Vol. 146, No. 26 — December 19, 2012

Registration

SOR/2012-254 November 30, 2012

CANADA STUDENT FINANCIAL ASSISTANCE ACT

CANADA STUDENT LOANS ACT

Regulations Amending the Canada Student Financial Assistance Regulations and the Canada Student Loans Regulations

P.C. 2012-1592 November 29, 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) and section 17 (see footnote c) of the Canada Student Loans Act (see footnote d) makes the annexed Regulations Amending the Canada Student Financial Assistance Regulations and the Canada Student Loans Regulations.

REGULATIONS AMENDING THE CANADA STUDENT FINANCIAL ASSISTANCE REGULATIONS AND THE CANADA STUDENT LOANS REGULATIONS

CANADA STUDENT FINANCIAL ASSISTANCE ACT

CANADA STUDENT FINANCIAL ASSISTANCE REGULATION

1. Subsection 2(1) of the Canada Student Financial Assistance Regulations (see footnote 1) is amended by adding the following in alphabetical order:

• “family physician” means a person who is entitled under the laws of a province to practise family medicine and who is so practising or who is in a family medicine residency program accredited by the College of Family Physicians of Canada. (médecin de famille)
• “nurse” means a person who is entitled under the laws of a province to practise as a nurse and who is so practising. (infirmier)
• “nurse practitioner” means a person who is entitled under the laws of a province to practise as a nurse practitioner and who is so practising. (infirmier practicien)
• “under-served rural or remote community” means any census subdivision — as defined in the Statistics Canada document entitled Standard Geographical Classification (SGC) 2011 — that
  • (a) does not have census tracts, as described in that document; and
  • (b) is located outside of the capitals of the ten provinces. (collectivité rurale ou éloignée mal desservie)

2. Subsections 15(3) and (4) of the Regulations are replaced by the following:

(3) If an event referred to in paragraph (1)(a) or (b) occurs, the Minister shall refuse to grant to the borrower

• (a) any repayment assistance under section 19 or 20 if the Minister pays a claim for loss in respect of the borrower’s guaranteed student loan; and
• (b) the loan forgiveness referred to in subsection 9.2(1) of the Act.

(4) If an event referred to in paragraph (1)(h) or (i) occurs, the Minister shall terminate any repayment assistance granted under section 19 or 20 and refuse to grant to the borrower further repayment assistance or the loan forgiveness referred to in subsection 9.2(1) of the Act.

3. (1) The portion of subsection 16(1) of the Regulations before paragraph (c) is replaced by the following:

16. (1) Subject to subsection (5), a borrower who has been subject to a measure taken in accordance with subsection 15(2), (3) or (4) due to the occurrence of an event referred to in paragraph 15(1)(a), (b) or (i) is entitled to a new student loan, a new certificate of eligibility, another interest-free period, further repayment assistance under section 19 or 20 or the loan forgiveness referred to in subsection 9.2(1) of the Act if

• (a) in the case of a measure taken in accordance with subsection 15(2), an event referred to in paragraph 15(1)(j) has not occurred in respect of the borrower’s student loans or guaranteed student loans;
• (b) an event referred to in paragraph 15(1)(h) or (k) has not occurred in respect of the borrower’s student loans or guaranteed student loans;

(2) Paragraph 16(3)(a) of the Regulations is replaced by the following:

• (a) in the case of a measure taken in accordance with subsection 15(2), an event referred to in paragraph 15(1)(j) has not occurred in respect of the borrower’s student loans or guaranteed student loans; and

• (a.1) an event referred to in paragraph 15(1)(k) has not occurred in respect of the borrower’s student loans or guaranteed student loans;

4. The Regulations are amended by adding the following after section 26:

PART V.1

LOAN FORGIVENESS FOR FAMILY PHYSICIANS, NURSES AND NURSE PRACTITIONERS

APPLICATION

27. This Part applies to a borrower who began to work in an under-served rural or remote community on or after July 1, 2011 as a family physician, nurse or nurse practitioner.

AMOUNT AND DURATION OF FORGIVENESS

28. (1) For the purposes of subsection 9.2(1) of the Act, the Minister may, for a year, forgive the lesser of

• (a) the outstanding principal of the borrower’s student loan, and
• (b) $8,000, in the case of a family physician or $4,000, in the case of a nurse or nurse practitioner.
  

(2) The maximum number of years in respect of which an amount may be forgiven is five.

CONDITIONS AND EFFECTIVE DATE

29. (1) To qualify for loan forgiveness for a year, the borrower must

• (a) have worked in an under-served rural or remote community as a family physician, nurse or nurse practitioner during the year; and
• (b) apply to the Minister in the prescribed form no later than 90 days after the end of that year.

(2) The loan forgiveness takes effect on the day following the end of the year.

CANADA STUDENT LOANS ACT

CANADA STUDENT LOANS REGULATIONS

5. Subsection 2(1) of the Canada Student Loans Regulations (see footnote 2) is amended by adding the following in alphabetical order:

• “family physician” means a person who is entitled under the laws of a province to practise family medicine and who is so practising or who is in a family medicine residency program accredited by the College of Family Physicians of Canada. (médecin de famille)
• “nurse” means a person who is entitled under the laws of a province to practise as a nurse and who is so practising. (infirmier)
• “nurse practitioner” means a person who is entitled under the laws of a province to practise as a nurse practitioner and who is so practicing. (infirmier practicien)
• “under-served rural or remote community” means any census subdivision — as defined in the Statistics Canada document entitled Standard Geographical Classification (SGC) 2011 — that
  • (a) does not have census tracts, as described in that document; and
  • (b) is located outside the capitals of the ten provinces. (collectivité rurale ou éloignée mal desservie)
    

6. (1) Subsection 9(3) of the Regulations is amended by adding the following after paragraph (d):

• (e) refuse to grant the loan forgiveness referred to in subsection 11.1(1) of the Act.

(2) Subsection 9(5) of the Regulations is replaced by the following:

(5) When the outstanding balance of the principal amount of a guaranteed student loan and any accrued interest become payable under paragraph (1)(h) or (i), the Minister shall, in addition to the measures taken under subsections (3) and (4), terminate any repayment assistance granted to the borrower under section 19 or 20 of the Canada Student Financial Assistance Regulations and refuse to grant further repayment assistance and the loan forgiveness referred to in subsection 11.1(1) of the Act.

7. The portion of subsection 10(1) of the Regulations before paragraph (a) is replaced by the following:

10. (1) A borrower who has been the subject of a measure taken in accordance with subsection 9(3), (4) or (5) is entitled to an interest-free period, repayment assistance under section 19 or 20 of the Canada Student Financial Assistance Regulations or the loan forgiveness referred to in subsection 11.1(1) of the Act if, on or after the earlier of the day referred to in paragraph 9(1)(a), (b) or (i) and the day on which the measure was taken,

8. The Regulations are amended by adding the following after section 16.6:

LOAN FORGIVENESS FOR FAMILY PHYSICIANS, NURSES AND NURSE PRACTITIONERS

APPLICATION

17. Sections 18 and 19 apply to a borrower who does not have any outstanding student loans under the Canada Student Financial Assistance Act and who began to work in an under-served rural or remote community on or after July 1, 2011 as a family physician, nurse or nurse practitioner.

AMOUNT AND DURATION OF FORGIVENESS

18. (1) For the purposes of section 11.1 of the Act, the Minister may, for a year, forgive the lesser of

• (a) the outstanding principal of the borrower’s guaranteed student loan, and
• (b) $8,000, in the case of a family physician or $4,000, in the case of a nurse or nurse practitioner, minus any amount that was forgiven for that year under section 9.2 of the Canada Student Financial Assistance Act.
  

(2) The maximum number of years in respect of which an amount may be forgiven is five minus the number of years in respect of which the amount referred to in paragraph 28(1)(b) of the Canada Student Financial Assistance Regulations has been forgiven.

CONDITIONS AND EFFECTIVE DATE

19. (1) To qualify for forgiveness for a year, the borrower must

• (a) have worked in an under-served rural or remote community as a family physician, nurse or nurse practitioner during the year; and
• (b) apply to the Minister in the prescribed form no later than 90 days after the end of that year.
  

(2) The loan forgiveness takes effect on the day following the end of the year.

TRANSITIONAL PROVISION

9. The loan forgiveness provided for in these Regulations applies in respect of a year beginning on or after April 1, 2012.

COMING INTO FORCE

10. These Regulations come into force on January 1, 2013.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Background

The Government of Canada has committed to strengthening health care in Canada’s rural and remote communities.

The Canada Student Loans Program (CSLP) promotes access to post-secondary education through the provision of financial assistance to eligible borrowers. Budgets 2011 and 2012 announced the forgiveness of a portion of CSLs for new family physicians (including residents in family medicine programs), nurse practitioners and nurses who practise in under-served rural or remote communities, including communities providing health care services to First Nations, Inuit and Métis populations. Starting in 2012–2013, practising family physicians will be eligible for federal CSL forgiveness of up to $8,000 per year to a maximum of $40,000. Nurse practitioners and nurses will be eligible for federal CSL forgiveness of up to $4,000 per year to a maximum of $20,000.

On December 15, 2011, the Keeping Canada’s Economy and Jobs Growing Act received Royal Assent and gave the Minister of Human Resources and Skills Development the authority to forgive an amount in respect of a student loan to a family physician, nurse or nurse practitioner who begins to work in an under-served rural or remote community subject to conditions to be established in regulations.

The legislation also provides the authority to prescribe regulations, including

• the conditions that must be met before a portion of a CSL debt can be forgiven;
• definitions of key terms, including family physician, nurse, nurse practitioner and under-served rural or remote community;
• the amount that can be forgiven in a single year and the maximum number of years of forgiveness; and
• the effective date of the forgiveness.

Attracting and retaining health professionals to and in rural or remote areas is a multi-faceted challenge. The determinants affecting the choice of working in these communities include both non-financial and financial considerations and touch many aspects of one’s life, including professional development and career, family, workplace preferences, and lifestyle preferences. (see footnote 3)

In the last decade, provinces and territories have attempted a variety of measures to attract professionals to under-served rural or remote areas. The provinces and territories offer a wide range of incentives to physicians and nurses that attempt to target different determinants that potentially affect a person’s decision to work in a rural or remote area (relocation assistance, career development, lifestyle preferences, student financial assistance, etc.). A non-exhaustive list of these incentives includes

• bonuses and resettlement grants for individuals relocating to identified under-served communities;
• higher compensation for physicians working in identified under-served communities;
• grants for certain specialists;
• business grants to assist family physicians establishing a private practice;
• in-study student financial assistance in the form of grants/bursaries or tuition assistance in exchange for return to service agreement; and
• in-repayment student financial assistance via loan forgiveness, interest relief and tuition reimbursement.

Issue

Rural and remote communities across Canada often lack access to health care services that are more accessible to urban communities. Many Canadians in these under-served communities need to travel significant distances to receive primary health care, or suffer from limited health care services, which in turn contributes to the poorer health status of residents of rural and remote communities. Among the many factors that contribute to the limited access to health care services in rural and remote areas is the challenge of attracting health care professionals to work in these areas.

Objectives

The objective of these regulatory amendments is to complement provincial and territorial initiatives that encourage family physicians, nurses and nurse practitioners to work in under-served rural and remote communities by offering a financial incentive. This measure supports the Government of Canada’s efforts to strengthen health care in Canada’s rural and remote communities, and builds upon existing provincial and territorial initiatives, such as resettlement grants and grants to establish private practices, that attract family physicians, nurses, and nurse practitioners to rural areas.

Description

The Regulations will provide loan forgiveness to family physicians, nurses and nurse practitioners for a year under the following conditions:

• The person is a CSL borrower.
• The borrower works during that year (see footnote 4) as a
• family physician;
• medical resident in a family medicine residency program;
• registered nurse;
• licensed practical nurse;
• registered practical nurse;
• registered psychiatric nurse; or
• nurse practitioner.
• The work is performed in an under-served rural or remote community. An under-served rural or remote community is defined as any census subdivision without a census tract and located outside of the capitals of the 10 provinces. Census tracts usually have a population between 2 500 and 8 000 and are located in census metropolitan areas or in census agglomerations that have a core population of 50 000 or more.
• The borrower is not restricted from receiving student financial assistance because the borrower has missed two payments, has failed to make a payment under the Repayment Assistance Plan, is guilty of an offence under any act of Parliament, and/or is subject to a judgment order to collect on outstanding CSLs.

Borrowers wishing to receive loan forgiveness will be required to submit an application for consideration. To ensure that borrowers are eligible health professionals, they will be required to submit proof of their credentials. To receive forgiveness for a year, borrowers will be required to submit proof that they have worked during that year in an under-served rural or remote community, within 90 days of the completion of the year of work. If the borrower meets all the requirements, the borrower’s CSL balance will be reduced by the maximum amount of loan forgiveness depending on the category of health professional (family physician, nurse, or nurse practitioner), or the outstanding loan balance, whichever is lower. Practising family physicians (including residents in family medicine programs) will be eligible for federal CSL forgiveness of up to $8,000 per year to a maximum of $40,000. Nurse practitioners and nurses will be eligible for federal CSL forgiveness of up to $4,000 per year to a maximum of $20,000.

Regulatory and non-regulatory options considered

These regulatory amendments follow legislative changes to the Canada Student Financial Assistance Act (CSFAA) and the Canada Student Loans Act (CSLA) that were included in the Keeping Canada’s Economy and Jobs Growing Act made in response to Budget 2011 and Budget 2012. The CSFAA and the CSLA allow for loan forgiveness with the conditions to be prescribed by the Regulations. In the absence of regulation, there would be no CSL forgiveness provided to family physicians, nurses, and nurse practitioners who practise in an under-served rural or remote community.

Benefits and costs

Under the Regulations, program costs will be experienced starting in the 2013–2014 fiscal year. While qualifying program participants who began working in an under-served community on or after July 1, 2011, will be eligible for forgiveness, costs will be delayed as participants must work for a year before applying and loan forgiveness will be applicable in respect of a year of work that starts on or after April 1, 2012. Approximately 700 borrowers could apply for loan forgiveness in 2013–2014, at a cost of $3.4 million. At maturity, costs are estimated to be $8.7 million annually and the measure is expected to benefit approximately 1 500 CSL clients per year.

The incremental cost of forgiving loans to eligible family physicians, nurses and nurse practitioners corresponds to the dollar amount of loans forgiven. The cost will depend on the number of family physicians, nurses and nurse practitioners applying to the loan forgiveness program, their repayment schedule and their amount of debt. The cost to the Government also includes an estimate for alternative payments. Provinces and territories that do not participate in the CSLP (i.e. Quebec, the Northwest Territories and Nunavut) receive alternative payments to assist them in delivering similar student financial assistance.

In recent Canadian literature on the combined effectiveness of incentives to attract and/or retain health professionals in rural and remote areas, a study by Chauban et al. conducted in 2010 provides early insight into potential findings of future analysis. (see footnote 5) Findings indicate that the main determinants of practising in a rural area are (1) the opportunity to utilize one’s full skill set; (2) rural lifestyle; (3) preference for a rural practice; and (4) match between community and career interests. The study also found that financial incentives play a greater role in younger physicians’ (younger than 45 years) decision to move to a rural area than in that of older physicians. Study results suggest that bundling many incentives together (non-financial and financial) might be more effective at attracting and retaining health professionals to and in rural or remote locations. For these reasons, the benefit of CSL forgiveness is adding to the suite of measures to attract medical professionals to rural and remote areas.

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments.

Small business lens

The small business lens does not apply to these amendments.

Consultation

As part of the development process of the loan forgiveness policy, the CSLP conducted consultations with the following impacted non-government and government stakeholders:

• Physician organizations: the Canadian Medical Association, the Association of Faculties of Medicine of Canada, the Canadian Federation of Medical Students, the College of Family Physicians of Canada, and the Society of Rural Physicians of Canada;
• Nursing organizations: the Canadian Association of Schools of Nursing, the Canadian Nursing Students’ Association, the Canadian Nurses Association, and the Canadian Association of Rural and Remote Nursing;
• Aboriginal organizations: the Assembly of First Nations, the Inuit Tapiriit Kanatami, the Aboriginal Nurses Association of Canada, and the Indigenous Physicians Association of Canada; and
• Federal/provincial/territorial tables: the Intergovernmental Consultative Committee on Student Financial Assistance (ICCSFA) and the Advisory Committee on Health Delivery and Human Resources (ACHDHR).

All parties were supportive of this measure. Key elements of the program discussed included definitions of under-served rural and remote communities, minimum required hours of work, and employment validation. Views on how the CSL forgiveness initiative should define “under-served rural or remote communities” ranged from complex measurement to simple measures based on population size. With respect to the amount of time an individual must practise family medicine or nursing in order to be eligible for the benefit, participants agreed that basing eligibility on full-time work over the course of a year would be too restrictive as minimum requirements for hours worked over a year differ across the provincial and territorial programs. To accommodate all provincial and territorial definitions, a minimum requirement of 400 hours during a year will be established as a matter of policy. Participants reported that the most straightforward method by which to validate employment would be a letter from the employers. In cases of selfemployment (e.g. some family physicians), it was suggested that a letter from the institution where the individual has hospital privileges could suffice.

Canadians, stakeholders and interested parties were invited to comment on the proposed regulatory amendments for a 30-day period following their prepublication in the Canada Gazette, Part I on August 4, 2012. During this period, the CSLP received comments and questions regarding the definitions of “under-served rural or remote community” and on the eligibility requirements of the loan forgiveness measure in addition to requests for clarification and further information on other eligibility requirements and design details.

Some comments indicated that the definition of “under-served rural or remote community” excluded certain rural areas due to their location in census agglomerations with a population over 50 000. Some census agglomerations may be large, but have a small urban influence (e.g. Cape Breton, Nova Scotia). The definition has been amended to include communities located in larger census agglomerations where the urban core is small.

A number of comments were also received regarding the requirement that borrowers must begin to work in an under-served rural or remote community on or after April 1, 2012. This design would not have allowed medical physicians, nurses and nurse practitioners who moved to rural or remote communities following the Budget 2011 announcement (but before April 2012) to qualify. The Regulations have been amended to allow family physicians, nurses and nurse practitioners who began to work in an under-served community on or after July 1, 2011, to be eligible for loan forgiveness. However, loan forgiveness will remain applicable in respect of a year of work starting on or after April 1, 2012.

Questions and comments were received regarding the interplay of this measure with the Resident Loan Interest Relief Program (RLIRP), a benefit offered by Ontario which involves the province purchasing the federal portion of the loan (such that no federal loan remains). Borrowers who choose to participate in this program are not required to make payments towards principal or interest on their government student loans during their residency period in exchange for a five-year return of service agreement (interest is paid on their behalf and principal is deferred). These borrowers do not qualify for federal loan forgiveness because the RLIRP assumes the federal portion of a student loan thereby leaving no federal loan to be forgiven. Borrowers must therefore decide which of these two measures (if any) best meets their needs and future plans given their individual circumstances. Those raising this issue have been informed that they must have a federal loan to be eligible for the measure.

Rationale

Improving access to health services in rural and remote communities is a complex issue demanding a range of financial and non-financial responses. Providing loan forgiveness will complement existing efforts by adding an additional financial measure.

Studies indicate that there is no single solution to the shortage of physicians and nurses in rural or remote areas and that better results will be achieved by bundling together a variety of initiatives to attract and retain medical professionals than by implementing one single policy or program. (see footnote 6) For example, according to a report by the World Health Organization (WHO), initiatives can target individuals directly (subsidized education for return of service, financial incentives), but can also be designed to lead to institutional changes (creation of educational institutions offering health programs in rural or remote areas, admission policies targeting students with a rural background, investment in infrastructure and services, development of career programs and professional networks, etc.).

There are two major benefits to using CSLs as a vehicle for a financial incentive. The majority of CSL recipients are young and financial incentives are more appealing to younger medical professionals. Also, student loan repayment and the transition to the labour market occur within the same period.

Implementation, enforcement and service standards

This measure is expected to be available in early 2013. It is expected that prospective applicants may begin submitting applications starting in early 2013. Qualifying health professionals who began to work on or after July 1, 2011, and who complete a year of work (starting on or after April 1, 2012) in an under-served rural or remote community will be eligible to receive loan forgiveness as early as April 1, 2013.

Direct loans issued by the Government of Canada (since 2000) will be directly forgiven by the Government of Canada. In the case of borrowers with only financial-institution-issued CSLs (issued by a financial institution before 2000) that are eligible for forgiveness, the CSLP intends to purchase these loans from financial institutions in order to provide loan forgiveness.

Complete documentation for validation purposes will be required within 90 days of the completion date (one year after the starting date). Otherwise, loan forgiveness will be rejected. Applicants will be required to submit a letter confirming their location of employment, the number of hours of work, as well as proof of credentials and/or licence.

Performance measurement and evaluation

To ensure effective program management and accountability to Canadians, federal student financial assistance programs will continue to be monitored for effective program performance and integrity. The resulting data will continue to be included in the CSLP Actuarial Report and Annual Report, both of which are tabled in Parliament as per the CSFAA. These reports can also be accessed online by the general public.

The effect of new loan forgiveness for family physicians and nurses will be incorporated into existing performance measurement and evaluation mechanisms. Performance indicators will be developed, and could include the number of borrowers receiving forgiveness, amounts forgiven and number of years of forgiveness. Human Resources and Skills Development Canada’s Evaluation Directorate has recently completed a five-year summative evaluation of the CSLP covering the period from 2006–2007 to 2010–2011. The effect of new loan forgiveness will be included in a subsequent summative evaluation.

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(1) and (2)
• Footnote b
  S.C. 1994, c. 28
• Footnote c
  S.C. 2011, c. 24, s. 158
• Footnote d
  R.S., c. S-23
• Footnote 1
  SOR/95-329
• Footnote 2
  SOR/93-392
• Footnote 3
  Chauban, Jong and Buske, 2010; Dussault and Franceschini,2006.
• Footnote 4
  To meet this requirement, a borrower must work at least 400 hours during a one-year period.
• Footnote 5
  Chauban, Tara S., Michael Jong and Lynda Buske, “Recruitment Trumps Retention: Results of the 2008/09 CMA Rural Practice Survey,” Canadian Journal of Rural Medicine 15(3), 2010, 101–107.
• Footnote 6
  WHO. Increasing Access to Health Workers in Remote and Rural Areas Through Improved Retention. Geneva: World Health Organization, 2010. Jackson, Jodie et al. “A Comparative Assessment of West Virginia’s Financial Incentive Programs for Rural Physicians,” Journal of Rural Health 19 (suppl.), 2003, 329–339.