Report F: HEALTH AND EDUCATION FUNDING

The government of British Columbia is committed to protecting the province's health care and education systems while at the same time moving towards a balanced budget. In an environment of reduced federal transfer payments and a continuing tax freeze, this has proven to be a major challenge. British Columbia has made progress on both of these objectives. The deficit has declined from a peak of $2.5 billion in 1991/92 to $185 million in 1997/98, while funding for education and health care has increased each year. At the same time, annual federal transfers have fallen from funding 30 per cent of provincial health, post-secondary education and income assistance expenditures in 1987/88 to 12 per cent in 1997/98 (and an estimated 10 per cent in 1999/00).

Achieving the goal of protecting health and education requires long term fiscal well-being so that government revenue is spent on people rather than on increasing interest payments on debt. Health care expenditures account for approximately one-third, and education spending over one-quarter, of provincial spending. Protecting these two priority areas has required some tough choices for the government. Whenever possible, these choices have focussed on improving efficiency and reducing administration. Unfortunately, they have also required the elimination or reduction of some programs that the government would have otherwise preferred to continue.

While the government of British Columbia is determined to restore fiscal balance, it is committed to investing in its most important resource -- its youth. During the period 1990/91 to 1995/96, British Columbia had the highest average annual rate of spending growth in the kindergarten to grade 12 (K-12) system of any province in Canada. The rate of spending growth in this sector was more than twice the national average (see Chart F1. Note: figures for Canada in all graphs exclude the Yukon and the Northwest Territories).

Some of British Columbia's increased K-12 spending shown in Chart F1 is due to population growth during this period. Much of the growth, however, represents enhanced per pupil funding which has moved from below the national average in 1990/91 to 5.1 per cent above the Canadian average in 1995/96, the latest year for which reliable data is available (see Chart F2).

In the post-secondary education sector, British Columbia had the highest average annual growth in spending during the 1990/91 to 1996/97 period, as indicated in Chart F3.

The government of British Columbia has endeavoured to expand the availability and protect the affordability of post-secondary education. Between 1991/92 and 1996/97, the capacity of the post-secondary system has been increased by 20.4 per cent, or by about 23,900 full-time student spaces. Chart F4 shows that per capita post-secondary spending in British Columbia was 4.5 per cent above the national average in 1996/97, second only to Quebec.

Chart F5 indicates that university undergraduate tuition fees were the second-lowest in Canada in 1995/96, the most recent year for which reliable data is available.

As with education funding, British Columbia's average annual growth rate for health care spending has been the highest in Canada (see Chart F6). This reflects government's commitment in this area, the unique role of health care as a defining national characteristic, increases in provincial population and the relative aging of the population. The application of health care funding increases has shifted significantly in recent years. Hospitals and physician services continue to comprise the largest areas of health spending, however, the rate of spending growth has been higher in the areas of continuing care for the elderly, illness prevention and services to shorten or avoid stays in health care facilities. This has significantly improved the quality of life for those requiring health care services.

As a result of the priority placed on this sector, health care spending per person is 11.4 per cent higher in British Columbia than the national average and was the highest in Canada in 1996/97 (see Chart F7). This level of financial commitment, combined with the dedication of health care workers and volunteers and the responsible use of services by the residents of British Columbia, contributes to one of the best health care systems in the world.

Budget 97 Reports

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BC Budget 97

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BC Ministry of Finance and Corporate Relations

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