Huffpost Canada ca
Nora Loreto Headshot

Why Not Tax the Universities' One Per Cent?

Posted: Updated:

Just before the 2012 Ontario budget vote, ONDP leader Andrea Horwath successfully injected a conversation about increasing the taxes of the ultra-rich into the political sphere.

She placed her party's support for the budget contingent increasing income taxes by two per cent for Ontarians who make more than $500,000. Forget the one per cent who in Canada, make an average income of $387,400, according to the Canadian Centre for Policy Alternatives. Horwath wants to make the elite of the elite pay just two per cent more. On Monday, April 23, Dalton McGuinty agreed to the tax increase.

Some of these ultra-rich work in the universities. Horwath's tax for the +$500,000 will affect just four employees in the entire sector: three presidents and one professor. They will take home two per cent less of their taxpayer and student funded salaries.

In post-Drummond Ontario, how could anyone working at a university find themselves among the half-millionaires club, let alone the one per cent? Despite Drummond's assertion that financial ruin would beset Ontario if university workers' wages weren't tackled, he missed the opportunity to recommend cost savings through implementing a cap on public sector compensation.

There are 248 lucky university folks and 49 even more lucky college folks who rise above $250,000. These salaries reach $89 million when added together. Number one is a staff person, the president and CEO of the University of Toronto's Asset Management Corporation. In 2011, William Moriarty made $655,995. Number two is the luckiest Canadian of all: For working no days at the University of Waterloo in 2011, Governor General David Johnston maintained his $610,504 salary. Waterloo issued a statement to say this is totally normal. They issued a nearly identical statement last year.

In fairness, maybe it is normal. Former vice-president administration at Ryerson University Linda Grayson was paid just over $270,000 in 2011 despite having left Ryerson in 2010.

The third-highest earner is also the highest paid professor. Former Goldman Sachs vice-president investment banker Kent Womack was paid $560,928 last year.

The highest paid trio in the college sector is the presidents of Seneca, Humber and Conestoga colleges: David Agnew ($396,360), John Davies ($427,915) and John Tibbits ($409,900), respectively. Davies pulls to the front when his nearly $13,000 in benefits are added to his salary.

Ontario's public sector salary disclosure (or, the Sunshine list) catalogues everyone working at colleges or universities who makes more than $100,000. This can range from workers who, after decades of service and a strong union, have finally cracked the threshold, to celebrity professors like Richard Florida (he made just over $370,000). Or runner-up mayoral candidates, like George Smitherman, who made $158,833 for specially advising Ryerson president Sheldon Levy, who made $360,000.

These salaries should be considered against the increasing costs borne by students. Built into the 2012 Ontario budget is the assumption that students will pay another five per cent increase in tuition fees.

If the NDP get their way, only four men in the entire college and university sector--one of whom didn't actually work in the sector last year--will see their taxes increase by two per cent.
There is wasteful spending in the college and university sector but the Sunshine list refutes Drummond's claim. It's not at the faculty level and certainly not at the support staff level.
Institutional presidents, the ones who dominate the top of the list, have the closest ties to government and greatest influence over policy. This is likely why administrative salaries have been allowed to balloon while students have had to pick up the tab through an education tax that has increased by five per cent annually.

Horwath's exercise has demonstrated the popularity of tax increases for the ultra rich, but it could have been extended further. Existing systems of wealth re-distribution must be used to offset the perceived need to increase tuition fees through corporate taxes and extending the definition of ultra-rich to the entire one per cent.

Until a tax increase for the one per cent is normalized public policy, and an education tax for students is considered outrageous, social inequality in Ontario will continue to grow.
There were no students on the Sunshine list.