Chapter B
Financial resources invested in education

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B1 Expenditure per student

Context

This indicator provides information on the investment, from all sources, in each student in public and private institutions at several levels of education. Expenditure by educational institutions per student is largely influenced by teachers’ salaries (see Indicators B3 and D2), pension systems, teaching and instructional hours (see Indicator D1), the cost of teaching materials and facilities, the program provided (e.g., general or vocational), and the number of students enrolled in the education system. Policies to attract new teachers or to reduce average class size or change staffing patterns have also contributed to changes in expenditure by educational institutions per student over time. Ancillary and R&D services can also influence the level of expenditure by educational institutions per student.

Effective schools require the right combination of trained and talented personnel, appropriate curriculum, adequate facilities and motivated students who are ready to learn. The demand for high quality education, which can translate into higher costs per student, must be balanced against other demands on public expenditure and the overall burden of taxation. Although it is difficult to assess the optimal volume of resources needed to prepare each student for life and work in modern societies, international comparisons of spending by educational institutions per student can provide useful reference points.

Policy-makers must also balance the importance of improving the quality of educational services with the desirability of expanding access to educational opportunities, notably at the tertiary level. In addition, decisions regarding the allocation of funds among the various levels of education are key. For example, certain provinces and territories emphasize broad access to higher education and some invest in near universal education for children as young as 3 or 4 years of age.

The indicator shows direct public and private expenditure by educational institutionsNote 1 in relation to the number of full-time equivalent students enrolled. Note that variations in expenditure by educational institutions per student may reflect not only variations in the resources provided to students (e.g., variations in the ratio of students to teaching staff) but also variations in relative salary and price levels.Note 2

Observations

Chart B.1.1 of Education Indicators in Canada: 2014

Description for Chart B.1.1

  • Expenditure per student for primary education in Canada, the provinces and at the OECD average was similar. However spending in the territories for primary education was somewhat higher.
  • Spending on secondary education was higher than that for primary education in Canada, the provinces (except Quebec and British Columbia) and territories, and on average, for the OECD. However, expenditure for secondary education varied considerably across provinces and territories.
  • University expenditure per student in Canada was substantially higher in all jurisdictions when compared with spending per student at the primary and secondary level. At $27,102, Canada’s figure was almost double that of the OECD average $13,958.

Chart B.1.2 of Education Indicators in Canada: 2014

Description for Chart B.1.2

  • Core educational services represented the bulk of expenditure per student in Canada, across provinces and territories and at the OECD level, ranging from 94% for the OECD, Quebec and Nova Scotia, to 99% in the territories.

Definitions, sources and methodology

Data refer to the 2010/2011 financial year and are for the elementary and secondary levels and for the university sector. A method is being developed to estimate this indicator for college as well. The OECD figures are from the UOE data collection on education statistics, administered by the OECD in 2013.Note 3

Expenditure by educational institutions per student at a particular level of education is calculated by dividing the total expenditure by educational institutions at that level by the corresponding full-time equivalent enrolment. Only educational institutions and programs for which both enrolment and expenditure data are available are taken into account. In accordance with the OECD definition provided in the data collection manual, debt servicing expenditure is excluded.

Financial data for elementary and secondary school levels are based on five Statistics Canada surveys: the Survey of Uniform Financial System – School Boards (this is the largest source of expenditure reporting); the Elementary-Secondary Education Survey (ESES) (for the estimates of capital spending in three provinces); the Survey of Federal Government Expenditures in Support of Education (most of which is for the education of First Nations students); the Survey of Financial Statistics of Private Elementary and Secondary Schools; and the Provincial Expenditures on Education in Reform and Correctional Institutions survey. The last two are inactive, but the figures are estimated based on data from previous years.

The financial data obtained at the elementary and secondary levels are not divided by level. Given that salaries are the largest financial item, the expenditure is broken down by level based on an estimate of the payroll at each level. The ESES does not provide details on teachers per level. In the 2011 National Household SurveyNote 4, teachers in each province and territory reported whether they were teaching at the elementary or secondary level, as well as their average salaries. Payroll was calculated by multiplying the number of teachers at each level by the average salary at that level. For each jurisdiction, the proportion of total payroll going to each level was then used to multiply total expenditure; e.g., if, in one jurisdiction, 69% of payroll went to the elementary level, it was assumed that 69% of total expenditure was attributable to that level.

Enrolment data for elementary and secondary school levels are the sum of enrolment in public and private schools (ESES) and enrolment in First Nations band-operated schools (Aboriginal Affairs and Northern Development Canada). Enrolment corresponding to the 2010/2011 financial year was obtained using 5/12 of the enrolment for the 2009/2010 school year and 7/12 of the enrolment for the 2010/2011 school year.

The manner in which enrolment was weighted between elementary and secondary levels is implicit in the definition of secondary school,Note 5 which varies from 7 to 11 (Quebec), 8 to 12 (British Columbia and Yukon), 9 to 12 (New Brunswick, Ontario and Manitoba), up to 10 to 12 (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, Saskatchewan, Alberta, Northwest Territories, and Nunavut), given that teachers report whether they teach at the elementary or secondary level, and given that the definition of secondary school varies by province. (In Tables B.1.1.1 through B.1.2.2, the secondary grades are reflected in the ISCED 3 category labelled “upper secondary”Note 6.) A different weighting was applied when calculating the figures for Canada that appear in Education at a Glance 2014: OECD Indicators. In that publication, enrolment for Canada at the upper secondary level was defined as Grades 9 to 12. The weighting factors were calculated based on actual enrolment figures in the respective grades in public school and in private schools in the 2010/2011 school year (ESES), and applied to the total weighted enrolment corresponding to the 2010/2011 financial year.

The following table gives weighting factors for both expenditure and enrolment in Canada.

Table 1
Weighting factors used to divide expenditure and enrolment by level
Table summary
This table displays the results of Weighting factors used to divide expenditure and enrolment by level. The information is grouped by Jurisdiction (appearing as row headers), Elementary, Secondary, Definition of secondary, Expenditure and Enrolment (appearing as column headers).
Jurisdiction Elementary Secondary Definition of secondary
Expenditure Enrolment Expenditure Enrolment
percent grade
Newfoundland and Labrador 59.6 73.0 40.4 27.0 10 to 12
Prince Edward Island 70.9 71.8 29.1 28.2 10 to 12
Nova Scotia 61.3 73.1 38.7 26.9 10 to 12
New Brunswick 61.7 65.0 38.3 35.0 9 to 12
Quebec 51.3 49.0 48.7 51.0 7 to 11
Ontario 60.3 63.6 39.7 36.4 9 to 12
Manitoba 61.0 64.4 39.0 35.6 9 to 12
Saskatchewan 61.8 72.1 38.2 27.9 10 to 12
Alberta 63.0 72.6 37.0 27.4 10 to 12
British Columbia 58.6 53.7 41.4 46.1 8 to 12
Yukon 53.0 57.0 47.0 43.0 8 to 12
Northwest Territories 59.4 68.9 40.6 31.2 10 to 12
Nunavut 59.9 73.2 40.6 31.2 10 to 12
Canada in this report 58.9 61.0 41.1 38.9  
Canada in the OECD report 59.0 64.4 41.0 35.6 9 to 12

For the university sector, the financial data were drawn from the Financial Information of Universities and Colleges Survey (FIUC), done in conjunction with the Canadian Association of University Business Officers (CAUBO), and the Survey of Federal Government Expenditures in Support of Education. The enrolment figures come from the Postsecondary Student Information System (PSIS); figures for the 2009/2010 and 2010/2011 academic years were used. Enrolment was first converted into full-time equivalents (i.e., the number of part-time students was divided by 3.5). Then the two academic years were weighted to correspond to the 2010/2011 financial year (April 2010 to March 2011) by applying 5/12 of the first and 7/12 of the second.

For comparison with the OECD, expenditure in Canadian currency was converted into equivalent US dollars by dividing the national currency figure by the purchasing power parity (PPP) index for the gross domestic product (GDP). The value of 1.22 (for the calendar year 2010) was used. The PPP index was used because the market exchange rate is affected by many factors (interest rates, trade policies, economic growth forecasts, etc.) that have little to do with current relative domestic purchasing power in different OECD countries. Expenditure data are not adjusted for the differences in the cost of living across the provinces and territories.

Educational core services are the expenditure portion that covers the real mission of educational institutions, which is to provide education. There are also expenditures on ancillary services, which have two main components: student welfare services (transportation, lodging and meals) and services for the general public (museums, radio and cultural programs). In the university sector, ancillary services typically include bookstores, food services (dining hall, cafeterias and vending machines), residences and housing, parking, university press publishing, laundry services, property rentals, university facility rentals, theaters, and conference centres.

Education expenditure at the tertiary level also includes expenditure on research and development, such as subsidies received by the institution for research projects and an estimate of the proportion of other current expenditures allocated to research and development.

The OECD average is calculated as the average of all OECD countries for which data are available.

Note: The corresponding OECD indicator is B1, How much is spent per student?.

Tables for B1 Expenditure per student

B2 Expenditure on education as a percentage of GDP

Context

This indicator provides a measure of the proportion of national wealth that is invested in educational institutions by linking public and private expenditures with gross domestic product (GDP).

Expenditure on education is an investment that can help foster economic growth and enhance productivity. Education contributes to personal and social development and reduces social inequality. The allocation of financial resources to educational institutions is a collective choice, made by government, business, and individual students and their families. It is partially influenced by the size of the school-age population and enrolment in education, as well as relative wealth.

Observations

GDP allocated to educational institutions

Chart B.2.1 of Education Indicators in Canada: 2014

Description for Chart B.2.1

  • With 6.4% of its GDP allocated to educational institutions in 2010, Canada devoted more than the 6.1% average estimated by the OECD.
  • In 2010, the financial commitment to educational institutions varied from one province or territory to another, ranging from 5% of GDP in AlbertaNote 7 to 10% in NunavutNote 8.

Primary and secondary education

  • In Canada, 58% of the national wealth invested in education in 2010 was spent on pre-primary, primary, secondary and postsecondary non-tertiary education,Note 9 less than the 63% average for the OECD countries.

Share spent on tertiary education

  • In 2010, 42% of the share of GDP that Canada invested in education was allocated to the tertiary sector, more than the 26% average for the OECD countries (Table B.2.1).

Definitions, sources and methodology

This indicator shows expenditure (public and private) with regard to educational institutions as a percentage of gross domestic product (GDP), by level of education and for all levels of education combined.

“Expenditure on educational institutions” includes spending on both instructional and non-instructional educational institutions. Instructional educational institutions are entities that provide instructional programmes (e.g., teaching) to individuals directly in an organized group setting or through distance education.Note 10  Non-instructional educational institutions are entities that provide advisory, administrative or professional services to other educational institutions but do not enrol students themselves.

The financial data for Canada were drawn from seven Statistics Canada surveysNote 11 and exclude expenditure related to debt service. GDP data were provided by the System of National Accounts Branch. All data for Canada, the provinces and territories refer to the 2010 financial year. The OECD averages (for the 2011 financial year) are based on data from all countries collected by the OECD through the UOE data collection on educational systems, conducted jointly by three international organizations (UNESCO, the OECD and Eurostat) and administered by the OECD in 2013.

Note: The corresponding OECD indicator is B2, What proportion of national wealth is spent on education?.

Table for B2 Expenditure on education as a percentage of GDP

B3 Distribution of expenditure on education

Context

This indicator outlines spending on education services and resources, identifying the proportion of budgets allocated to current and capital expenditures. A breakdown of current spending—compensation of teachers, other staff and other expenses—is also presented.

The distribution of expenditures may be influenced by a number of factors, including compensation for teachers, the generosity of pension plans, the size of the non-teaching staff, and the different needs for infrastructure. Budget allocation can affect the quality of services, the condition of equipment, and the ability of the education system to adapt to changes in enrolments. Both budgetary and structural decisions taken at the system level have repercussions extending into the classroom: they influence the nature of instruction and the conditions in which it is provided.

Observations

Current expenditure

Chart B.3.1.1 of Education Indicators in Canada: 2014

Description for Chart B.3.1.1

Chart B.3.1.2 of Education Indicators in Canada: 2014

Description for Chart B.3.1.2

  • Current spending accounted for most of the educational expenditure in Canada, the provinces and territories, and for the OECD, on average.
  • In Canada, current spending accounted for 93% of expenditure for primary, secondary and postsecondary non-tertiary education and 87% for tertiary education. Both of these proportions were similar to the comparable OECD averages.Note 12

Compensation of staff

Chart B.3.2.1 of Education Indicators in Canada: 2014

Description for Chart B.3.2.1

Chart B.3.2.2 of Education Indicators in Canada: 2014

Description for Chart B.3.2.2

  • For primary, secondary and postsecondary non-tertiary education, the compensation of staff (78%)—particularly teachers (63%)—accounted for the largest proportion of current expenditureNote 13 in Canada in 2010, a situation mirrored in all OECD countries.
  • At the tertiary level in Canada, 65% of current expenditure was devoted to compensation of all staff, and 38% to compensation for teachers.

Capital expenditure

  • In Canada in 2010, 13% of education expenditure for tertiary education was allocated to capital expenditure; the OECD average was 11%.Note 14
  • For primary, secondary and postsecondary non-tertiary, the proportion of education spending allocated to capital expenditure was less than that for tertiary education both in Canada (and in OECD countries (both at 7%).

Definitions, sources and methodology

This indicator shows the proportion of budgets allocated to current and capital spending at different education levels. Expenditures are based on accrual and cash (or fund) accounting, depending on the data source(s) used by the provinces/territories. It also shows the proportion of current expenditure allocated to compensation of teachers and of other staff, along with other current expenditure.

The distinction between current expenditure and capital expenditure is taken from the standard definition used in national accounts. Current refers to resources used each year by institutions as they carry out their activities. Capital covers assets that last longer than one year, including spending on new or replacement equipment and construction or renovation of buildings. Neither takes expenditure related to debt service into account.

Expenditure on educational core services includes all expenditure directly related to instruction and education; i.e., all expenditure on teachers, school buildings, teaching materials, books and administration of schools.

The data for Canada reflect the 2010 financial year, and figures were drawn from seven Statistics Canada surveys: the Elementary-Secondary Education Survey; the Survey of Uniform Financial System-School Boards; the Survey of Financial Statistics of Private Elementary and Secondary Schools; the Financial Information of Universities and Colleges Survey; the Survey of Federal Government Expenditures in Support of Education; Provincial Expenditures on Education in Reform and Correctional Institutions; and Financial Statistics of Community Colleges and Vocational Schools. Information for OECD member countries, and the OECD averages, refer to data for the 2011 financial year and are based on the data collection on educational systems conducted jointly by three international organizations—UNESCO, the OECD and Eurostat—and administered by the OECD.

Note: The corresponding OECD indicator is B6, On what resources and services is education funding spent?.

Table for B3 Educational attainment of the adult population

Notes

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