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Business Administration Expenses in Canadian Schools

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This article is part of the Canada’s School Spending series where GPetrium draws out insights through data visualization and analytics. If you would like to visit other articles within this series, please visit the page Canada School Spending Series.

              In this article, we will take a deeper look at Business Administration expenditure (from 1973 to 2016) for the Canadian education budget by taking a look at Canadian provinces and territories in relation to economic classifiers such as fees and contractual services, fringe benefits, salary and wages, among others. To better understand data visualization and the dashboard above, please refer to ‘Canadian School Expenditure Insights Through Data Visualization’.

General

              Business administration expenditure has reached $1.58 billion in 2016, up by $18 million compared to 2015, a 1.1% increase. Such annual increase shows a 20 years trend towards a smaller increase in comparison to the periods of 1974 – 1994.

              The major business administration spenders in 2016 are Ontario ($538.6 million), Quebec ($431.3 million), Alberta ($243.6 million), and British Columbia ($140.3 million). In the 1993-2002 period, British Columbia saw a rapid rise in this expenditure, causing it to pass Alberta. However, from 2002-2004, it saw a rapid drop from $193.3 million to $94 million – it then stabilized for the remaining period.

Budget Allocation

              Canada’s salaries and wages expenditure remains the largest part of the business administrative expenses at 61.2%, followed by fees and contractual services at 14.45% and fringe benefits at 11.49% in 2016.

Source: Statscan

              Other operating expenditure hit its lowest point in 2016 with 4.6%, a welcome outcome in terms of transparency. This has been led by Quebec, the biggest spender in this area, who has decreased outlay in such category.

              Fees and contractual services hit a peak in 2009 at $237 million, led by Quebec, while most other provinces were seeing this segment shrink, most likely due to the Financial Crisis at the time.

              Fringe Benefit in Alberta has surpassed that of Quebec, growing from $17.9 million in 2006 to $33.7 million in 2016, an 88% growth that looks set to continue on the same trajectory as it follows similar trends to salary and wages, and fees and contractual services. With fringe benefits accounting for 11.49% of the business administration expenses in 2016, it may be important, specially for Ontario and Alberta to continue to monitor their numbers.

              Salaries and wages experienced a few abnormal trends in Saskatchewan (SK), Nova Scotia (NS) and British Columbia (BC) have been noted:

  • Saskatchewan has seen a continued growth in salaries and wages throughout the years, with an exceptional year between 2012 ($27.7 million) to 2013 ($62 million) at 216% growth. Such number was then decreased in 2016 to $38.2 million, albeit still a 95% growth in comparison to 2012.
  • Nova Scotia sustained two major spikes in the past decade or so. The first occurred between 2005-08 where salaries and wages moved from $9.8 million to $21.6 million, a 119% growth. The second was in 2011-2014 where it changed from $19.3 million to $31.3 million, at 62% growth. The number then went down to a more realistic level at $17.9 million.
  • British Columbia saw a major spike in the period of 1993-2002 going from $50.8 million to $136.4 million only to get back to the $55.3 million mark in 2004 with continuous incremental growth up until 2016 ($78.6 million).

              Supply and services peaked in 2009 at $156.9 million and has dropped to $131.2 million by 2016, which was led by cuts from Ontario and Quebec. Supply and services have hit the lowest percentage of the business administration pie since 1973 at 8.26%, which can raise the question of whether there has been an over expenditure for decades or there is an under expenditure at this time. A quick projection would likely see Ontario and Quebec’s number stabilizing with a small incremental growth in the upcoming decade, likely leading to an expenditure range of $130-175 million.

              It can be difficult to determine a smooth linear expenditure in this segment since maintenance and much needed upgrades may come at different times and rates due to a variety of factors. Most governments around the world will use relatively simple historical models and expenditure predictions (with guidance from the districts) to determine a cap for each subcategory within supply and services. Districts and schools would then determine the level of priority within their directive based on budget availability.

Conclusion

              The dashboard raises numerous interesting trends and variances that may benefit from further investigation. It is in no way a be-all and end-all solution to the opportunities and challenges that school education faces, it is a tool that, along with extra information, can provide deep insights and pose questions to drive better decisions.

              Business administration as a percentage of the total budget has decreased in a relatively linear fashion since it peaked in 1994 at 3.9% to 2.56% in 2016. This means that it has not kept to pace with other expenditure items. Questions should be asked as to whether business administration is suffering a shortage, has became more efficient or other segments have become bloated on a province to province basis based on their unique economic and demographic profiles.

              There have been multiple variances for each classification at different timelines and provinces/ territories, this is to be expected due to policy decisions, administration changes, etc. Although there have been interesting outcomes from this article’s analysis, further province/ territory specific research would be beneficial to better understand the trends of the past to support decision making in the present and future.

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