Education Spending in Canada: What’s Actually Happening?

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Media reports on education spending in Canada often refer to spending cuts, gaps and caps, budget shortfalls, and expenditure decreases. An informal observer may well conclude that spending on government elementary and secondary schools across the provinces is falling, and that it has been doing so for quite some time.

But is this actually the case? Has spending in government schools increased or decreased over the last decade?

Using comprehensive Statistics Canada data, this paper analyzes changes in spending on government schools from 2001/02 to 2011/12—examining variations in provincial spending on public elementary and secondary schools for a period of just over a decade. The data are presented in aggregate form (all provinces combined), with additional province-specific analysis offered throughout the paper and in the appendices.

The paper discusses four of the measures commonly used to analyze spending, and identifies some of their weaknesses when applied to education spending. It also offers an analysis of what spending on education in government schools would have been had it only matched inflation and changes in enrolment. The results do not support a narrative of decline in education spending in Canada.

The most common measure of education spending is nominal spending—the level of total spending in any particular year compared to total spending in previous years. Using this approach, total nominal spending in government schools in Canada grew by 53.1 percent, increasing from $38.9 billion in 2001/02 to $59.6 billion in 2011/12. Every province showed a marked increase in nominal spending on government schools. But this measure does not account for changes in student enrolments.

We next consider spending as a ratio of gross domestic product. Spending in government schools relative to GDP at the end of the period was where it was at the beginning of the period (3.4 percent). Even though it initially declined slightly, it then spiked in 2009/10 before declining again. This approach too is a misleading measure of spending over time, however, because the marked increase in education spending as a share of GDP observed in 2009/10 had little to do with changes in education spending and a lot to do with the recession, during which GDP contracted.

The third measure analyzes education spending as a ratio of provincial spending. The proportion of total program spending represented by spending in government schools fell almost continuously over the period, declining from 21.9 percent in 2001/02 to 19.4 percent in 2011/12. Still, this can also be misleading. Given the marked increases in nominal spending noted earlier, this measure could well simply reflect more dramatic increases in other program spending areas.

The final measure of education spending is at a per-pupil level, accounting for changes in enrolment in government schools. Enrolments have declined from 5.4 million in 2001/02 to 5.0 million in 2011/12, a national decline of 33,000 students per year on average. Only Alberta saw an increase in student enrolment over the period. Furthermore, as a share of total population, student headcounts also declined in every province. Most importantly, when nominal spending is adjusted by enrolments, the per-pupil spending in government schools in Canada is found to increase from $7,250 to $11,835, or by 63.2 percent. When variations in student enrolments are considered, the resulting per-pupil spending measure presents a superior approach to analyzing changes in education spending in Canada.

A concluding analysis compares actual spending to what education spending would have been had the level of per-pupil funding in 2001/02, adjusted for inflation, remained constant over the decade. For 2011/12, the real increase in spending compared to 2001/02 was over $14.8 billion—38.1 percent higher.
Thus, using the best measures available for gauging spending on education in government schools in Canada, large-scale increases in spending between 2001/02 and 2011/12 are observed. The analysis of variations in nominal spending and per-pupil spending exposes, despite widespread narratives to the contrary, a story of marked education spending increases for the period, the first showing an increase of more than 53 percent, the other an increase of more than 63 percent.

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