Low post-secondary tuitions in Canada are not a wealth transfer from the poor to the rich Sierra Rayne a,* , Kaya Forest a a Chemologica Research, 318 Rose Street, PO Box 74, Mortlach, Saskatchewan, Canada, S0H 3E0 Abstract Between 2007/2008 and 2012/2013, inflation adjusted undergraduate tuition fees for full-time Canadian students increased significantly in all disciplines. All disciplines except dentistry also exhibited substantial increases in inflation adjusted graduate tuition fees for full-time Canadian students over this period. In contrast to prior claims in the literature, we show that low tuition rates in the Canadian post-secondary system do not redistribute wealth from the poor to the rich. For each dollar of taxpayer derived financial support going into the Canadian college and university system, the wealthiest families paid almost the entire amount. Consequently, it appears that regardless of current or proposed tuition rates, the Canadian post-secondary system is a wealth transfer from the rich to the poor. Keywords: Tuition fees, Post-secondary education, Socio-economic policy, Wealth redistribution Introduction Between 2007/2008 and 2012/2013, inflation adjusted undergraduate tuition fees for full-time Canadian students [1] increased significantly in all disciplines (Table 1). All disciplines except dentistry also exhibited substantial in- creases in inflation adjusted graduate tuition fees for full- time Canadian students [2] over this period (Table 2). Some have attempted to argue “[w]hy higher tuitions are not ‘unjust’” [5], claiming that “[k]eeping tuitions low sim- ply distributes to those who are already among the best- off. The Occupy protests last fall - which likely see a sig- nificant overlap with student protests - were a wake-up call that we need to reconsider the policies and structures that benefit the richest in our society at the expense of those most in need. If as a society we truly care about inequality and the message of the Occupy movement, then there is simply no way to justify educational policies which redistribute to the richest families.” It is difficult to understand how low tuition rates in the Canadian post-secondary system can redistribute wealth from the poor to the rich. The costs of educating a student in the college or university system are paid - in general - by two sources: (1) tuition, and (2) the taxpayers. What- ever is not paid in tuition comes from government general revenues allocated to a particular institution. Since rich students do not pay less tuition than poor students, there is no wealth transfer at this level. What about the non- tuition component? Wealthier families contribute a much larger portion of the tax base than do low-income families. * Corresponding author. Tel.: +1 306 690 0573. E-mail address: sierra.rayne@live.co.uk (S. Rayne). For example, in 2002, the half of Canadian tax filers with lowest incomes (i.e., the lower half of the 50th percentile among all incomes) paid only 4.4% of the total federal tax [6]. In contrast, the 10% of tax filers with the highest in- comes (i.e., the wealthiest 10%) paid 52.6% of the total federal tax. The so-called intermediate income tax filers with incomes between the 50th and 90th percentiles paid 43.0% of the total federal tax. In other words, the top 50th percentile of income earners in Canada during 2002 paid 95.6% of the total federal tax in that year. Since general revenues are truly “general” revenues, we cannot track which individuals paid what amounts out of their tax bills into the post-secondary system. What we can say is that for each dollar of taxpayer derived financial support going into the college and university system, the wealthiest families paid almost the entire amount (there are provincial differences, of course, but for the purposes of this generalized discussion, the upper 50th percentile of income earners paid a 21.7 fold higher share of the tax base than the lower 50th percentile of income earners). Consequently, it appears that regardless of current or pro- posed tuition rates, the Canadian post-secondary system is a wealth transfer from the rich to the poor, or the op- posite of what has been argued elsewhere. References [1] CANSIM Table 477-0021: Weighted average tuition fee for full- time Canadian undergraduate students, by field of study, Statis- tics Canada: Ottawa, ON, Canada, 2012. [2] CANSIM Table 477-0022: Weighted average tuition fee for full- time Canadian graduate students, by field of study, Statistics Canada: Ottawa, ON, Canada, 2012. Preprint submitted to viXra January 12, 2013