Liberal Leader Michael Ignatieff dropped his first big-ticket promise of the campaign on Tuesday - $1,000 a year of tax-free cash for every Canadian high school student who goes on to university, college or CEGEP ($1,500 for low-income students).
The so-called Canadian Learning Passport (cost: $1-billion a year) starts with a lofty premise. The global economy is creating haves and have-nots, and the clear winners are those with the knowledge and skills that come from higher education. To stay competitive, Ottawa needs to ensure more young Canadians can afford to get there.
The Liberals are strategically targeting middle-class families, where angst is growing about soaring tuition costs and crushing student debt. Undergraduate university tuition reached an average of $5,138 last year, low by U.S. standards, but still a lot more than many families can bear. And tuition fees are rising at twice the rate of inflation. Costs are even higher in the most specialized fields, leaving medical students, for example, with average debts of $100,000 when they're done.
The plan seems not quite ready for prime time, as the Liberals rush to gain a campaign edge. It offers $1,000 for attendance at all types of postsecondary institutions. But some schools, such as Quebec's CEGEPs charge less than that, meaning some students could turn a profit by going to school. Liberal Party officials later clarified that such payouts would be limited to actual fees paid and would stretch over five years instead of four. This would add complexity to a program designed to be clean and simple.
Nothing comes for free, and Mr. Ignatieff says he'd pay for the plan partly by reinstating the 18-per-cent corporate tax rate and by scrapping existing education and textbook tax credits. The Conservatives counter that the loss of the education tax breaks could deprive Canadians of nearly $700-million a year worth of tax relief, sharply reducing the net benefit. Liberals say they would merely change the "delivery method," giving Canadians money up front when it's most needed.
A BETTER WAY?
The Liberals purposely bypassed existing programs with their billion-dollar promise. So why not have a policy to beef up student grant and loan programs, or boost transfers to the provinces for education? Party sources said they want something that would deliver cash "direct to families" (translation: win votes among key constituents).
The passport offers simplicity. Open a Registered Education Savings Plan and you get the money - $1,000 a year for four years. But education experts say this might not be the best way to steer limited resources to the most needy. The best way is to put extra cash into means-tested grants and loans, according to both the Canadian Federation of Students and the Association of Universities and Colleges of Canada. Both groups said they're thrilled the parties are all talking about higher education, but argue the "passport" scheme needs some work.
AUCC president Paul Davidson said the $1-billion would do nothing to improve the quality of schools or open more spots for students. And CFS president David Molenhuis said the new money would be "eroded" by soaring tuition.
THE BOTTOM LINE:
To succeed, the Liberals will have to turn their promise into workable public policy, particularly in the event of another minority government. Don't bank on this one just yet.
UNIVERSITY TUITION AROUND THE WORLD
Private/Public (all figures are U.S. dollars)
United States: $21,979/$5,943
South Korea: $8,519/$4,717
Britain: no private/$4,678
Canada: no private/$3,693
New Zealand: no private/$2,734
France: no private/$1,206
Czech Republic: no private/free
Sweden: no private/free
Denmark: no private/free
Finland: no private/free
Ireland: no private/free
(Source: OECD report Education at a Glance 2010, based on 2006-07 tuition fees. Excludes room and board)