Tuition should be raised – along with a lot of other fees

The standard arguments in favour of higher student fees are well-known and valid:

Those with a university education earn hundreds of thousands of dollars more over a lifetime than those without.

Quebec fees are the lowest in Canada.

The tuition-fee increases amount to a month of summer work for a typical student, and thus do not constitute a serious barrier to schooling.

Products that are underpriced are underappreciated, and this is reflected in Quebec having one of the lowest university-enrolment rates in Canada.

As Henry Aubin rightly noted in a recent column (“Strikers should fear provincial debt,” March 6), however, it’s hard to criticize the young demonstrators’ sense of entitlement since we older generations know all about it.

The parents of many students benefit from heavily subsidized daycare and work-leave programs; the baby boomers benefit equally from subsidized health care and drugs; all generations benefit from underpriced electricity, underpriced water supply and underpriced infrastructure – particularly roads and bridges; and many able-bodied individuals can retire on a full pension while still in their early 50s (for example, police and firefighters).

If the provincial government were so inclined, it could certainly find the requisite half-billion dollars in its budget to bring university revenues in Quebec up to the Canadian average. So why put the burden on students to pay the extra $1,500 annually that the scheduled increases will entail?

The problem is that these entitlements have all been made possible with the help of credit markets, which have willingly lent to all levels of government.

The result is that Quebec today has the highest accumulated debt of any province. This is a concern not just from the standpoint of financial ratings, but because higher debts imply higher taxes to cover interest charges, and less for the social programs that we cherish. Our escape from the worst of the recent recessionary ravages must not cloud our vision.

Mr. Aubin writes that “if Quebecers are to crawl out of this debt hole, it’s not only you, the striking students, who must lower your expectations. It’s all of us.” I agree.

I propose that the solution to our current fiscal challenge is to be found not just in reducing government funding to a single heavily subsidized program that benefits the youngest generation, but in reviewing the subsidized programs that benefit other generations as well. A 2008 report by Claude Montmarquette, Joseph Facal and Lise Lachapelle (“Task Force on Fees for Public Services: The right fees to live better together”) suggested that we reduce – not eliminate – subsidies to a number of programs, and move in the direction of a user-pay framework.

In raising student fees, the government has taken a first step. But it now must confront the broader question of how to balance tax rates with user fees. High taxes are the corollary of heavy subsidization. Again Quebec is a Canadian leader in having high personal income taxes and sales taxes.

A move toward the user-pay/benefit principle could not only yield additional revenues from services and reduce waste from overconsumption; it also might enable Quebec to have lower income taxes.

Hence, even a fiscal conservative like myself can sympathize somewhat with the soon-to-be workers currently at university. Will the bulk of the debt challenge fall on their generation? Or should we not reform our fiscal structure so that the parents and grandparents of these students can contribute to the solution in an equal manner?

And are our political leaders up to the challenge?

Ian Irvine est chercheur associé à l'IEDM et professeur d'économie à l'Université Concordia.