Chapter 6: Elementary and Secondary Education

2010–11 Spending  

$21.9 billion

Average Annual Growth Rate in Spending,
2001–02 to 2010–11 

4.6%

Projected Average Annual Spending Growth
Rate Under Status Quo, 2010–11 to 2017–18

4.2%

Average Annual Spending Growth Rate Cap
Consistent with Return to a Balanced
Budget in 2017–18 

1.0%

Since their development in the mid-19th century, publicly funded schools have been a cornerstone of Ontario’s public services. With the rise of the knowledge economy, a strong education system is more critical than ever to Ontario’s prosperity and global competitiveness. The importance of a strong foundation through education and the progress made in Ontario’s education system in recent years must be kept in mind when considering how to meet Ontario’s fiscal challenges. Still, we believe that this era of restraint presents an opportunity for the government to ensure that education is delivered as efficiently and effectively as possible.

Historical Context and Recent Trends

The education sector includes programs and services that support elementary and secondary education from junior kindergarten through Grade 12. The government provides funds to each of Ontario’s 72 district school boards using a formula based on student enrolment, number of schools and local factors, such as the demographic and geographic profile of individual boards. School boards then make local decisions on funding and staffing schools, implementing programs to enhance student achievement, and carry out capital projects with ministry approvals.

Through the Ministry of Education, the province funds nearly 98 per cent of education sector spending. School boards are funded through direct grants and the education portion of property taxes. School boards’ expense represented about 94 per cent of the ministry’s total expense in 2010–11. Over 76 per cent of ministry spending goes to salaries and benefits for teaching and non-teaching staff.

Provincial spending on elementary and secondary education has grown significantly over the past decade despite declining student enrolment. Since 2002–03, student enrolment has declined from 1,997,000 to 1,877,000, a decrease of 6.0 per cent, or 0.7 per cent per year on average. Despite this decline of 120,000 students, there are about 24,000 more teachers and non-teaching staff in Ontario’s publicly funded schools. If teaching and non-teaching staff had declined since 2002–03 proportionally to the decline in enrolment, there would have been 35,000 fewer teaching and non-teaching staff in Ontario’s schools in 2010–11. The combination of increased funding and declining enrolment has led to a 56 per cent increase in per-pupil funding from $7,201 in 2002–03 to $11,207 in 2011–12.

Improved student success is critical to the creation of a better-educated and more successful workforce. Key education priorities have included improved student achievement, reduced gaps in student achievement and increased public confidence in Ontario’s publicly funded schools. To advance these priorities, schools have been provided with funds to sustain labour peace and stability; increase preparation time for elementary teachers; reduce class sizes; support student achievement initiatives; and, as of 2010–11, begin implementation of a provincewide full-day kindergarten program (FDK). New programs have been implemented to improve provincial assessment results at underperforming schools and expand learning options to increase graduation rates.

The terms of staff compensation, benefits and work structure are founded in collective agreements mutually negotiated between each teacher federation or staff union and the individual school boards. Over the past eight years, teacher federations and provincial associations representing school trustees entered twice into four-year provincial labour framework agreements, facilitated and funded by the province. In 2008, similar provincial labour framework agreements were also reached with unions representing support staff.

The last two framework agreements provided for across-the-board salary increases of two per cent to three per cent in each year of the agreements. While precise benefit levels can vary by board, labour framework agreements have maintained or enhanced benefit levels, which are reflected through annual school board funding benchmarks.

Teachers’ collective agreements also include salary grids, which provide salary increases for teachers as they gain experience during their first 10 years as a teacher, and as they acquire additional qualifications. Salary increases through the qualification and experience grid are provided in addition to any across-the-board salary increase specified in the collective agreement. This means that even without future across-the-board wage increases, teachers who are not at the top of the grid would still receive real salary increases, provided the grid and inflation remain approximately at current levels. The same can be said for most support-staff workers who may not be at the top of their respective salary grids.

Terms of work for classroom teachers in labour framework agreements include increased teacher preparation time and class-size reductions. These provisions have resulted in increases in the number of teaching staff. The amount of preparation time allotted to elementary teachers has increased steadily through the agreements; actual preparation time for elementary teachers has increased from 152 minutes per week in 2002–03 to 240 minutes per week in 2011–12. Current school board funding projections include funds for additional teachers to support specific class sizes; there are hard caps on class sizes of 20 students per class from junior kindergarten to Grade 3 (excluding FDK), with the option of going up to 23 students in 10 per cent of classes. Certain collective agreement provisions play a central role in determining the staffing levels at schools and the allocation of time by school staff.

The Current Challenge

These recent trends have led to a status quo in elementary and secondary education expenditures that is not sustainable given the government’s fiscal constraints. In terms of immediate costs, the ministry must manage 2011–12 school-year funding commitments that have not yet been fully absorbed on a fiscal-year basis, and there are provisions of the current labour framework agreement that kick in on Aug. 31, 2012. Amortization costs incurred because of approved or existing school renewal projects cannot be avoided. The ministry is expecting increased costs associated with the qualifications and experience of teachers in the range of $900 million by 2017–18, before factoring in the impact of retirements. School boards will face other cost pressures associated with benefits, utilities and fuel. Against this backdrop, the next collective agreements must be negotiated in a climate of overall fiscal restraint.

The government’s newly introduced FDK program will further increase costs in the education sector over the next several years and beyond. The program represents a substantial investment in education with long-term fiscal implications. The program has now been rolled out in almost 800 schools, with enrolment of about 50,000. That is about one-fifth of the intended 247,000 students to receive a full day of kindergarten learning when the program is available across the province in the 2014–15 school year. The program has been implemented with a staffing model of one teacher and one early childhood educator (ECE) per classroom during the school day, with an average class size of 26. As a result, 3,000 new teachers and 20,000 ECEs will be added in schools by September 2014. Further implementation will cost an additional $1.2 billion, resulting in an annual commitment of over $1.5 billion when the program reaches full maturity.

Because it represents a large and growing share of government expenditures, education sector spending growth poses a substantial challenge to the government’s plan to return to balance. Maintaining the existing policy framework and program delivery model for elementary and secondary education may result in average funding increases of about four per cent per year until 2017–18.

Recommendation 6-1: To meet our overall fiscal objectives, the Commission believes that the growth rate in the education budget over the term from 2010–11 to 2017–18 must be constrained to one per cent per year.

The government faces the challenge of restraining the growth of spending on education while protecting the scholastic progress achieved. Demographics will help initially, because enrolment is expected to keep declining until 2013–14. But enrolment will begin to rise again by 2015–16. This projected increase must be considered when planning for a period of controlled growth in the education sector.

The bottom line for the education sector is the following:

  • The government has committed to fund the remaining expansion of FDK, at an incremental cost of $1.2 billion over the cost already budgeted in 2010–11;
  • Based on most recent trends of settlements in the broader public sector (BPS), compensation costs could increase by $2 billion between 2010–11 and 2017–18;
  • The current funding model features real fiscal pressures to the government estimated at $1.2 billion by 2017–18, funding enhancements already announced, capital projects already approved, and estimated increases in salary costs associated with teacher qualifications and experience;
  • These three key pressures total $4.4 billion. The Commission recommends a one per cent annual increase in education spending, generating $1.6 billion in additional revenues by 2017–18, leaving a shortfall of $2.8 billion by 2017–18; and
  • This shortfall does not include eventual potential pressures in areas such as benefits, utilities and so on.


Throughout the remainder of the chapter, we present recommendations aimed at assisting the government as it tries to alleviate the substantial fiscal pressures that now weigh on the elementary and secondary education sector. We believe these recommendations will meet the one per cent average annual growth target for a return to a balanced budget, while striving to maintain the progress already made in student outcomes.

The Commission is fully mindful of this progress. An agenda focused on student achievement has brought notable results:

  • 69 per cent of Ontario Grade 3 and Grade 6 students met or exceeded the provincial standard (level 3 or “B” Grade) in reading, writing and math in 2010–11, up from 54 per cent in 2002–03; and
  • The high school graduation rate in 2009–10 was 81 per cent, up from 68 per cent in 2003–04.

There has been improved co-operation among government, school boards and school staff in recent years.

Recommendation 6-2: The budget constraint must be applied strategically so as not to jeopardize the improvements in results achieved, such as on provincial assessments and with graduation rates.

However, since compensation costs make up over three-quarters of the education sector budget, the recommended one per cent growth rate target would be difficult to achieve without restraint in this area.

Commission’s Principles and Goals

The government’s approach to the education sector should continue to focus on capacity-building, strong classroom instruction and the promotion of sound pedagogy rather than structural reform. Steps should be taken to ensure fiscal sustainability in the education sector while staying the course with its agenda of improving student achievement, closing student achievement gaps and increasing confidence in the publicly funded education system.

Progress towards the achievement of these goals has been driven by efforts at the local and provincial levels. Schools, school boards and the province have worked together to develop tools and best practices to promote student achievement and take action when goals are not being met. This “pressure and support” approach to accountability has been the basis for consistent performance improvement, and should be sustained as reforms are enacted.

Recommendation 6-3: The elementary and secondary education sector should stay the course with its current agenda, which consists of three key goals: improving student achievement, closing gaps in student outcomes and increasing confidence in the publicly funded school system. The province and the sector must sustain the current alignment between provincial, school board and school-level efforts, and sustain the “pressure and support” approach adopted in recent years.

Co-operation across the sector will continue to play a vital role in achieving goals and building on recent successes.

Recommendation 6-4: Reforms in the elementary and secondary sector should be introduced so that all stakeholders have their role to play in ensuring the system’s long-term sustainability and so that unnecessary sources of distraction are avoided.

Recommendation 6-5: To ensure transparency and effectiveness, the province should confirm multi-year allocations to school boards for the 2012–13 to 2017–18 period so that they can plan accordingly, have enough time to find the required efficiencies and enter negotiations for renewal of the sector’s collective agreements that will expire on Aug. 31, 2012, with clear knowledge of their budgetary position.

A sound and transparent approach to fiscal planning will also enhance co-operation and stability. Multi-year allocations will improve the ability of boards to improve efficiency while protecting key elements of local service. They will also support constructive collective bargaining. This is likely the Commission’s most important recommendation for the education sector. Failure by the government to implement this recommendation will lead to poor planning and decision-making by the sector.

Investments for the Future in First Nations Education

To achieve the government’s objective to return to balance by 2017–18, restraint will be necessary to curb spending growth through targeted reductions. It will be equally important to reallocate scarce resources to support strategic investments that will lower long-run costs and reap significant social dividends.

The Commission believes that there is an urgent need to significantly improve the provision of on-reserve First Nations education in the province. The current state of on-reserve education in Ontario is unacceptable. There is a substantial and growing gap in educational attainment between First Nations peoples living on-reserve and the rest of the Canadian population.1 Data from the 2006 census show that only 40 per cent of on-reserve First Nations adults have completed high school, compared with 76 per cent of Canada’s overall adult population, a difference of 36 percentage points.2 Alarmingly, this gap rises to 41 percentage points when looking specifically at the population aged 25 to 34 (see chart that follows).3 These figures reflect stagnant outcomes for on-reserve youth contrasted with continuous intergenerational gains in the high school completion rate of Canada’s non-Aboriginal population.

Share of Population with Incomplete K-12 Education, 2006

Improving educational attainment is critical to improving social and economic outcomes for First Nations peoples. A long-overdue investment in on-reserve education will help alleviate the long-run costs of the economic exclusion of Ontario’s growing First Nations communities.4

 

The Cost of the Status Quo

In 2009, the Centre for the Study of Living Standards (CSLS) published a report estimating the potential long-run returns of closing the gap in educational attainment and labour-market performance between Aboriginal and non-Aboriginal Canadians. The study looked at the potential gains in overall economic activity as well as the potential benefit to governments’ balance sheets. The CSLS estimated that if these gaps were fully eliminated, Canada could realize a cumulative increase in real economic output of $401 billion over the period from 2001 to 2026. Of this figure, $180 billion is attributed to the impact of improved educational outcomes alone. Further, CSLS estimated that together, governments’ fiscal position could improve by $116 billion as a result of $77 billion less in excess expenditures due to the Aboriginal population’s above-average use of government programs such as health care, social services and the justice system, and $39 billion in increased tax revenue.

Source: “The Effect of Increasing Aboriginal Educational Attainment on the Labour Force, Output and the Fiscal Balance,” Centre for the Study of Living Standards, 2009.

Although on-reserve education is a federal responsibility, the province is affected because there is significant student mobility between on-reserve and provincially funded schools. The majority of Aboriginal students in Ontario are educated in provincially funded schools. In addition, many secondary students living on-reserve are educated off-reserve in provincially funded district schools through tuition agreements and the underfunding of on-reserve elementary schools often translates into acute remedial needs at the secondary level in provincially funded schools.

The federal government identifies “comparability” as a general objective for on-reserve education.5 It is commonly noted, however, that federal funding falls well short of parity with provincial education spending on a per-student basis.6 The intolerable delays from the federal government to increase per-student funding for on-reserve education to close the gap with provincial funding levels must end.

Recommendation 6-6: The Ontario government should put strong pressure on the federal government to provide funding for First Nations on-reserve education that at least reaches parity with per-student provincial funding for elementary and secondary education.

Recommendation 6-7: The province should negotiate with the federal government and First Nations to ensure the establishment of new multi-year, strategic top-up funding agreements for on-reserve schools. These agreements, voluntary for interested First Nations, would ensure that per-student funding for on-reserve schools is at least equivalent to that provided to adjacent English-language public district school boards.

The federal government’s current approach to funding on-reserve education in Ontario involves funding individual bands and stand-alone schools. This “one-school, stand-alone model” does not allow for economies of scale in the provision of educational services. Back-office services, which are typically supplied by district school boards and provincial ministries of education, include functions ranging from curriculum development to long-term capital management.7 Without a comprehensive education system, individual bands and schools may have less capacity to provide specialized services such as speech therapy and counselling that are generally shared among schools in district boards. The creation of administrative bodies could help achieve economies of scale and improve the provision of educational services on-reserve.

Recommendation 6-8: Agreements with the federal government should facilitate the formation of education entities among participating First Nations with powers similar to provincially funded district school boards. To establish a system of support services for on-reserve schools, chief executive officers of the new education entities should join the Council of Ontario Directors of Education as well as the regional education councils. Additionally, the new education entities should negotiate with the province multi-year targets for the proportion of supervisory officers, principals and teachers who will be deemed qualified by the Ontario College of Teachers. Such qualifications can be earned from existing providers or from newly accredited Aboriginal service providers.

Recommendation 6-9: When negotiating funding agreements, the province should pressure the federal government to increase funding for capital for on-reserve schools and consider transferring this funding to the province, which is better equipped to provide expertise for K–12 capital renewal and construction.

Recommendation 6-10: Failing to come to an agreement with the federal government, the Commission recommends that the province step up to provide funding to ensure that on-reserve schools are funded at parity with adjacent English-language public district school boards.

Affordability of the Full-Day Kindergarten Program

In recent years, the government has devoted significant attention and resources to early learning. In 2009, the government committed to implementing full-day learning for four- and five-year-olds with an investment of $200 million in 2010–11 and $300 million in 2011–12. Dr. Charles Pascal was appointed as the Premier’s special advisor on early learning8, and was asked to provide recommendations for implementing a full-day early learning program.

Dr. Pascal’s 2009 report, “With Our Best Future in Mind,” recommended the development and implementation of a coherent approach to early childhood development and education, including FDK for four- and five-year-olds. Dr. Pascal also recommended before- and after-school programming for kindergarten students, funded through parent fees.

In September 2010, FDK was launched in nearly 600 schools across Ontario. The rollout has continued in 2011 with an additional 200 schools, and about 900 new school sites have been announced for the 2012–13 school year. A framework for the extended-day component of the program has also been set; school boards offer the program either independently or through on-site third-party partners, in areas where there is enough demand.

The Commission appreciates the research and analysis performed by Dr. Pascal. There is substantial evidence that investments in early childhood education produce significant socio-economic benefits in the long term. The Pascal report offers a plan that reduces gaps in child development policy, supports student achievement, and promotes better long-term economic, health and social outcomes.

However, consideration must also be given to the demands placed on the education system by the program, and the resources required to meet these demands. Costs associated with new staff, classroom supplies, transportation, other school operations, capital and stabilization for the child care sector will result in a mature program expense of over $1.5 billion per year.

Given the current fiscal climate, the Commission is concerned that the timing is not appropriate for a new program with a cost of this magnitude. The costs of FDK were incorporated into the March 2011 Budget and the 2011 Ontario Economic Outlook and Fiscal Review in November. But as we have discussed elsewhere, not enough offsetting restraint was secured in other spending to ensure that these fiscal plans would achieve the overall deficit objective.

The Commission considered recommending the suspension of further implementation of the FDK program, with a progressive redistribution over time of the funded sites to communities with the lowest socio-economic status within each board. However, such an approach would create inequalities, and would pose additional challenges for families, schools, boards and government.

Recommendation 6-11: Given the difficulties with such an approach, and the prohibitive cost of the program overall at this time, the Commission recommends cancellation of the full-day kindergarten (FDK) program, without prejudice to schools that already had FDK before the introduction of this government strategy.

The Ministry of Education should carefully develop phase-out provisions so that a child who had a full day in junior kindergarten would not move to a half day in senior kindergarten, and so that purpose-built spaces are appropriately utilized for child care.

Recommendation 6-12: If the government decides to continue the implementation of the full-day kindergarten program, then the Commission recommends delaying full implementation from 2014–15 to 2017–18 and reducing program costs by adopting a more affordable staffing model, involving one teacher for about 20 students, rather than a teacher and an early childhood educator for 26 students, to help moderate salary expenditures for the program by about $200 million. The government should not confirm full implementation of the program without assurances from school boards, teacher federations and support-staff unions that negotiated annual wage increases by 2017–18 will not be higher than the current trends in the broader public sector, and that the class-size increases and reductions in non-teaching staff contemplated by the Commission by 2017–18 will be achieved.

This approach would also help ease the oversupply of teachers in the labour market and reduce costs associated with correcting the current undersupply of ECEs.

Class Sizes

The determinants of high student achievement have been a topic of significant debate among researchers, education-sector stakeholders and governments. Attention has been paid to the relationship between socio-economic status and education outcomes. Concurrently, significant efforts have been made to help policy-makers decide how best to allocate resources to support better outcomes for students.

One of Ontario’s fundamental strategies to support improvements in student achievement has been to reduce primary class sizes (kindergarten to Grade 3). Since 2008–09, 90 per cent of classes have had no more than 20 students and the remainder have been capped at 23 students.

These reductions in class size have required significant resources. In 2004–05, when primary class sizes were funded at an average of 24.5 students per class, the ministry provided a $90 million, primary class-size reduction grant as a first step to reducing class sizes to 20 students or fewer. By 2009–10, this grant had increased to over $430 million. In 2010–11, the funding formula ensured that primary classes were funded based on a class size of 19.8 students. Capital investments were also made to allow schools to accommodate smaller class sizes.

The government has also committed resources to reducing class sizes at other levels. The 2008 provincial labour framework agreements included funding to decrease average class sizes in Grade 4 through Grade 8 by 0.5 student between 2009–10 and 2012–13. At the secondary level, increases for teacher preparation time and additional teachers as part of the Student Success Strategy have also resulted in increased resources.

The government has emphasized the importance of smaller classes in promoting improved education outcomes. Since 2003, the government has maintained that smaller classes yield better results through greater teacher-student interaction.9 In its “2011 Progress Report,” the government said that “[s]tudents in smaller classes get more individual attention from teachers and other educators, helping improve literacy and numeracy and are more likely to succeed.” Indeed, Ontario’s recent improvements on provincial assessments and quality indicators have coincided with the government’s efforts to reduce class sizes.

Empirical evidence of the benefit of smaller class sizes on education outcomes presents a more complicated picture. A review of Ontario’s primary class-size policy by the Canadian Education Association notes that class-size reductions typically yield at least modest quality improvements, but questions of “what size class is ‘small enough,’ how and why reducing class size works, and under what conditions it works, are all under-explained.”10 Research by the C.D. Howe Institute suggests that “no solid evidence exists to show that smaller classes improve student achievement in the later primary and secondary grades in Canada.”11

International evidence of the educational benefit of smaller class sizes offers similar conclusions. Studies have suggested that positive and negative impacts of class sizes were observed in the same proportion of classes (14 per cent each), while nearly 72 per cent of results showed no statistically significant impacts.12 The Organization for Economic Co-operation and Development’s (OECD) Programme for International Student Assessment (PISA) has shown that “[a]mong systems with comparatively high levels of spending on education that prioritize small class size, performance patterns are mixed.”13 This evidence suggests that small class sizes are not a key determinant of educational outcomes, and certainly small class sizes alone are an insufficient measure to achieve these outcomes.

The debate over the impact of smaller class sizes continues to this day, with conflicting conclusions and no definite outcome. However, evidence suggests that, in terms of value for money, investments in lower class sizes do not provide the greatest possible benefit. The PISA finds that “raising teacher quality is a more effective route to improved student outcomes than creating smaller classes.”14 Similarly, the C.D. Howe Institute notes that resources devoted to class-size reduction could have a greater impact if reallocated elsewhere in the education system.15

While it is true that Ontario’s recent improvements on provincial assessments and quality indicators have coincided with the government’s efforts to reduce class sizes, there is no evidence of causality. Even if the reduction of class sizes had some impact on outcomes, the evidence suggests that investments in smaller classes do not offer the most efficient means of improving results in the education system.

Given the lack of convincing empirical evidence to support a policy of reduced class sizes, the Commission believes that scarce resources should not be applied to this goal.  

Recommendation 6-13: Set the cap in class size for primary grades at 23 and eliminate the other requirement that 90 per cent of classes must be at 20 or fewer, and increase the averages in junior/intermediate class sizes from 24.5 to 26 and secondary class sizes from 22 to 24.

This shift in policy will undoubtedly dishearten important partners in the education sector. The recommended increase in class sizes will lead to approximately 5,900 or 4.8 per cent fewer teaching positions by 2017–18, representing an average annual attrition rate over the next six years of 0.8 per cent among teaching staff.

Non-Teaching Staff

Aside from classroom teachers and ECEs, the Commission notes that since 2002–03, staffing has increased by more than 13,800 in non-teaching positions. School boards have hired 5,500 more educational assistants, 4,000 more professionals and paraprofessionals, 1,500 more school maintenance staff, 800 more co-ordinators and consultants/teacher support services, 700 more school office staff, 550 more library and guidance teaching and non-teaching staff, 400 more principals and vice-principals, and 350 more supervisory officers and board administration staff.16 The Commission projects that about 70 per cent of these 13,800 new, non-teaching positions must be phased out by 2017–18 through attrition and reductions, representing annual savings of about $600 million.17 This represents roughly 9,700 fewer positions (a decline of 11.8 per cent) out of a total of 82,000 positions in place in 2010–11 for these job categories; by 2017–18, overall staffing for these job categories would fall back to about their same level as in 2005 through average annual attrition of about two per cent over the next six years among non-teaching staff. Boards will also have to examine how the number of non-teaching staff can be reduced in a manner that minimizes impacts on school operations.

The Commission hopes that an environment of co-operation, transparency and informed multi-year human resources planning will make this difficult process as manageable and constructive as possible.

The Commission recognizes the benefits of strategic ministry and school board interventions to improve education outcomes. The ministry has worked with school boards to provide additional resources to schools with potential for improved literacy and numeracy results, and to encourage the adoption of best practices. This approach aligns with research that indicates a greater benefit from smaller class sizes in lower-income schools.18 In light of this, the ministry may set aside some of the savings from this for strategic interventions for vulnerable groups.

Similarly, the Commission supports continued emphasis on programs that have proven critical to increasing graduation rates. More students have graduated with the help of the Student Success Strategy. Unique programming to support higher graduation rates, such as dual credits, co-operative education and the Specialist High Skills Majors program, has encouraged a transition to post-secondary education or better employment opportunities. Care should be taken to increase class sizes in a manner that does not jeopardize programs that have helped increase graduation rates and benefited Ontario students.

Limits to Funded Secondary School Credits

To obtain a secondary school diploma, Ontario students must complete 30 secondary school credits, as well as 40 hours of community service and achievement of the provincial literacy requirement. While only 30 credits are needed to graduate, the Commission has observed that many students are completing more than the required number of credits. As a result, 14 per cent of the province’s Grade 12 students return for a fifth year of secondary education.19

The financial pressure placed on school boards by students returning for additional credits has been observed in other jurisdictions. A recent report to the Nova Scotia Department of Education notes that, while there are “understandable reasons” for students returning for a fifth year of high school, this activity increases public expense, and private tutoring may be a suitable alternative.20

Recommendation 6-14: The province should cap the funding of high school credits to 32 successful credits per student, and amend the Education Act to give the power to school boards to charge a modest fee, set by the province, for each additional credit above the 32 successfully completed credit threshold.

Students seeking additional qualifications may seek private alternatives to do so, and school boards should be given authority to charge a fee set by the province, tied to the cost of providing additional courses.

Encouraging Efficient Student Transportation

Transporting students to school is a challenge for school boards. Costs associated with transportation can be difficult to contain, in large part because fuel prices are volatile. To their credit, the government and school boards have tried to reduce the growth of transportation costs. The challenges of transportation costs were noted in the 2002 Report of the Education Equality Task Force.21 The task force’s recommendations led to the adoption of a consortia model, which called for co-operation in service delivery among coterminous boards. By 2006, the ministry had integrated the consortia model into its funding formula.22 This approach encouraged efficiencies through co-operation among adjacent school boards.

Despite these efforts, student transportation expenses have continued to increase. The Student Transportation Grant in the Grants for Student Needs has increased from $629 million in 2002–03 to an anticipated $845 million in 2011–12, an increase of over 34 per cent (an average of 3.3 per cent per year). The ministry has also recently placed a moratorium on new competitive procurement in the sector while it consults with sector stakeholders.23 This moratorium delays the achievement of efficient, effective student transportation service through competitive bidding in the sector.

Recommendation 6-15: The province should immediately lift the moratorium on the competitive procurement requirement for student transportation, so that competitive bids are used for the 2012–13 school year.

While the government should continue to address student transportation expenses, the Commission also sees an opportunity to promote sustainability through revenues. A modest user fee for student transportation would shift a portion of the costs of transportation to those who use the service. Such a fee could encourage boards to look for efficiencies to better serve their clients, and would provide an incentive for families to examine other methods of transportation. Similar approaches have been permitted and adopted in Alberta.24

The Commission is aware of the importance of student transportation for keeping students safe and providing access to learning. However, given the fiscal picture, it may be necessary for users to bear a portion of the cost through a student transportation fee. Provisions could be put in place to ensure that lower-income, special needs and rural students do not have their access to learning restricted.

Recommendation 6-16: The province should amend the Education Act to give school boards the power to charge a modest transportation user fee set by the province.

A Comprehensive Resource Plan to Live Within One Per Cent Per Year in Education

The funding policy changes contemplated by the Commission to live within a one per cent annual growth rate in education program spending to 2017–18 are summarized below:

Our recommendation of a one per cent annual increase in education funding means that the education sector’s 2017–18 budget will be $1.6 billion larger than it was in 2010–11. However, a combination of higher compensation costs, the remainder of FDK expansion as now planned and other real fiscal pressures point to an additional $4.4 billion in spending in 2017–18, as shown in the table below. The result in 2017–18 is a shortfall of $2.8 billion:

TABLE 6.1  2017–18: Where the Status Quo Outlook Leads with 1% Annual Spending Growth
1% growth per year in education spending increases by 2017–18 $1.6 Billion
Compensation cost increases by 2017–18 (annual wage increases as per current public-sector trends of settlements — MOL BPSdata) ($2.0 Billion)
Remainder of FDK expansion under current model ($1.2 Billion)
Real fiscal pressures by 2017–18 (annualization of 2011–12 enhancements, amortization of approved capital projects, increased teacher qualifications and experience) ($1.2 Billion)
Shortfall ($2.8 Billion)

To enable the government to balance its budget by 2017–18, the Commission has made a number of recommendations for the elementary and secondary education sector. In the table below, we begin with the $2.8 billion shortfall from the table above and then reduce it to zero as we set out the savings from each of our recommendations. These are listed in order of priority:

TABLE 6.1  2017–18: How 1% Annual Spending Growth Can Be Managed
Shortfall ($2.8 Billion)
Provision for top funding agreements with First Nations ($0.15 Billion)
Capping secondary school funding to 32 successfully completed credits $0.07 Billion
25% reduction by 2017–18 in non-salary investments such as the pupil foundation allocation portion for textbooks and learning materials, classroom supplies and classroom computers $0.12 Billion
Increase in average class size in Grades 9–12 from 22 to 24 students by 2017–18 $0.23 Billion
Set the cap in class size at 23 in primary grades and eliminate the other requirement that 90% of classes must be at 20 or fewer by 2017–18 $0.09 Billion
Increase in average class size in Grades 4–8 from 24.5 to 26 students by 2017–18 $0.14 Billion
Elimination by 2017–18 of 70% of the non-teaching staffing increases implemented since 2002–03 (9,700 out of 13,800 new positions created — educational assistants excluding early childhood educators, professionals and paraprofessionals, library and guidance, school office, principals, vice-principals, teacher consultants, supervisory officers, board administration, school maintenance) — Represents annual attritio`n rate of 1.9% over next six years within these job categories $0.6 Billion
Cancellation of FDK program $1.4 Billion
25% reduction by 2017–18 in non-salary Investments such as student transportation grant and school renewal allocation $0.3 Billion
Shortfall $0.0 Billion

Recommendation 6-17: Education stakeholders should build on the climate of trust and evidence-based decision-making fostered since 2003 to begin a constructive dialogue on how best to find the savings needed to meet student achievement objectives while holding annual spending growth to one per cent. To help stakeholders, the Commission believes the following measures should be phased in progressively over the next six years, in this priority sequence:

  • Reduce by 25 per cent the per-pupil funding for textbooks and learning materials, classroom supplies and computers;
  • Increase the average class size from 22 to 24 in Grades 9 to 12;
  • Set the cap in class size at 23 in primary grades and eliminate the other requirement that 90 per cent of classes must be at 20 or fewer;
  • Increase the average class size from 24.5 to 26 in Grades 4 to 8 by 2017–18;
  • Eliminate 70 per cent of the 13,800 additional non-teaching positions created in school boards since 2002–03; and
  • Reduce by 25 per cent the funding for capital renewal and student transportation.

The Commission acknowledges that current provisions in some collective agreements may prevent some school boards from implementing some of these measures. The willingness of teacher federations and support-staff unions to agree to remove such obstacles should be a consideration when the province decides, either through new provincial labour frameworks or through its education funding policy, to fund wage increases by 2017–18.

School boards, teacher federations and support-staff unions may be able to lessen the impact of the $1.06 billion in savings from larger class sizes and fewer non-teaching staff by agreeing to compensation increases that are below the current settlement trends in the BPS. The growth in wages across the BPShas slowed since the government introduced its restraint policy in March 2010.25 While the parties may be able to secure lower compensation increases in the early years, the Commission doubts that it is realistic to assume that such a pattern can persist through to 2017–18.

As indicated in Table 6.2, the Commission has identified other potential restraint measures in non-salary expenditures related to textbooks, learning materials, classroom supplies and computers. Permanent funding reductions in capital renewal and student transportation can be considered, although they would remain the lowest-priority measures recommended by the Commission.

The Commission assumes that school boards would achieve further efficiencies or seek increases to other revenues to offset cost pressures from such items as benefits, utilities, fuel and so on. The following recommendations, while not explicitly costed, have been developed in this spirit.

We note in Chapter 18, Revenue Integrity, the province could increase revenues for education by just over $1 billion by 2017–18 through raising the lower business education tax (BET) rates. Additionally, we discuss a review of education tax rate-setting policies for residential and business tax rates to maintain a stable level of education tax revenues in real terms. Please see Chapter 18, Revenue Integrity, for further discussion of education taxes.

Promoting Evidence-Based Solutions in Special Education

Special education grants are a significant portion of education spending, $2.5 billion in 2011–12, about 12 per cent of all grant-based funding for school boards. Since 2002–03, special education funding has increased by $893 million, or 55 per cent, despite declining enrolment.26 If funding had grown by only three per cent per year over that period, which would represent a healthy allowance for inflation and cost escalation, annual funding today would be almost $400 million less.

Ontario’s Auditor General took note of this rapid growth rate in a 2008 report assessing the extent to which Ontario’s special education programs met the needs of students and were delivered “economically and efficiently.” He found “still a number of areas where practices need to be improved to ensure that the significant funding increases result in continuous improvement in the outcomes for students with special education needs in Ontario.”27 In a 2010 followup audit, the Auditor General noted progress on a number of recommendations. The link between increased funding and outcomes for students, however, is not obvious.

Since 2002–03, total enrolment has declined, but the number o f students that school boards report as needing special education services has grown. A student with exceptionalities is defined by the Education Act as one who requires placement in a special education program because he or she has one or more special behavioural, communicational, intellectual or physical needs. School boards are responsible for providing early and continuing identification of students with exceptionalities through Identification, Placement and Review Committees (IPRCs). Under the Education Act, all students identified as exceptional must have access to special education programs. But this requirement does not account for all students receiving special education services. In the 2007­–08 school year, for example, 192,000 students were identified by an IPRC as exceptional and an additional 96,600 students were provided with special education programs and services, even though they were not formally identified as exceptional.28

The Ministry of Education’s data-driven funding allocations for special education are based, in part, on information reported by school boards. The data, and consequently future allocations, reflect variation in boards’ philosophies, practices, exceptionality thresholds, program and service delivery models, and abilities to access community resources. If all boards used provincial criteria for their IPRCs and if all data were reported independently, special education funding could be allocated more consistently and more equitably while maintaining local flexibility and decision-making.

We need more information to understand the impact of increased special education funding on student achievement. The average gap in student outcomes on Grade 3 and 6 assessments by the Education Quality and Accountability Office (EQAO) between students with special needs (excluding gifted) and the overall student population decreased from 36.7 per cent in 2002–03 to 33 per cent in 2010–11. However, there is no system-wide procedure to track progress and achievement in students in areas such as communication skills, social skills or behaviour management, all of which affect student achievement. However, some progress has been made. The Commission recognizes the benefit of pilot initiatives such as the Assessing Achievement in Alternative Areas guidelines that have been developed to enhance assessment processes for students with special education needs who do not access the Ontario curriculum and do not participate in EQAO assessments. More needs to be done, however, to ensure that funding is being used effectively in a manner that improves student outcomes.

The Commission commends the province’s focus on supporting students with special needs. To meet overall spending targets while preserving gains in student achievement, however, every dollar must be directed to programs where it will achieve the most impact. This will ensure that investments in special education are being used effectively to improve outcomes.

Recommendation 6-18: The province should review its special education programs and the results they have achieved, including both “section” programs for students in care, custody or treatment, and hospital boards, with the aim of ensuring that funding is being used effectively to improve student outcomes.

As rapidly as special education funding has risen, many school boards report “a deficit” in this area. It should be noted that to a large extent such deficits are artificial. Any underspending on special education is taken back by the ministry. It cannot be carried forward to a subsequent year. This creates an incentive to plan on spending more than will be received. While this convention protects the use of special education funds for their prescribed purpose, it yields a misleading assessment of needs. And it often leads to public criticisms of “special education deficits” that are not well grounded.

For clarity, the Commission does not believe there is a “problem” in the overall special education funding envelope, or even in the way it is currently allocated among school boards. The challenge we see is the lack of measurable outcomes from the significant investments made since 2002–03.

Reform of Provincial Schools

The Ministry of Education directly manages a number of schools for the deaf, Demonstration Schools for students with learning disabilities and a School for the Blind and Deafblind; these are located in Belleville, Brantford, London, Milton and Ottawa. About 800 students are served in these eight schools. Most of the students live in residence on the schools’ property. School staff members are provincial employees. The provincial schools budget for 2011–12 is $72 million.29

The Commission believes that the Ontario Public Service is not the optimal governance arrangement for these schools. Alternative programming in school boards should be considered instead of Demonstration Schools for students with learning disabilities; this would allow students to live with their families. Schools for the deaf need a critical mass to offer a wide range of programs and services, especially at the secondary panel, yet enrolment has declined significantly; these schools should be consolidated.

Recommendation 6-19: The government should close the Demonstration Schools and reinvest savings to expand alternative secondary school programs in school boards. The three Schools for the Deaf in Belleville, London and Milton should be consolidated into one site to achieve a greater critical mass of students from primary grades through secondary school. Savings should be reinvested in the consolidated school for the deaf and in enhanced opportunities for deaf learners in school boards, colleges and universities. The Ministry of Education should transfer the oversight and management of the Brantford site and of the newly consolidated school for the deaf to one or two English-language school boards, and transfer the oversight and management of the Centre Jules-Léger (School for the Deaf) to a French-language school board.

Appropriate Incentives for Teachers

Ontario’s goal is a public service that delivers consistent quality, generates excellent value for money and supports the best possible outcomes for those it serves. A public service of this sort can only be sustained by recruiting the best and the brightest workforce. If government is to recruit highly skilled people away from opportunities with other organizations, it needs to offer a compensation package with appropriate incentives tied to performance, outcomes and productivity.

These principles have particular resonance in the education sector. Public education is a vital public service in promoting child development and future prosperity. Teachers are charged with the critical responsibility of providing service in a manner that promotes the best possible outcomes on these fronts. Research supports the linkage between quality teachers and student achievement. For example, one study suggests that jurisdictions seeking to improve student achievement “may be well-advised to attend, at least in part, to the preparation and qualifications of the teachers they hire and retain in the profession.”30

A precise relationship between quality and specific types or levels of teacher training is more difficult to determine, especially because it is difficult to estimate the effects of good teaching and how long they last.31 However, meaningful and effective professional development is regarded as an important component of an evaluation and compensation system that supports student success.32 Research could yield further information that policy-makers would find useful. For example, the impact of a particular form of teacher training may vary by subject; studies have suggested that there is a stronger correlation between teacher training and the student learning experience in mathematics than in other subjects.33 This type of information could be applied to policies that encourage the most effective forms of teacher training.

Ontario teachers are provided salary increases as incentives to engage in continued learning and development through the Teacher Qualifications and Experience (Q&E) grant, which recognizes the additional experience they gain each year between their second and eleventh year of teaching. These increases are in addition to any across-the-board salary increases negotiated in collective agreements.

The Q&E grant also allows teachers to move into more advanced qualification categories, with higher salaries, by completing courses of further post-secondary education or in specializations or teacher training. A teacher’s qualification category is determined by bodies set up by the teacher federations. The Elementary Teachers' Federation of Ontario, the Ontario English Catholic Teachers Association and l’Association des enseignantes et des enseignants franco-ontariens jointly established the Qualifications Evaluation Council of Ontario to certify the qualifications of their members, while the Ontario Secondary School Teachers’ Federation provides the same function for its members.

The Q&E grant allows teachers to move to the high end of salary ranges relatively early in their careers. Based on the 2011–12 instructional salary matrix issued through the Grants for Student Needs, teachers in the highest qualification category will exceed the provincial benchmark salary amount of $72,879 by their seventh year of teaching. Moreover, about half of teachers are at the top level of the salary range (nearly $95,000 per year), up from about one-third in 2002–03. 

The Commission acknowledges the importance of providing incentives for continued professional development and helping school boards retain excellent teachers. The Q&E grant should reflect this.  However, it is important that the Q&E grant focus on teachers whose additional qualifications are based on the best available evidence, most likely to help their students achieve better results.

Recommendation 6-20: The added value of training programs leading to additional qualification should be reviewed, and decisions regarding the granting of qualifications and experience should be made by a body that is independent of teacher federations and school boards.

Many teachers take additional qualification courses — teacher librarian, for example — even though they have no intention of fulfilling such duties. These courses can even be delivered by their own teacher federation. In their absence, the employer must pay supply teachers and disrupt classroom continuity for students.  

Recommendation 6-21: The province should be able to exercise legislative and regulatory authority to require that teachers have a minimum number of years of full-time teaching experience before they are allowed to attempt an additional qualification. While they could decide to make contractual arrangements with faculties of education or other service providers, school boards should ultimately have direct oversight of the content of additional qualification courses. The design of such courses should be reviewed in tandem with the new curriculum for the two-year teacher education program in Ontario. Both should be more rigorous and evidence-based, and focused on those aspects of their work that lead to improved student outcomes.

Other areas of school staff compensation must strike a better balance between fair working conditions and fiscal responsibility. Many collective agreements offer retirement gratuities to school employees, which allow them to cash out unused sick days accumulated over the course of a career prior to retirement. Most teachers are eligible for 20 sick days per year and, depending on the number of sick days accumulated, retirement gratuities can equal a half-year of salary in some boards. This system offers protection against long-term illnesses. The Commission acknowledges that most of these entitlements were grandfathered years ago for employees with more seniority. However, even such grandfathered entitlements are difficult to justify from the perspective of their value to taxpayers, particularly in light of the stable pension plan for teachers that the government already co-sponsors. Since 1998, some boards have offered retirement gratuities in the form of RRSP contributions; given the benefits of the pension plan, this gratuity should also be reconsidered. Total provincial liability from retirement gratuities as of Aug. 31, 2011, amounted to nearly $1.7 billion.34

Recommendation 6-22: In the upcoming renewal of collective agreements, school boards should negotiate the removal of entitlements associated with retirement gratuities to help offset the costs of future economic adjustments. School boards’ power in the Education Act to offer retirement gratuities should be removed.

The phasing out of such entitlements would lift an annual Public Sector Accounting Board (PSAB) accrual requirement in school board budgets.

Delivering Services More Efficiently

Streamlining services to improve outcomes and reduce duplication is a common objective in all sectors of government, but has emerged as a particular theme in the children’s services sector. The province has responsibilities related to children’s health, developmental and social services, and education. It also provides important support to municipalities for services such as child care. It is important to recognize opportunities for cross-government strategies for making the delivery of services to children and families more efficient.

The government is aware of the benefits of children’s service integration. Strategies to improve children’s services such as mental health and school health support services have made compelling cases for the need to reduce duplication and make services simpler to access.35 The Pascal report also warned against “bureaucratic duplication” and supported making schools “true community hubs” for service delivery.36

The Ministry of Education should be a leader in promoting service efficiency and reducing duplication. Existing school board facilities and information technology may offer effective platforms for co-operation with other ministries and agencies in fostering innovative service delivery. All ministries with a role in supporting children should continuously examine how government can improve service while lowering costs through co-ordination and co-operation.

School boards should continue to seek opportunities to collaborate with each other and with other parts of the BPSto foster procurement efficiencies. As significant purchasers of similar supplies, equipment and services, school boards can work together to make smart purchasing decisions through their expanded buying power. Important steps have already been taken in this respect through the establishment of the Ontario Education Collaborative Marketplace (OECM), a not-for-profit procurement organization. In consultation with the education and postsecondary sectors, OECM competitively procures common contracts on behalf of school boards, colleges and universities. Additionally, regional buying groups and transportation consortia have encouraged prudent joint procurements.

School boards and other BPSbodies, such as post-secondary institutions, should continue to find ways to create savings and efficiencies through collaborative procurement. Future measures could include a co-ordinated procurement policy framework, strategic sourcing, contract management and product/process standardization. Boards should be required to take advantage of existing organizations such as the OECM and regional buying groups.

Boards can also work together to consolidate back-office functions. Given the similarities in business demands and functions and technological advances, models of shared services could help boards operate more efficiently and reduce administrative costs. Information technology, financial services and human resource co-ordination could all be delivered at lower costs if effectively consolidated by boards. The Commission notes that French-language boards share many administrative and educational services.

Shared ownership of employee benefit plans and joint control of decision-making could also create greater incentives for cost containment than exist when individual employers have complete control. Through collective agreements, unions in the education sector negotiate benefit plans that provide services such as drug coverage, and vision and dental care for members and their families. Opportunities for efficiencies and cost containment can almost certainly be found in the management of these plans.

Recommendation 6-23: The government should work with school boards, teacher federations and support-staff unions to investigate mechanisms involving shared ownership and administration of benefit programs in the education sector.

Efficiency can also be found by maximizing the value of the school boards’ capital assets. While overall enrolment has declined, enrolment in individual schools has fluctuated with regional population trends. High-growth areas have required new or expanded schools, and outdated schools have been replaced. The ministry has made substantial capital investments, beginning with the Good Places to Learn initiative, from 2005 to 2009, and continuing with support for board capital priorities.

In some areas of the province, schools have been closed or consolidated because of declining enrolment or the completion of a new school nearby. As a result, school boards have surplus properties that could be divested. The current regulation requires school boards to sell surplus properties at fair market value. In much of the province outside the Greater Toronto Area and other major urban centres, sales of school boards assets yield limited proceeds.

The Commission therefore advises the ministry to mount a more aggressive and professional approach to divesting of surplus school properties.

Recommendation 6-24: The government should amend the Education Act to give power to the minister to order the sale of closed schools or other unused properties, especially when such dispositions could meet other needs in the broader public sector.

Freeing up surplus schools would also likely help boards gain access to school buildings to serve French-language rights holders. In addition, divesting of surplus property may reduce operation and maintenance costs and liabilities for unused assets. New revenues through prudent divestiture will also generate funds to invest in improving existing schools, building new schools and reducing the backlog of school renewal needs.

Boards should also consider changing the grade configuration at some underused schools to make better use of existing facilities. Schools with excess capacity are still subject to the same fixed costs of school operations, such as utilities and maintenance. Because space is underused, however, the schools do not receive enough per-pupil funding through basic foundation grants to cover these fixed costs. To address this problem, the ministry provides boards with top-up funding, estimated at $237 million for the 2011–12 school year, for costs associated with excess space in underutilized schools.37

This may be practical in the short term, but does not provide an adequate incentive for school boards to seek innovative solutions. An increasingly widespread solution is the consolidation of Grades 7 through 12 in one secondary school. The number of secondary schools in Ontario that also serve Grade 7 and 8 students in the same facility has grown in recent years, especially since the Ontario Academic Credit (Grade 13) was eliminated. Using excess secondary school space to house Grades 7 and 8 offers a practical use of existing resources.

The Commission recognizes that decisions about school organization in specific communities are better left to locally elected school boards. However, in a period of fiscal restraint, the Grade 7–12 model can provide capital savings by improving the use of space.

Recommendation 6-25: The province should no longer provide top-up funding to underutilized secondary schools if these schools could instead accommodate some or all of the Grade 7 and 8 students in their catchment area.

The transfer of Grade 7 and 8 students in some communities would, as a consequence, accelerate the consolidation of elementary schools. The transfer of Grade 7 and 8 students to secondary schools should not be used by boards as a rationale for receiving additional top-up funding at the elementary level.

We understand that this configuration may increase transportation costs in some cases. However, savings from staffing, school operations and capital renewal will overwhelmingly offset such costs. In some cases, it is more cost-efficient for boards to make minor capital additions to secondary schools to enable the Grade 7–12 configuration, and thus consolidate more elementary schools.

Containing Costs of Retirement Benefits

The province’s involvement in public-sector pension plans varies from sector to sector. It is a sponsor or co-sponsor for some pension plans, and an indirect contributor through transfer payments to others. Most of the large plans are consolidated in the government’s financial statements even though the province has no direct control over benefits or contributions in some of these plans. One plan in which the province plays a major role is the Ontario Teachers’ Pension Plan (TPP).

The province co-sponsors the TPP with the Ontario Teachers’ Federation (OTF), so the province is jointly responsible with working teachers for funding the plan. Both parties also share in financing any shortfalls that may occur. The province matches the contributions of the 178,000 active members even though teachers are employed by school boards, not the province directly. The province’s matching contribution was about $1.3 billion in 2010–11.

In recent years, as equity markets have become increasingly volatile and often negative, and as long-term interest rates have been low, TPP’s funding valuations have revealed deficits. Ontario’s pension legislation requires all pension plans in Ontario, including those in the public sector, to file a “balanced” actuarial valuation with the regulator; a filed funding valuation must indicate how a shortfall is being addressed — through higher contributions, lower prospective benefits, or a combination of the two.

The province’s matching contribution rate to TPP remained unchanged from 1990 to 2006. In 2005, the plan revealed an unfunded liability and the sponsors of the plan decided to increase the contribution rate gradually over three years — from 8.9 per cent on income above the Year’s Maximum Pensionable Earnings under the Canada Pension Plan to 12 per cent (the contribution rate on earnings under the YMPE also changed). Both the province and the plan members contributed 12 per cent respectively. In 2011, the sponsors approved a further temporary increase in the contribution rate to 13.1 per cent by 2014 to eliminate an unfunded liability. This latest increase was accompanied by a reduction in future indexation benefits for certain plan members. While the Plan need not file a valuation until 2014, depending on circumstances at the time, it may be necessary to further adjust either contribution rates or benefit provisions to bring the plan back into balance.

We note that TPP’s contribution rate is already in the upper range of what other major Ontario public-sector pension plans require. Further increases in contribution rates would affect both parties’ ability to pay. For the province, it would mean fewer financial resources to fund other programs. For individual teachers, it would mean lower disposable income and more personal financial resources to fund current benefits.

Recommendation 6-26: To mitigate further increases, the province should, in future discussions with the Ontario Teachers’ Federation, reject further employer rate increases to the Teachers’ Pension Plan beyond the current rate, and instead examine which benefits could be reduced prospectively to make the Plan more affordable and benchmark any changes to the provisions contained in other plans.

As well, the province should not agree to contribute more to the Plan than teachers, including additional payments in respect of forgone inflation adjustments to retirement benefits.

The province should also consider increasing the average age of retirement. Under the terms of the Plan, teachers can retire as young as age 50.38 This is possible because plan members can qualify for a reduced retirement pension once they are 50 years of age and have two or more qualifying years of service. While a few teachers do retire this early, the average retirement age in 2010 was 59. According to the TPP Board’s 2010 annual report, the typical teacher works 26 years and collects a pension for 30 years. Given the general increase in longevity in Canada in recent decades, raising the average retirement age would reduce plan liabilities and help alleviate the need to reduce benefits in the future. For a broader discussion of pensions, please see Chapter 19, Liability Management.

Promoting an Efficient Labour Market for Teachers

A looming shift in demographics has characterized much of the thinking about the education sector’s workforce during the past 20 years. By the late 1990s, evidence showed that people working in the education sector were older on average than people in other sectors, but had a lower age of retirement.39 This in turn led to forecasts of the labour market for teachers. Ministry discussion papers prior to the 2004 provincial labour framework discussions projected that 32 per cent of the teacher workforce would retire by 2014.40

The late 1990s’ threat of a teacher shortage also prompted the government and university community to increase teacher education efforts. Funding for additional spaces was provided to Ontario’s faculties of education, and new bachelor of education (B.Ed.) programs were accredited at several Ontario universities. In addition, universities based in the United States and Australia offer Ontario-accredited B.Ed. programs.

As a result of these dynamics, and the relative increase in compensation and benefits, the number of certified teachers in Ontario increased during the past decade. The Ontario College of Teachers (OCT), the province’s regulatory and licensing body, tracks and reports on the  labour market for new teachers. According to the OCT, the number of graduates from Ontario-based teacher colleges who became certified teachers grew by over 3,000 per year between 1998–99 and 2009–10, a total increase of 49 per cent (3.7 per cent per year average annual growth).41 The rate of teacher retirement also decreased over this period; the OCT noted that the number of new teachers exceeded the number of retirees by 1,800 per year in the early part of the decade, but this gap has now widened to 7,600 a year.42

Continued growth in the supply of teachers will lead to an inefficient labour market that fails to capitalize on the skills of post-secondary graduates. The proposal to convert B.Ed. programs to two years in length, with enrolment in each cohort halved, offers some prospect of reducing the oversupply of teachers.

Recommendation 6-27: The government should work in a co-ordinated fashion to discuss supply planning and, in particular, the overproduction of teachers, with Ontario’s 13 universities offering teacher education programs. Attempts should be made to direct teacher education spaces to areas of greater need, especially in light of the staffing changes contemplated by the Commission between now and 2017–18.

The Ministry of Education and Ministry of Training, Colleges and Universities should work together to ensure that teacher education is funded with the objective of training an adequate number of well-qualified teachers without creating inefficiencies in the labour market.

The changes recommended in this chapter need to take place in the context of a continued focus on improved teaching, especially in light of the importance of continuing learning opportunities for teachers. Such opportunities must remain one of the cornerstones of Ontario’s vision of a strong, publicly funded education system.

1. In 2000, the Auditor General of Canada, in an audit of Indian and Northern Affairs Canada’s (INAC) elementary and secondary education programs, reported that the 1996 Census found a 28 percentage point gap between the on-reserve high school completion rate and that of the Canadian population as a whole. A followup audit in 2004 reporting on 2001 census data found that while the attainment gap had narrowed by 1.3 per cent, the pace of improvement had slowed. Most recently, the 2011 Auditor General’s Status Report found that the trend of slow improvement was reversed over the period from 2001 to 2006, with the attainment gap widening to 36 percentage points

2. Statistics Canada, Census of Canada, 2006.

3. Ibid.

4. This general conclusion is reached in a multitude of studies, including the Centre for the Study of Living Standards, TD Economics and Canadian Policy Research Networks.

5. Tonina Simone, “Current and Emerging Issues: First Nations Education,” Library of Parliament (2011), p. 22.

6. See, for example, Don Drummond and Derek Burleton, “Aboriginal People in Canada: Growing Mutual Economic Interests Offer Significant Promise for Improving Well-being of the Aboriginal Population,” TD Economics, (2009), p. 9, and Michael Mendelson, “Improving Education on Reserves: A First Nations Education Authority Act,” Caledon Institute of Social Policy, (2008), p. 7.

7. Michael Mendelson, “Why We Need a First Nations Education Act,” Caledon Institute of Social Policy, (2009), p. 5.

8. Dr. Charles Pascal was appointed in 2007.

9. See Ministry of Education, “Building the Ontario Education Advantage: Student Achievement,” Apr. 29, 2004, http://www.edu.gov.on.ca/eng/document/nr/04.03/building.pdf.; Education — 2011 Progress Report, http://www.ontario.ca/en/initiatives/progressreport2011/ONT05_039131.html?openNav=education.

10. Canadian Education Association, “Ontario’s Primary Class Size Reduction Initiative: Report on Early Implementation,”
February 2010, p. 6.

11. Yvan Guillemette, “School Class Size: Smaller Isn’t Better,” C.D. Howe Institute Commentary 215 (August 2005), p. 13.

12. Eric A. Hanushek, “Assessing the Effects of School Resources on Student Performance: An Update,” Educational Evaluation and Policy Analysis 19 (June 1997), no. 2; Hanushek, “Evidence, Politics and the Class Size Debate,” in The Class Size Debate, Lawrence Mishel and Richard Rothstein (eds.) (Washington: Economic Policy Institute, 2002), p. 42.

13. Organization for Economic Co-operation and Development, “PISA 2009 Results: What Makes a School Successful?” Resources, Policies and Practices 4, p. 28.

14. Ibid, p. 106.

15. Guillemette, op. cit., p. 13.

16. Ontario Ministry of Education, “2002–03 to 2010–11 School Board Financial Statements,” “2010–11 Revised Estimates — Staffing FTE.” Based on the revised 2010–11 estimate.

17. 2010–11 School Board Revised Estimates – Compensation and Staffing for 2010–11 Education Sector Employees (2010–11 School Year Basis).

18. Graham J. McKee, Steven G. Rivkin and Katharine R.E. Sims, “Disruption, Achievement and the Heterogeneous Benefits of Smaller Classes,” NBER Working Paper 15812, March 2010, p. 22.

19. According to the Ontario Ministry of Education, in 2011 there were a total of 118,360 students who represent two groups of students who return to secondary school for a fifth year: students who met the graduation requirements but return for a fifth year (50,051 students); and students who have not met the graduation requirements and have not accumulated sufficient credits by the end of their fourth year and must return for a fifth year (68,309 students).

20. Ben Levin, “Steps to Affordable and Sustainable Public Education in Nova Scotia,” Report to the Nova Scotia Department of Education, April 2011, p. 21.

21. Education Equality Task Force, “Investing in Public Education: Advancing the Goal of Continuous Improvement in Student Learning and Achievement,” December 2002, downloaded from http://www.edu.gov.on.ca/eng/document/reports/task02/complete.pdf, pp. 48-51.

22. Ministry of Education, “Education Funding for 2006–07,” downloaded from http://www.edu.gov.on.ca/eng/funding/0607/2006_07MemoB8.pdf.

23. Downloaded from http://www.edu.gov.on.ca/eng/policyfunding/memos/june2011/TransportJune.pdf.

24. Province of Alberta, School Act, s. 51(3).

25. Average annual wage increases in the Ontario BPS(excluding municipalities and federal employees) averaged
1.5 per cent for contracts ratified between April 2010 and Dec. 6, 2011.

26. Ministry of Education, “Grants for Student Needs Technical Paper 2011–12,” downloaded from http://www.edu.gov.on.ca/eng/general/elemsec/speced/ontario.html.

27. “2008 Annual Report of the Office of the Ontario Auditor General,” section 3.14, p. 365.

28. Ministry of Education website, http://www.edu.gov.on.ca/eng/general/elemsec/speced/ontario.html.

29. In FY11–12, according to the Ontario Ministry of Education, Provincial Schools Budget is $80.6 million, broken down as follows: operating, $72 million and capital, $8.6 million. Please note that the capital amount does not include assets and statutory appropriations.

30. Linda Darling-Hammond, “Teacher Quality and Student Achievement: A Review of State Policy Evidence,” Center for the Study of Teaching and Policy, December 1999, downloaded from http://www.nctaf.org/strategies/assure/teacher_quality_assurance/documents/LDH_State_Policy_Evidence.pdf, pp. 38-39.

31. See, for example, Thomas J. Kane, Douglas O. Staiger, “Estimating Teacher Impacts on Student Achievement: An Experimental Evaluation,” NBER Working Paper 14607, December 2008; Jesse Rothstein, “Teacher Quality in Educational Production: Tracking, Decay, and Student Achievement,” The Quarterly Journal of Economics 125 (2010), no. 1, pp. 175–214.

32. Daniel Weisberg, Susan Sexton, Jennifer Mulhern and David Keeling, The Widget Effect: Our National Failure to Acknowledge and Act on Differences in Teacher Effectiveness (Brooklyn: The New Teacher Project, 2009), pp. 7–8, downloaded from http://widgeteffect.org/downloads/TheWidgetEffect.pdf.

33. Andrew J. Wayne and Peter Youngs, “Teacher Characteristics and Student Achievement Gains: A Review,” Review of Educational Research 73 (Spring 2003), no. 1, p. 103.

34. According to the Ontario Ministry of Education Retirement Gratuities multi-year summary, the retirement gratuity liability as of Aug. 31, 2011, amounted to $1,684,289,026.

35. “Open Minds, Healthy Minds — Ontario’s Comprehensive Mental Health and Addictions Strategy,” http://www.health.gov.on.ca/english/public/pub/mental/pdf/open_minds_healthy_minds_en.pdf; Deloitte, Review of School Health Support Services: Final Report, http://www.health.gov.on.ca/english/public/contact/ccac/docs/deloitte_shss_review_report.pdf, 11.

36. “With Our Best Future in Mind,” p. 6.

37. Ministry of Education, “Grants for Student Needs Technical Paper 2011–12,” downloaded from http://www.edu.gov.on.ca/eng/funding/1112/technical11.pdf, p. 95.

38. According to the OTPP/TPP website, the pension is defined by a formula that takes into account average salary and credit. For participating teachers who have at least two qualifying years, they are eligible for an unreduced pension when they reach age 65 or their 85 factor (age + qualifying years = 85 factor). The basic annual pension is: 2 per cent X credit X best-five years’ average salary. For more information, refer to www.otpp.com.

39. Andrew MacKenzie and Heather Dryburgh, “The Retirement Wave,” Statistics Canada Perspectives on Labour and Income 4 (February 2003), no. 2, downloaded from http://www.statcan.gc.ca/pub/75-001-x/00203/6449-eng.html.

40. Ministry of Education, “Teacher Excellence — Unlocking Student Potential Through Continuing Professional Development,” August 2004, downloaded from http://www.edu.gov.on.ca/eng/document/nr/04.03/teacherexcellence.pdf.

41. Ontario College of Teachers, 2010 Annual Report, downloaded from http://www.oct.ca/annual_report/2010/en/downloads/OCT_16_New_Members_by_Faculty.xls.

42. Ontario College of Teachers, Transition to Teaching 2010, downloaded from http://www.oct.ca/publications/PDF/transitions10_e.pdf, p. 2.