The Impact of Post-Secondary Funding on the Educational Attainment of Indigenous Students in Canada

By Maggie Jones, JDI Student Fellow, Queen’s University

In 1980, Canadian men with a bachelor’s degree earned approximately 32% more than those with a high school degree. For women, the equivalent figure was 44%.  By 2005 the university to high school wage premium had increased to about 41% for men and 51% for women (see Figure 1).  The rise in the wage premium over this time period shows just how important post-secondary education has become at an individual level.

In a recent working paper, titled Student Aid and the Distribution of Educational Attainment, I examine the effects of providing post-secondary funding on educational choices in the context of a large program for Indigenous students in Canada. 

Many Canadians are under the impression that all Indigenous peoples receive free post-secondary education, a statement that is inherently false, and perpetuates the negative stereotype that Indigenous peoples do not have to work hard for their achievements, or that they receive unlimited handouts from the government.  The origins of the “free education” belief stem from a post-secondary funding program that was established by the federal government in 1977 with the stated purpose to “encourage Registered Canadian Indians and Inuit to acquire university and professional qualifications so that they may become economically self-sufficient […]”

At the onset, the program, initially called the Post Secondary Educational Assistance Program (PSEAP), really did provide a comprehensive student aid package for Registered Status Indian and Inuit students, with funding covering everything from tuition, books, and living expenses, to the cost of traveling home for the holidays (although, non-Status First Nations, and Métis people were not included in these educational provisions).

The number of students funded under this program, the total amount spent on funding, the average cost of tuition, and the average per student funding can be seen in Figure 2.  By all measures, the program was substantial, funding upwards of 21,000 students, at an annual cost of just over $300 million (2016 CAD) by 1989. But then, in 1989, the government imposed a cap on per-year funding, and re-structured the program under the Post Secondary Student Support Program (PSSSP).  Although the number of students covered by funding continued to grow, the estimate of per-student funding plateaued after 1989, making it more difficult for students who did receive funding to cover the full cost of their education.

I examine the effects of both the initial implementation of the program in 1977 and the cutbacks to funding in 1989 on the distribution of educational attainment.  I focus on the choice of education level, categorized as “no school,” “high school,” “trade or apprenticeship,” “college,” and “university.  The analysis uses confidential micro data from the 2006 Census of Population.

I show that the share of First Nations and Inuit people with a college degree increased by approximately 2-3 percentage points after the program was implemented.  In the years following the cutbacks to funding, college completion decreased by up to 4 percentage points among this demographic.

One of more nuanced findings of this study is that, for students living on-reserve, where the costs of graduating high school are often high, and the return to schooling low (George and Kuhn, 1994; Feir, 2013), high school graduation rates declined after the funding was cut back. This result suggests that if post-secondary education is no longer an option for students who face large costs of completing high school, then graduating high school may no longer be worthwhile either.

In 2016, the Supreme Court of Canada unanimously passed a ruling stating that Métis and non-Status Indians are “Indians” within the meaning of the 1867 Constitution (see this article from the Globe and Mail). Until now, this demographic has been excluded from the educational provisions under both the PSEAP and the PSSSP.  It is not yet clear which social benefits and programs will be provided to the Métis and non-Status populations under this new ruling, which should affect almost 700,000 people country-wide.  If the government decides to extend post-secondary assistance to Métis and non-Status people, the results from my research suggest that there could be an increase in educational attainment among those affected by the ruling, and that we may even observe a rise in high school graduation rates among those in very remote communities.

The results of my study can also be seen as cautionary.  If the federal government decides to allocate funding in a way that requires students from different Indigenous groups to compete against one another, or that reduces in some way the per-student funding for First Nations and Inuit people, then the government should be informed of the possibility that post-secondary and high school attainment may decline in response.



 Boudarbat, B., T. Lemieux, and C. Riddell (2010). The evolution of the returns to human capital in Canada, 1980-2005. Canadian Public Policy 36 (1), 63–89.

Feir, D. (2013). Size, structure, and change: Exploring the sources of the Aboriginal earnings gaps in 1995 and 2005. Canadian Public Policy 39 (2), 309–334.

Galloway, G. and S. Fine (2016, April). Métis, non-status Indians win Supreme Court battle over rights. The Globe and Mail.

George, P. and P. Kuhn (1994, 42). The size and structure of the Native-White wage differentials in Canada. The Canadian Journal of Economics 27 (1), 20.

Stonechild, B. (2006). The New Buffalo: The Struggle for Aboriginal Post-Secondary Education in Canada. University of Manitoba Press.