Update #6 May 11, 2012 – The Wrong Deal

At some point, you just feel like a kid in the back seat of your parent’s car, enduring a seemingly endless journey to somewhere. You have no control over anything, and are left asking the inevitable question to those in the front seat, the people who are supposed to be in charge: “when are we going to get there?”

The Association was hopeful that the “deal in principle” negotiated with the three Quebec student federations with the Ministry of Education would provide closure to the student protest. We were cautiously optimistic given how intransigent the Minister of Education has been to sit down with the student leaders until well after 14 weeks of “strike” actions. Was it necessary to wait this long to negotiate only to endure more protests and further risk the academic careers of our students?

Their other decision, an 11th hour attempt to sequester the Quebec Liberal Party convention to Victoriaville (beside a construction site), did not bode well for students demonstrating their concerns. As it turned out, the affair placed students and the citizens of Victoriaville in peril: all this in a vain attempt to not repeat the Plan du Nord spectacle. Despite the debacle, word came out of the brief glimmer of “the deal.” A hope on Saturday last that we were finally going to see the end of this collective nightmare. But it was not to be. As we have seen this week, the “deal” has died a quick death.

The “Deal In Principle” 

The “deal” provided was not an honourable “deal” that could be endorsed by students province-wide. The three elements of the “deal in principle” were each fraught with limitations and vague assumptions that would not address the planned hikes in tuition let alone the privatization of post-secondary education. Remember that the tuition hikes generate a real increase of $265 million. This is the amount students need replaced.

What were the three elements of this “deal”? 

  1. The creation of a Committee to evaluate spending in the universities in the hopes of reducing costs of tuition.
  2. An increase of $51 million in bursaries and loans.
  3. The stretching of tuition hikes to seven years.

What is wrong with the “deal”?

1. The Committee 

The examination of excessive spending of senior administrators and their bureaucratic regimes, the excessive spending in publicity, the excessive spending in the creation of satellite campuses, excessive spending of real-estate (e.g. Ilot Voyageur by UQAM) should rightly be examined to render Universities publicly accountable.

We are no strangers at Concordia to the amount of money spent on severance packages alone – figures closer to $25 million when you throw in the number of senior staff who have mysteriously disappeared and others who have had to be hired on an interim basis. A former Concordia President had to brought back and duly compensated.

Then there is the question of the Committee’s 19 member composition who would ultimately determine any potential sources for savings. The committee is not a parity committee making any negotiations difficult. Students would hold 4 out of 19 positions. The remaining 15 seats consist of 4 members from the unions, 6 University Presidents/Rectors, 2 members of the business community (chosen by the Minister yourself), 1 member from the Federation of Colleges, and 1 member of the Ministry of Education. The Committee would be chaired by an individual appointed by the Minister. Lastly, the Minister would also hold the tiebreaking vote.

The difficulty here is that the Committee is not a bilateral committee (students and government) but a multilateral committee wherein the ultimate power for decision making would not reside with those directly affected with the conflict – the students. And when has a University President/Rector ever admitted to having sufficient funds to operate their University? Unlikely that any University administrator would recommend cutting operational funds so students could pay less. As for government, they not only imposed the expensive corporate structures Universities now have, but provided laissez-faire policies for Universities to impose user-fees on students.  The government allowed Universities to charge these fees in the first place. If they were serious about addressing them, why did they not take a more direct approach to ending them?

The proposed Committee would therefore be unlikely to resolve some fundamental conflicts for faculty, students and staff who study, work, and share a commonality of interests about the privatization of post-secondary education. 

2. An increase of $51 million in bursaries and loans. 

Aside from increasing student debt, and continued limitations on eligibility criteria for bursaries, much of the $51 million in financing would come from the Universities’ budgets for teaching. This would result in larger classes. Then there are the proposed changes by the Quebec Minister of Revenue with the reduction of the tax deduction for education in addition to students and families paying higher taxes. It is difficult to see the benefit to students or to faculty of this proposal in the “deal”. The key is to recognize that the interests of students and faculty are shared. Larger classes, elearning as a panacea, fewer funds supporting graduate studies, etc. are some of those concerns we all share that will not be addressed.

3. The stretching of the tuition hikes over seven years.

The “deal” proposes hikes in tuition that would be spread over seven years instead of the original proposal of five years. “Increases over seven years will be lower”, vaunted the Minister. Rhetoric aside, the total increase will be more as it will be indexed each of the years. No student could agree to pay more than what was originally proposed by the Minister. Difficult to understand why this logic has escaped the government. 

Alternatives to Tuition Hikes 

There are a number of alternatives to tuition hikes that have not been explored. Other countries that have found ways to finance Universities without placing students in debt. No not any of the English speaking countries of the U.S., England, Australia or New Zealand but countries like Holland, the Czech Republic, India, and the Scandinavian countries. These models have not been studied or advanced. Other solutions involve a serious examination of taxation. What follows are a number of well documented tax proposals submitted by the Dawson Faculty Union. Unlikely that any of these would be studied by the Committee that would be formed as part of the “deal”. The proposed Quebec government’s “deal in principle” is no Keynesian agreement but the wrong deal.

Students have democratically defeated the “deal”, many risking the semester while remaining fearless to stand.

We’re back to square one 14 weeks later and, we’ll remain in this challenge for more weeks to come.

ALTERNATIVES TO TUITION HIKES AS PROPOSED

BY THE DAWSON TEACHER’S UNION

Increasing the present division of 3 tax personal income tax brackets to 10 and returning to a more progressive taxation system could generate about $1.2 billion in additional revenues while redistributing the tax burden more equitably between income levels. Those making between $25,000 and $60,000 would see a slight decrease in their taxes while those earning over 60,000 would face progressively higher taxes, approaching 50% for those earning $250,000 and over.

Canadian corporate income tax rates, currently 15%, have been steadily slashed since 2000 when they were at 28%. This represents more than $10 billion a year (CCPA) of lost revenues. The Quebec government could offset the federal government’s reduction in corporate income tax (already one of the lowest in the western world) and recoup some of this lost revenue. A report by the CCPA shows that the lower corporate tax rates have not translated into increased jobs as promised by Liberal and Conservative governments.

Re-imposing reasonable tax rates on Canadian banks, the most profitable sector of the economy, would provide a huge boost to revenues. (Banks have also been the beneficiaries of a little known Canadian “bail out” of at least $200 billion). Last year, after tax bank profits for the top three banks (Royal, TD and Scotia) was over $14 billion dollars. In 2009, as Jim Stanford of The Globe and Mail states “…restoring tax rates for the financial sector to where they were when the Conservatives took office (21 per cent, plus a 1.12 per cent surtax) would boost the take to $4-billion a year.” Again, the provincial government could introduce offsetting taxes. Quebec Solidaire has shown that a 0.3% increase in taxes on profits of financial institutions would add enough to replace the government fees increase and a 0.8% increase would finance free post secondary education.

Closing the exemption for 50% of the revenue from capital gains for individuals earning over $250,000 per year could result in additional $244 million dollars.

The same measure applied to corporations would result in revenues of up to $470 million per year.

In 2009, the Quebec government allowed corporations to defer payment of corporate taxes to future years to compensate for losses in previous years. This represented a loss of about $709 million.

In 2010, then Revenue minister, Jean-Pierre Blackburn, stated that Canadians deposited $146 billion in tax shelters, a substantial increase from the $88 billion reported in 2003.

The costs of corruption in Quebec’s construction industry are legion. Estimates run between 2 and $4.5 billion yearly (Le Soleil). A serious push to increase oversight by appointing additional inspectors and arming them with adequate legal power, as was done in New York City in the 1980s, could return an important fraction of that amount.

CLASSE suggests that reducing the excess funding in Quebec of commercial research directly connected to company interests from the current 26.2% would generate 142 million. If excessive Quebec directed research were reduced to the Canadian average of 21.5%, the 30% increase of 2007 could be eliminated. CLASSE also suggest that the elimination of University commercial publicity would save $18 million. To this could be added the money saved by a freeze in the hiring and salaries of managers and directors in Quebec universities and by a moratorium on new satellite campuses and the expansion of existing satellite campuses. For example managers in the University of Quebec received an increase in pay by 83% from 1997-2004.

Sources

“2011 Rankings of Canada’s top 1000 public companies by profit”, Globe and Mail Update Thursday, Jun. 23, 2011

http://www.theglobeandmail.com/report-on-business/rob-magazine/top-1000/2011-rankings-of-canadas-top-1000-public-companies-by-profit/article2071184/

Pierre Couture, “Contrats d’infrastrusctures: le chantier de la… corruption!” Le Soleil, 28 septembre http://www.lapresse.ca/le-soleil/affaires/actualite-economique/201109/27/01-4451979-contrats-dinfrastrusctures-le-chantier-de-la-corruption.php

David Macdonald, “Corporate Income Taxes, Profit, and Employment Performance of Canada’s Largest Companies,” Canadian Center for Policy Alternatives April 2011

http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2011/04/Corporate%20Income%20Taxes%2C%20Profit%2C%20and%20Employment.pdf

IRIS (Institut de recherche et d’informations socio-économiques,“ Budget 2010: comment financer les services publics? Mars 2010.
http://www.iris-recherche.qc.ca/wp-content/uploads/2011/06/Note-Budget2010.pdf

IRIS (Institut de recherche et d’informations socio-économiques) “D’où vient la «crise» des finances publiques?” Mars 2008.
http://www.iris-recherche.qc.ca/wp-content/uploads/2011/06/note_fiscalit%C3%A9.pdf

Jim Stanford, “Bottom line: Canadian banks should pay their fair share,” Globe and Mail, Friday, Apr. 30, 2010.

http://m.theglobeandmail.com/news/opinions/bottom-line-canadian-banks-should-pay-their-fair-share/article1551490/?service=mobile

Radio-Canada.ca “Duchesneau à TLMP : l’opposition à Québec réitère son appel pour une enquête publique,” lundi 26 septembre 2011

http://www.radio-canada.ca/nouvelles/Politique/2011/09/26/001-reactions-opposition-duchesneau-entrevue.shtml

QuebecSolidaire

http://www.quebecsolidaire.net/actualite_nationale/greve_etudiante_quebec_solidaire_propose_un_plan_de_sortie_de_crise

CLASSE

http://www.bloquonslahausse.com/

Dr. David Douglas,
Chair Communications,
CUPFA Executive