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Alberta

Province defends post-secondary funding changes. Says United Kingdom, Denmark, Finland, Hong Kong using performance-based funding

Published

4 years ago

7 minute read

Minister Nicolaides meets with student leaders prior to announcing a new post-secondary funding announcement.

From The Province of Alberta

Transforming post-secondary funding

A new outcomes-based post-secondary funding approach will increase transparency and accountability and help build a modern and diverse workforce for the future.

Under the new funding model, a portion of government funding to colleges, universities and polytechnics will be based on achieving key performance measures. Performance measures will encourage institutions to improve services, increase efficiencies and create opportunities for Albertans through strong labour market outcomes and innovative programs and research.

“This is a new and completely transformative funding model for our universities, colleges and polytechnics. Our new approach will help ensure students are set up for success by encouraging institutions to produce job-ready graduates. Students make a significant investment in their post-secondary education, and it is essential we do everything possible to give them a rewarding career at the end of their studies. By shifting the focus to performance, we will ensure taxpayer dollars are being used in the most responsible way possible.”

Demetrios Nicolaides, Minister of Advanced Education

“The University of Calgary has the ability to create the ‘arc to the future’ for Calgary and help re-imagine Alberta. The outcomes-based funding model is not only a tremendous opportunity to transform our post-secondary system, but to graduate a workforce that is capable of adaptation, with the skills and abilities to innovate and to support economic growth and diversification.”

Geeta Sankappanavar, chair, Board of Governors, University of Calgary

“We look forward to working with government to implement the new outcomes-based approach to funding. This approach should improve predictability in government funding levels and enhance accountability for results delivery, both of which will benefit our students.”

Dave Collyer, chair, Board of Governors, Bow Valley College

“Alberta’s post-secondary presidents welcome the opportunity to work with the Government of Alberta, our learners and other stakeholders in building a performance-based model that will enable us to achieve an overall vision for Alberta’s post-secondary system, that builds on the strengths and core mission of each institution, and that maximizes the quality of our learning and research environments so that learners and communities can reach their highest potential.”

Neil Fassina, president of the Council of Post-secondary Presidents of Alberta and president of Athabasca University

“Alberta’s students deserve an institutional funding model that is both modern and evidence-based. ASEC supports the changes made by the Government of Alberta towards a model that fits our values of transparency, accountability, affordability and predictability. We look forward to working with the government in the further development of the Campus Alberta Grant allocation.”

Emmanauel Barker, director, Government Relations and Advocacy, Alberta Students’ Executive Council

In addition to tying public investment to results, government is also transforming its relationship with post-secondary institutions by negotiating three-year funding agreements. Investment management agreements will include specific performance targets for each institution. They will also specify the government funding each institution will receive if they meet their performance targets. Three-year terms will help institutions plan for the future and build on their record of excellence.

The amount of funding tied to performance outcomes will begin at 15 per cent of operational funding for 2020-21 and gradually increase to a maximum of 40 per cent by 2022-23. A small number of performance measures will be introduced for the 2020-21 academic year, and more measures will be gradually introduced over the next three years to a total of about 15.

 Quick facts

  • Government provides operational funding to 26 universities, colleges and polytechnics every year, but historically, this funding has not been tied to any targets or outcomes. While government provides many different kinds of grants to post-secondary institutions, only operational funding through the Campus Alberta Grant will be tied to performance.
  • The MacKinnon Report identified that the current post-secondary funding structure does not link funding to the achievement of specific goals or priorities for the province, such as ensuring the required skills for the current and future labour market.
  • Outcomes-based funding is a global trend in higher education. About 35 U.S. states use a form of performance-based funding. Over the past 10 years, additional jurisdictions have implemented various methods of performance-based funding, such as the United Kingdom, Belgium, Spain, Portugal, Italy, Norway, Sweden, Denmark, Finland, Poland, Australia, New Zealand and Hong Kong.
  • While performance measures will be finalized after discussions with post-secondary institutions, students and faculty, some examples may include:
    • graduate employment rate
    • median graduate income
    • graduate skills and competencies
    • work-integrated learning opportunities
    • administrative expense ratio
    • sponsored research revenue
    • enrolment (including potential targets for domestic students, international students and under-represented learners)
  • Performance measures will also be weighted differently depending on the institution. For example, different performance measures will be more important to different kinds of institutions.
  • Institutions that meet all of their targets will receive 100 per cent of their allocated funding.
  • If an institution does not meet its targets, the institution will receive funding that is proportionate to its level of achievement. For example, if an institution achieves 90 per cent of its target, it will receive 90 per cent of its funding for that target.

 

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After 15 years as a TV reporter with Global and CBC and as news director of RDTV in Red Deer, Duane set out on his own 2008 as a visual storyteller. During this period, he became fascinated with a burgeoning online world and how it could better serve local communities. This fascination led to Todayville, launched in 2016.

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Alberta

Alberta government should eliminate corporate welfare to generate benefits for Albertans

Published on May 2, 2024

By

From the Fraser Institute

By Spencer Gudewill and Tegan Hill

Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.

And this is just one example of corporate welfare paid for by Albertans.

According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.

Why should Albertans care?

First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.

For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.

Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.

Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.

In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.

By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.

Authors:

Spencer Gudewill
Policy Analyst, Fraser Institute
and
Tegan Hill
Associate Director, Alberta Policy, Fraser Institute
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Alberta

Official statement from Premier Danielle Smith and Energy Minister Brian Jean on the start-up of the Trans Mountain Pipeline

Published on May 1, 2024

By

Alberta is celebrating an important achievement for the energy industry – the start-up of the twinned Trans Mountain pipeline. It’s great news Albertans and Canadians as this will welcome a new era of prosperity and economic growth. The completion of TMX is monumental for Alberta, since this will significantly increase our province’s output. It will triple the capacity of the original pipeline to now carry 890,000 barrels per day of crude oil from Alberta’s oil sands to British Columbia’s Pacific Coast.
We are excited that Canada’s biggest and newest oil pipeline in more than a decade, can now bring oil from Edmonton to tide water in B.C. This will allow us to get our energy resources to Pacific markets, including Washington State and California, and Asian markets like Japan, South Korea, China, and India. Alberta now has new energy customers and tankers with Alberta oil will be unloading in China and India in the next few months.
For Alberta this is a game-changer, the world needs more reliably and sustainably sourced Alberta energy, not less. World demand for oil and gas resources will continue in the decades ahead and the new pipeline expansion will give us the opportunity to meet global energy demands and increase North American and global energy security and help remove the issues of energy poverty in other parts of the world.
Analysts are predicting the price differential on Canadian crude oil will narrow resulting in many millions of extra government revenues, which will help fund important programs like health, education, and social services – the things Albertans rely on. TMX will also result in billions of dollars of economic prosperity for Albertans, Indigenous communities and Canadians and create well-paying jobs throughout Canada.
Our province wants to congratulate the Trans Mountain Corporation for its tenacity to have completed this long awaited and much needed energy infrastructure, and to thank the more than 30,000 dedicated, skilled workers whose efforts made this extraordinary project a reality. The province also wants to thank the Federal Government for seeing this project through. This is a great example of an area where the provincial and federal government can cooperate and work together for the benefit of Albertans and all Canadians.
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