Reality of education spending in Alberta

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Appeared in the National Newswatch, September 18, 2015

In some quarters, it is taken as a given that Alberta’s schools are underfunded. Critics cite rising class sizes and slipping international test scores (in some areas) as evidence that more money is needed.

An examination of the relevant evidence, however, brings much needed clarity and shows that Alberta’s schools are simply not underfunded. Despite chronic complaints from some about funding levels, spending on public school education in Alberta has not been cut and has in fact increased markedly over the last decade. The problems observed in our public schools simply cannot be explained by a lack of resources.

Consider that Alberta spent $7.9 billion on education in public schools in 2012-13, the most recent year of available data. This is $3.3 billion more than was spent in 2003-04—an increase of 71.8 per cent.

This rapid increase in spending occurred during a time when student enrolment increased by only 7.6 per cent. It’s true that Alberta is the only province in Canada with rising student enrolment levels, but the increasing number of students does not account for a large share of the observed spending increases. As a result of spending growth significantly exceeding enrolment growth, per-student spending in Alberta’s schools grew by 59.7 per cent during this timeframe. In other words, the province is now spending much more money on only a few more 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 (76.7 per cent) of all education spending in Alberta’s public schools is consumed by compensation, which includes salaries, benefits and pensions. Indeed, 75 per cent of the entire $3.3 billion increase in education spending 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 Alberta, pension costs increased in Alberta by 142.4 per cent, rising from $385 million to $932 million in annual spending between 2003-04 and 2012-13. In 2012-13, about 12 cents of every dollar spent on education in Alberta went to pensions, a proportion higher than any other province. 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.

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 Alberta’s public schools has actually increased significantly in recent years, and at a much faster rate than student enrolment.

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

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