Legislative Assembly by many university students in the province that we have a grants commission for Prince Edward Island . The nature and the function of grant commissions are certainly very well known to all members of the academic community in this province and elsewhere since they have them in all other Canadian Provinces. As we already know, Mr. Speaker , we propose to introduce and establish a grants commission in this Province. The function of this commission will be to advise the government on the aggregate needs of the universities of the Province, both capital and operating, and to divide among the universities the amount voted' by the Province. Allocating monies for the financing of higher education is the greatest prob¬ lem facing Departments of Education throughout Canada today. On the one hand the Departments and the government must recognize their responsibility for econo¬ mical expenditure of public funds. And on the other hand, they must accept the principle of a university's autonomy and academic freedom. A guarantee against political interference in the internal affairs of the uni¬ versities is primary function of a body such as a grants commission, and I would like to emphasize, Mr. Speaker , that in my opinion, this Commission will not in any way upsurp the functions of the Boards of Governors of our two institutions. The grants commission will advise the government through a very careful study, through consultation with the universities, with the Boards of Government, Boards of Governors of the institutions, will advise them, as I say, on the fiscal needs of the university. The Boards of Governors will maks representations to the Commission with respect to the needs of the institution concerned, and later allocate the monies as they do now from the government through the grants commission. I do not wish to anticipate the methods which will be used by the grants commission in assessing the fiscal needs of our two universities. However, I would like to take a few moment to comment on the two methods commonly used in assess¬ ing needs of the university. One is deficit financing, a system whereby each university assesses its need and estimates its revenue from all sources other than government, and then they come to the government and the province and they ask that body to pick up the tab for the deficit. Very often the province finds the total of these deficits more than it is prepared to appropriate and makes grants which fall short of the requests. Universities must then cut back, possibly raise tuition fees, raise the cost of board, and indeed incur a very real deficit. Such a system makes it difficult for a univer¬ sity to do any systematic or real planning. As we know, staff appointments must be made very early in the year, in the fall for the following academic year, and under this system of deficit financing it is very difficult to estimate and assess these costs. In most provinces, as I undertand, Mr. Speaker , grants are made to univer¬ sities on a formula basis. That is, grants are made to universities on the basis of the courses that are being offered in the Arts, in the Sciences, and at the various levels within the institution. And such a method makes is much easier for a univer¬ sity to predict exactly what their costs are going to be. So I would expect that the grants commission possibly applying this formula would take into consideration any special needs of universities, if it is a merging institution as we call it, then perhaps they would consider the greater need for an institution under those circum¬ stances. Earlier this month the grants committee in Nova Scotia , as you probably saw in the newspapers, they sounded a pretty stern warning to the fourteen universities coming under their control. They said something like this speaking of the univer¬ sities: they may soon have to take a look at unnecessary and expensive duplication of services. And this same trend was noted in a criticism voiced by the grants commission in Great Britain when it stated, and I quote: "What appears to be a lack of co-ordination among the country's forty-four universities leading to a feeling among those responsible for the dispersement of public funds that there are unnecessary and expensive duplication and reduplication of university services." —314—