Budget 2016 addresses student loans and young employment
By Mercedes Deutscher, News Editor
The Liberal government released their 2016 budget, titled “Growing the Middle Class,” on March 22, compiled by Finance Minister Bill Morneau.
The budget racked up a deficit of $29.4 billion, and is not expected to reach a surplus prior to the next federal election.
The budget took Canada’s first major step towards providing universal post-secondary education to students. Under the Trudeau government, those who have graduated post-secondary who do not earn more than $25,000 annually will not be required to pay off their student loans. This will come into effect at the beginning of the 2016–17 school year.
The government will also be introducing flat-rate student contribution. This is particularly beneficial to students who work in addition to attending post-secondary, who often receive limited assistance due to their income.
In addition to freezing interest rates on student loans, low-income students will also benefit from an increased number of grants, with students now being eligible for up to $3,000 annually. Middle-income students will also qualify for up to $1,200 annually. Part-time students may also qualify for $1,200–1,800 in grants.
“Now more than ever, it is important that post-secondary education remains affordable and accessible, and that young Canadians have access to meaningful work at the beginning of their careers,” read the budget.
However, in order to fund the post-secondary proposals brought forth in the budget, the government will be removing Education Tax Credit and the Textbook Tax Credit at the start of 2017—although the tax credits prior to 2017 may still be claimed in the future.
The decision to eliminate the tax credits is disappointing to some, especially those who pay higher tuition fees.
“Tax credits are related to the actual tuition that you pay, but the grant is based on an average of undergraduate fees,” Marcus McCann, a recently practicing lawyer who fought against high tuition fees during his time in law school, said to the Globe and Mail. “There’s time for policy makers to have a think on what this means for professional students, including law and medicine.”
In a similar sentiment, Viviane Bartlett, the interim executive director of CASA, expressed concern for the removal of the tax credit.
“It’s great that it’s being reinvested in grants, but grad students don’t get federal grants,” Bartlett told the Globe and Mail.
Students and youth, who are twice as likely to be unemployed compared to older populations, will have more opportunity to employment under the new budget. The amount of government funding for the Youth Employment Strategy will increase from $330 million to $495.4 million within the next year.
Special initiatives will open up for youth to enter the environmental and heritage sectors. Technology, science, and engineering companies will also receive more incentives to open up co-operative positions, receiving $14 million annually to support these positions.
As well, additional opportunities will be opened to disabled and indigenous youth.
These job opportunities do not include the already-existing Canada Summer Jobs Program, which will maintain an annual budget of $339 million.
Altogether, these initiatives and opportunities will open up an expected 40,000 jobs.