Why increasing tuition fees is not the solution to adequately funding university education in Quebec

Quebec need not go down the same ideological road to policy making as English Canada. It is quite nearly always the same plaint: low tuition = low quality university education. With the implicit or explicit always being higher tuition = high quality university education. Indeed this is the form that Lucien Bouchard’s recent pronouncement on tuition fees takes. It is reported that Mr. Bouchard opined:

“Quebec universities are dangerously underfunded compared with those in Canada and North America.…. These precarious finances have now reached a critical stage. If nothing is done, it is students themselves who will suffer first. And surely, inevitably, so will all of Quebec society.”

Pretty ominous stuff. Luckily I have had the pleasure of teaching in universities from British Columbia to Ontario and now Quebec. And luckily, or unfortunately, I was in each province both as a student and then as a professor. So I can attest to the before and after of tuition hikes (well not yet in Quebec). Here is what I observed. While the need for tuition increases was always cloaked in the garb of quality education it has rarely resulted in higher quality university education. In both the cases of British Columbia and Ontario I observed the following:

(1) There was not an increase in professorial pay beyond the CPI (although some funds were made available to attract Stars).

(2) There was not a decrease in class sizes. They either remained the same or were scaled up so that the professor to student ratio was decreased; that is, more students per professor. And this has been at all levels from the bachelors through to the Ph.D.

(3) There was not an increase in the number of tenured faculty. In fact tuition increases were accompanied by an increase in a reliance on sessional faculty. And this is directly related quality. Sessionals get paid much less than their tenured counter-parts they must therefore take on a greater teaching load to make up for the difference; often teaching at two and sometimes different universities during the same semester. How much time do you think they can spend on quality education? Couple this with the increase in class sizes and the picture is less than high definition quality.

(4) Nor did I notice an increase in expenditure on support staff. The consequence of which is that for both students and faculty the level of administrative services is approaching that of Rogers or Bell: that is one level above Kafkaesque.

Nowhere in Mr. Bouchard’s comments was there any indication of what he meant by quality of education save for some vague reference to competitiveness. My suspicion is that what he really was talking about is a move towards greater cost recovery via user fees. That is, he thinks Quebec should be moving towards full cost recovery of the expense of running universities through raising tuition fees. That this much is a standard liberal economists preference is beyond doubt. Indeed, they have been the protagonists of this position across English Canada. And I have no doubt there is a cavalcade of liberal economists earning publicly subsidised salaries ready to throw in on Mr. Bouchard’s side.

Yet that Mr. Bouchard is little confused is evident by the fact that full cost recovery is predicated on the idea that the value of a post-secondary education accrues solely to the individual student (that is education is a private good) and not at all to society in general. Oddly at the same time he wants to maintain that the underfunding of Quebec universities, owing to low tuition, will eventually cost Quebec society in general (re-read the quote above). Either education is a public good with significant benefits flowing to society from an increase in the average age of the citizenry or it is private good in which the individual student captures most or all of the benefits. Mr. Bouchard wants it to be both. This is indeed a circle that is hard to square, although Bob Rae made a valiant effort at such double speak in his commission into tuition fees in Ontario.

Let us however leave the question as to the quality of higher education and the question over its public and private goods nature to one side. Let us assume all benefits of higher education solely accrue to the individual student. Let us further concede that university thus ought to be self financing: i.e., total cost recovery. There still remains the question of how to raise the money to do this.

Mr. Bouchard’s preference is apparently for front end financing a.k.a. tuition increases. But can this position be justified within the framework of a private goods approach to higher education. Normally yes. But the problem is that in Quebec and in the English Canada university education was previously heavily subsidised by the general citizen regardless of whether or not they went to university.

Let us Assume Mr. Bouchard gets his way and the liberals raise tuition next year three fold. On what basis, that is sense of justice, should it be that those who received their university degree this year and years past not be subject to any cost recovery? That is, if I received my degree three years ago I have the benefit of a high subsidy but those graduating three years from now must absorb a much higher percentage of the cost of their higher education. Simply put, I received a benefit the next generation of students will not. There is simply no way to justify this generational inequality of treatment.

However if the cost of higher education were to be financed through higher marginal tax rates then this disparity could be fully mitigated through a general tax increase on professional incomes (say above 70,000). To simply increase tuition amounts to an inter-temporal (intergenerational) transfer of wealth. Using the progressive tax system however would ensure that those who most benefit(ed) from a university education pay a proportionate share.

This also has two added benefits. First, those students who choose to go into lower paying professional jobs like k-12 education, social services, etc., are not unduly burdened by student debt. And second that the prospect of arduous student debt does not deter those from lower income families from pursuing higher education. Well it may be true well targeted bursaries for lower income families could ameliorate this problem to some degree. However in practice the calculation of lower income is not so easily defined and when coupled with the first point the raft of bursary programs necessary to compensate is unduly complex when compared to the relatively simple instrument of progressive marginal tax rates. That Mr. Bouchard has only thought the matter through to the extent of increasing tuition rates suggests that he, like the liberal economists he appears to be taking his crib notes from, is unduly burdened by a simplistic ideology when what is really called for is a pragmatic and realistic approach to policy making.

If we take both of these points together we can conclude that the demand for higher tuition fees has little to do with higher quality post-secondary education and everything to do with cost recovery. This being the case it stands to reason that all the generations which benefited from a higher education degree should shoulder the burden and not just the future crop of university students.

Quebec need not go down the same ideological road to policy making as English Canada.