Translating the printemps érable

by Simon Tremblay-Pepin. June 1 2012

IRIS - Institut de recherche et d’informations socio-économiques

Original French Text: http://www.iris-recherche.qc.ca/blogue/negocier-de-bonne-foi/

It’s not obvious that parties seated at a negotiation table are there in good faith. To measure the extent of it, the capacity for agreement-facilitating concessions can be evaluated. Both the government and students question the opposing party’s open-mindedness. Let’s examine the offers submitted by each side in order to determine who has made the most concessions during the recent round of negotiations that just ended. 

On the government’s side

At first glance, and as Alain Dubuc believes, it could be thought that the government has made several concessions before even beginning the negotiations. Yet upon closer inspection, some drawbacks are revealed. The government: 

• Maintains its offer to improve the loan program, but this position does not involve any concessions, as it is requesting universities to compensate by donating the 20 M$ of this offer. 
• Maintains its proposal to increase the bursaries program and to spread out the hike. Again, there’s no true concession: the spreading out of the hike is at the expense of the universities themselves, and the increase in bursaries is happening at the same time as a reduction in income tax credits, which are decreasing from 20% to 16.5% of paid tuition fees. 
• Proposes a program of reimbursements proportional to income, without mentioning how it will work. 

As it appears, the government’s actions are not really concessions, but rather positive adjustments. They are not bad measures in and of themselves, but they are far from perfect, as we’ve shown here, here, and here, and they don’t impact (or hardly) the very issue of the strike: the increase in tuition fees. 

Let’s take a look at the negotiations that have just come to an end. The government proposed to reduce the tax credit again, bringing it down from 16.5% to 13.5%, and to spread the effects over 7 years (the famous 35$ per year reduction). In the end, we’d have a total increase of 1533$. Following the student proposal, the government would have considered condensing the tax credit decrease in one year while nevertheless proposing to maintain an increase of 100$ per year (like the ones put in place between 2007 and 2012) for 2012-2013, the timeframe of the proposed forum on education. It would therefore be an increase of 1624$. The government refused all propositions that would encourage the illusion of a moratorium, all while submitting a second offer that was higher than the first one that was immediately refused. 

What then is the government conceding? It’s conceding the idea of a forum (which would resemble the special assembly demanded over the past few months) to discuss education. It is also ready to slightly reduce the hike, as long as it doesn’t cost the state or taxpayers anything, and that the students themselves pay for this decrease by sacrificing the tax credits to which they were previously entitled. 

Did the government have other options that would have respected their will to not “hand the bill” over to a social group other than the students? In a previous blog post, I brought up the idea of grabbing several million dollars in tax credits and a bit more to essentially cover the government’s “miscellaneous expenses”. By doing so, it would not have been asking for a single extra penny from taxpayers, and would have maintained its university financing plan all while solving the crisis. 

On the students’ side

During this last round of negotiations, students appeared to have made considerable concessions on their end. Firstly, they accepted to enter into the government’s parameters to negotiate. What does that mean? 

• They accept the university financing plan without question. This is an important concession since the various associations were contesting the very notion of university underfunding from the very beginning of the strike. However, within the context of the negotiations, they have accepted to give into the notion that the plan is to go ahead. 
• A concession with still greater consequences is that the associations have accepted to make it so that neither the government or the taxpayers (be they individuals or businesses) pay more to reduce the tuition hike and will pay for the reduction themselves. The hike would be therefore absorbed through various fiscal benefits. 

What we take from the students’ propositions is that they are prioritizing tax credit reduction and savings incentives for two years without a hike, all while maintaining the hike for the following years. During those two years, the forum would take place which would help determine what we envision for post-secondary education. The students would therefore take their own money to finance a temporary fee freeze, without costing taxpayers, while affording us time to discuss matters in a forum that even the government acknowledges as being of interest. 

Sacrificing the tax credit costs each and every student. With the current tuition fees, the credit corresponds to 434$. The fee increase of 1778$ would increase the credit to 789$ per year. With the reduction to 16.5%, students would sacrifice 138$ of that tax credit. Bringing it still down to 13.5%, the tax credit reduction would be reduced to 287$. 

It is a veritable sacrifice, but the game is probably worth it. This tax credit represents 138 M$. Tax credits are fine and dandy, but there are good reasons to do this. There is evidence that a constraint from the get-go is more of a deterrent than the promise of a reward upon completion is desirable. 

But what about the Registered Education Savings Plan the students are considering dropping (the RESP)? The government stated during its press conference that to scrap it would be to ax the middle class’s savings for their children’s studies. It’s hard to tell with the little available information. In reality, the fiscal data indicate it’s only a 55 M$ expense for 2011. Statistics Canada claims that, for Canada in 2002 (it’s been quite some time, but it’s hard to believe there would be an improvement in numbers during an economic slump), only 17% of students benefitted from the program (or from trust accounts, or from savings bonds) at an average amount of 1500$ per year. If we consider that it’s still 17% of the population (households are in debt at a rate of 150%, leaving little room for savings), it’s hard to believe that these folks are amongst the poorest or the middle class. In fact, again according to Statistics Canada, a similar retirement plan, RRSPs, is principally used by families earning 85 000$ and more (at 90%) and much less frequently by families earning less than 36 500$ (at 35%). This is again a sacrifice, but mostly for the wealthy. 

Where is the good faith? 

In short, the government has made some adjustments, some with interesting effects, but have not made any concessions that have cost it anything, either financially or politically. It doesn’t seem to have taken into account which offer would be most suitable for people in the current context who have been striking for over three months. 

Inversely, it appears obvious that the students have accepted to make considerable concessions: to pay, using their fiscal benefits, to temporarily avoid a tuition hike while time is taken to have a province-wide discussion on education, to accept the financing plan despite their opposition of the platform of underfunding universities. Why make these concessions if not to allow the government to accept a proposal without having to lose face? Is it not the very definition of good faith to seek an understanding that is acceptable to your partner in negotiations? 

The answer to the question “where is the good faith?” seems obvious.

Translated from the original French by Translating the printemps érable.

*Translating the printemps érable is a volunteer collective attempting to balance the English media’s extremely poor coverage of the student conflict in Québec by translating media that has been published in French into English. These are amateur translations; we have done our best to translate these pieces fairly and coherently, but the final texts may still leave something to be desired. If you find any important errors in any of these texts, we would be very grateful if you would share them with us at translatingtheprintempsderable@gmail.com. Please read and distribute these texts in the spirit in which they were intended; that of solidarity and the sharing of information.