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Good ideas and familiar faces

A few ideas the Conservatives might wish to pluck from their opponents’ now-shuttered platforms


 
Good ideas and familiar faces

Mark Blinch/Reuters

After handily winning the federal election earlier this month, Prime Minister Stephen Harper should have little trouble implementing his not-so-hidden agenda. Between now and 2015 we can thus expect that the deficit will be whittled away, per-vote subsidies for political parties phased out, the long-gun registry eliminated, crime fought and taxes kept low.

But having a winning platform is not the same thing as having a monopoly on good ideas. Four years without an election offers this government the luxury of considering new policies on their own merits. And with this sort of freedom in mind, here are a few ideas the Conservatives might wish to pluck from their opponents’ now-shuttered platforms.

A more effective and civil House of Commons, as promoted by both opposition parties, is clearly a pressing need. The hyper-partisanship of the recent minority governments has pushed Parliament into general disrepute, robbed Canadians of timely and unbiased information on many important subjects and led to the abuse of various parliamentary procedures, including prorogation. “Canadians,” the Liberal platform stated, “want to be proud of our democratic institutions.” The NDP platform promised to set a “new tone in Parliament.” It will be up to all three parties to make this happen, but the government should demonstrate leadership.

A Liberal proposal for a voluntary add-on to the Canada Pension Plan is also worth a second look. Evidence that a sizable minority of Canadians are not saving sufficiently for their retirement poses a looming dilemma for federal and provincial governments. While a massive increase in CPP premiums, as advocated by the NDP, is certainly inappropriate, an optional top-up program could fit the bill with no cost to government or business.

The most promising suggestion from the 2011 election, however, looks to be Liberal leader Michael Ignatieff’s under-reported proposal for a Canadian Learning Passport. This was to take the form of a $1,000 per year grant made directly to post-secondary students and their families for four years. Low-income students would qualify for an additional $500 per year.

Such a plan—let’s properly call it a voucher system for higher education—holds the promise of some important benefits to the post-secondary industry in Canada.

In recent years, provincial government funding constraints have caused considerable hardships for Canada’s post-secondary institutions. And federal assistance for students has made increased use of tax credits over loans and grants, which reduces their upfront ability to pay for education. Central control of the funding levers has created a largely static education system that discourages innovation.

It makes sense, therefore, to consider giving students greater control over post-secondary funding by putting more of the public money directly into their hands, which is the intent of the Liberal idea. Faced with a real market for education services, schools would be encouraged to engage in more spirited competition, leading to greater differentiation and specialization of programs. This was the aim behind recent reforms to the British university system, in which tuition fees were largely deregulated and student aid vastly improved. A similar recommendation was made for Nova Scotia’s post-secondary system last year by economist Tim O’Neill.

A Canadian Learning Passport is an example of innovative thinking with regards to Canada’s college and university system and deserves much greater scrutiny, regardless of who thought of it first.


 

Good ideas and familiar faces

  1. A Liberal proposal for a voluntary add-on to the Canada Pension Plan is
    also worth a second look.

    So Canadians already aren’t adequately saving for their retirement by using one of the many voluntary options open to them and you guys think we need yet another voluntary option. Didn’t really think this one through, did you.

    • There’s empirical evidence that this kind of program can work to increase savings rates. Some mechanisms from the ‘nudge’ school of public policy include auto-enrollment with opt-out, rather than opt-in, and a default where 50% or 33% of future increases in pay are dedicated to increased savings contributions.

      The wide array of RRSP options tend to lead to analysis paralysis than anything. Canadians know that many of these choices are not in their interests as they are going up against much better informed fund management companies whose interests are not well-aligned with them as savers (extracting substantial fees–upwards of 2.5% of assets per year). So, providing a straightforward, sensible and trustworthy manager for savings could help push people out of this state of fear and inaction.

      There may be room to increase the defined benefit component of CPP, but I don’t see how one could be seriously opposed to a voluntary saving plan as proposed by the Liberals.

      • I’m not disputing what you’re saying, but I’m more inclined to agree with Robert on this one. And that doesn’t happen often. With TFSAs, which are not taxable upon withdrawal, the available savings vehicles are now more generous than ever. RRSPs have an advantage of an actual tax deduction now, though any future withdrawals are fully taxable at your highest marginal rate.

        The money you get from CPP is fully taxable as it is with RRSP redemptions, but the money you contribute is not deductible (though you do get a tax credit on your contributions, calculated at the rate of the lowest federal and provincial tax brackets). From a tax perspective, making additional CPP contributions would clearly be a worse option than TFSA and/or RRSP contributions. And that being the case, why would the government make such an option available. Dangling an option in front of contributors that is clearly worse than already available options would border on unethical in my opinion.

        •  I think you’re assuming too much, here. There’s no reason to believe that contributions to such a voluntary, defined contribution plan managed by CPPIB would be treated any differently than contributions to RRSPs, Registered Pension Plans, or the proposed Pooled Private Pensions. The Liberal proposal explicitly stated that it would be treated as an RRSP contribution and would reduce contribution room.

  2. It shouldn’t be hard at all to sell the Conservatives on a voucher style reform of post-secondary, it’s the best idea of the election. 

    • Sure, because we need more people mindlessly pursuing useless arts degrees. Our education system is already far too oriented towards universities, and not nearly focused enough on technical colleges that teach people skills they can actually use. Go ahead and call me an uneducated bumpkin if you like. I spent many years in university. My actual education started after I graduated, and began – slowly – to unlearn the assorted foolishness I had been taught in university.  

      •  I agree that students should see the cost of their education, and benefits contingent on attending post-secondary tend to be regressive.

        I quite like the system that UK is moving towards of inflation indexed loans (so the real value of the loan is preserved over time, rather than zero percent loans), repaid through a 9% levy on income above 15,000 pounds per year (until the loan is repaid in full). Every student qualifies for a loan of 72% of the cost of tuition and living costs (rent, food, etc.) and may qualify for larger loans on a means-tested basis. Universities and colleges are then free to set their tuition rates, access to education is preserved for low-income individuals, and it could save the government boat-loads of money. The system could actually be cost-neutral if the loan were at CPI+1.5, since this is roughly the cost of capital for the government. Since some of the benefits of post-secondary education accrues to society (in addition to the benefit to the individual), I think that discounting the loan somewhat is fair, but no lower than CPI.

      • What I have in mind for a voucher style system wouldn’t discriminate between technical and university schools. I think there’s value in arts degrees that we maybe don’t appreciate because our democracy seems so bulletproof but I definitely agree – I see no reason to tie funds to one or the other type of school rather than to students, especially when you keep hearing about people trying to pay off their loans driving cabs.

  3. Giving  money to those “enrolling in university,” would result in money thrown away.  Instead why not reward those who diligently work to repay student loans. 

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