While the Ontario government’s announcement of free post-secondary tuition for students from low-income families may sound like a scheme that will cost a lot of money, local MPP Liz Sandals says the plan is not initially expected to cost much more.
“This is redesigning programs that are already there,” Sandals said in a post-budget interview on Friday.
The free tuition announcement was the centrepiece of the Ontario budget, released Thursday. Starting in the 2017-18 school year, students from families with incomes of $50,000 or less will be able to get free college or university tuition under the Ontario Student Grant. There will also be non-repayable grants available to students from families with incomes of $83,000 or less.
But the grant isn’t being offered in addition to existing education grants programs. Rather, it is being offered by redirecting funding from the Ontario Tuition Grant, the Ontario Student Opportunity Grant, Ontario Access Grants and other grants offered through the Ontario Student Assistance Program (OSAP).
“We took the existing ways of spending money and totally blew it up,” said Sandals.
In addition to replacing existing grants programs, the government is also taking away the tuition tax credit, all in an effort to streamline the process and make it easier for students to understand what they can afford, said Sandals.
Under the old OSAP system, students might have been getting some of their tuition covered, but they wouldn’t have known that when they started their post-secondary studies, Sandals said.
“It isn’t until you’re about to graduate that you actually find out how much is a grant and how much you have to pay back as a loan,” she said.
The new grant program is meant to take the guesswork away.
“There will still be a grant program and a loan program, but you’ll know up front which is which,” Sandals said.
She applied a similar justification to the cancellation of the tuition tax credit.
“By the time you get the tax money back, you’re a long, long way from the actual event,” she said. “It really doesn’t help you.”
The changes were made partly in response to feedback from student unions that argued the cost of tuition was a deterrent for low-income students, scaring them away from post-secondary education, Sandals said.
The Ontario Undergraduate Student Alliance, which represents several university student associations, not including the University of Guelph, released a statement Thursday applauding the changes to student support programs.
“For years, OUSA has led the push for tax credit funds to be repurposed into effective, up-front aid, and now that’s exactly what we’ll be seeing,” alliance president Spencer Nestico-Semianiw said in the statement.
The changes were made with a view toward further increasing participation rates for low-income students in post-secondary education, said Sandals.
Initially, there may be some “transitional costs,” but otherwise the bill for the government will be about the same, she said.
“If it’s successful and we attract more low-income students, it will end up costing us more,” she said.
Outside of the changes to the student assistance program, Sandals said one budget announcement that would likely be of interest to Guelph residents is the government’s cap-and-trade plan.
“Guelph has historically been very interested in environmental issues,” Sandals said.
The cap-and-trade plan will see the government put a cap on greenhouse gas emissions and then create limited tradable emissions allowances. Companies that reduce their emissions would be able to sell their excess allowances to companies that need additional allowances.
It’s a scheme that has been criticized by the Ontario Progressive Conservative Party, which has said cap-and-trade equates to putting a new tax on gasoline and home heating.
“By raising taxes on gasoline and natural gas, already cash-strapped Ontarians will be forced to pay more,” said a news release from Wellington-Halton Hills MPP Ted Arnott.
“Technically, this is not a tax,” said Sandals.
But she conceded that costs will go up, because gasoline and natural gas are greenhouse gas producers. Companies that deal with these products at the wholesale level will have to buy credits under the cap-and-trade scheme, and in turn, the price of the product will go up, Sandals said.
But the government is expecting the scheme could generate as much as $1.9 billion in revenue that will go back into a green investment fund.
Money from that fund will be used to support the further reduction of greenhouse gases.
That could include things like subsidies for people buying electric cars, more plug-in stations to charge electric cars, funding for home-energy audit and home retrofits, Sandals said.
In a news release from the Green Party of Ontario, party leader Mike Schreiner and finance critic Kevin Labonte said the cap-and-trade plan is “an example of a good idea that needs improving.”
“Revenue from carbon pricing needs to go back to citizens to make energy efficiency affordable,” Labonte said in the release.
“That’s why the GPO has always advocated a carbon fee-and-dividend policy – not cap-and-trade – as the fairest, most effective way to address the climate crisis,” Schreiner said.
Sandals said the government’s plan is designed such that the things that create greenhouse gases will get more expensive.
“We’re taking climate change seriously,” she said, but added, “We’ve got a lot more heavy lifting to do.”
The Conservatives also criticized the budget for making life more expensive for seniors.
Arnott noted that seniors will have to pay “substantially more” for prescriptions thanks to an increase in the deductible for the Ontario Drug Benefit program from $100 to $170.
Sandals argued that the deductible had not changed for 20 years, so it was time for an update.
At the same time, the government changed the threshold at which the deductible is payable, so that about 170,000 more low-income seniors “will not pay any deductible at all,” said Sandals.
She added that Ontario seniors still pay the lowest deductible in Canada.
When it comes to health care, Sandals highlighted an increase in base funding for hospitals, an increase in funding for home care, funding to create more hospices and an increase to the cancer care services budget.
“The hospitals will be better off and the patients and the families will be better off,” Sandals said.
Some of the funding for these increases comes out of revenue growth, some comes from fee increases and some comes from programs that were cut.
The child activity tax credit and the healthy home tax credit got the axe, Sandals said.
Among the fee increases, the fee for drivers licences is going up, “but it’s still the cheapest in Canada,” Sandals said.
Smokers will also be paying more for their cigarettes, and drinkers will be paying a bit more for a bottle of wine.
“It creates more revenue on things that are optional,” explained Sandals.
Overall, Sandals said the government is on track with this budget.
“We are on target to balance the budget next year,” said Sandals, noting it was not something the government said it could do all of a sudden.
“We said this was the plan and we stuck to the plan,” she said.