Mind the gap: Montmarquette says underfunding a real problem

Posted on Saturday, February 23, 2013

Quebec economist Claude Montmarquette participated in a panel discussion as part of the PGSS summit on higher education this past December. / Photo: Adam Scotti.

By Jim Hynes

Depending on which recent study you look at, Quebec universities are underfunded by more than $850 million or as little as $300 million. And then there are those who will tell you they aren’t underfunded at all.

Quebec economist Claude Montmarquette favours the study published by the Conférence des recteurs et des principaux des universités du Québec (CREPUQ) on January 15, which concludes that the funding gap between Quebec universities and their rest of Canada counterparts had grown to more than $850 million by 2009-10, and continues to grow at an alarming rate. A study published in 2010 showed a gap of $620 million.

Montmarquette, professor emeritus of Economics at the Université de Montreal, is the President of CIRANO, the Centre for Interuniversity Research and Analysis of Organizations, a collection of approximately 185 scholars from Quebec universities that seeks to transfer knowledge on a breadth of subjects to Quebec businesses, government and other institutions, and the community at large. He and CIRANO helped the authors of the CREPUQ study develop a methodology to measure the underfinancing of Quebec universities, a methodology he stands by steadfastly.

“There’s a consensus now that this is the right way to do it,” Montmarquette says of the revenue-based approach used in the last two CREPUQ studies.

Another approach, with a formula based on expenditures, was used in a recent study conducted by Université du Québec à Montréal Economics professor Pierre Fortin. That study concluded that the funding gap between Quebec universities and their Canadian counterparts was only $300 million.

“But if you use the expenditures method, you have to be very careful to look at every expense, and this kind of data can be difficult to find,” Montmarquette says. “So what we said was, ‘let’s look at the revenues, and since we operate on a competitive basis then we should be buying everything at the same price.’ But Pierre Fortin started adjusting that.”

And it’s those adjustments, principally a 15-per-cent reduction in academic salary expenditures based on the premise that the cost of living in Quebec is lower than in the rest of Canada, that Montmarquette takes issue with. (He and former Université de Montreal rector Robert Lacroix recently co-authored an opinion article in Le Devoir that called the Fortin study dangerous and unreliable.)

“Comparing the cost of living across provinces or cities is very difficult. Even Statistics Canada doesn’t go in that direction. It’s not even certain that it costs less to hire here than it does elsewhere. You do see headhunting firms try to do this, say ‘if you come here it will be less costly for you to buy a house.’ But the problem there is what kind of house do you want? Plus, 65 per cent of all Quebec university students are enrolled at a Montreal university, and many Canadian universities are located in small towns. I don’t see housing being all that expensive in some of these places. Montreal isn’t necessarily going to be a much cheaper place to live. And you’re going to realize that you will have to pay more taxes too.”

The Fortin study also made a seven per cent adjustment on the costs of supplies and equipment.

“Where does that figure come from?” Montmarquette asks. “And why would it be less costly to buy those things in Quebec? Books, for example, especially French books, are more expensive here, not less.

“Again, it’s hard to get good data on that that’s reliable. So let’s use something that we have a better handle on,” Montmarquette says. “These studies aren’t perfect to the dollar anyway. Is the figure exactly $850 million? The issue is that there’s a huge gap, and it’s increasing. Even Pierre Fortin recognized that.”

But not everyone does. The current Parti Québécois government, which only a few years ago, while in opposition, argued that Quebec universities were underfunded, has now started to challenge that premise, saying universities may even be overfunded because Quebec universities receive two per cent more per student than the Canadian average ($29,242 to $28,735 in 2008-09).

Some critics of university administrators, meanwhile, lump research and capital funding in with operating budgets, which boosts the Quebec-per student average even further.

“Yes, in terms of its capacity to pay, and GDP, Quebec is very generous with respect to universities, Montmarquette says. “So this is why I and many others say, ‘well, why don’t we ask a little more of students to make sure that they will have a high quality education. “Most of the gap, 75 per cent, comes from the fact that tuition differs so much. What else is there to say?”

Then there are those, like the leaders of the Fédération étudiante universitaire du Québec, who question why Quebec universities should be compared to those in other jurisdictions rather than evaluating what their “real needs” are, a recipe Montmarquette says will lead the province down the path of mediocrity.

“First of all, if I want to go to university I want the best education I can get. You want your degree to be worth something,” he says. “Also, as a Quebecer, we are out in the world now, trying to compete. We certainly want to have the best engineers, the best doctors, the best economists, the best lawyers, the best business people. Why would we settle for less?

“What does it mean, “real needs?” You need to compete. You need to see what’s going on. You need to integrate the new technology. You need to have new ideas, social innovation. That’s not going to come from a mediocre university.”

 

SIDEBAR: A brief history of uncertainty: How the picture has changed

• After the Quebec Government brought down its Spring 2012-13 budget, Quebec universities expected additional funding from tuition and government investment – a cumulative total of $2.5 billion over five years (2012-13 to 2016-17). McGill planned its budget in March 2012 based on these assumptions.

• The day after the Board of Governors approved the University’s 2012-13 budget, the former Government changed the tuition increase from $325/year to $254/year, reducing our overall planned revenues by approximately $2 million.

• The new government elected in September then cancelled those tuition increases (a negative impact of $6 million to McGill’s budget, only $4 million of which will be compensated), but promised to compensate universities for the money lost and to honour the former government’s reinvestment in universities.

• In November, the Government also promised to compensate universities for extra costs incurred as a result of the student conflict last spring.

• The November 20 provincial budget promised an additional $158 million in reinvestment for 2012-13 (in addition to compensation for tuition), which would rise to nearly $575 million per year in 2018-19.

• Two weeks later, the Minister of Higher Education told Quebec universities that they would face retroactive cuts of $124 million in this year (2012-13).

• From mid-December through mid-January, the Government maintained that they would invest $1.7 billion in Quebec universities over the next seven years for reinvestment and compensation for lost tuition.

• On January 18, 2013, the press reported that the Minister of Higher Education told the President of the University of Quebec network that the $124-million cut would continue for 2013-14, and more cuts might be demanded. The Minister did not confirm or deny the report.

• On January 22, Premier Pauline Marois said she would not guarantee the planned reinvestment of $1.7 billion, and that the Government was looking at changing the formula used to distribute funding to universities. This means some universities could get less money – on top of the cuts – and some could get more.

• On January 30, Government officials informed McGill for the first time that if we do not implement at least 50 per cent of the cut required ($9.6 million) before the end of April, the Government might not give us the “conditional grant” of $32 million for this year.

• A little more than a week later, on February 8, the Government informed us that we would have to have cut 50 per cent of the two-year total (approximately $19 million) by the end of April 2014 to avoid losing our conditional grant.

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