Vol. 146, No. 9 — April 25, 2012

Registration

SOR/2012-79 April 10, 2012

CANADA STUDENT FINANCIAL ASSISTANCE ACT

Regulations Amending the Canada Student Financial Assistance Regulations

P.C. 2012-391 April 5, 2012

His Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources and Skills Development, pursuant to section 15 (see footnote a) of the Canada Student Financial Assistance Act (see footnote b), hereby makes the annexed Regulations Amending the Canada Student Financial Assistance Regulations.

REGULATIONS AMENDING THE CANADA STUDENT
FINANCIAL ASSISTANCE REGULATIONS

AMENDMENTS

1. Schedule 3 to the Canada Student Financial Assistance Regulations is replaced by the Schedule 3 set out in the schedule to these Regulations. (see footnote 1)

COMING INTO FORCE

2. These Regulations come into force on August 1, 2012.

SCHEDULE
(Section 1)

SCHEDULE 3
(Paragraphs 14.3(b), 38(1)(d), 38.1(1)(e),
38.2(1)(f), 40.02(1)(d) and 40.021(1)(d))

INCOME THRESHOLDS

TABLE 1

LOW-INCOME THRESHOLDS, 2011 ($)

Province

ON

NS

NB

MB

BC

Family Size

1 person

23 293

20 061

20 061

23 293

23 293

2 persons

28 999

24 973

24 973

28 999

28 999

3 persons

35 651

30 701

30 701

35 651

35 651

4 persons

43 285

37 277

37 277

43 285

43 285

5 persons

49 094

42 277

42 277

49 094

49 094

6 persons

55 368

47 683

47 683

55 368

55 368

7 or more

61 644

53 087

53 087

61 644

61 644


Province

PE

SK

AB

NL

YT

Family Size

1 person

19 937

20 061

23 293

20 061

23 293

2 persons

24 819

24 973

28 999

24 973

28 999

3 persons

30 512

30 701

35 651

30 701

35 651

4 persons

37 047

37 277

43 285

37 277

43 285

5 persons

42 017

42 277

49 094

42 277

49 094

6 persons

47 390

47 683

55 368

47 683

55 368

7 or more

52 761

53 087

61 644

53 087

61 644

 

 

TABLE 2

MIDDLE-INCOME THRESHOLDS, 2011 ($)

Province

ON

NS

NB

MB

BC

Family Size

1 person

42 124

36 893

32 434

35 994

40 426

2 persons

58 974

51 650

45 409

50 391

56 598

3 persons

73 215

64 269

56 349

63 110

73 528

4 persons

83 319

73 217

64 114

72 133

85 535

5 persons

91 163

80 162

70 136

79 137

94 847

6 persons

97 561

85 837

75 054

84 860

102 459

7 or more

102 980

90 634

79 216

89 696

108 896


Province

PE

SK

AB

NL

YT

Family Size

1 person

33 637

35 609

44 969

32 334

43 769

2 persons

47 092

49 852

62 957

45 269

61 277

3 persons

59 868

62 440

75 460

56 558

72 020

4 persons

68 936

71 365

84 324

65 369

79 644

5 persons

75 965

78 289

91 209

72 200

85 557

6 persons

81 711

83 952

96 828

77 785

90 396

7 or more

86 566

88 734

101 581

82 504

94 478

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Background

In its 2008 Budget Plan, the Government of Canada announced new investments into student financial assistance in Canada, including the creation of the Canada Student Grants Program (CSGP). Implemented in 2009, the CSGP was designed to increase access to post-secondary education by providing more effective grant funding to eligible Canadians. The CSGP currently includes grants for low- and middle-income students, part-time students, students with disabilities, and students with dependants. This regulatory amendment relates only to grants disbursed to students from low- and middle-income families.

The creation of the CSGP enhanced assistance to low- and middle-income Canadians with the introduction of the Canada Student Grant for Students from Low-Income Families (CSG-LI) and the Canada Student Grant for Students from Middle-Income Families (CSG-MI), which offer $250 and $100, respectively, in predictable, non-repayable financial assistance per month of study to qualifying students. These grants reduce student debt by replacing loan amounts (for all but those who have financial need that qualify them for the maximum loan in addition to the grant). Students from low- and middle-income families qualify for the CSG-LI and CSG-MI based on a set of defined income levels set out in the Low-Income Thresholds and the Middle-Income Thresholds, included as Tables 1 and 2, respectively, under Schedule 3 of the Canada Student Financial Assistance Regulations (CSFAR). These thresholds vary by province and territory and according to family size.

Introduced at the same time as the Canada Student Grant (CSG), the Low-Income Thresholds were derived using estimates from Statistics Canada’s Low-Income Cut-Off (LICO), which are used by programs targeting benefits or assistance to low-income Canadians. The LICO is a measure indicating the income level below which a family is likely to spend significantly more of its income on food, shelter and clothing than the average family.

The Middle-Income Thresholds, also introduced in 2009, are based on the Moderate Standard of Living (MSOL) indicators. MSOL is a threshold currently used by the Canada Student Loans Program (CSLP) to determine the point at which the student, or the student’s family, is considered to have sufficient discretionary income to make a contribution to the cost of post-secondary education.

In order to ensure that eligibility thresholds continued to reflect the financial realities of students, the 2009 Low- and Middle-Income thresholds were updated in 2011 to account for inflation.

2. Issue

Without annual adjustments to account for inflation, the real value of the income eligibility thresholds will decrease. This would result in the CSGP becoming more restrictive, as students who were eligible for this non-repayable assistance in a given year could find themselves ineligible in a subsequent year without any real change in their income. The result would be higher debt for those students who would have grant amounts replaced with a loan, or in the case of those already receiving the maximum loan, not enough assistance to cover their financial needs. Consequently, a regulatory amendment was required to adjust the Low-Income Thresholds (Table 1) and Middle-Income Thresholds (Table 2) found in Schedule 3 of the CSFAR to account for increases due to inflation since the last update in 2011.

3. Objectives

The objective of this regulatory amendment was to ensure that students targeted for these grants continue to be eligible for the non-repayable assistance they need to pursue post-secondary education, by updating the Low- and Middle-Income Thresholds used to determine eligibility for CSG-LI and CSG-MI to take into account inflation.

4. Description

This regulatory amendment has updated the Low-Income Thresholds (Table 1) and the Middle-Income Thresholds (Table 2) found in Schedule 3 of the CSFAR according to the Consumer Price Index (CPI) rate of 2.9% for 2011.

To qualify for the CSG-LI as per section 40.02 of the CSFAR, the income of the student’s family needs to be below the income threshold in Table 1 of Schedule 3 for the province or territory in which he or she resides. To qualify for the CSG-MI, the income of a student’s family will need to fall between the threshold in Table 1 and the threshold in Table 2 of Schedule 3 for the province or territory in which he or she resides.

5. Consultation

The provinces and territory that participate in the CSLP, as well as student and educational stakeholder groups, were consulted during the development and implementation of the CSGP in 2008 and 2009. At that time, they were made aware of the CSLP’s intention to update the income thresholds on an annual basis to account for inflation. Overall, these partners and stakeholder groups are supportive of the CSLP using a proxy such as CPI to keep the income thresholds up to date.

6. Rationale

Adjusting the income eligibility thresholds according to the CPI for 2011 ensures that low- and middle-income students will not be denied access to CSG-LIs and CSG-MIs as a result of out-dated income thresholds.

The number of people expected to be impacted by this regulatory amendment is estimated to be fewer than 350. This value was determined by estimating the number of people who would no longer qualify for a CSG-LI or CSG-MI under the previous thresholds if their income increased by 2.9% with a small adjustment for projected increases in enrolment.

Recipients of the CSG-MI receive $100 per month, while recipients of the CSG-LI receive $250 per month. Over a typical eight-month academic year, the incremental costs of disbursing CSG-MIs are $800 per recipient (those who would be ineligible for a grant based on the previous thresholds will receive a CSG-MI of $800 under the revised thresholds) and the incremental costs of disbursing CSG-LIs are $1,200 per student (those who would otherwise have exceeded the CSG-LI threshold and received a CSG-MI of $800 will qualify for $2,000 under the revised thresholds). A conservative estimate of the cost to government (assuming that all affected students are CSG-LI recipients) would be approximately $420,000 annually.

7. Implementation, enforcement and service standards

The participating provinces and territory as well as the federal service provider administer CSLs and CSGs on behalf of the CSLP. The provinces and territory have the capacity to update the tables used in the assessment of need for student financial assistance on an annual basis. There are not expected to be any significant challenges in terms of implementation, enforcement and service standards.

8. Contact

Atiq Rahman
Director
Operational Policy and Research
Canada Student Loans Program
Learning Branch
Human Resources and Skills Development Canada
200 Montcalm Street, Tower II, 1st Floor
Gatineau, Quebec
K1A 0J9
Telephone: 819-994-4518
Fax: 819-953-6661
Email: atiqur.rahman@hrsdc-rhdcc.gc.ca

Footnote a
S.C. 2011, c. 24, s. 155

Footnote b
S.C. 1994, c. 28

Footnote 1
SOR/95-329