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The government boasts that its hard line on teacher contracts led to one-time savings of $1.1-billion.

Peter Power/The Globe and Mail

Ontario's government is warning it needs to trim education spending in 2014 to keep school board costs sustainable.

The Liberals 2013 education spending contains precious little new funding, but it sustains their most costly flagship initiatives, such as the "30 Off" tuition grant, giving many Ontario postsecondary students a break on fees, and the rollout of full-day kindergarten across the province by 2014.

Premier Kathleen Wynne continues to work at mending her government's relationship with teachers, who were outraged by Bill 115, which imposed strict contracts limiting teachers' pay increases and eliminated perks such as bankable sick days. The 2013 budget nonetheless sounds a vague warning that an "efficiencies and modernization savings strategy" will demand cuts to elementary and secondary education in 2014 aimed at securing "long-term sustainability" in school spending. It also promises consultations with the sector prior to any cuts.

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"The issue for us is that we continue to have declining enrolment, so we do have to look at what the implications are," said Education Minister Liz Sandals.

Education remains one of the only areas receiving funding increases above the government's overall 1-per-cent target, but new dollars for 2013 are still minimal. There is $12.6-million over three years to expand summer-school programs that target struggling and lower-income students to improve reading, writing and math skills. And $5-million more will be earmarked each year to support aboriginal student achievement. Both represent small change in the context of $31.8-billion in spending on all levels of education.

The government is also honouring last year's promise to give operating funding for universities and colleges a 1.9-per-cent boost to help pay for modest growth in their enrollments. The Liberals recently capped tuition increases at 3 per cent for the next four years – well above the freeze students had demanded, but below the universities' hopes for continued 5-per-cent hikes.

The bulk of new spending was poured into a new $295-million youth jobs strategy, announced days ahead of Thursday's budget. The first $195-million goes toward incentives for employers to hire 25,000 young people – a measure designed to appease the NDP. The remaining funds will be split across several funds to boost youth entrepreneurship, support on-campus incubators, teach innovation skills and get business more involved in training students.

The Council of Ontario Universities and the Elementary Teachers' Federation of Ontario both praised the youth employment measures, but the Ontario Confederation of University Faculty Associations said it was disappointed there was no direct investment on post-secondary institutions.

"For all [the Premier's] focus on youth and youth opportunity in this budget, we regard the lack of investment in universities as a real lost opportunity for improving things for Ontario's youth," said Constance Adamson, OCUFA's president, noting Ontario still has "the worst, the lowest per-student funding and student-faculty ratios" in Canada.

The government trumpets that its hard line on teacher contracts yielded $1.1-billion in one-time savings and that relations with teachers unions have slowly improved, which has allowed the extracurricular activities teachers had withheld in protest to be restored.

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But introducing full-day kindergarten, keeping caps on class sizes in the primary grades, and maintaining the postsecondary tuition grant – which gave 230,000 low– and middle-income students a discount equal to 30 per cent of an average undergraduate arts and science tuition bill in 2012-13 – continue to consume much of the province's discretionary education spending, leaving little for measures that might win back teachers' goodwill.

Instead, the budget signals plans to change the rules around deferral fees schools can charge to students who don't pay their full tuition bills at the start of the semester, and to redefine the number of credits that make up a "full university course load" – measures that could give students a break on their fees, but might leave universities scrambling to make up lost revenues.

The government also plans to press ahead with efforts to pool public-sector pension funds, including those of universities, under a single asset management structure in an effort to reduce costs that are straining underfunded plans across the province.

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