In their election platform unveiled over the weekend, the Liberal Party of Canada is proposing that if elected they will implement a new program called the Canadian Learning Passport. Under the program, the Liberals will pay $1,000 annually over 4 years for every high school student who attends college, university or CEGEP. Kids from low-income families will receive $1,500 per year. The Learning Passport benefit will be directly deposited into a child’s RESP and the amount will be reduced for part-time students.

The Liberal Platform also mentions in passing that the Learning Passport “will simplify the existing scheme of tax credits by ending and rolling in the modest Textbook and Education tax credits” [Emphasis mine]. For the 2010 tax year, the education amount is worth $400 and the textbook amount worth $65 for every month that a full-time student attends University. For a full-time student attending University throughout the year, these tax credits could be worth as much as $837 per year, which is anything but “modest”. Talk about giving with one hand and taking away with the other!

As reader Phil pointed out the other day, it would be far simpler to directly reducing tuition for all students. But then I suppose the Liberals are banking on the fact that people like receiving $1,000 (or rather a net benefit of $1,000 less the value of existing tax credits) directly more than some abstract promise of tuition fee reductions. And they are also likely hoping that Canadians aren’t paying close attention to the fine print.

This article has 13 comments

  1. People never pay attention to the fine print when it comes to election promises. The leader makes the announcement, gets the headlines, and then doesn’t bother to change anything anyway.

    Can you tell I’m a little cynical about politics?

  2. CC, I hope we are missing something in the translation, because this is absolutely ridiculous. Firstly, just to clarify, for a student to lose $837, that would require 12 months full time attendance which is atypical. Most students are 8 months full attendance and thus $558 would be the typical cost of losing the credits, still severe. However, in Ontario and I think the other provinces, there is a provincial component to the credit. For arguments sake, let’s say Ontario goes along with the Feds and cancels the full-time and textbook credit; a 12 month student would actually be out of pocket $128 dollars. Anyways, I am just playing with numbers; the key is if the Liberals are truly concerned with the cost of education, why would they even consider reducing the typical student’s credit by at minimum $558? They cannot even argue the credit is not required in most cases due to a student’s low income, since the credit carries forward if not used by the parent or the student, to be used when the student obtains full time employment. A truly contradictory amendment decision if the policy is as it appears.

  3. I wonder how this policy would affect me. I’m putting 3 people through school right now and all are 18+ meaning that their RESP days are over. Will I just lose the textbook and education credits times 3?

  4. @Michael James:

    The Liberals had stated on their web page that they are working out what they will be doing for existing students during the transition period and the time when full payouts will be funded by the plan (since it’s $1000 a year for high school students now, it will be 4 years before it’s fully funded… sound familiar?. I’ve been told on another web page (A Liberal shill page essentially) that they had also announced in a conference later that the funds would be available to existing students, but I don’t quite get how that will be funded.

    • @Financial Uproar: I share your cynicism when it comes to politics. All of these guys are tripping over each other trying to bribe us with out own money. And they are being (IMO) sneaky about it. I’ll give you $1,000 but take away $500. They are hoping voters won’t notice the fine print.

      @The BBC: I agree that 8 month full-time for undergraduate is more realistic. Like you say, we are still talking $558 worth of tax credits that can be transferred or carried forward. Details are lacking but you can read whatever is available in the platform here:

      Here’s the exact fine print:

      “The Learning Passport will simplify the existing scheme of tax credits by ending and rolling in the modest Textbook and Education tax credits (except for graduate students). The Tuition Tax Credit will remain in place, as would the Canada Student Loans Program and the associated Canada Student Grant Program.”

      @Michael James: As Traciatim points out, details are sketchy at this point. The platform document makes no mention on how the Passport amounts will be paid to existing students.

  5. Thanks for the mention CC! Too bad I don’t have my own blogspot to advertise. But it wouldn’t draw much traffic because it would mainly be filled with my libertarian diatribe during election season… 🙂

  6. Education falls within provincial responsibility. The feds have no power to control tuition directly. As much as all these tax credits and deductions hurt my head, it is the only way to have an education friendly election platform without encroaching on provincial jurisdiction.

    The entire fine print on all election promises is that federal parties are promising to do things which are either exclusively provincial jurisdiction (mainly health care and education) or shared jurisdiction and, as such, are subject to negotiations (such is the state of affairs in a weak federal system). Any promises to do with health care, education, training (since the Feds have given some of those powers to certain provinces- read Quebec) cannot be concrete. It is not an excuse for these crazy promises but it is an unspoken truth.

    …Which leads back to Phil S’s point- the only thing the Feds truly control which the average taxpayer cares about is the federal taxes. Why not just cut that? Then the promise is not conditional on negotiations with the provinces. But I guess that would require someone doing what they say they will do… can’t have that in politics can we? It will make everyone else look bad!

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  9. Interesting points. It is not a perfect system. But personally, I think the $1000 up front would have been way more useful to me than than the tax credit was. It was my parents who benefited from the tax credit, not me – despite the fact that I was paying my way through a student loan.
    Tax credits only help those who are able to pay up front, and who are making an income and filing taxes – not true for all students.

    • @Natalie: Students do have the option of carrying forward unused tuition, education and text book amounts to a future year. They are not obliged to transfer the credits to a parent.

  10. It would be much better to just make higher education free for all. I don’t understand why it costs us $40,000 to get a degree

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