Canada's universities got a cold shower of fiscal thriftiness from its new government's first budget last week.

Spending plans announced by the Conservative Government led by Stephen Harper contrast with the welter of promises made by the Liberals last summer when the Liberals were trying to hold on to power. The Liberals secured the support of the New Democratic Party with a generous social-programme package. Pledges of C$6.5 billion (?3.2 billion) over five years have been supplanted by C$1 billion for a vaguely worded infrastructure trust fund.

Jim Flaherty, the Finance Minister, said: "Overall, this budget delivers more than twice as much tax relief as new spending."

Higher education was not spared the impact of tax cuts. And money earmarked for climate change groups, many of which are partnered with university researchers, was diverted to a tax break for bus-pass holders.

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On the plus side, scholarships will now be exempt from federal income tax, and the Government has introduced a textbook tax credit worth about C$80 a year for a full-time student.

George Soule, chairperson of the Canadian Federation of Students, said:

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"Tinkering around the edges of the tax system is not going to increase access to college and university."

He said C$80 would not make much of a difference to those who were racking up C$25,000 debts after four years in an undergraduate programme. "With the massive surpluses the Government is looking at, they could have made significant strides in setting standards for reducing tuition fees."

Claire Morris, president of the Association of Universities and Colleges of Canada, said there was a need for the Government to pay attention to the international competition for research. "This country made significant gains and has to maintain momentum."

James Turk, executive director of the Canadian Association of 51¹ú²úÊÓƵ Teachers, was worried by a line in the budget that read: "The Government will also undertake a review of the accountability and value for money of the granting councils' activities."

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Dr Turk said the statement could mean that the Conservative Government would go beyond simply setting low-level budgets and to making researchers justify the cost of their work.