NL Tuition Freeze Subsidy History

A recently obtained ATIPP request reveals a government document on the history of the tuition fee freeze subsidy that the Government of Newfoundland and Labrador provided to Memorial University of Newfoundland. See document below:

Tuition Freeze Subsidy History

• Between 1999 and 2005, successive governments implemented tuition fee freezes and reductions at the public post-secondary institutions without compensation to the institutions for the loss of tuition revenue.

• In 2001-02, a 25 per cent decrease in tuition occurred at Memorial over three years. Government replaced the University’s lost tuition revenue from the 25 per cent decrease, but did not provide any further subsidy increase to the University after that to offset the effect of tuition not increasing thereafter and the University’s domestic tuition has been frozen at current levels since 2003-04 for NL students.

• In 2005-06, Government through its White Paper on Public Postsecondary Education, implemented what was originally intended to be a three-year subsidy to the University to offset the loss of tuition revenue.

• At the time, 70 per cent of University revenues came from the provincial operating grant with 22 per cent from student tuition fees and the University advised it was struggling to find sufficient revenues to cover increasing costs. For example:
• Cost pressures resulting from salary step increases to faculty;
• Cost to keep programs current and at the level that is required to maintain accreditation;
• Inflationary costs related to energy, insurance and library acquisitions; and,
• Equipment and maintenance costs associated with programming.

• To compensate, the University projected at the time that a 17 per cent tuition increase was required in the next year given the then fiscal forecast of the University’s operating grant.

• The then Department of Education, in reviewing Canadian tuition increases for a six-year period, excluding NL, developed several options, including (i) an eight per cent tuition fee increase cap, and (ii) an eight per cent tuition freeze subsidy to cover institutional operational requirements.

• These options:
• Assumed an inflation rate of five per cent for Memorial University expenses for 2004-05 and 2005-06 and 2.5 per cent thereafter;
• Took into account MUNFA’s collective agreement at that time (2.5 per cent wage increases twice a year until it expired in September 2005); and,
• Took into account a $2 million reduction in grant-in-aid in 2004-05 and the University’s request for $470,000 annually to help compensate for lost revenue due to previous tuition cuts.

• The White Paper process applied an eight per cent annual increase as a tuition freeze subsidy to maintain a tuition freeze initially for 2005-06, 2006-07 and 2007-08.

• When the White Paper money ended there was no incremental increase in 2008-09 at first, but the 2009-10 increase then included 2008-09 incremental amount retroactively and was handled outside the budget process.

• This process continued in future fiscal years and the subsidy calculation methodology was not revisited until 2013-14 as the tuition freeze commitment was maintained. The allocations did not always align with fiscal years, and the amount was rounded up or down in some years.

• The average incremental tuition freeze subsidy increase over the period 2005-06 to 2011-12 was 6.8 per cent.

Tuition Subsidy Increase 2005-06 to 2012-13

Year	Annual Incremental Increase to Tuition Subsidy	Annual % in Subsidy
2005-06	$3,600,000	–
2006-07	$3,900,000	8%
2007-08	$4,200,000	8%
2008-09	$4,200,000	0%
2009-10	$4,900,000	17%
2010-11	$5,000,000	2%
2011-12	$5,300,000	6%
2012-13	$5,500,000	4%

• A final decision was made during the budget process to provide the University with $5.5 million in 2012-13 calculated using a four per cent annual incremental increase rate.

• The Budget 2013 process allocated $3.8 million.

• In subsequent years this was rounded up to $4 million annual incremental increase to the tuition freeze subsidy, notionally allocated to support year-over-year inflationary pressures as per the example in the above table. Please see Annex A for table to MUN tuition freeze subsidy allocations rolled into MUN’s operating grant.

See image format of ATIPP below:

Matt Barter is a fourth-year student in the Humanities and Social Sciences Faculty at Memorial University of Newfoundland, majoring in Political Science with a minor in Sociology. He enjoys reading thought-provoking articles, walks in nature, and volunteering in the community.