Universities are vital investments for all orders of government

Special to The Globe and Mail
Published Friday, Apr. 10 2015

One of the best spin words used to justify government spending is the word “investment.” It implies that tax dollars are being used for something that will bring future prosperity. The word itself is impervious to criticism. Yet most government spending isn’t really investment at all. It’s just spending on things voters like.

There are exceptions. Infrastructure and K-12 education, for example, do deliver important long-term economic benefits. But in public finance, the word “investment” is most appropriately and correctly applied to postsecondary education. And within this realm – which includes colleges, polytechnics and vocational training – universities are in a special category. They are the only institutions that deliver true benefits to all three orders of government.

At the municipal level, universities are important assets worth cultivating. Every great city in the world has one thing in common: a great university. The presence of a major campus can be a strong ace card for the city’s international reputation, as well as its tourism and convention business. In Canada, municipal governments don’t typically make direct financial contributions. But proper urban planning and transportation connections are ways in which city halls can support their universities.

The federal government has a lot at stake with Canada’s university system. Financial support involves funding for research chairs, student bursaries and cash transferred to provinces for education. Our universities offer Ottawa the potential to claim that Canada has arrived on the global stage. The best and brightest students in countries like China and India are hungry for English-language university education, but they look to schools in the United States, the U.K. and Australia. Canada isn’t in the first tier, but we could be with a determined federal government.

Universities also offer Canada the chance to lead the world in medical research, the environment, natural resources and human development. Being recognized for maple syrup and Celine Dion is one thing, but to be recognized globally for our contributions to the advancement of humankind is something else.

Yet among the three orders of governments, the provinces have the most to gain from strong universities. Sadly, postsecondary education can take a back seat at budget time to health care and the K-12 system. People tend to vote more actively for hip replacements and new elementary schools. No one doubts the importance of a quality health system, nor does anyone challenge the value of primary and secondary education. But economically, spending on universities is in a different league.

The economy requires adults to be more than just full of information. It needs creative, innovative and imaginative thinkers. Building on the foundations laid in the K-12 system, universities take up the baton of opening students’ minds and curiosity. As Einstein said: “Education is not the learning of many facts, but the training of the mind to think.” That’s the role of universities, particularly of the much-derided liberal arts degree.

But for provinces, the benefit of universities goes well beyond a bright and curious work force. It plays the role of applied research, which holds the keys to economic diversification. In no province is this more evident at the moment than in Alberta. Applied research at both the University of Calgary and the University of Alberta will help transform the economy over the next decade – but only if the provincial government is unwavering in its financial commitment.

Energy has always been Alberta’s strong suit. Yet as we’ve found out once again with the plunge in oil prices, extracting and selling hydrocarbons isn’t enough. The province has the potential to be a leader in renewable energy, new products based on hydrocarbons, and environmental stewardship. In these, Alberta’s economy will find its elusive diversity that will provide prosperity for generations to come. Applied university research is the catalyst that will make it happen.

But it all takes money. Einstein also said “If there is no price to be paid, it is also not of value.” Governments must show they value universities. Stable and consistent funding from the provinces, strong financial support from Ottawa, and a new appreciation from our city councils–our universities deserve it all.

Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.