(Ottawa) The Trudeau government is ready to pay annual financial compensation to Quebec if the Legault government follows suit and permanently eliminates interest on student loans.
Negotiations are already underway between Ottawa and Quebec, which manages its own loans and bursaries program, in order to conclude an agreement to this effect, according to information obtained by The Press. The Quebec Student Union urges the Legault government to sign an agreement quickly to allow students from Quebec universities to enjoy the same benefits as those in the rest of the country.
In the economic statement she presented to the House of Commons last month, Finance Minister Chrystia Freeland announced that Ottawa will permanently eliminate interest on federal student and apprentice loans starting on 1er April 2023. This measure will cost the federal tax authorities approximately $550 million annually, and it will allow a student to save an average of $410 per year.
The Trudeau government had already announced the suspension of interest on these loans for two years in 2021. This measure was therefore to end on March 31, 2023. But Minister Freeland chose to make it permanent in order to give students a boost in part of a package of measures to help those less fortunate cope with the rising cost of living.
Federal officials are already in contact with Quebec officials. Federal funding will be available so that Quebec students can benefit from this essential measure. And we hope that the government of Quebec will follow our example to help students, as it has done during the pandemic.
Jessica Eritou, communications advisor in the office of Mr.me Freeland, in an email to The Press.
She added that the Ministry of Finance has already included in the amount of $550 million a sum to compensate Quebec.
She explained that during the pandemic, Ottawa had suspended repayment of Canada student loans for six months and that it had transferred funds to Quebec to convince it to do the same, which had been the case.
“The same model would be applied here. Funding to facilitate this in Quebec […], if Quebec decides to eliminate interest on its own student loans, was provided for in the fall economic statement. The federal government will provide the funding if Quebec agrees to eliminate interest on its student loans,” she said.
Upcoming economic update
In Quebec, the office of Finance Minister Eric Girard has indicated that they are considering following in the footsteps of the Trudeau government.
“Education is a jurisdiction of Quebec. We are studying the possibility of harmonizing our loan and bursary program with that of the federal government,” said Claudia Loupret, Minister Girard’s press secretary, in an email.
Mr. Girard must present an economic update on December 8 which should contain the measures of the “anti-inflation shield” proposed by François Legault during the electoral campaign. The elimination of student loan interest was not on the list. But Ottawa’s decision to grant financial relief to students with loans may force the Quebec government’s hand.
One thing is certain, the Quebec Student Union (UEQ) wants the Legault government to announce its colors as soon as possible.
The president of the UEQ, Samy-Jane Tremblay, affirmed that the students have a low income and must also deal with an increase in the cost of living.
“What we want is for the federal government to transfer the money to Quebec. But since this money goes into the pockets of students in the rest of the country, we do not want it to be used for other purposes in Quebec. We want Quebec students to also see the color of this money and that it goes directly into the student financial assistance program,” said Samy-Jane Tremblay.
“Currently, we find ourselves in a situation where the student population is facing a fairly severe housing crisis. And in the context of the inflation that we are experiencing – it is 5% to 8% per month – it is absolutely necessary to support the student population,” she added.