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A look into Canadian Adult Education Spending

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This article is part of the Canada’s School Spending series where GPetrium draws out insights through data visualization and analytics. If you would like to visit other articles within this series, please visit the page Canada School Spending Series.

              In this article, we will take a deeper look at Adult Education expenses (from 1973 to 2016) for the Canadian education budget by analysing provincial expenditure, the Canadian GDP, the Canadian unemployment rate, and then, we will conclude by dissecting and analysing expense classification within the adult education budget for Canada. To better understand data visualization and the dashboard above, refer to ‘Canadian School Expenditure Insights Through Data Visualization’.

General

              Adult education expenses in Canada has experienced an increase of 35% between 2006 and 2016, whereas the overall education expenditure increased 43%. Education as a whole has been expanding continuously at a faster pace than the Canadian economy, which grew 17% in the period of 2006-16.

              Everything with the exception of Business Administration (weighted 2.6% in 2016) and Debt Charges (1.3% in 2016) have far outpaced the Canadian GDP. Questions may rise as to whether previous expenditure rates were appropriate, or if education should be a larger part of the country’s GDP. One thing is clear, baring exceptional economic growth or an increase in revenue receipts, a continuous growth in education expenditures at this rate, will likely force provinces/territories and the federal government in Canada to either abruptly cut down costs or reallocate budget from other areas.

Formula: Percentage Change = (2016-2006)/2006 | Weighted Average = (Function & Year)/ Total for the Year

Geography, Economic Growth, and Unemployment Rate

              When compared to other provinces, Quebec has taken a disproportionate size of the adult education expenditure pie. Despite Quebec’s population representing only 23.2% of the Canadian population, the province accounted for 43.98% of the 2016 adult education expenditure. Ontario, the most populated province in Canada (38.3% of the country’s total population), used 28.2% of the budget while BC and Alberta spent 16.6% and 9.2%, respectively.

Source: Statscan

              Further, it can be observed that adult education expenditure for the period between 1985 to 1991 experienced an abrupt rise and subsequent drop in provinces such as Nova Scotia, Saskatchewan, Northwest Territories and specially Quebec. It is worth mentioning that such changes may be partially related to political policies based on economic growth and unemployment rates at the time (as seen by the Canadian unemployment rate and economic growth for the same period).

Canada Unemployment Rate

Canada Economic Growth

              Overall, salaries and expenditures have been a larger part of the adult education expenditure pie, ranging from a peak of 82% in 1993 to 69% in 2016. This is mainly attributed to the fact that capital outlay (accounting for 9.7% of general expenditure) is not part of the adult education expenditure (except for the period between 1973-79). This can be attributed to Adult Education utilization of currently available infrastructure provided by elementary and high school institutions.

Fees and Contractual Services

              The rapid rise in British Columbia’s (BC) fees and contractual services expenditure may bring doubts regarding the budget’ sustainability and whether there are certain underlying problems that the province has been facing. BC represents only 13% of the country’s population, which begs the question: why is it spending the equivalent of more than Ontario and Quebec combined in capital outlays?

Fringe Benefits

  • Expenditure in fringe benefits under adult education has increased from $55.8 million in 2006 to $88.1 million in 2016, a 58% total increase.
  • Quebec has remained at the top throughout the years in terms of fringe benefits expenditures under adult education followed by Ontario (2nd), BC (3rd) and Alberta (4th).
  • British Columbia has seen a drastic increase from $5.9 million in 2011 to $13.7 million in 2012. It is twice the size of Alberta’s expenditure and if it continues in that trajectory, it is projected to surpass Ontario in the upcoming decade.

Other Operating Expenditures

  • Other operating expenditures under adult education have been erratic throughout the years, with Quebec, Ontario, Manitoba and Alberta being the main users of such account.
  • Further research is required regarding the spikes in Quebec 2013-2016 and Ontario’s 2001-2005
  • At 4.4% or $40.5 million of the adult education budget, other operating expenses is a drop in the bucket. However, this practice should be discouraged since it can decrease transparency and accountability.

Salaries and wages

              Quebec remains ahead of all provinces in salary and wages expenses for adult education. The province is the only French-speaking region in the country, which can require higher rates of French education enrollment for adults that are hoping to work there in the long run.

              At 69.38%, salary and wages expenditure are the highest allocated expenses for adult education. Further, British Columbia and Manitoba are two provinces that have seen drastic increases in salary and wages for adult education in the past few years while Ontario, Quebec and Alberta have stabilized.

Supply and Services

              In 2016, supply and services accounted for 10% of the adult education budget at $91 million. Quebec has seen its supply and services under adult education skyrocket to a high of $27.3 million in 1989 (similar to other Quebec adult education numbers) only to fall drastically to $6.6 million in 1993 and stay relatively flat.

              The biggest spenders in 2016 were Ontario ($35 million), British Columbia ($26.8 million), Alberta ($19.1 million) and Quebec ($7.4 million). Manitoba has seen two major spikes in supply and services, with $0.5 million in 2000 to $1.9 million by 2002 and $1.7 million in 2013 to $2.8 million by 2016. Saskatchewan shows a different trajectory, with a spike between 1991 to 2008 ($1.1 million floor and $1.6 million ceiling), only to fall into a band between $0.5-0.7 million in 2010-16, likely due to a pressure caused by the 2008 economic downturn.

Conclusion

              There are two major factors that are likely to lead to continuous growth in adult education expenditure: 1) Immigration and 2) Re-Skilling/ Upskilling.

  1. Since Canada continues to be perceived as one of the top places to immigrate to and its immigration policy has remained relatively open, allowing for a continuous flow of immigrants, it should be expected that adult education costs will continue to rise to help cope with the demand. Similarly to Statistics Canada projections (link), we expect major cities such as Toronto (ON), Vancouver (BC), Montreal (QC) to continue to be the main contributors in the growth of adult education learning, enrollment and, consequently, expenses.
  2. As technology such as Machine Learning, Robotics and Artificial Intelligence continue to pick-up pace, Canada should expect to see some job loss. Although it may be likely that new job opportunities arise, there will be a need for the workforce to be re-skilled to work under these new environments. In areas where organizations may not be able to support re-skilling/ upskilling of the workforce, the government is likely to jump in by providing adult education. This would in turn lead to an increase in adult education enrollments, which leads to higher expenditures.

              Quebec, Ontario, British Columbia and Alberta are the major adult education spenders (in that respective order). A surge in adult education expenditure in British Columbia and Manitoba may need further research and monitoring.

              Unless re-skilling/ upskilling falls under a different governmental category in certain provinces/ territories, many of them may benefit from starting an adult education pilot program.

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