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Canada's School Spending: School Facilities Services Expenditure​

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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 our article Canada School Spending Series page.

              In this article, we will take a deeper look at school facilities services expenditure (from 1973 to 2016) for the Canadian education budget. This article will cover the economic classifiers that impact this expenditure and some of the major spikes that have occurred throughout its history. To better understand data visualization and the dashboard above, please refer to ‘Canadian School Expenditure Insights Through Data Visualization’.

              School facilities services cost Canada $5 billion in the year 2016 alone. This number equates to 8.13% of the total Canadian education budget. For the most part, school facilities services was segmented as such for the year of 2016:  salary and wages accounted for $2 billion (41.3%), supply and services accounted for $1.7 billion (34.1%), fees and contractual services represented $745.9 million (14.8%) and fringe benefits marked $483.8 million (9.6%) of the total $5 billion destined to school facilities services.

              Throughout the years, Ontario has remained the biggest spender in terms of school facilities services. In 2016 alone, the province distributed a total of $2 billion across its 4,877 elementary and secondary schools (Ontario Ministry of Education). Alberta followed with $738.1 million distributed across 2,225 schools (Government of Alberta), then Quebec with $735.7 million distributed across 2,340 school (Éducation international), and British Columbia spent $622.5 million across their 1,578 schools (Vancouver Sun).

              Between 2013 and 2016, Ontario has seen its expenses in this category flatten while Alberta’s growth has far outpaced other provinces such as British Columbia and Quebec between the period of 2001 and 2016.

Economic Classifiers

             Fees and contractual services – Over a period of 10 years, between 1996 and 2006, Alberta saw its expenses increase by 196%, from $28.2 million to $83.6 million. This was likely viewed as a normalization of fees and contractual services in relation to British Columbia, a province of similar population size and demographics. Since then, major provinces saw a stable growth of 40-55% decade-over-decade with relative fluctuations. Unless there are changes to the ratios of salaries and wages in relation to fees and contractual services, this segment should continue to grow, albeit at a slower pace.

             Fringe Benefits – Throughout the decades, Ontario has continued to take an oversized piece of the fringe benefits pie, accounting for roughly 54% by 2016. Quebec’s growth in this area has remained relatively tame, specially when population size is considered. Alberta has seen the fastest growth decade-over-decade, with triple digit numbers in the 1996-2006 period, from $36.7 million to $65.2 million by 2006. If Alberta maintains a 50% growth decade-over-decade, it is expected to surpass British Columbia by 2026 assuming BC maintains a growth below 30%.

             Other operating expenditures – As discussed in previous articles, other operating expenditure should be limited if non-existent since it makes it difficult to maintain transparency. This relatively small budget expense, other operating expenditures has been historically prone to spikes throughout Canadian Educational history, although at different rates and extents from province to province. These spikes will be looked at a later segment.

             Salary and Wages – Most of the major provinces have seen mild growth in salary and wages throughout the past 2 decades. Throughout the period, Alberta was the only province that experienced a mid two-digit growth, going from $110.7 million in 1996 to $254.8 million in 2016. In 2016, Alberta took the lead over Quebec in terms of salary and wages expenditure under school facilities services. One must wonder whether Quebec has managed to do more with less in the school facilities service segment, its categorization is different or whether it may be underfunded for a province of such size.

              Supply and services – Ontario saw strong growth in supply and services throughout its history, with rapid growth between 1996 and 1999 followed by short periods of cuts between 2009 and 2012. In 2016, Alberta surpassed Quebec in supply and services expenditure, hitting $290 million in 2016 while Quebec had a meager growth of 2.77% decade-over-decade, reaching $264.4 million in 2016. British Columbia has the smallest growth decade-over-decade between 2006-16 of 1.48%.

Spikes in History

              Throughout the 1990s, major provinces such as Ontario, Quebec and Alberta saw their school facilities expenditure flatten and even at certain points, drop by double digits percentage. These changes were often closely associated with major economic classifiers such as salary and wages, fees and contractual services and fringe benefits.

             Fees and contractual services – Quebec suffered a downward pressure between 1991 and 1999, from $125.4 million to $97.8 million. It then quickly picked up in the following years. Ontario saw similar drops that started at a later period in the 90s and peaked in 97 with $125.7 million, then dropped again to $89.9 million by 2000 only to pick up quickly again in a similar fashion to Quebec. Out of the three, Alberta was the only one that saw a drastic increase, moving from $15.8 million in 1995 to $49.7 million in 1996.

              Salaries and wages – Between 1991-93, Quebec saw its salaries and wages move from a historic peak of $258.9 million to $210.4 million, a -18.7% drop. Then, it experienced a gradual decrease in 1998. From then on, salaries and wages flattened with some years having small increases and others a decrease. Ontario had similar trajectories, although its peak was in 1992 at $697.4 million and it hit the lowest level in 1999 when it saw its steepest drop from $646.2 million in 1998 to $592.7 million in 1999 (a -8% drop). Alberta had an almost identical route to Ontario, with the major difference being in the extreme drop seen in 1998 when it went from $114.7 million to $44.8 million in 2000, a -60% decrease.

              Fringe benefits – As expected, with the close correlation between salaries, wages and fringe benefits, the swings that occurred in salaries and wages throughout the 1990s can also be seen on fringe benefits.

              Supply and services –Similar trajectories to salaries, wages and fringe benefits were experienced in supply and services. Albeit at a laggard pace and with less variances in comparison to the above categories.

              Other operating expenditures – Between 1973 and 1980, Quebec saw other operating expenditures hit between $9.7 and $21.3 million. The number stabilized at more appropriate levels before it spiked again in 2012 at $11.8 million. Between 1999 and 2003, Ontario saw similar spikes that ranged from $11.7 and $23.8 million. It is worth noting that according to the Bank of Canada inflation calculator, Quebec’s 1975 expenditure would be worth approximately $74.2 million in 2003 – the same year Ontario had its peak at $23.8 million. It would be interesting to understand why Quebec’s expenditure for this category hit such a peak at the time.

              In a similar tone, Nova Scotia had a spike from $2.4 million in 2003 (already high for NS standards) to $11 million in 2004, reaching close to 9.6% of the school facilities services expenditure. Oddly enough, in 2015 and 2016, the numbers went to the negative side, hitting -$15.9 and -$7.4 million, respectively. This is likely retrograding part of the numbers seen in 2003-08. Other operating expenditures are often a very small part of the budget, so its impact tend to be limited. However, operating expenditures can rapidly throw a budget out of whack and raise serious concerns if left unattended.

Conclusion

              Ontario remains the highest spender in school facilities services even though it has seen its expenditure flatten between 2013 and 2016. Although Quebec has seen a smaller population growth in relation to Alberta and British Columbia, it can be quite concerning to see provinces with half of the size (population wise) closing the gap and even surpassing their peers in school facilities service expenditure. Spikes in other operating expenditure should be closely watched and provinces/ territories should refrain from using this segmentation. Both sides need to consider whether they may be under or overspending. As always, further research is always welcome, including better insight in enrollment rates in relation to school facilities services, quality and reliability of service among other areas.

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