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Jun Yagi/The Gauntlet

Federal budget gives provinces $2.5B

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On Mon., Feb. 28, Federal Finance Minister Paul Martin announced the 2000 budget--one that includes a $2.5 billion injection in transfer payments to the provinces for health care and post-secondary education over the next four years.

"It really puts the ball back in the province's court right now because they've been so often saying they don't have enough money to meet all of their priorities," said Students' Union President Rob South. "But they were just given at least an extra $300 million next year to fund health and post-secondary, so if they want to make these things a priority, they definitely can."

Since health care and education fall under the constitutional jurisdiction of the provinces, federal funding for these services is provided to the provinces in the form of transfer payments. Disbursement of the budget's $2.5 billion injection is left to the discretion of the provinces.

The Alberta government has made it clear that their main priority is health care. In the days before the budget announcement, each province criticized the state of health care in Canada, and post-budget reaction was similarly negative. Alberta Premier Ralph Klein stated that the increase in transfer payments means $100 million more for Alberta, which he committed to health care, noting that it is only enough to keep the province's hospitals open for six days.

"Martin's budget all but ensures that tuition fees will continue to go up at post-secondary institutions," said Canadian Federation of Students President Michael Conlon. CFS lobbied for $3.7 billion for education, an amount they say restores funding to 1993/94 levels.

The budget also includes provisions for education and research. Canadian universities will receive $900 million over the next five years for 2,000 new research chairs.

"There will be new research positions at Canadian universities, designed to attract the best researchers from around the world and retain the best from across Canada," said Martin.

The biggest direct benefit to students comes in the form of tax exemptions. The tax exemption on scholarships and bursaries will be raised from $500 to $3000.

"I definitely am very impressed that they've increased the personal exemption on scholarships being taxed from $500 to $3,000 so students can earn their $3,000 in scholarships without being taxed," said SU Vice-president External and Canadian Alliance of Student Associations Treasurer Nassr Awada.

"[The U of C] pushed the government through CASA... we don't know how the province is going to spend all this money they're going to be getting. We were hoping the federal government would sort of coerce the province into dealing with the issue of tuition."

Martin defended the federal government's record of transfer payments, citing increasing amounts of money to the provinces for both health care and education.

"As a result of this and last year's budgets, the cash component of the Canadian Health and Social Transfer will rise from the 1998/99 level of $12.5 billion to $15.5 billion next year--an increase of almost 25 per cent over just two years," he said.

South disagrees, stating that with the strong tax cuts, the government's ability to provide more funding in the future will be compromised.

"They've taken $45 billion out of their revenue base over the next five years, so it could be harder for us to get more funding from the federal government in the future considering their loss of revenue," he said.

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