While finance ministers from Canada's ten provinces met last month with the federal government to discuss how to divide up ever-diminishing federal funds, universities and other post-secondary institutions were feeling left out of the dialogue.

The two days of meetings mainly focused on transfer payments, the money given to the provinces to help cover social programmes, such as education, that fall under provincial jurisdiction.

Ever since Paul Martin, the federal finance minister, announced that he would be lumping together health, welfare and education in one block payment and that there would be Can$7 billion (Pounds 3.5 billion) less in that block in the next two years (meaning a reduction by one-third), many have seen the writing on the wall for federal support of post-secondary education.

In fact, even the new name of the amalgamation, the Canada Health and Social Transfer, leaving out the word education, has had many universities wondering where the federal government stands.

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The governing federal Liberals have said that the block funding will allow the provinces greater flexibility in the financing and management of universities and colleges. They have also said they are committed to post-secondary education but within a changing "fiscal reality".

But with dwindling transferpayments, recent announcements like Ontario's 15 per cent cut for direct university funding from the province next spring may be the beginning of a further bloodletting.

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Quebec has been the only province to ask for a complete takeover of post-secondary funding with a widened scope of its taxing power to accompany it. The federal government refused the request.

Currently the Canadian government, aside from contributing Can$2.2 billion to ÖйúAƬ in the form of transfer payments, also runs three national research agencies to the tune of Can$800 million. In fact the transfer payments make up just over half of their contribution to ÖйúAƬ.

The federally run National Science and Engineering, the Medical Research and the Social Science and Humanities Research Councils have always received direct payments to researchers for hiring students and funding equipment.

The government has claimed that the indirect costs of these projects were made up through the money they transfer to the provinces.

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