The 2007 federal budget, tabled March 19 by Finance Minister Jim Flaherty, addressed the question of fiscal imbalance by considerably increasing transfer payments to the provinces and by introducing a new equalization formula.
The main budgetary items dealing with higher education and university research will be based henceforth on an amount of $800 million, earmarked exclusively for post-secondary education, that will be integrated into transfer payments for social programs starting in 2008-2009. Investments in research are also allocated. This is the case for, among others, the financing of graduate scholarships, the Canada Foundation for Innovation, CANARIE and the Networks of Centres of Excellence. Indirect research costs also receive increased financing, but not enough to fully meet costs incurred by these projects. Subsidized organizations get increased financing for specific target research fields.
“Of the measures contained in the 2007 federal budget,” said Prof. Heather Munroe-Blum, Principal and Vice-chancellor of McGill University, “I am particularly delighted with the investment in McGill’s Montreal Neurological Institute, which is thereby recognized as the world leader in its field.”
The federal budget also affects the long term by making the post-secondary transfers stable and predictable. Starting in 2009-2010, they will evolve at a rate of three per cent a year until 2013-2014.
Even if these steps are real and tangible, the larger needs of the university system in Quebec, whose share of the transfer payments will be around $200 million in 2007-2008, must be recognized. The 2007-2008 transition year will get off to a difficult start because the increase in transfer payments does not begin until the following year. As a result, the disparity with regard to universities in other provinces may well increase. With the help of the equalization payments, the government of Quebec should now invest a greater share in universities. They represent the greatest investment for ensuring the province’s place among innovative societies, where economic prosperity and social justice are based on knowledge.
Prof. Munroe-Blum urges the federal and provincial governments to continue investing in university education and research and to recognize the areas of excellence by granting them specific financing.