Volume 29 - Number 11 - Thursday, February 27, 1997

Budget earns kudos

by Daniel McCabe

Budget announcements, whether emanating from Ottawa or Quebec City, haven't exactly delivered tidings of great joy for universities in recent years. But the federal budget unveiled by finance minister Paul Martin last week has been drawing praise from many in the academic community.

The Martin budget made the Networks of Centres of Excellence a permanent part of the country's research enterprise (see story on page six) and also created the Canada Foundation for Innovation, a new agency which will direct about $800 million over the next five years to universities and teaching hospitals to support their research infrastructure.

"One feels that the federal government is taking science and technology very seriously," says Vice-Principal (Research) Pierre Bélanger.

The Martin budget will benefit universities in another way--by providing greater incentives to donors to make contributions to the schools. Donors will be given greater latitude in the type of tax-deductible gift they can offer universities and other charities--stocks and bonds, for instance. Donations of depreciating assets such as used equipment will receive more favourable tax consideration as well.

Students and their parents also received good news. The education tax credit will be doubled immediately to $150 and will increase to $200 in 1998. Students who don't earn enough in a given year to benefit from using the tax credit can now defer it to a later date when their incomes are higher or transfer it to their parents. Mandatory non-tuition fees--such as student services charges--will now be covered by the tax credit.

Students from other parts of the country who are on the verge of graduating have cause to feel a bit better about their student debt loads. The deferral period for students unable to meet their repayment obligations under the Canada Student Loans Program will be extended from 18 to 30 months and the federal government will pay the interest on outstanding student loans during this period. About 2,500 McGill students are currently supported by the Canada Student Loans program

Judy Stymest, director of student aid, thinks these measures will help. "Students who graduate from universities do tend to find jobs, but it's definitely taking them longer than it once did and that extra time is forcing many graduates into default situations."

For Stymest, the eye-opening news was the announcement that the feds are pursuing talks with their provincial counterparts on the possibility of establishing an income contingent repayment plan. "I'm kind of lukewarm about that--it all depends on how well designed the plan will be. I want to see the fine print," says Stymest. She likes the fact that it will be offered as an alternative to students who have Canada Student Loans and that it won't be imposed on anyone.

"The steps taken to help students are a start," says Principal Bernard Shapiro. "The issue of debt load is a very sensitive one, and the government's willingness to discuss the issue is a very good sign."

Shapiro is quick to point to McGill's own recent moves to help students cope with the costs of their studies. The University's proposed budget for next year increases the money set aside for student aid from $3 million to $6 million--a big chunk of which will be used to help out-of-province and international students deal with the tuition hikes they'll face in September from the Quebec government.

Much of the media focus on Martin's budget has been centered on the new Canada Foundation for Innovation. "The Canada Foundation for Innovation is about looking forward," Martin said in his budget speech to the House of Commons.

"The research facilities in our hospitals, our universities and our colleges are part of the root system of our economic prospects for the future. But today, these facilities are far from what they should be. There has been too little investment. Much of our current research infrastructure is literally unable to handle the kind of pressures required to keep Canada in the front ranks of the new economy."

The foundation will be operated at arm's length from the federal government, run by a board of directors drawn from the research, academic and business communities. The head of the foundation will be Dr. John Evans, a former president of the University of Toronto.

The foundation's money will be used to upgrade labs, establish computer networks, purchase new technologies and scientific equipment and support new research data bases. The eligible projects will be in the sciences (including the social sciences), engineering, health and the environment.

But the foundation will only provide up to 50% of the funds needed for such projects. Universities or hospitals seeking grants from the foundation will have to be able to prove that they can get the remaining money from their provincial governments or from foundations, industry or private donors.

The projects will be chosen through a peer review process. The selection criteria will include the quality of the research and its likely contribution to Canada's economic growth and quality of life. The peer reviewers selecting the projects will also consider their potential for attracting talented researchers to an institution.

"Obviously the timing of this program is not optimal for us," says Bélanger. "We would be in a much better position in terms of getting matching grants if we were just starting a new capital campaign instead of just finishing one. But that's the luck of the draw."

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