Volume 90, Issue 82

Wednesday, February 19, 1997

intuitive


NEWS
 

Budget bonanza

By Karena Walter
Gazette Staff

Paul Skippen is excited that yesterday's announcement of the 1997 federal budget states students can save income tax credits for after graduation, despite the fact he cannot take advantage of the plan.

The former University of Waterloo economics/English student came up with the idea.

All unused portions of tuition and education credits can be carried forward and applied against any future income, Finance Minister Paul Martin unveiled in Ottawa.

In May 1996, Skippen and another student, Chris Lowe, brought the proposal to the Waterloo Federation of Students.

"We wanted to come up with a viable solution to make tuition more affordable to students," Skippen said.

The federation liked the idea and took it to the Canadian Alliance of Student Associations, of which Western is a member, and the organization adopted the policy and lobbied the government.

"All along people thought it was a good workable idea," said Kelly Foley, provincial director of CASA. She added the process was a model grass-roots level lobbying effort.

The income tax credit change was one of many announcements regarding students and post-secondary education.

The deferral period for repayment of Canada Student Loans will be extended from the current 18 months to 30 and the government will pay the interest over this period, equaling an additional $20 million a year in assistance to students.

However, there will be no interest relief or subsidies during the interest period which will push up the costs of loans for students, said Matthew Hough, national director of CASA.

Tax credits will increase from $100 to $150 a month immediately and to $200 per month in 1998. As well, credits will now cover mandatory fees set by post-secondary institutions.

The inclusion of university ancillary fees in tax credits was also announced, another idea the federal lobby group pushed. "For CASA as an organization this is a real signal that we're doing the right thing," Hough said.

Another announcement was the creation of the Canada Foundation for Innovation which will provide $800 million to renew research infrastructure at post-secondary institutions. Western's president Paul Davenport said the research funds were badly needed and long overdue.

"Overall this is the best federal budget for universities that I have seen in my eight years as a university president," he said.

Research funds could be used for a wide variety of infrastructure such as labs and scientific equipment, Davenport said. However, there is no guarantee Western will see the money. The distribution of funds for research will be decided by a peer review committee. "We want to make sure we have competitive proposals," he explained.

The budget also stated the federal government will pursue with provinces the option of an income contingent loan repayment plan. Western's University Students' Council president Dave Tompkins said the fact students will be able to choose between the existing loan system and an ICLRP system is good news.

The yearly contribution limit to the registered education savings plans will increase from $2,000 to $4,000 and parents will no longer lose their investment in RESPs if their children do not go on to a post-secondary institution. They can transfer the income into a registered retirement savings plan.

There will be no new tax increases and no new spending cuts, the minister announced.

For a Liberal government vying for re-election this year, the government's budget was not a traditional display of handing out goodies. "This is a new style pre-election budget," said Sid Noel, a Western political science professor.

Noel said the Ministry of Finance gets more credit these days for trying to reduce the deficit. "They can't play Santa Claus with the public's money. It would backfire nowadays."


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Copyright The Gazette 1997