By: Pranjali J Mann, News Writer
Low-income workers and students were offered some financial relief in a budgetary announcement from Parliament Hill, Ottawa on November 3. Federal finance minister Chrystia Freeland has proposed waiving federal student loan interest permanently.
In an attempt to provide “a real, robust industrial policy” for Canadian economic growth, Freeland’s budget aimed to increase federal funding for student loans. According to CBC News, all “federal student and apprenticeship loans will be interest-free permanently.” It is estimated this will provide $410 of student relief every year. The policy will take effect on April 1, 2023.
This step is a continuation of COVID-19 relief for students on federal loans. According to Narcity, extension of the federal interest freeze until 2023 would aid “about 1.5 million Canadians who have debt to repay.” For students in BC, the provincial portion of their loans were interest free since 2019. At the time, it was estimated 200,000 people were benefiting from the announcement. This included students enrolled in full-time graduate and undergraduate degree programs.
The Liberal party of Canada’s website said, “As we look towards the future, we believe that no one should be deterred from pursuing an education because interest costs make it unaffordable.”
Now, with students being permanently interest-free from federal loans, they are set to receive greater benefits. As before, loan repayments are not required until 6 months after completion of the university programs.
Under the Government of Canada’s “Youth Employment and Skills Strategy” program (YESS), an estimated $800 million will be invested to increase job placements — with at least “70,000 annual summer job placements” in the next three years. This investment is in addition to the 2022 annual budget commitments to ensure the government’s effort towards post-secondary education affordability. YESS is aiming to provide necessary information, work experience, and skills for youth facing barriers in “transition into the workforce.”
It was also highlighted that despite possible signs of recession in the coming year, unemployment rates are predicted to remain lower to the 2008–2009 crisis standard. One of the reasons cited for this was the current state of “tight labor market.” This indicates some sectors have staff shortages whereas others have a surplus of workers. This creates what CBC News calls a “seller’s market.” In an interview to CBC News, a government official also indicated lower unemployment and higher commodity prices are generally “good for the Canadian economy.”
For low-income Canadian workers, Freeland announced possible changes in current Canadian Worker Benefit (CWB). “CWB is a refundable tax credit for individuals and families who are working and earning a low income.” This announcement offered a “refundable tax credit” top-up for about three million workers. This is found to support up to “$714 for single workers and $1,231 for a family,” as per the press release.
To learn more about the government’s housing, healthcare and clean electricity transition low-income family workers policies, visit the Government of Canada website.
