’s bumpy ride is far from over’: The best comments from Hub readers this week

Commentary

This week, Hub readers engaged in topics ranging from how Hamas is viewed by Palestinians, what Canada can do to update its supply management mentality, the lack of trust in Canadian news media, balancing the budget, and what skyrocketing MAiD deaths tell us about Canadian society.

The goal of Hub Forum is to bring the impressive knowledge and experience of The Hub community to the fore and to foster open dialogue and the competition of differing ideas in a respectful and productive manner. Here are some of the most interesting comments from this past week.

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Palestinian support for Hamas appears to be growing

Monday, November 27, 2023

“Nothing Israel could do would satisfy those whose only intent was to destroy the Jews.”

Richard Courtemanche

Canada’s supply management mentality is holding us back

Tuesday, November 28, 2023

“Those of us who raise beef and grow crops have wondered for years why certain sectors of agriculture require supply management and the accompanying supports. The elimination of the Canadian Wheat Board was a very contentious move generating severe opposition. However, the opportunities for new crops and markets have been incredible for those who’ve embraced the change and the challenge! The question regarding agriculture, healthcare, etc. is ‘Who is benefiting from and fighting to maintain these current systems?’ There are alternatives and innovative approaches that deserve consideration and implementation.”

B Kirschenman

“More market control is not necessarily good or bad, but it does need to be a healthy market.

Government intervention in markets needs to be effective (efficiently achieve explicit goals that benefit the whole of society). Obviously, there is a tension between protecting industry (jobs and taxes…AND regional votes) and protecting consumers (prices). If supply management is protecting likely entrenched and sluggish incumbents at a greater overall cost to the citizenry, then sure, let’s have less supply management and more dynamism!

The case for both options should be independently, dispassionately, and ruthlessly made in each of the various affected industries.”

Rob

The news industry’s biggest problem isn’t financing—it is trust

Wednesday, November 29, 2023

“This was a good article. I don’t use social media and don’t think I am missing anything. Journalists need to get back to the five W’s. A news story needs to relay the facts and not sensationalize. It should not contain emotion. An opinion piece should be clearly labeled as such. The two should not mix in one article. Headline writers need to read the story and not over hype. I have read stories in mainstream media where the headline has little to do with the story. It was just to grab my attention.

I would like to see a code of journalism and a list of approved media outlets developed, but I do have concerns over who would approve such outlets. We already have had issues with this. Institutional bias exists for both political extremes.”

Alice Barr

“As they struggle to regain market share and, most importantly, public trust, the news industry’s bumpy ride is far from over.”

RJKWells

“While I use social media I didn’t grow up in the social media age. So perhaps I lack some appreciation of the impact of it on younger audiences. But I can’t buy the claim that lack of trust in Canadian news media is simply a product of ‘guilt by association.’ The quality of news coverage has been going downhill for years and this trend pre-dates social media and the widespread adoption of the internet.

The social media format may well drive news quality to a degree (shorter articles easily consumed). There is some truth to Marshall McLuhan’s conclusion that ‘The medium is the message.’ But social media didn’t force legacy media to adopt biased reporting as a norm. It doesn’t force the CBC (for example) to not cover stories that don’t support their narrative. And if their news industry leaves social media their own platform, that won’t change the internet-driven dynamic or their own quality issues.

Bias is a matter of human nature. The aim for all of us is—and a critical component of journalism was—to acknowledge and guard against one’s own bias. Don’t just critically examine your opponent’s position, critically examine your own. I consistently find it both amusing and frustrating when members of the media talk about the evils of social media. Their lack of self-awareness is stunning.

Currently Canadian media writ large functions from a principle inspired by Marx’s take on philosophy—in this case, ‘the point is not to merely report on the world but to change it’. If the Canadian legacy news media wants to be taken seriously, they should behave like responsible news organizations and not activists or partisans. If that were the case people might be more willing to pay for it.”

Gord Edwards

One straightforward way to balance the budget? Cut seniors benefits

Thursday, November 30, 2023

“As a senior facing an OAS clawback, I’m ok with it. I would just as soon contribute toward my own health-care costs beyond private insurance, or have some assurance the savings would actually contribute toward deficit reduction, but since that isn’t going to happen, I will accede to the cut with some reservations.

At the other end of the spectrum is the GIS supplement. I recognize its necessity, and purported fairness, but I happen to know three or four people who collect it. Two of them for certain did everything humanly possible to avoid having a job all of their lives. Anything short of high crime to not have a job. Of course, they draw the maximum GIS benefit since their CPP pays little because they didn’t work much. One of them does see some humour in this benefit; he may see even more humour at the idea that my OAS is reduced and his benefit increased, which also could happen.”

Dave T

Skyrocketing MAiD deaths represent a profound societal failure

Friday, December 1, 2023

“The numbers are a stark reminder that this issue goes beyond the story of individuals. We need the data to better understand the reasons why they are choosing something so drastic and so permanent.

Life today has moved from something that once was so precious to something that is so casually seen as disposable. We must tread carefully. There is more to the story and the statistics help to better understand what that is.

To read, as an example, that government, unable or unwilling to serve veterans whom we once called upon to serve us in our time of need, is offering them the option of MAiD in their time of need, without even exploring other options, is disturbing. It also tells me that this goes beyond personal choices for those going through unbearable pain and suffering.

The measure of any society is how it treats its most vulnerable. The numbers indicate that we must do a better job, especially on something from which there can be no return.”

RJKWells

“I share many concerns with the author. I do not think that death should be preferable because of a poor level of care or social support. I agree that we have serious societal problems when it comes to how we deal with people who need care generally, especially long-term care, and maybe end-of-life care most of all.

But imposing more restrictions on medically assisted dying does not solve these problems, it only robs the people suffering most from them of a choice.

I think eliminating that choice is a bullet that someone who is against ending one’s own life can bite when making their argument. But the bullet should be bitten, rather than conflating arguments about access to MAiD with concerns about the lack of choice.”

Janet Bufton