TORONTO - The “free” post-secondary tuition program announced in last week’s provincial budget comes at a stiff cost to hundreds of thousands of Ontario college and university students.
About one million post-secondary students are expected to claim $365 million in provincial tuition and education tax credits this year — a popular tax break that is being axed to pay for the free tuition program.
According to the budget, 90% of college students and 70% of university students whose family’s annual income is below $50,000 will get grants covering more than the cost of tuition.
The new grant program, which takes effect in the 2017-18 school year, is not expected to reach as many students as the tax credits.
“We estimate that through the new Ontario Student Grant (OSG), over 150,000 students will receive grants that exceed their tuition each year,” Kelsey Ingram, a spokesman for Finance Minister Charles Sousa, said in an e-mail.
“All the additional revenue from eliminating the tuition and education tax credits will be re-invested to support the new Ontario Student Grant or other post-secondary, education, training and youth job programs.”
The Conference Board of Canada estimated that the cancellation of the tax credits will net the government $145 million in new revenue, but the entire budget of the Ministry of Training, Colleges and Universities is only going up by $94.7 million in 2016.
The Ontario government says this is not a tax grab because all the money will be reinvested in student-related programs.
“While we are continuing to finalize the design of the new OSG, we expect the total cost to be in line with the $1.3 billion we currently invest in student financial assistance,” Belinda Bien, a spokesman for Training, Colleges and Universities Minister Reza Moridi, said in an e-mail.
“This upfront, targeted grant is a smarter way to allocate taxpayer dollars and it will help those who need it the most, increasing access to a low-income segment of the population that is underrepresented,” Bien said. “It’s also important to keep in mind that no Ontario student will receive less than they are currently eligible for through the 30% Off Tuition Grant.”
PC MPP Vic Fedeli complained the government has failed to provide details on the free tuition program, despite its announcement in the budget.
“This was surely a case of ready, fire, aim,” Fedeli said. “We do know that 70% of all students are not going to be eligible for the full grant any further.”
Ontario has the most expensive post-secondary tuition in the country, but government overspending limits what it can do to help students, Fedeli said.
Premier Kathleen Wynne visited a Toronto high school Tuesday to talk about the free tuition plan in her budget, and to defend the decision to eliminate the well-used tax credits.
“As a premier whose top priority is to ensure everyone can have good jobs, it’s my job to fix these problems,” Wynne said. “It’s my job to erase any worries people have that a college or university education is out of reach.”
More than half of students whose families have annual incomes of $83,000 or less will receive grants that equal tuition.
Under the program it’s replacing, a student could receive 30% off tuition if parental income was under $160,000.
The tuition and education tax credits being cancelled mean up to hundreds of dollars a month to students or their parents who claimed them, many middle-class and higher-income earners.