Algoma-Manitoulin-Kapuskasing MP, Carol Hughes writes a regular column about initiatives and issues impacting our community.
The inflationary problems that have plagued Canadians throughout the past year are slowly starting to ease.
February’s year-over-year inflation rate cooled to 5.2 per cent, still above target for a healthy economy and higher than the Bank of Canada’s target inflation rate of two per cent, but modestly better than where we’ve been throughout the past year.
One cohort of Canadians who are feeling the belt-tightening a bit more significantly than most is current and prospective students, the people who will serve as the backbone of our economy of the future. With tuition costs more than doubling since 1990, and essentials such as food and housing taking a bigger chunk out of student budgets, it’s getting more and more difficult for young people to be able to enter the workforce with the skills they need without a mountain of debt.
Budget 2023 invests $800 million to expand loans and grants for the 2023-24 school year, increasing the maximum grants available to $4,200, up from $3,000, for low-income students.
This represents a 40 per cent increase to student grants for those students who qualify…in normal years. Those students who have been accessing grants and post-secondary financial assistance recently may recognize that this is actually lower than the government’s previous grant program increase, which doubled Canada Student Grants in the early days of the pandemic, from $3,000 to $6,000, as a temporary measure.
That measure is unfortunately about to end, following the completion of the 2022-23 school year. So while the government likes to tout the increase to the program, it functionally will feel like a decrease for students enrolled right now.
Additionally, those new grant maximums aren’t permanent. They exist only for the 2023-24 educational year, and unless a real commitment to enshrine an increase to the grant program is made, the 2024-25 year will see student grants reduced significantly.
A longer-term, sustainable approach must be made to ensure students can fund a post-secondary education without driving them into debt they carry for years, sometimes decades, to come.
Grants are a significant form of student funding.
Over half a million students access student grants, but we need to take into account how much of an effect that has. According to Statistics Canada, students enrolled in Canadian undergraduate programs spent an average of $6,834 on tuition fees for the 2022/2023 academic year.
So even with current grant programs, students who are eligible for the maximum amount can’t cover the full cost of a year’s tuition, let alone rent, food, books, and other necessities. Obviously, many students do work and save for their education, and many parents are able to save for their kids’ education through RESPs, but student debt continues to be a major barrier for young people finalizing their education and entering the job market.
The average Canada Student Loan debt climbed to $28,000 per debtor in 2019, according to the Canadian Federation of Students. In Ontario, one in five insolvencies was caused by unmanageable student debt. With the latest budget, a permanent freeze on Canada Student Loan debt has been put in place, which will alleviate a significant portion of their financial burden as they move into the job market. This is good news, both for graduating students, and the economy.
Student loan debt forgiveness is also an issue worth considering if we are to help build the economy and the workforce of tomorrow.
The Biden administration in the U.S. has proposed a student loan debt forgiveness program, and while the program there is under review, there’s no reason we can’t look to emulate some form of student loan forgiveness here. But what may be more pressing is to get the federal government to work with provinces and territories to cap and reduce tuition fees.
Post-secondary education is a gateway to a better future. Ensuring young people have the ability to train to become the doctors, millwrights, educators, and STEM professionals of the future, without crippling them financially as they enter the workforce, must be a priority if we are to build a thriving economy.