Reality of education spending in Ontario

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Appeared in the London Free Press, September 15, 2015

As a new school year begins, labour strife is once again affecting Ontario’s public schools. Elementary school teachers are engaged in a “work to rule” campaign and the possibility of a strike looms. Crucially, the government must deal with these issues in the context of Ontario’s precarious fiscal position, which includes an $8.5 billion budget deficit. 

The ongoing labour disputes have naturally raised questions regarding education spending and school performance. An examination of the relevant evidence brings some much needed clarity. The data show that despite chronic complaints from some quarters about funding levels, spending on public school education in Ontario has not been cut and has in fact increased markedly over the last decade despite a decline in student enrolment. The problems observed in our public schools simply cannot be explained by a lack of resources.

Consider that Ontario spent $25 billion on education in public schools in 2012-13, the most recent year of available data. This is $8.3 billion more than was spent in 2003/04—an increase of 50 per cent. 

This substantial increase occurred despite a 4.6 per cent decline in student enrolment in Ontario’s public schools over that same period. As a result, per-student spending has increased by 57.3 per cent during this timeframe. In other words, more money was spent on fewer students. 

Clearly spending on education is going up. The natural question to ask is: why? The answer, in short, is increased spending on compensation.  

As is the norm in service-oriented sectors of our economy, the bulk of spending in education is on compensation. Fully three-quarters (75.1 per cent) of all education spending in Ontario public schools is consumed by compensation, which includes salaries, benefits, and pensions. Indeed, 73.4 per cent of the entire increase in education spending of $8.3 billion was allocated to increased compensation costs for both teaching and non-teaching staff in public schools.

Of note is the larger and larger share of compensation costs consumed by pensions. Government-sector employees generally enjoy premium pensions compared to those in the private sector. Teachers and non-teaching staff in public schools are no different in terms of enjoying a generous pension. Pension costs increased in Ontario by 103.8 per cent, rising from $685 million to $1.4 billion in annual spending between 2003-04 and 2012-13. Greater diligence in managing these costs through reform will be needed sooner rather than later as pension costs continue to crowd-out other education spending.

Spending on renovations and the building of new facilities is another area of increasing costs, which is surprising given the decline in student enrolment. Specifically, spending on new schools and renovations of existing facilities in Ontario nearly doubled from $1.4 billion annually in 2003-04 to $2.4 billion in 2012-13. 

Conversations about how our schools perform and how they can do better must be informed by the relevant data. And the data show that far from experiencing a crisis of underfunding, government spending in Ontario’s public schools has actually increased significantly over the past decade.

This evidence of increased education spending diffuses any notion that a shortage of resources is to blame for the challenges facing Ontario public schools.