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The University of Alberta campus in Edmonton.RICHARD SIEMENS

Alberta's decision to shield postsecondary institutions from some of the impact of the collapse in oil prices was welcomed by university leaders, who said a modest 4-per-cent trim to their budgets showed that Premier Jim Prentice understands the importance of higher education to the province's economic future.

"Given where Alberta is and the fiscal situation, I think the Premier and his team have done a remarkable job of navigating the province in a very tough time, and laying down a plan of how Alberta might finally not be subject to the roller coaster of oil and gas revenues," said Indira Samarasekera, the president of the University of Alberta.

The budget signalled that an overhaul of how the province funds postsecondary institutions is now up for discussion. In Alberta, government money accounts for a higher percentage of university revenue than in other provinces, and student tuition fees for less.

Over the next five years, the province will examine and possibly change that funding structure, the budget said. Student associations have been concerned that the province could be moving toward removing the inflation cap on tuition increases.

"We have to worry about students, particularly about students from a lower socio-economic background. There are other ways in which revenue can be generated," Dr. Samarasekera said, adding that continuing education and increased alumni fundraising could be ways to increase money without placing too much of a burden on students.

In spite of its large public investment, a recent nation-wide study found that Alberta trails other provinces in some educational outcomes, including research and student debt.

"What the right numbers are for Alberta is going to take a lot of dialogue to ensure that we get the balance right and that we have the ability to deliver stable, predictable funding," said Elizabeth Cannon, the president of the University of Calgary.

Oil at $50 a barrel is proving to be a massive budgetary headache for the Prentice government. For universities and colleges, however, it is an opportunity to show their value to the province's economy.

"This is the moment in which Alberta has to face the future. … We cannot plan budgets based on the price of oil. I've always said that resource revenue belongs to generations of Albertans and we have no right to spend it now. The opportunity is to invest that revenue where Alberta might have a long term future," Dr. Samarasekera said.

The universities' presidents had been bracing for worse news. Even as operating budgets will be reduced by 1.4 per cent this year and 2.7 the next, the decrease is not as steep as the almost 7-per-cent trim that was imposed two years ago under Alison Redford. In 2013, the province slashed budgets while maintaining the inflation cap on tuition fees.

"We felt that two years ago that was not fair to the system, and not fair to the province. I think our Premier understands education, research and development and how important that will be for Alberta's quality of life," said Dr. Cannon.

Making sure that student access is maintained will be key to how the system develops in the future, she added. The budget includes increased funding for grants, particularly for low-income, aboriginal and apprentices.

Late last year, postsecondaries already gained some flexibility when the province allowed 25 programs, including nursing, pharmacy, law and business to increase fees from 10 to over 50 per cent.

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