Free tuition for low-income students squeezes middle class, critics say - Action News
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New Brunswick

Free tuition for low-income students squeezes middle class, critics say

The New Brunswick government says it's cancelling tax credits to help pay for its new free tuition policy for low-income students, and some critics say that will squeeze the middle class.

Government is axing tuition tax credits to help pay for the new free tuition policy for under $60K households

The New Brunswick government says it's cancelling tax credits to help pay for its new free tuition policy for low-income students, and some critics say that will squeeze the middle class.

Lindsay Handren, executive director of the New Brunswick Student Alliance, says free tuition up front is better than tuition tax credits later. (CBC)
After cancelling the tuition rebate program, which could reach a maximum of $20,000 for graduates who went on to work in the province, the province is now moving to scrap education and tuition amounts on the income tax return.

The credits could be shared with parents who could save hundreds of dollars on income taxes owed.

The New Brunswick Student Alliance says it supports the Gallant government's tradeoff for the new policy, which takes effect next year.

"They're paying for it mostly by taking away tax credits and also some reinvestment from the rebate program that was cut last year," said NBSA'sexecutive director Lindsay Handren.

"Obviously, there are winners and losers here for sure. But ultimately, tax credits are not as helpful to students as up front aid is. So we are happy they are going with the upfront aid."

Interim Progressive Conservative Leader Bruce Fitch says the free tuition policy for low-income families will make it more difficult for other families to afford to send their children to university. (CBC)
Opposition critic Bruce Fitch says the changes will put a squeeze on families who find themselves just over the income threshold set by the province for its tuition access bursary.

"So if you're a single parent, maybe you're a teacher making $65,000 or $67,000,you're totally out of the picture," he said.

"And I would argue, with the loss of these tax credits, it's making it harder for the families making $60,000,or $65,000, or $70,000, or even more, tosend their students to school."

In 2013,28,700 students claimed tuition, education and textbook amounts on their income tax return, according to Canada Revenue Agency statistics.

That same year,13,480 people claimed their child's tuition, education, and textbook amounts, the figures show.

Following federal, Ontariolead

The province says it's following the direction of the federal and Ontario governments.

Ottawa is eliminating the education and textbook tax credits in 2016, althoughcredits carried forward from years before 2017 will still be claimable in 2017 and subsequent years.

The federal tuition tax credit will remain unchanged.

The New Brunswick government says all accumulated tax credits that have not yet been used will be honoured.

The Higher Education Quality Council of Ontario, an agency of the province, says the concepts of tax credits and income tax refunds don't carry the same punch as free tuition.

"Students don't see the tax credit that is years down the road," saidMartin Hicks

"So to take that money and move it up frontand say,'We're going to talk to you about how you don't have to pay money in the first place,' that's way better."

"Post-secondary education is really the best leg up for anyone. You get better jobs. You earn more. You're healthier. You cost the government less over your lifetime," said Hicks.

Without financial assistance, low-income students would be more likelyto opt out, which just perpetuates the cycle, he said.

Ontario's free tuition policy begins in 2017.