Changes to Education Finance in Ontario

copyright 2000

Part I : Introduction

"The Harris Conservatives came into office with an agenda to turn our
education system inside out and upside down. They intentionally created
a crisis. And in Oct 97 with Bill 160, they sparked a political protest by
teachers, supported by parents and students, the like of which has never
been seen in Ontario. Students, parents and teachers are reeling from
chaos that never seems to end." NDP Fact Sheet on Bill 160, 1997
From Boom, Bust to Echo.

Over the last 30 years, Ontario's spending patterns in education have changed in response to the
demands of society. In the late 1960's, early 1970's, education spending was 1/3 of the provincial
budget, as compared to 1/5 spent on health care. In the early 1970's the baby boom generation
required more classrooms than ever before. By 1975, the Province paid 60% of all educational
costs.

During the baby bust beginning in the 1980's, when costs relating to oil and gas, heating,
maintenance, inflation and wages increased, the spending from the province remained static.
During the baby boom echo which began filling up elementary schools in 1991, the provincial
share was approximately 40% of expenditures. The rest was raised through local taxation.

In 1995, the situation had been reversed, health spending was 1/3 of the overall budget, while
education was 1/5 or 16% of the total provincial budget. During this period the largest growth
sector in Provincial spending was debt payments which in 1995 also took approximately 16% of
the total provincial budget. The same percentage spent on education.

Delegation of Power

In terms of trends within the institutional framework of Ontario's educational system, the
Ministry of Education is now responsible for what was once divided up into many separate
Ministries, such as the Ministry of Colleges and Universities, the Ministry of Skills, and the
Ministry of Education. Streamlining these portfolio's into just one Ministry of Education and
Training was done over a period of time under the rubric of administrative convenience.

The Education Act, R.S.O.,[1990] (hereinafter E.A.1990.)gives the Ministry virtually unlimited
power to regulate in the matter of education in infinite detail. School boards are not independent
creatures but are created by the Education Act, and thereby bound by law to carry out the will of
the Minister. (s.58.1 Ed. Act)
The Ministry of Education and Training has the duties outlined in s.2 of the E.A.1990.

S.2(2) E.A.1990 : The Minister "shall preside over and have charge of the Ministry."

S.2(3) E.A. : The Minister of Education "is responsible for the administration of the Act and the
regulations .. . as may be assigned to the Minister by the Lieutenant in Council

s. 2(4) : "The Minister may in writing authorized the Deputy Minister or any other officer or
employee in the Ministry to exercise any power or perform any duty that is granted to or vested
in the Minister under this or any other Act."

Part II : History of Funding Formula.

In 1894, municipalities were given the right to raise revenue from tax on
property and local levies to help establish schools. In 1907, the
government first began to pay a sliding scale of grants based on local
ability to raise money, and in 1924, the government decided to use the
amount of property assessment as the measure of local wealth. (FN35)

Origins of Old Model

In 1964, the Minister of Education implemented the Ontario Foundation Tax Plan which based
the cost of education on a model school program. These costs were estimated from actual costs in
sample boards across Ontario. The province set a mill rate that had to be levied by all boards and
then provided grants to bring all boards up to the foundation level or "grant ceiling." (the average
per pupil cost.)

Every year a basic per pupil amount would be declared as well as a standard mill rate necessary
to raise the recognised ordinary expenditure per pupil or R.O.E. of a board from local residential
and commercial property assessments. Boards could increase this mill rate to raise additional
funds. The municipalities collected the taxes on behalf of the boards. School boards in wealthy
assessment communities could raise more money per mill than poorer assessed municipalities.
Therefore the local revenue generated did not supply the funds necessary to support the ceiling
amount of a great many students, especially in rural communities.

To remedy this disparity, the Province provided a basic per pupil grant that would close any gaps
between the amount raised locally by the provincial mill rate and the expenditure ceiling.
Responding to local community pressure, boards who wanted to spend over the ceiling could
order additional funds for educational programs and services by directing the municipality to
raise the mill rate.

Boards with strong commercial and industrial assessment bases were able to generate more
money with fewer mills. Some boards spending went well beyond the ceiling without having to
tax a higher rate at all, while other boards' local tax base wouldn't even support the expenditure
ceiling.

The Ottawa Board of Education had almost twice the provincial average of per pupil property
assessment wealth, while Metro Toronto had more than twice the provincial average.

The Ministry also provided additional grant allocations to take into account such board specific
factors as sparsity of population, distance from an urban centre, the need to maintain small
schools, and provide for programs such as Special Education, French as a Second Language and
International Languages.

By allowing boards to spend funds beyond the grant ceiling, as long as the money was raised
from local taxes, the government acknowledged local needs; at the same time, however, this built
in a continuing source of spending inequity across boards.

The Historical Process of School Board Budgets

1. Assess potential revenues from property taxes.

2. Establish program priorities. (80% of school board spending is in salaries)
3. Guesstimate probable GLG revenue from province.
4. Set budget and determine allocations.
5. Send tax requisition to municipal city hall. (board adjusted mill rate)
6. Hope that guesstimate was reasonably accurate.
7. Hope tax payers are willing to pay and to reelect.

Regulations Made Under the Act

School boards assessments do not usually compare net expenditures, but rather use expenditures
based on "cost of operating." This cost is the amount a board would charge in tuition fees for
students who do not reside within its boundaries but whom the board is educating. (FN30)

Elementary and secondary education funding has always been governed by General Legislative
Grant Regulations (GLG Regs.). Today as in the past, these regulations authorized the Minister
to distribute funds to school boards and set conditions for distribution.

Funding for 1995

Each year the province would establish a dollar amount per pupil which represented the cost of
providing a base level of education for a student. This amount was reviewed each year to reflect
changes in costs.

In 1995, for elementary this amount was $3,795 per pupil and $4,803 per pupil for secondary.
Added to this amount was support for special education programs, and pooling amounts.

In 1995, the special education amount was $293 per elementary pupil and $217 per secondary
pupil.
Added together the basic per pupil amount for elementary students was $4,184 and $5,116 for
secondary pupils. This basic per pupil amount was then multiplied by board enrolment numbers
to arrive at the recognised ordinary expenditure per pupil or R.O.E. of a board.

The Mill Rate

A mill represents $1 of tax for every $1000 of property assessment; i.e. a property assessed at
$100,000 with a mill rate of 25 will attract taxes of $2,500. Local taxation was raised by levying
a mill rate on the assessed value of real property according to :

Amount = M.R./1000 * E.A.

Where amount is amount of $ raised

M.R. = mill rate
E.A. = equalized local assessment. (compensation for undervalued assessed property). All taxes
assessed on nominal value for real properties.

Relevant Educational Reports

Education funding has been reviewed in numerous commission studies and other government
reports over the past fifty years.

The Hope Report 1950

The Hope Report 1950, acknowledged the tradition of local autonomy and recognized the need
for greater decentralization of administration and supervision in educational institutions. Local
involvement in education is appropriate to ensure there is flexibility and autonomy to respond to
local needs and preferences. The report also recommends more special education funding and
programming. (Hope Report, 1959) p.380

The Macdonald Commission Report 1985

The Macdonald Commission Report 1985, recommended to continue per-pupil grants for special
education programs and services, conditional upon annual approval by the Ministry of Education
or a Program Review Committee; that appropriate costing, accounting and reporting mechanisms
be developed for special educational programs and services; that the Ministry of Education
continue to fund, on an individual program approval basis, specific special education programs
and services provided by school boards. (E.A.P.E.1999)

The Royal Commission on Learning, For the Love of Learning, 1994

The Royal Commission on Learning, 1994, concluded that there were several sources of inequity
in the previous funding system.

For example, relating to commercial and industrial revenue,

"There is a difference in the way some commercial and industrial revenue is determined and who
receives it. For example: ... "A pulpandpaper company in the area covered by the Red Lake
Board of Education pays stumpage fees for the trees it cuts, not taxes on the land on which the
trees are cut. The fee is paid to the Province of Ontario, not directly to the local school board,..."

This was the equivalent of an educational tax exemption.

As well, tax revenue from corporate head offices supported inequity,

"Commercial and industrial revenue is often generated in one place but paid to a municipality in
another. ... For instance, major corporate head offices tend to be clustered in a few large urban
areas, while corporate income comes from across the province."

The Commission also recognized inequity in the funding scheme between public and separate
boards. In the collection of taxes,

"People who for various reasons do not specifically direct their taxes to the separate school board
are assumed to be public school supporters. ... This is done under what is known as the 'default
provision', and has generally resulted in public school boards getting more than their share of
property taxes..."

Each resident can elect to support a local Roman Catholic or French board with their residential
property tax. If a resident does not indicate a separate board there is a presumption that the
money is to go to the public board in the municipality..

The Province declined to change this built in inequity with the EQIA, 1997. True equity could
not have been the motivation for change behind the financing of educational in light of the fact
that many recommendations were ignored which were designed to achieve equitable goals, such
as the tradition of commercial pooling which was finally eliminated by the EQIA 1997.

Commercial and industrial property taxes for education are levied under the discretion of the
Minister of Finance and are set at different levels for different districts. The reforms eliminated
commercial pooling funding strategies that attempted to address this inequity.

Ontario School Board Reduction Task Force, final Report, 1996.

This task force represented the Progressive Conservative position on education in Ontario. "The
current economic and social climate reinforces our opinion (The Ministry recommends), … that
the level of education programs and services we have been enjoying cannot be maintained under
our present governance and funding systems. If we don’t change both these systems, our ability
to education our children will be threatened." Final Report p.18.

The panel noted that school boards are required by law to provide special education programs
and services.

The reasoning of the Harris Revolution relies on the fact that our educational system cannot be
supported and it lacks funding. This recognition requires a change to the governance and funding
systems threatened by the PC policies. Therefore, the system must change and become better.
Not only must PC's stop increasing money spent on education, they must also subtract additional
money to support other political interests.

Part III : Student Focused Funding, A New Delivery Model

Under the direction of the Harris Progressive Conservatives, the

financing of elementary and secondary schooling has undergone
significant structural and substantive changes since 1 January 1998.
Changes to the Education Act, (hereinafter E.A.1990) and
accompanying regulations created a sudden and drastic shortfall of
funding that undermined existing special education programs and
services considered adequate, necessary, and effective by the expert staff
of the Ottawa Carlton District School Board.
The Purpose of the New Model

In January 1997, the Legislature of Ontario began a series of reforms resulting in new provisions
for funding municipal services, including education finance reforms. In May, 1997, the province
cut the education portion of residential property taxes in half, from $5 Billion to $2.5 Billion,
with the province taking on a greater share of the costs of education. In Dec. 1997, the
government announced that the Minister of Finance would set a uniform tax rate for the portion
of the residential taxes that continued to go towards education.

The reduction of 2.5 billion in residential property taxes for education (FN36) provided
municipalities with opportunity to tax in order to fund new local downloaded services, including
social housing, police, water and sewers, public health, municipal and Go Transit, and land
ambulances. Overall, the government will gain money in this transfer, and this is the real
motivation for changing property tax assessment regulations.

Minister John Snobelen announced in January of 1997 that school boards lacked accountability
for spending habits and that residential property taxpayers shouldn't be expected to pay spiraling
education taxes set by school boards. He attributed rising education costs to excessive indulgence
in perks and opulent administrative centres. (FN39)

The Ontario government began reform of our children's educational system with the enactment
of Bill 104, the Fewer School Boards Act, 1997, in force 24 April 1997, which changed the
structure and organization of every school board in the province, including the addition of 9 new
French-language boards. The Act reduced the total number of school boards from 129 to 72
resulting in an estimated savings of $150 M.(FN89) The number of school-board trustees would
decline from about 1,900 to 700. Trustee remuneration was limited to $5,000. (Paquette)
As a result of Bill 104, the Ottawa Board of Education and the Carleton Board of Education
amalgamated and became the OttawaCarleton District School Board (O.C.D.S.B.).

The common sense revolution continued with Bill 160, The Education Quality Improvement Act
(E.Q.I.A. 1997) in force 8 December 1997.

The Minister sets a standard provincial mill rate for residential property taxes and proscribes a
multiple of mill rates for various municipal business property taxes levied throughout the
province for educational purposes. The E.Q.I.A. 1997 allows the Minister of Finance to set tax
rates for residential and business properties in the province of Ontario, effectively eliminating the
participation of local school board trustees from setting tax rates which maintain existing special
education programs and services in O.C.D.S.B.

Bill 160's formal purpose was in the words of John Snobelen, "to set standards for quality. These
standards would include the amount of instructional time, length of the school year, and enhance
student access to professionals with the special expertise they need."

Legislative Context.

Relative to the size of Bill 160 (two hundred plus pages) and its complexity, the government
allowed only four weeks for discussion. Often major pieces of legislation are preceded by a
white or green paper that outline the issues and options and that invites public discussion. Bill
160 had no such papers, and its public discussion was truncated. Only about 50 or the 217
amendments had been debated at the time of closure.

Bill 104 established the Education Improvement Commission which was to oversee the transition
process and its recommendations were gathered in the report called, "The Road Ahead." Many of
their recommendations were incorporated into Bill 160. The Report found a need to address the
ever expanding demands upon the system in a time when enrolments are increasing. The Road
Ahead recommends giving boards the flexibility they need to delivery programs effectively. The
Report placed importance "…on the need to give boards more flexibility in their programme
delivery and school organization, while ensuring that educational quality is maintained or
enhanced. … The Commission believes that such programmes are the key to addressing the ever
expanding demands upon the system.

In E.A.P.E. 1999 Lawrence Greenspon identifies the issue as, "How can we take funding away
from school boards like Ottawa-Carleton and Metro Toronto, yet expect to maintain service
when demand is increasing?"

StudentFocused Approach to Funding

In 1997, the total provincial budget for education was $12.9 B. This amount increased by $252
M for the school year of 19981999. The projected amount for 19992000 is $13,250 M. M.E.T.
figures indicate there is an overall projected increase in 19981999 to 19992000 of $133,633,137.
Special education envelop funding may increase $37,196,214.
Under the new approach, property taxes are still being used to support education. Municipalities
collect on behalf of the Boards except the Minister of Finance sets a uniform residential tax rate
in each municipality. The Minister also sets property tax rates for business properties, business
tax rates vary from one municipality to another. These taxes are then "distributed among the
boards in proportion to enrollment as determined and calculated by the Minister". The Minister
bases the calculation of the average daily enrolment under s.2 of the Regulation made under the
Act entitled "Calculation of the A.D.E. for the 19992000 Fiscal Year." Business taxes are
distributed to local boards in proportion to enrolment numbers (S.257.8 Ed.Act) while residential
taxes are distributed based on intention of resident to support public or separate board. (s.257.9
Ed.Act).

Using the new studentfocused approach to funding the Minister determines each board's overall
needs. Every year each school board must submit a financial statement, on a date set by the
Minister, containing estimated costs. (s.252 Ed. Act). Local property tax revenues provide part of
the funding. The additional funding comes from government grants which top up allocations to
arrive at the per pupil expenditure base foundation level. The new approach is supposed to
provide more funding for students and teachers in classrooms and less for administrative
purpose. In effect it is the same as the old scheme, except for a new accounting method, and the
elimination of commercial pooling. Most boards slightly benefit, except METRO and OCDSB,
which incur heavy loses.

Although the new taxation system will equalize the amount of money spent by each school board
on a per pupil basis, it is a disaster for boards in large urban areas such as the OttawaCarleton
Board of Education and the GTA public boards. These large urban boards no longer control the
levers to raise money to support their current spending patterns and student needs. They are
obliged to conform to a system that is committed to seriously reducing previous operating
budgets in order to afford the tax cut dream of PC politicians looking for extended popularity.
Before the EQIA, actual funding for students varied widely across Ontario. Today, every school
board receives funding allocation based on a standard calculation. In the EQIA along with the
two Fair Municipal Finance Acts, the government claims to make property taxes fairer and more
consistent across the province. With these changes, owners of residential properties with the
same assessed value would pay the same education property tax, no matter where the property is
located. (FN36) Even though the Ministry recognizes that different needs must be accorded
different treatment

The province recognizes that each board will have different and unique needs, just as they realize
that different students will have different needs and require different educational programs.
Therefore, each board should have the flexibility to decide how to use funding and meet local
priorities. Yet there is a limit to this flexibility.

School boards can no longer raise additional revenue from local property taxes but they can raise
money through other means if they choose. The situation is such that between public and
separate residential tax assessment the funding is determined by competition of votes. Separate
school share is determined through participation in the taxation period, in the shadow of the
public board collection. Residential taxes are not collected, appropriated, and distributed in an
inequitable manner, only if the tax payer indicates on the form to direct their residential tax to the
separate board do they get funding.
Business taxes are distributed equally but only within the area of the collecting municipality, as
between municipalities business tax is not shared equally. Overall, business tax assessment
allows for spending inequity between regional school boards depending on their commercial and
industrial base, but distributed equally to boards within the region. Residential tax is still
distributed inequitable after the changes as between public and separate school boards.
Residential property with the same assessed value would pay the same education property tax, no
matter where the property is located, however the distribution of the funds remains inequitable.

The New Model

Foundation Grant

Basic funding starts with the Foundation grant. The grant is allocated to school boards on a per
student basis. The Cabinet determines the basic cost for providing an education program to a
student for one school year. The foundation grant is calculated by multiplying the average daily
enrolment by the per pupil basic cost.

The Ontario School Board Reduction Task Force Report 1996 and the Minister's Advisory
Council on Special Education 199697 both recommended that the province establish a new
"realistic" level for the recognized ordinary expenditure because the last actual cost sampling to
establish a baseline was done as part of the Ontario Foundation Tax Plan 1964. We have yet to
determine exactly what criteria is applied to determine the per pupil basic cost.

The basic cost for the school year of 19992000 in elementary is $3367, and $3,953 for
secondary.

According to the Ministry, the Foundation Grant does not include the additional costs associated
with a student's special needs. Yet it does cover classroom spending such as classroom teachers,
teacher assistants, textbooks and learning materials, classroom supplies, classroom computers,
library and guidance services, professional and paraprofessional support ( psychologists, speech
therapists, social workers, child/youth workers.) The Foundation Grant also covers non-
classroom spending such as teacher prep time, and teacher consultants.

Current staffing levels can be cut under a variety of categories. The new job description given to
special education professional staff is that of a consultant, they operate in the classroom in
conjunction with the teacher on a consultation basis. To this extent the Student Focused Funding
Model provides the incentive to cut special education staff which is money not spent on a non-
classroom expense. (FN 18)

For example teacher assistants (in JK K), speech therapists, and child/youth workers can be
funded by the Foundation Grant as a non-classroom expense. The staff described by the
Ministry is also capable of being funded by the S.E.P.P.A. grant, or the ISA grant. This
categorization is allows the same jobs to be funded by two different envelopes. ISA funds
attaches to the student, allocations from the Foundation Grant are discouraged by the Ministry in
a non-classroom category.
Currently, all ISA funding is frozen until the Ministry finishes it's review of current ISA claims.
In the recent past, O.C.D.S.B.'s psychologists, speech therapists, social workers, and child/youth
workers were there to provide support for special need students in programs designed to meet
their needs. Yet today, unless your claim for ISA funding was received in the first operating year
of 1998-99 and subsequently approved you may not apply in 1999-2000 for your enveloped
funding.

Special Education Grant

Regulation 306 : Every board shall maintain the special education plan in respect of the board
and ensure that the special education plan is amended from time to time to meet the current
needs of the exceptional pupils of the board.

An exceptional pupil is a pupil whose behaviour, communication, intellectual, physical or

multiple exceptionalities are such that he/she is considered to need placement in a special
education program by an IPRC of the Board.(Ed.Act Reg 181.) The Special Education Advisory
Committee is a statutory committee established under MET Reg 464/97 to make
recommendations with respect to the establishment, development and delivery of programs and
services for exceptional students.

The first level of support for students experiencing difficulties in school is at the classroom level.
The classroom teacher makes every effort to differentiate/ modify program content, teaching
strategies and evaluation. These in-class efforts to differentiate/modify the learning environment
by the classroom teacher are the initial and most important steps to meet the needs of students.

Total Special Education funding is set up like a layered pyramid. At the base of the pyramid is
the Foundation Grant. It is given for every student enrolled whether or not the student is an
exceptional child. The money in this grant area can go toward staff such as teacher assistants,
psychologists, social workers etc. The next layer would be the Special Education Grant. The
special education grant is divided in two with the SEPPA (Special Education Per Pupil Amount)
used for the assessment and assistance needed by most exceptional students, and the ISA
(Intensive Support Amount) being used to provide high-cost assistance to a relatively small
number of students who need very intensive support.

The total Ontario Special Education grant was $1.052 Billion in 9899. OttawaCarleton`s share is
$43 Million. School boards are required by Regulation 306 to maintain a special education plan
for programs and services for exceptional students, and to submit annually to the Minister, any
amendment to their special education plan. (FN8) In June 1998 the Ministry announced $40
million of additional funding to be allocated for special education across the province to help
make the transition from the old model to the new. Students who have been receiving
individualized special education services, such as support from Educational Assistants can
continue to do so, according to the Ministry (FN 27) However, O.C.D.S.B. spent $35.680 of the
mitigation grant on classroom teachers and Teacher Assistants in 98/99. In 99/00, that grant is cut
back half.
Within the OCDSB Budget there are four special education departments. The Special Education
& Student Services Department is responsible for EA's, Personal Care Asst. and Youth Workers
with a budget of $23.625. The Secondary Special Education Department pays for classroom
teachers a total of $7.683. The Elementary Special Education Department (including
Developmental Delayed Program) hires Teachers and Secretarial Staff for a total of $21.422. And
the Alternative Schools Department is running a budget for teachers and secretarial staff for
$2.812.

The government claims it protects specific spending for special education purposes. (FN15) But
the funding mechanisms of special education are completely entwined with the classroom
teacher expenses and the foundation grant. To subtract from the foundation grant in order to let
special education survive will deprive the other students of an equal per pupil share, to subtract
special education funding from the Foundation Grant is to benefit the regular student at the
expense of the exceptional pupil.

The new Special Education Grant requires that special education funds be used for special
education purposes only. The Ministry has created a new "streamlined application process" and
defined the types of spending for which the grant can be used. The Resource Manual for ISA
Grants acts as a list of allowed costs that boards are required to respect. However, it should be
noted that although many reports recommended the implementation of some sort of
accountability mechanism to ensure a "sealed envelop" spending habit, such mechanisms are not
in place under the current scheme. Currently the only accountability mechanisms created by the
Ministry ensures against fraudulent ISA applications.

Special Education Per Pupil Amount (S.E.P.P.A.)

S.E.P.P.A. provides flexible funding for students with special need. This funding must be used
only for students with special needs. Funding is for programs that address relatively common
exceptionalities that do not require a high level of financial support for the individual students.
(FN 27)

The SEPPA grant is based on school board enrolment. The base level special education cost as
set by the Minister is $362. The SEPPA grant is calculated by multiplying this number by the
daily average enrolment. (s.15 Regulation under Education Act.) This funding will allow boards
to respond to local needs using locally designed programs and services. The funds support the
cost of student assessments and services prior to any formal designation of exceptionality. They
can be used for hiring support personnel needed by exceptional pupils, including special
education teachers, educational assistants, social workers, psychologists, speech therapists,
physiotherapists, and occupational therapists. However, there is some overlap with many of the
professional and paraprofessional staff who are also listed as being funded from the Foundation
Grant. For example, funds for teacher assistants are provided though either SEPPA and/or the
Foundation Grant.

Intensive Support Amount (I.S.A.)

The second part of the Special Education Grant is the Intensive Support Amount (ISA). It meets
the needs of students who require intensive or specialized staff assistance. ISA is for one on one
support, the funding stays with student, and can cover the cost of specialist teachers, educational
assistants, child and youth workers. (FN27) The ISA is a further layer above the Foundation
Grant and the SEPPA. It is based on the specific needs of a single student and it will follow the
student if they change schools. The ISA will cover costs such as oneonone support as well as
specialized equipment that is necessary for the exceptional pupil.

Since the ISA funding "attaches" to the individual as required to meet the needs of a specific
student, the student must meet with the criteria of the ISA funding. There are four level of ISA
funding (FN40) :

ISA Level 1 for special individualized equipment needs, cost exceeding $800
ISA Level 2 for students with moderate to severe needs
ISA Level 3 for students with severe to profound needs and
ISA Level 4 for education programs offered in care, treatment, or correctional facilities.
To qualify for ISA level 1, a student must provide an assessment from an appropriately qualified
professional and attach proof of the cost of equipment to be purchased. The assessment must
indicate that a particular device is essential in order for the student to benefit from instruction
and that the disability device would help him improve. But there is a catch to ISA level 1
funding, there is a deductible fee of $800 for every child. This means that a student who has
three claims of $1200 a total of $3600 would only be funded $2800 of grant money from ISA,
after paying the deductible. While three children with three claims of $1200 would be funded
$400 a piece after paying the first $800. It seems absurd that the government would guarantees
special education money and then attach a deductible fee. It is expected that the board will use
SEPPA funds or other special education funds (such as reserves) to cover the $800 deducted from
the ISA claim. Therefore the more ISA claims for equipment that a board has the less SEPPA
money it spends on general special education resources. If these new reforms are suppose to
protect student funds, why do they internally play against each other, one category losing to the
other? Does this model consider the best interest of the student? Does it ensure an adequate
education for exceptional pupils? School boards have the illusion of funding when one grant
amount is subtracted by the use of another grant.

For ISA level 2 and 3, the government has asked an expert panel to review eligibility criteria for
ISA funding. In 19992000, new eligibility criteria will be assessed through a provincewide
review process. School boards and the Ministry of Education will evaluate the refined criteria
recommended by the expert panel. It seems that the government is trying to refine specific
criteria to raise the qualifications necessary qualify for ISA level 2 and 3. They are designing a
way to prevent exceptional pupils from qualifying. The government may explain that they are
refining the criteria to exactly match student need but every child is unique, and may or may not
fit in the predefined categories set by the province. Students in need may find it harder qualify
for the new specific qualifications and then be abandoned by ISA funding altogether, yet still be
disabled.

Special Incidence Portion (S.I.P.)

At the top of the special education funding pyramid is the Special Incidence Portion (S.I.P.). This
new element will support children who were eligible in 19981999 for ISA level 3 and have
extraordinary needs for staff support necessary to maintain their health and safety. There is no
SIP or ISA level 4 funding this or any year at the OCDSB.

Other Grant Categories that Fund Special Education

A school board uses other grants to also support special education, such as the Transportation
Grant, which covers the cost of transporting pupils to their special education programs. The Pupil
Accommodation Grant builds wheelchair ramps, and the School Board Administration and
Governance Grant helps support the cost of the administration of the special education programs
and services. But with the cuts that the OttawaCarleton school board is facing, the last thing they
will do is spend money from "non special education" grant categories in order to support special
education. They already have trouble coping with the dramatic changes in their budget as each
slash requires cutting jobs or programs.

Mitigation Grant

The O.C.D.S.B. announced layoffs of 1,870 employees in response to the new funding formula.
100 administration people, 700 classroom teachers, 470 school support workers, 240 teacher
assistants, and 375 custodial and maintenance workers were on the cutting table, over 25% of all
employees. The layoffs also include education assistants, plant support staff, psychologists,
social workers, speechlanguage pathologists, office staff, technicians and managers. (FN 42)
Whether or not any of these employees were actually laid off is unknown to us but it does
represent the sustainable level of programs at currently Ministry allocations.

The new funding system is being buffered by a one time phasein grant so that boards can cope
with the decrease of revenue. Where change in revenue is 4% or more, either positively or
negatively, an adjustment will be made to the board's grant allocation. To calculate the phase in
adjustment, the government follows this equation: (FN41. p.30)

Change in operating revenue = Operating revenue for 19992000 / Operating revenue for
19981999

Adjusted change in operating revenue = ( Change in operating revenue) x ( 199899 Average

Daily Enrolment)
(19992000 ADE)

Part IV : Changes

Financial Changes to Ottawa-Carleton District School Board

To see a summary of numbers consult the Appendix.

One of the obstacles to tracking expenditures during the transition from one funding model to
another is caused by the change in Educational Fiscal Year which used to end Dec. 31. Starting
on September of 98, it currently follows the school year.

In 1996, before the two boards were fused together, the net expenditure of the Ottawa Board of
Education and the Carleton Board of Education totalled $546,785,343 In 1998/99, with an
amalgamated school board, total allocation of the Ottawa Carleton DSB was $512.794,706 Total
net expenditures for 98/99 was $515,171,702

Within the total allocation was $43,718,040 of phase-in adjustment, which is going to drop to
$21,302,958 in 99/00 and then to nothing the year after. Without the Phase-in Adjustment the
OCDSB total allocation for 98/99 is $469,076,666. $45 Million less than their current
expenditures.
These numbers clearly indicate that from year to year, the OttawaCarleton Board has been
dealing with more and severe funding cuts. For the board to deal with such drastic reduction, it
has to cut somewhere. According to the Costing Frameworks Ottawa and Carleton spent a total
of $546.785 on education in 1996. M.E.T. estimates of OCDSB net expenditure for 1997 is
$506.098 and allocates in 98/99 only $482.163. OCDSB estimates its expenditure in 98/99 at
$513.171. If we compare the costing frameworks of 96 with the OCDSB numbers from 98, the
amalgamated board decreased spending by $33.614. If we compare 96 costs with 98 allocation
then overall OCDSB is short $64.622. This is buffered by the Mitigation Grant in 98/99 of
$43.718. In 99/00 the phase-in allocation grant will drop to $21,302. Ottawa is also able to
qualify in 99/00 for the new "Stable Funding Guarantee" which grants them $19.287 for
exceeding a 4% rate of change. The 00/01 phase-in allocation grant is $0.

Absorbing a change of $33.614 over two years means not only that there will be cuts in
administrative positions but also a reduction in overall services. The change in total expenditures
by $33.614 exceeds the 4.% ministry cap as provided for by Premier Harris. (FN Nancy Naylor
p54)

Ottawa claimed 976 students for ISA Level 2 and 3 in 98/99.

1998/1999 Special Education revenue allocation was $43,253,615

1999/2000 Special Education revenue allocation was $44,067,785
19992000 Special Education revenue allocation projected increase is $814,170
1998/1999 Total Special Education Estimated Expenditure was $67,435,034

1998/1999 Amount to be placed in Special Education Reserve Fund is $55,990,758

How do these cuts effect exceptional pupils when the government has claimed to protect this
funding in the special education grant? Well, since funding is provided in layers and boards must
spend in enveloped categories, it will cut paraprofessionals and professionals who are funded
from the Foundation Grant. As well, Boards may cut on transportation which benefits special
education. The cuts may not lower the special education grant directly, however, they can have a
severe indirect impact when funding is cut in other categories. When large and drastic cuts are
gouged from the system, a board will reduce the number of resource teachers necessary to create
a balanced budget or borrow money and go further in debt.

The Province of Ontario is not the first to have drastically changed its education system. British
Columbia underwent major reform in December 1996. It reduced its school boards from 75 to
57. The boards have no taxing authority. The province provides 95% of education funding.
Alberta also reduced their total number of school board from 181 to 57, saving money on
administrative charges in the process. That province provides 100% of funding for public
education boards. Separate boards may collect their own taxes and receive a perpupil grant from
the province. (FN9)

In the long run, the system may prove to be fair and provide quality education to the children in
this province. But today it is disastrous for the large urban boards that have lost a huge sum of
funding dollars because of the new equitable funding formula. These assessment "rich" boards
have to deal and cope and suffer with this situation. Unfortunately, as is always the case, it is
those who are vulnerable, the special education students, who will suffer most from the neglect
of adequate funding and staffing levels.

Capped ISA Funding

A newspaper article in the Windsor Star 08 July 1999 entitled Special Feature : Special Needs
Pupils on Hold; Funding Frozen Pending Review provides that a list of recommendation was
given to the Minister concerning funding for special education students. The announcement was
made during a sixhour emergency meeting on the special education funding crisis. The session
involved more than 110 school board directors, business superintendents and special education
officials. They were responding to the Ministries announcement to freeze all ISA grants at 9899
levels until the M.E.T finishes a boardbyboard audit aimed at weeding out illegitimate claims.

Board officials are upset because the new funding formula operating in its first year requires
extensive paperwork, and there was not enough time to file ISA claims last year for every
student. Many students who should have received ISA support last year were not counted.
Windsorarea boards have identified more than double the number of ISA pupils for this fall but
cannot increase staff and resources because of the funding freeze.. The result is that hundreds of
special needs children can expect less ononone attention and more time in regular classroom. The
M.E.T. claims that "the current $1.1 billion being spent on the Special Education Grant is more
than the province has ever spent on special education before." Prior to the changes they only paid
40 percent of the total cost, now they pay for everything. The members of the emergency
meeting suggest that the Special Education Funding model has not averted a crisis but created
one. Without ISA funding attaching to the student the student is clearly denied equal access to
education.

In the OCDSB there are 976 students with ISA 2 and 3 grants. How many more are identified but
have yet to have an application put forward? In March of 99 the Director of Education James
Grieve wrote a letter to the Board which provided for the General Operating Expenses of Special
Education programs be restored to their levels in 1998/1999. Although I have yet to see a letter
that freezes ISA funding, there is one out there. The government has capped ISA funding in 99-
2000 to the same funding as in 98-99. Evidently you can only apply for ISA funding 99-00 if
you had previously been granted 98-99 funding. Plus new arrivals to the board are not allowed
apply for ISA. The paper work to fill out ISA request is extensive. Many students who are
identified do not have ISA funding because the paper work was not completed. Some schools
filed for as many students as they could given the short time involved and the fact that it was the
first year for the scheme to be in place. The schools did not file for every student last year, and in
the second year of this funding scheme the application list is capped. At least the board has
maintained General Operating Expenses. Can the Ministry ban funding in this manner to
exceptional pupil? And if the formulation of the funding scheme has spending consequences, i.e.
unable to cap funding, would this prohibition extend to other operating budgets at the local level?

Accountability

Curriculum documents generated by MET outline the framework for standards and
accountability for all students. The first level in recognizing accountability is a
clear outline of criteria for the entry to or requirement for special education
programs and services. The second stage of this accountability structure is an IEP
which conforms to MET requirements and also clearly outlines the program
expectations, strategies and methods of evaluation for all exceptional students.
Parents and students have the right to have access to clear documentation and
information on the IEP. There will also be a mechanism devised for the monitoring
of the duration of time a student has spent in a special education program. ISA
documentation will be subject to internal audit processes in order to ensure that the
length of stay in a specialized program is appropriate and in the best interest of the
student.

What will it take to prevent the total abandonment of Special Education programs
and services developed in the Ottawa Carleton area over the last 20 years? If
proper accountability mechanisms were in place the transition may be easier.

Cabinet has de facto power over setting the per pupil rate. Should the per pupil rate
be set by a politician, or should it be set by an expert in the field of education under
open and public criteria? If the Minister can wield this power, can he do so at the
expense of group equality rights enshrined in the Charter for exceptional pupils.
The cost of maintaining programs in Ottawa-Carleton is not very large in
comparison with the overall budgets. $60 Million more dollars a year will allow
the entire Ottawa-Carleton board to construct theses change in a positive way, for
the best interest of the students. The OCDSB put $55 M in a reserve fund for
special education, this covers expenses for approximately one operating year,
obviously supplemented by the $43 M allocated by Ministry. So the OCDSB
Special Education Department has reserves that will last 5 years if current envelop
spending is maintained. However, the facts remain that, in the first of these five
years OCDSB totally dismantled the essence of the special education programs and
services available to children of the board.

Boards are losing great amounts of money in a very short period of time. Losing
such "expropriated" funds in so short a time has accelerated the rate of change
beyond what the OCDSB is able to with, the rate of change has overwhelms the
staff of these institutions to maintain programs and services. Can the minister
decide to cut any single school board budget by 20-30% and risk the results of
infringing on special education equal access guarantees.

In Re-engineering Ontario Education: The Process and Substance of the Harris

Reforms in Education in Ontario, J. Paquette writes,

"At least until late 2003, all of the most important educational-cost parameters will
be set in Queen's Park, not at the local teacher-board negotiating table or by
budgetary decisions of individual boards of education. Bill 160 assures that the
provincial government has complete control of all the major cost and spending
levers in elementary/secondary education. In short, all the parameters that have
historically driven board mill-rate decisions, are now beyond the power of boards
of education to decide. Bill 160 undermines much of previous legitimate activity of
the unions."

The government legislated the end to local accountability with the transfer of
power from school board trustees into the hands of the cabinet. The Harris
Conservatives took education delivery decisions away from the local community.
The cabinet now sets the education portion of property taxes behind closed doors.
Shouts of no taxation without representation have been disheartened by recent case
law. Yet the effect of the legislation was to removed the local decision-making
powers of trustees (elected officials) in the attempt to thwart the democratic
process. Further, the Ministry also does not recognize approximately $2 billion
spent by local boards on programs.

Previous to the changes, the local school board was responsible for special
education funding and expenditures. Local conditions influenced the local tax base
to meet and determine those needs. For the first time boards are unable to respond
to increases in local need. Now the province is wholly responsible for special
education funding and expenditures. This responsibility entails a duty to have a
funding formula in place that adequately covers the actual costs of providing
appropriate placements. A funding formula based on the overall enrolment of
students does not adequately fund exceptional pupils in areas like OCDSB with a
high incidence of special needs students. It is discriminatory in that the funding is
not related to the level of incidence in any given area, some students receiving
more per pupil than others. Previously, special education costs could be increased
by increasing the mill rate. Without this kind of flexibility there is no
accountability for ensuring equal educational opportunity. In the past, a community
of parents could approach and lobby a board to implement or fund particular
services, now they must go to the Province if they want to be heard, the boards no
longer have the power. I would argue that the scheme must respond to the actual
real need of the student, or allow the boards to do so, as it did in the past, otherwise
they will systemically deprive exceptional pupils of an equal education. If the
formula does not adequately take into consideration the different needs of distinct
and disadvantaged communities it should not withstand a constitutional challenge.
Proper criteria for decision making must be applied to ensure that the Minister's
discretion is not exercised in an arbitrary manner. There is no local accountability
mechanism to ensure adequate placements any longer in place the Province must
adequately fund special education or breach the equality provision of the Charter.

The government's decision to centralize decision-making power in the cabinet was

justified as an attempt to make the system more accountable. To remedy this lack
of accountability , the government decided to take control of the finances of the
boards and set out standardized tests to decide funding rates and compare the
achievement of students. They said that too many teacher in the system were not
working in the classroom. In reality many of those non-classroom teachers were
providing special education programs and services, where the ratio of teachers to
students is more like 1:8 or 1:12. By reallocating the "extra" teachers into the
regular classes, special needs students are not as likely to have much needed one-
on-one support. The error is in counting exceptional pupils as regular students
when capping class sizes, because it fails to consider the extra attention needed,
especially by non-teaching staff.

The new legislation also increases the numbers of non-professional teachers in the
classroom and allows for the hiring of people who do not have a teaching
certificate to deliver guidance and other programs. T.A.'s and E.A.'s do not bring
with them professional knowledge of program innovation and delivery. It is
essential to have qualified teachers who have adequate preparation time to develop
specialized programs and work with the kids. Teaching is not the delivery of a
lesson plan, it is the ability to create a lesson plan linked to the needs of each
particular students. The E.A.'s cannot replace a teacher if learning and the
education of the student are the primary interest. Non-professional teachers are not
trained to perform the duties of a certified teacher. To allow more non-professional
staff in lieu of teachers is a move to substantially lower the quality of education in
Ontario. The teaching of standardized texts cannot replace the need for a qualified
decision maker operating in the best interest of the student.
It would seem to me that the province took control of the money without properly
establishing accountability standards. Why move so fast? The process of change
should take much longer and be accompanied by more particular accountability
mechanisms.

The rate of change is beyond the ability of board to adequately respond. They lack
the ability to raise local funds to support the special education programs already in
place. The cutbacks have further reduced their number of staff, while adding more
non-teachers. It also shortened prep time, which limits the time for development of
specialized programs for special education students. With so much change the
board can't cope, and so the work involved in making changes diminishes until
there is little work being done on the changes at all. There is a total revamp of the
system from the top-down while the people involved learn helplessness. Previous
to 1995 many impact studies were done to address the impact of programs and
services on exceptional pupils, now no impact studies are being done with the
changes being implemented at the board or ministry level. The S.E.L.K. is not
being studied. The old placements in programs are now integrated in regular
school. As a result teachers can on longer adequately deliver all IEP's. The current
situation is exactly like trying to teach 15 different lesson plans in one class. The
teachers cannot delivery the IEP's to each student integrated in the regular
classroom. Psychologist's used to teach learning and emotion to students in need at
OCDSB, now their time is taken up with crisis intervention. The OCDSB cannot
adequately respond to meet the rapid changes.

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