The myth of education spending cuts in Ontario

Printer-friendly version
Appeared in the Financial Post

Soon, the Wynne government will present its first budget since being re-elected with a majority last June. This will be a critical test, particularly with respect to the bond market and credit rating agencies. The governing Liberals must present a credible fiscal plan that, among other things, curbs government spending.

And yet, unless the government targets its two largest spending portfolios—health care and education—it will be nearly impossible to restrain spending.

K-12 education spending can rightly been seen as an investment, and an important one for the next generation. The key to mitigating spending restraint—or cuts—is to reform existing spending.

Before discussing reform, however, it’s important to understand the current state of education spending.

According to Statistics Canada’s data, between 2001-02 and 2011-12, the most recent years available, spending on public schools in Ontario increased 62.4 per cent, ballooning from $15.2 billion to $24.8 billion. When price changes (inflation) are considered, the increase is 32.5 per cent. Only Alberta and Saskatchewan had higher increases in spending on public schools in that period.

This measure, however, does not account for changes in student enrolment, and therefore presents an incomplete picture of education spending. After all, if a jurisdiction increases education spending but simultaneously experiences a larger proportional increase in enrolment, actual per student spending will decline. Alternatively, a jurisdiction with a declining enrolment could actually reduce total education spending but still increase per student spending. A recent Fraser Institute study calculated the per student spending levels over the last decade.

In total, public school enrolment in Ontario dropped from 2.16 million in 2001-02 to 2.04 million in 2011-12, a 5.5 per cent decrease.

The declining enrolment amplifies the increase in Ontario public school spending. During the same 11-year period, spending on a per student basis increased 72 per cent, from $7,047 to $12,117.

Yet dramatic increases in spending aren’t necessarily associated with increases in achievement. In Ontario, recent measurements of mathematics performance, for instance, by the Education Quality and Accountability Office show declines in the percentage of Grade 3 and Grade 6 students performing at or above the provincial standard. Specifically, only 54 per cent of Grade 6 students achieved at or above the provincial standard in math, down from 61 per cent five years ago.

Study after study has demonstrated that it’s far more important to focus on how money is spent rather than worrying about the total amount spent. The key to better education isn’t spending more—it’s spending wisely, reforming the way we spend.

British Columbia offers a model for reform in Ontario. B.C. enjoys comparatively low levels of spending increases coupled with relatively high student performance rankings (as measured in 2012 by OECD’s PISA scores). Unlike Ontario, B.C. relies heavily on parental choice and education competition with one-in-eight students attending an independent school. Ontario, quite uniquely in Canada, relies on four public systems of education, thus providing parents with limited choice. Only one-in-20 Ontario students attend an independent school.

As noted in a 2014 Fraser Institute study, Ontarians could save up to $1.9 billion if the province reformed education spending by adopting a B.C.-style model for education.

As Ontario’s government prepares to deliver its budget, it’s important to note that contrary to the rhetoric, spending on public schools in Ontario has increased dramatically. And more spending hasn’t meant better results. The focus should be on reform—how we spend on education—and not on simply worrying about the amount we spend.

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.