Government subsidies of private facilities save the public money . . . not!

Charles Ungerleider, Professor Emeritus, The University of British Columbia

[permission to reproduce granted if authorship is acknowledged]  

According to a new study by the Leisure Institute, a non-partisan Canadian think-tank, government subsidies for private golf club memberships would save the province millions,

"Subsidizing private golf clubs would reduce the strain on government finances and save taxpayers money," said Chip Greenway, associate director of leisure policy at the Leisure Institute. "Public courses aren't the right fit for every golfer. But, making private courses affordable for middle-income families would reduce the competition for tee-times at public courses and the cost of public course maintenance because fewer golfers would be using public facilities," Greenway said.

Specious, yes?

Well, the Fraser Institute makes a similar argument about government funding for private schools in a May 2024 news release. “Some people claim that BC’s funding for independent schools take resources away from government public schools, but in fact, funding independent schools actually reduces the strain on government finances, saving taxpayers money,” said Paige MacPherson, associate director of education policy at the Fraser Institute.  

I am guessing that, in the run-up to the provincial election, the Fraser Institute was worried that the B.C. government might stop subsidizing private schools to the tune of more than $360 million per year. “Government public school isn’t the right fit for every child, and BC’s school choice policies make independent schools affordable for many middle-income families,” MacPherson said. “If funding for independent schools was taken away, many families would have no choice but to migrate to the government school system, limiting school choice for parents and increasing costs for taxpayers.”  

There are variations on the Fraser Institute’s theme. Subsidies for professional sports stadiums are a prime example. Subsidies by government are often justified by promising economic growth and job creation. Studies have shown, however, that these benefits rarely materialize as promised. Instead, the costs often outweigh the benefits. For example, the Citizens Against Government Waste report explains how the use of public funds for stadiums often leads to increased local taxes without corresponding economic gains. The Brookings Institution found that US government subsidies through tax-exempt bonds for stadium construction have cost taxpayers billions without delivering substantial public benefits​.  

Corporate subsidies are another area where the supposed benefits are not realized. According to the Hoover Institution, US federal subsidies to businesses cost taxpayers nearly $100 billion annually. These subsidies are often justified on the grounds of job creation and economic competitiveness. The benefits, however, largely accrue to large corporations disproportionately while failing to deliver the promised economic growth.  

If you buy the Fraser Institute’s argument about the BC government’s funding of private schools, please send me $800 to subsidize my membership at a private golf course of my choice. Or, better yet, join my investment club where I guarantee unconditionally to return half of your initial investment in less than a year. 

“The last thing a parent wants is to feel . . . .”

 Charles Ungerleider, Professor Emeritus, The University of British Columbia

[permission to reproduce granted if authorship is acknowledged]  

In a response to a question from a journalist about a controversial issue in education, a candidate for provincial office said, “the last thing a parent wants is to feel their child is being taught to be a certain way or taught something against their family’s values." However, that sentiment is antithetical to the purpose of education in a democratic society.  

A key purpose of education in a democratic society is to expose students to a diversity of perspectives, values, and ideas, not just those that align with their family's views. This exposure encourages critical thinking, empathy, and a greater understanding of the world. If education were limited to teaching only what aligns with each family’s values, students would not be exposed to values different from those of their parents, leaving them less well-prepared to function in a democracy.  

Democratic education aims to prepare students to be active and informed citizens, capable of participating in public debates, making reasoned arguments, and understanding different viewpoints. If schools restricted what they taught to the values of individual families, students would be isolated from the social and political conversations that are vital to the functioning of democracy. Such restriction would limit their ability to engage with others who hold different perspectives and would weaken the fabric of civic discourse.  

Education in a democracy seeks to develop individuals who can think independently and make informed choices. This sometimes means challenging pre-existing beliefs, including those learned at home. If students are only taught what aligns with their family's values, it limits their capacity for intellectual growth and personal autonomy, both of which are necessary for participating fully in democratic society.  

A democratic society relies on a sense of shared values and common understanding. While families may hold diverse views, education plays a key role in promoting civic values such as equality, justice, and mutual respect. If schools avoid teaching concepts that challenge family values, they would fail to instill these democratic principles which in turn would undermine social cohesion. 

In a democratic society, all children are entitled to access a broad and balanced curriculum, regardless of their family's beliefs. This includes knowledge about history, science, ethics, and human rights, which may at times conflict with certain familial or cultural values. Shielding students from this information would result in unequal educational outcomes by limiting some students' ability to fully participate in society.  

I am not saying that parents' values are not important. But education in a democratic society must balance this with the need to promote critical thinking, expose students to diverse perspectives, and prepare them to participate in the civic life of a pluralistic society. To do otherwise would compromise the foundational democratic ideals of freedom, equality, and shared responsibility.

Addressing the Teacher Shortage

 Charles Ungerleider, Professor Emeritus, The University of British Columbia

[permission to reproduce granted if authorship is acknowledged]

 

B.C. NDP Leader David Eby has made a $75 million election promise of loan forgiveness to attract doctors, nurses, and other health professionals to rural communities in British Columbia. The initiative is designed to address staffing shortages that have caused emergency room closures in rural hospitals. Health-care professionals who commit to working in a rural area for at least five years would be eligible for student loan forgiveness ranging from $10,000 to $20,000. Eby emphasized that this program is designed to make rural B.C. a more attractive option for both national and international health workers.  

If elected, the NDP might use the $75 million to conduct a public policy experiment. Instead of dedicating all the funds to loan forgiveness, the government might offer health professionals a choice between loan forgiveness and a mortgage forgiveness system.  

There is some evidence that homeownership tends to reduce the probability of homeowners leaving an area compared to renters. This is often referred to as the "lock-in effect," where homeownership creates financial and psychological incentives for individuals to stay in place. One key factor is the significant financial commitment involved in owning a home.  

I am writing about this in a blog about education because, like health services, education suffers shortages of teachers in rural and remote areas, and in specialized instructional subjects. Given the costs associated with teacher turnover, mortgage forgiveness may be an approach that school districts might employ to attract and retain teachers.  

A variation on mortgage forgiveness is employed by an Ontario engineering firm. The firm has fostered employee loyalty by offering up to $20,000 in down payment assistance for staff who are first-time homebuyers, a benefit that has helped 36 employees since 2021. The program, created in response to housing challenges, has improved employees’ housing security and built long-term retention, as employees must stay with the firm for three years after receiving the assistance.

Homeownership entails mortgage payments, maintenance costs, and property taxes, all of which create a higher barrier to moving compared to renting. Homeowners also face transaction costs when selling a property (realtor fees, moving expenses, and sometimes capital gains taxes). These costs can act as a deterrent to relocation. Renters, on the other hand, typically have fewer financial constraints and transaction costs, allowing them to move more easily in response to changes in employment or life circumstances.  

Beyond financial factors, homeownership is also linked to stronger social and psychological ties to a community. Homeowners are more likely to invest in local social networks, participate in civic activities, and develop a sense of emotional attachment to their homes and neighborhoods. This sense of belonging can make it harder for homeowners to consider leaving the area compared to renters who may have less attachment due to the temporary nature of rental agreements.  

Homeownership provides stability in housing costs for the owner, especially for those with fixed-rate mortgages. Unlike renters who are subject to potential rent increases or market fluctuations, homeowners with fixed mortgages have predictable housing expenses, which can encourage them to stay in the same place.  

In sum, homeowners are less likely to move compared to renters. Financial commitments, social investments, employment-related factors, and stable housing costs all contribute to this dynamic. This suggests that policies encouraging homeownership, such as a mortgage forgiveness program, could help retain professionals in rural and remote areas by increasing their investment in staying for the long term.  

To entice professionals to move to rural and remote communities in British Columbia, a mortgage forgiveness system could be implemented, structured over five years with graduated benefits. The program would be directed to essential professionals such as medical personnel, teachers, and other critical roles, offering increasing interest forgiveness for those committing to stay in these areas long-term.  

My back of envelope financial model assumes a house costing $500,000, with a 90% mortgage ($450,000) amortized over 25 years at an interest rate of 5%. This results in a monthly mortgage payment of approximately $2,617. Over the 25-year amortization period, the total interest paid amounts to $338,950.  

Over the first five years, the total interest paid is $109,200. The mortgage forgiveness schedule would begin modestly in Year 1 and increase each year, incentivizing long-term retention. In Year 1, the system would forgive 10% of the interest paid, or $2,276. This provides a modest relief to help professionals settle into their new community. In Year 2, the forgiveness rate would increase to 15%, covering $3,349 of the $22,324 in interest paid. As the program progresses, the rate increases to 25% in Year 3, forgiving $5,466 of the $21,863 in interest paid. By Year 4, forgiveness would cover 30% of the interest, which amounts to $6,414 on $21,379 of interest paid. Finally, in Year 5, the program would forgive 50% of the interest paid, providing $10,435 in relief on $20,870 in interest.  

Over five years, professionals would receive about $27,940 in interest forgiveness, making the program more financially rewarding as they continue to stay in rural or remote communities. The increasing forgiveness rates each year make staying for the full five years attractive, helping to ensure retention of essential professionals in these underserved areas. This graduated model would provide immediate and long-term benefits, balancing modest early support with more significant rewards for continued commitment. Professionals who remain in place receive the full financial advantage, which may help to address the staffing shortages in rural and remote communities.  

Without special legislative provisions, the forgiveness program, whether mortgage or student loan, would likely be considered a taxable benefit under CRA guidelines.  However, if the forgiveness is structured as part of a government program aimed specifically at economic or workforce development in underserved regions, it is possible that special tax treatments or exemptions could be developed.  

If the government pursues my suggestion that health professionals be given a choice between loan forgiveness and a mortgage forgiveness system, my prediction is that those who choose the mortgage forgiveness option will likely remain in the community longer than those who select loan forgiveness. 

Hard Truths

Charles Ungerleider, Professor Emeritus, The University of British Columbia

[permission to reproduce granted if authorship is acknowledged]  

Scarcity drives the need for policy, and policy requires careful thought and evaluation. Like everything that people value, public schools and the school boards responsible for them do not have enough resources. Leaving aside what 'enough' might mean, school districts do not have evidence that they are using their limited resources advantageously. And, for the most part, they are resistant to gathering the information that would provide that evidence.  

Even though it would be beneficial to systematically assess instructional programs and practices, school districts are unwilling to confront the obstacles to evaluation. Evaluations require time, collection of information, money, and expertise—resources that are scarce. Districts are often reluctant to allocate resources to evaluation from other areas even when doing so might enable them to operate more effectively, efficiently, and economically in the long run.  

Designing and conducting proper evaluations that produce evidence upon which school districts can act requires specialized knowledge of research design, data analysis, and statistical methods. Many – I am tempted to say most – school districts do not employ personnel with the necessary background.  

It is inevitable that evaluations will expose program weaknesses or failures that will attract attention. School boards and senior officials are reluctant to evaluate because of the potential for criticism and negative publicity.  

Evaluation means looking at and comparing the value of all uses of resources. Many school boards assume a “fixed cost” state of mind that we are offering this program already, we should keep it and not evaluate it against other possible uses of resources.  

School districts face pressure from multiple stakeholders (parents, teachers, unions, government bodies) whose priorities often conflict. Pressure from these disparate groups prompts school boards to focus on short-term goals rather than long-term evaluation. The desire to implement programs that are politically favorable, regardless of their effectiveness, typically outweighs the need for evaluation.  

Teachers and the organizations that represent them resist systematic evaluation because they fear evaluations will be used punitively, are disinclined to employ practices that are not aligned with their personal beliefs, are resistant to practices that they believe are being imposed because of district or provincial mandates, and place greater priority on personal experience than they do on empirical evidence.  

Educational outcomes can take a long time to mature or be manifest and it is difficult to isolate the effects of a single program or practice from broader social, economic, or demographic factors. But these challenges, common to most complex public endeavors, are not adequate reasons to avoid evaluations that may allow resources to be used more effectively, efficiently, and economically to the betterment of students.  

There will always be shortages of things that people value and surpluses of things people do not want. Arguments for additional resources are more likely to be persuasive if there is evidence that the resources at hand are being employed effectively, efficiently, and economically. 

World Teachers’ Day: An occasion for celebration and appraisal

Charles Ungerleider, Professor Emeritus, The University of British Columbia

[permission to reproduce granted if authorship is acknowledged]  

October 5^th is World Teachers' Day commemorating the signing of the 1966 UNESCO/International Labour Organization (ILO) Recommendation concerning the Status of Teachers. I’ve long argued that teaching is among the most socially useful professions because teachers help to recreate society by preparing the next generation of citizens. October 5^th acknowledges the contribution that teachers make: shaping the future of those whom they teach and, through them, society.  

The 1966 UNESCO/ILO Recommendation outlines the rights and responsibilities of teachers and sets international standards for their employment conditions and professional preparation. The Recommendation addresses various dimensions of the profession. It emphasizes professional standards and responsibilities: Teachers should aim to foster the physical, mental, and moral development of students, preparing them for active participation in society. Teachers should be able to exercise their judgment while they adhere to high ethical and professional standards and demonstrate integrity, fairness, and dedication.  

Teacher preparation and continuous professional education are key components in the Recommendation. Teachers must receive thorough and effective initial training that includes both theoretical and practical knowledge. To ensure teachers stay current with educational advancements and methodologies the Recommendation regards currency of professional knowledge through ongoing professional development as essential.  

Employment and working conditions are also addressed in the Recommendation. Merit-based recruitment, job security, fair remuneration, and the benefits of social insurance benefits are key considerations. Schools must provide safe and healthy working conditions, with adequate resources and facilities to support effective teaching and learning.  

The Recommendation also draws attention to the importance of teachers' participation in educational decision-making and their right to hold membership in professional organizations that represent their interests. Teachers should be involved in the development and implementation of educational policies that affect their work and the quality of education.  

The 1966 Recommendation is intended to be a global framework for ensuring that teachers are respected, well-prepared, and supported throughout their careers. The standards it articulates are intended to improve the quality of education, promote the well-being of teachers, and benefit students and society.  

Almost sixty years have passed since the Recommendation was advanced. It would be interesting to see whether and how well the aspirations expressed by the standards have been realized. October 5^th should be both a celebration of the profession and appraisal of its progress toward the standards recommended.