Volume 91, Issue 81
Wednesday, March 4, 1998
Budgeting student concerns
MILLION DOLLAR SMILE. Finance Minister Paul Martin delivers the budget in Ottawa last week.
By Sara Marett
OTTAWAIt seems the grey skies currently hovering over Canada's universities are starting to clear thanks to the federal government's 1998 'education budget.'
The main attention grabber of Finance Minister Paul Martin's budget, tabled Feb. 24 in the House of Commons, was that for the first time since 1969, it was written with black ink instead of red. Martin also promised that for the first time in almost 50 years, the books will remain balanced for three consecutive years.
"Canadians have paid to see the movie 'The Deficit.' They don't want to pay to see the sequel," Martin said.
The men in black have taken out their cheque-books and will spend $18.1 billion on new investments and tax relief over the next four years. Of this amount, $10.9 billion will be used for spending, with $4.7 billion being spent on educational initiatives.
The big ticket item of the budget was the much anticipated Canada Millennium Scholarship Foundation. "Today we are announcing the largest single investment ever made by a federal government to support access to post-secondary education for all Canadians," Martin said.
The fund consists of an initial endowment of $2.5 billion which will provide 100,000 scholarships annually to Canadians from low and middle-income families. Scholarships will consist of $3,000 per year for full-time students who need help in financing their studies and demonstrate merit.
But Bloc Québécois leader Gilles Duceppe said the Millennium Foundation is a invasion of provincial jurisdiction. "Almost everyone in Quebec is against the [Millennium] program. We already have a pretty good system of loans and bursaries the only province who has bursaries for students."
Dodging criticism that the Millennium fund does not help students until the year 2000, Martin insisted his government is taking several measures to help students with their current debt levels. One of which is a tax credit for students on the interest portion of the amount paid on their student loans.
"Businesses are able to deduct the interest cost of buying equipment when investing in their future. We believe that individual Canadians should receive similar treatment when investing in their future," Martin said.
The government will now pay for the interest on an individual's loan if they are unable to make their payments for up to 30 months. An additional two years of interest relief has been added for those having financial difficulty. If, after an extended repayment period of 15 years, a student remains in financial hardship the government will reduce the loan principle so payments can be met.
But Progressive Conservative leader Jean Charest said these new measures are not enough. "You have to first get into debt, then waste the best five years of your life trying to get out of it and then under this new program, [the Liberals] say, if you are completely desperate, we'll help you get out of it."
$2.5 billion Canada Millennium Scholarship Foundation will provide 100,000 scholarships of $3,000 annually to students in financial need who demonstrate merit beginning in the year 2000.
Tax relief for interest on student loans students will be able to claim a tax credit on the interest portion of the amount paid on loan.
Debt relief if an individual is unable to meet loan payments and has exhausted 30 months of interest relief, lenders will be asked to extend the repayment period from 10 to 15 years. If after 15 years, an individual is still experiencing financial hardship, the government will reduce the loan principle.
Canada study grants up to $3,000 per year to 25,000 needy students with dependents, available 1998-99.
Increased funding to Canada's national granting councils a $107 billion increase to the three granting councils.
Tax-free RRSP withdrawals full-time students can withdraw up to $10,000 per year tax-free.
Education tax credit for part-time study beginning in 1998, part-time students will be able to claim an education amount of $60 for each month of course study.
Canada Education Savings Grant starting immediately, the government will provide a grant of 20 per cent on the first $2,000 of annual contributions made to registered education savings plans (RESP).
Youth unemployment for 1998-99, the federal government has committed $380 million for youth unemployment programming.
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