Why does your TA have a smile on his face this morning?

It might be because she’s heard about the new federal budget, announced last Tuesday. The Liberal budget included more than $25 billion in new spending over three years. Programme spending will increase to almost $150 billion in 2004-5, up from $124 billion last year.

And some of that money will be spend on Canada’s universities—and their graduate students.

The biggest beneficiary in Finance Minister John Manley’s budget is health care. Almost $35 billion in new spending was announced—a move, critics say, to cement Prime Minister Jean Chrétien’s legacy, and to poke in the eye of his rival, former finance minister Paul Martin, who will be bound by Chrétien’s spending promises.

The Armed Forces will get $800 million per year in new money, plus $325 million for deployments in Afghanistan and the Middle East.

Other social services spending includes cash for urban housing, the homeless, an increase in the Child Tax Benefit and more money for daycare. Foreign aid will increase eight per cent per year.

The Registered Retirement Savings Plan and pension plan limits will be increased to $18,000 per year. The capital tax will be eliminated over five years, other business taxes will go down slightly, and Employment Insurance premiums will go down.

The Liberals also plan to spend $3 billion on the environment, including $2 billion to implement the Kyoto Protocol on greenhouse gas emissions.

On postsecondary education, the budget will increase money to universities for research and graduate students. Money for Canada’s three granting councils will rise by $125 million per year, starting next year. Universities will also get $225 million per year to offset the costs of research, such as maintaining buildings, hiring support staff and improving libraries. Health research and genetic research will also get a cash infusion.

But the most popular changes to postsecondary education will likely come through changes to the Canada Student Loan programme, and the establishment of Canada Graduate Scholarships.

A government backgrounder said the income exemption for Canada Student Loans “will be increased to $1,700 for income earned while in school, and a separate exemption of $1,800 will be established for merit-based scholarships”—meaning students will be able to earn more money without compromising their loan amounts. Debt reduction and loan forgiveness restrictions will be loosened.

The new Canada Graduate Scholarships will fund 2000 master’s students and 2000 doctoral students per year, at an annual cost of $105 million. Doctoral students will get $35,000 per year, for three years. Master’s students will get $17,500 for one year.

Carl Amrhein, dean of the Faculty of Arts and Sciences at U of T, was positive about the budget:

“The Federal government’s impact on education comes mainly through research,” Amrhein said. He said the money for research support was especially needed.

Graduate student funding “makes us immediately competitive with the best offers from the U.S.,” Amrhein said, adding “Even though the money flows to the grad students, the benefits can flow to undergraduates.”

But Amrhein said more money was needed for student debt relief.

But Victor Catano, president of the Canadian Association of University Teachers, was more critical of the budget:

“We’ve made the point that with respect to postsecondary education, it’s like a person dying of thirst in the desert and seeing an oasis, but he gets closer and it’s just a mirage.”

Catano said “wicked sleight-of-hand” in the budget means “the money that will now go to postsecondary education will actually decrease.” That’s because of more spending on health care.

“Postsecondary education will get $2.8 billion in 2003-4. In 2004-5, the amount will be about $1 billion less.”

Catano is also concerned that the increased spending on research will lead to a drop in basic research spending.

Back at U of T, Students’ Administrative Council president Rocco Kusi-Achampong thinks the increased research money is good for the university.

“I think they took a step in alleviating the operating burden of maintaining research facilities,” he said.

Kusi-Achampong added that targeting transfer payments for education would be an improvement the budget didn’t make, at least this year.