Education Finance

President’s Blog

By now you have probably heard the funding announcement from the Provincial Government and you are probably aware that School Divsion are facing some difficult decisions about where to cut and where add. Border Land School Division has begun to undertake a survey to understand what parents and community members are feeling they need in from division and how we should support our schools. However Border Land Teachers’ is going to share with some information, some information that you might not know. A few weekends ago our Education Finance person Joel Wiebe went to the Education Finance Seminar and brought back this information.  Thank you Joel for sharing this information. If you have any questions please feel free to contact Joel or me Mary Chalmers and we will see how we can help you. 

As information becomes available please watch our website and our Facebook feed for more information. 

Education Finance Report

The Financial Condition of Manitoba is vastly better than what has been claimed. The Economic fundamentals of this province are sound, much better than what has been released by the current government for the media to report.

According to the OECD (Organization for Economic Cooperation and Development), Canada saw an overall economic growth rate or 1.5%. This year it is expected to be 1.8% and for 2021, 1.7%. This is not bad compared with the other G20 countries.

Since the economic downturn of 2008-2009, the Manitoba Economic Outlook has been surprisingly healthy.

  2019 2020 2021
Real GDP 1.25% 1.45% 1.6%
Nominal GDP 3.05% 3,4% 3.5%

One reason for this positive economic health is diversified trade. Manitoba is unique among the provinces in that it trades as much interprovincially as it does internationally. That said, almost 70% of Manitoba exports to to a single market, the USA. 8% to 10% goes to China and Hong Kong (in 2020 this will likely be lower – Corona Virus), 5% now goes to Japan, 4% to the EU and about 2.5% to Mexico.

Another reason for this good news is a growing population within Manitoba. According to the 2016 Census, the provincial population grow rate was 5.8% between 2011 and 2016, the third fastest in Canada. Canada grew by 5.0%. Since then the growth rate has continued, thanks largely to immigration. In October, 2019, Manitoba had a population estimated to be 1,373,859, up about 16,000 from a year earlier. This amounts to a 1.2% rise in population.

The impact of this increased population has impacted our public school system as well. Fertility rates have been rising as the overall population has gotten younger. Saskatchewan and Manitoba are now the second youngest among all the provinces in Canada. In 2009 there were 179,000 residents aged 5 to 18 (school aged). By 2020 this number as risen to 190,000. (This compares to the 250,000 students at the peak of the baby boom in the 1970s). The stagnant years of population growth now appear to be behind us.

 

Financial Transfers from Ottawa to Winnipeg (Federal to Provincial)

The Federal Government in Canada is in a better position to collect taxes than the provinces but the provinces are responsible for the greatest spending needs – health and education. Federal transfers are Canada’s way of wealth distribution, moving dollars from the wealthier provinces to the less wealthy ones. It is one of the benefits of living in a confederated union of provinces and territories. At the time of Confederation, the Maritimes was the wealthiest region of Canada. For a long time, it was Ontario. For the past 40 years it has been Alberta and now it is BC.

Major federal transfers include:

  • Canada Health Transfer
  • Canada Social Transfer
  • Equalization payments

In the Harper era, transfers from Ottawa to the provinces flatlined. Taking the rising cost of living (inflation) into account, they actually declined. Manitoba saw losses of about $300 million annually. This amounted to approximately a 1% rise in PST. This partially prompted the Selinger government to raise the GST rates (something politically unpopular). Since Trudeau, however, the federal transfers have increased, and will likely continue to do so under a minority government.

The Canada Health Transfer was $1.521 billion, up $50 million or a 3.4% rise from 2019-2020.

The Canada Social Transfer was up $15 million, for a total of $546 million.

Equalization payments were up $218 million (10.7%) over 2019-2020, for a total of $2.5 billion.

United States-Mexico-Canada Free Trade Agreement has been signed but yet not enacted into legislation. This appears to be likely, as the Conservative Party of Canada has indicated that it intends to vote along with the Trudeau Liberals to make this into law.

 Recent Education Funding Announcement

Just a few weeks ago, the Manitoba Government announced it plans for Public School funding for the 2020-2021 school year.

2019/2020
Funding
Operating Increase Capital Increase TIG
Decrease
Total

Increase

2020/2021
Announcement
%

Increase

$1,326.8 M $4.4 M $10.4 M (8.2 M) $6.6 M $1,333.4 M 0.5 %

https://winnipegsun.com/news/news-news/manitoba-announces-small-increase-to-school-funding

What Mr. Kelvin Goertzen, the Education Minister, will not tell you is that, taking inflation into account, an overall increase of 0.5% amounts to a 1.5% reduction in funding for public education. This cut seems to hurt more when overall student population growth in public schools is projected to be 1%. More students to work with less money is not a great scenario, especially when the provincial economy and revenues are in good shape.

(The $10.4 M capital increase is for the 20 new schools that the Pallister government campaigned on during the last election. Several of these schools, at least 2 of them, have already been built in Winkler).

When looking at the overall picture, the amount of tax dollars that is going into public education is a shifting dynamic. Five years ago, when the government shifted from the NDP to the PC colours, the province was paying 64% of the costs of public education. Municipalities/Local governments were paying 36%. After 5 years of the current government, the province is paying 58% of the costs of public education, leaving the Municipalities/Local governments were left with 42%. Imagine the frustration at the local governmental level when the province has shackled their ability to raise mil rates at no more than 2%! (That is, of those who are not afraid to raise the rates at all).

Currently, 26 of 36 divisions are losing money, before even taking the rising costs of inflation into account. Of these 20 have lost revenues four consecutive years. Inflation only adds to the devastation. 14 school divisions have seen a -2.0% increase four straight years. Borderland is one of them.

Report submitted by: 

Joel Wiebe

Education Finance Chairperson

Border Land Teachers Association