Regulations Amending the Canada Student Financial Assistance Regulations: SOR/2022-131

Canada Gazette, Part II, Volume 156, Number 13

Registration
SOR/2022-131 June 10, 2022

CANADA STUDENT FINANCIAL ASSISTANCE ACT

P.C. 2022-650 June 10, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development, pursuant to section 15^{footnote a} of the Canada Student Financial Assistance Act ^{footnote b}, makes the annexed Regulations amending the Canada Student Financial Assistance Regulations.

Regulations Amending the Canada Student Financial Assistance Regulations

Amendments

1 (1) The definitions full-time student, part-time student, permanent disability and severe permanent disability in subsection 2(1) of the Canada Student Financial Assistance Regulations ^{footnote 1} are replaced by the following:

full-time student

means a person

• (a) who, during a confirmed period within a period of studies, is enrolled in courses that constitute at least 60 per cent of a course load recognized by the designated educational institution as constituting a full course load,
• (b) whose primary occupation during that confirmed period is the pursuit of studies in those courses, and
• (c) who meets the requirements of subsection 5(1) or 7(1) or section 33, as the case may be; (étudiant à temps plein)

part-time student

means a person

• (a) who, during a confirmed period within a period of studies, is enrolled in courses that constitute at least 20 per cent but less than 60 per cent of a course load recognized by the designated educational institution as constituting a full course load, and
• (b) who meets the requirements of subsection 12(1), 12.1(1) or 12.2(1) or section 33, as the case may be; (étudiant à temps partiel)

permanent disability

means any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment — or a functional limitation — that restricts the ability of a person to perform the daily activities necessary to pursue studies at a post-secondary school level or to participate in the labour force and that is expected to remain with the person for the person’s expected life; (invalidité permanente)

severe permanent disability

means any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment — or a functional limitation — that prevents a person from performing the daily activities necessary to participate in the labour force in a manner that is substantially gainful, as defined in section 68.1 of the Canada Pension Plan Regulations, and is expected to remain with the person for their expected life; (invalidité grave et permanente)

(2) Subsection 2(1) of the Regulations is amended by adding the following in alphabetical order:

persistent or prolonged disability

means any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment — or a functional limitation — that restricts the ability of a person to perform the daily activities necessary to pursue studies at a post-secondary school level or to participate in the labour force and has lasted, or is expected to last, for a period of at least 12 months but is not expected to remain with the person for the person’s expected life; (invalidité persistante ou prolongée)

2 The Regulations are amended by adding the following after section 2:

Election

Person with a disability

2.1 A person who has either a permanent disability or a persistent or prolonged disability and who, during a confirmed period within a period of studies, is enrolled in courses that constitute at least 40 per cent but less than 60 per cent of a course load recognized by the designated educational institution as constituting a full course load, may elect to be considered as a full-time student.

3 (1) Subparagraph 15(1)(j)(i) of the Regulations is replaced by the following:

• (i) in the case of a full-time student with either a permanent disability or a persistent or prolonged disability or in the case of a full-time student to whom a guaranteed student loan has been made as a full-time student, whether or not that loan is outstanding, 520 weeks,

(2) Subparagraphs 15(1)(j)(ii) and (iii) of the French version of the Regulations are replaced by the following:

• (ii) quatre cents semaines, dans le cas où il suit des études doctorales,
• (iii) trois cent quarante semaines, dans les autres cas;

4 (1) Subparagraph 20(1)(b)(i) of the Regulations is replaced by the following:

• (i) has either a permanent disability or a persistent or prolonged disability, or

(2) The portion of paragraph 20(2)(a) of the Regulations before subparagraph (i) is replaced by the following:

• (a) in the case of a borrower who has either a permanent disability or a persistent or prolonged disability

(3) The description of W in subparagraph 20(2)(a)(ii) of the French version of the Regulations is replaced by the following:

W le revenu familial mensuel de l’emprunteur moins les dépenses mensuelles qu’occasionnent son invalidité et qui ne sont pas couvertes par le régime de soins de santé de sa province ou par son régime d’assurances privé,

(4) Subparagraph 20(3)(a)(i) of the Regulations is replaced by the following:

• (i) in the case of a borrower who has either a permanent disability or a persistent or prolonged disability, 120 months minus the number of months that have elapsed since the applicable day referred to in subparagraph 19(1)(d)(i), and

(5) Subparagraph 20(3)(b)(i) of the Regulations is replaced by the following:

• (i) in the case of a borrower who has either a permanent disability or a persistent or prolonged disability, 120 months minus the number of months that have elapsed since the applicable day referred to in subparagraph 19(1)(d)(ii), and

5 The heading before section 34 of the Regulations is replaced by the following:

Grant for Services and Equipment — Students with Disabilities

6 (1) The portion of subsection 34(1) of the Regulations before paragraph (b) is replaced by the following:

34 (1) An appropriate authority or a body authorized by the Minister for a province may make a grant for services and equipment to a qualifying student who has either a permanent disability or a persistent or prolonged disability and who

(2) Paragraph 34(1)(d) of the English version of the Regulations is replaced by the following:

• (d) is in need of exceptional education-related services or equipment that are required for the student to perform the daily activities necessary to pursue studies at a post-secondary school level and that are indicated in the List of Eligible Exceptional Education-related Services and Equipment, as amended from time to time, published in the Canada Gazette Part I; and

(3) Paragraph 34(2)(b) of the Regulations is replaced by the following:

• (b) provide, with that application, a document or documents that demonstrate that the student has a permanent disability or persistent or prolonged disability; and

7 The heading before section 40.01 of the Regulations is replaced by the following:

Grant for Students with Disabilities

8 (1) The portion of subsection 40.01(1) of the Regulations before paragraph (b) is replaced by the following:

40.01 (1) The Minister, an appropriate authority or a body authorized by the Minister for a province may make a grant to a qualifying student who has either a permanent disability or a persistent or prolonged disability and who

(2) Subsection 40.01(2) of the Regulations is replaced by the following:

(2) In order to obtain a grant, a qualifying student shall provide, with their loan application, a document or documents that demonstrate that the student has a permanent disability or a persistent or prolonged disability.

Coming into Force

9 These Regulations come into force on August 1, 2022.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issues

Expanding eligibility for disability supports

Students and borrowers with disabilities face some of the highest costs and most significant barriers to long-term academic and career success. Every year, the CSFA Program supports over 75 000 students and borrowers with a permanent disability through enhanced grants, in-study benefits and specific repayment assistance. However, these supports were not available to students and borrowers whose disabilities are persistent or prolonged, but not permanent.

Modernizing disability definitions

While the regulatory definitions^{footnote 2} of permanent disability and severe permanent disability have been interpreted to capture a wide range of impairments and functional limitations, the two terms “physical” and “mental” in those definitions did not explicitly recognize the full spectrum of impairments or functional limitations that persons with disabilities may face.

In contrast, the Accessible Canada Act definition of disability is broad, and expands on the mental and physical impairments that can exist to include “a physical, mental, intellectual, cognitive, learning, communication or sensory impairment — or a functional limitation.” Budget 2021’s announcement to expand CSFA Program disability supports to those with a persistent or prolonged disability presents the CSFA Program with the opportunity to modernize the definitions of permanent disability and severe permanent disability, and to establish the new definition for persistent or prolonged disability, in keeping with the Accessible Canada Act’s definition of disability.

Demonstrating eligibility for disability-related grants

To demonstrate eligibility for the Canada Student Grant for Students with Disabilities (previously the Canada Student Grant for Students with Permanent Disabilities) and the Canada Student Grant for Services and Equipment – Students with Disabilities (previously the Canada Student Grant for Services and Equipment for Students with Permanent Disabilities), the Canada Student Financial Assistance Regulations required that students submit a medical certificate, a psycho-educational assessment or documentation indicating they receive federal or provincial/territorial disability assistance. In some cases, the requirements pose significant burden and costs for students with disabilities. Groups representing students with disabilities and some provinces and territories have urged the CSFA Program to allow greater flexibility and discretion in the documentation that can be accepted.

Background

The CSFA Program provides eligible students with grants and loans to help pay for post-secondary education (PSE) at a designated college, university or other post-secondary institution. In addition, when students leave school, the CSFA Program offers a number of measures designed to help borrowers who are experiencing financial difficulty in repayment.

Canada Student Grants and Canada Student Loans are available to students from nine provinces (British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island) and Yukon. In these jurisdictions, students receive both federal and provincial/territorial student aid. Québec, Nunavut and the Northwest Territories receive alternative payments from the Government of Canada to administer their own student financial assistance programs.

The CSFA Program offers a number of upfront, in-study and in-repayment supports for students with disabilities, such as the following:

• the Canada Student Grant for Students with Disabilities (previously the Canada Student Grant for Students with Permanent Disabilities);
• the Canada Student Grant for Services and Equipment – Students with Disabilities (previously the Canada Student Grant for Services and Equipment for Students with Permanent Disabilities), for exceptional education-related costs;
• flexibility to maintain full-time student status on a reduced course load;
• exemption from fixed student contributions in their need assessment for student financial assistance;
• a maximum of 520 weeks of student financial assistance in each student’s lifetime, rather than the standard maximum of 340 weeks;
• the Second Stage of the Repayment Assistance Plan (also known as the Repayment Assistance Plan for Borrowers with Disabilities) [previously the Repayment Assistance Plan for Borrowers with Permanent Disabilities], which contributes to principal and interest payments for borrowers experiencing challenges repaying their loans; and
• the Severe Permanent Disability Benefit, which forgives the entire amount of a Canada Student Loan (CSL) or Canada Apprentice Loan (CAL) for borrowers whose disabilities prevent them from participating in substantially gainful employment for their expected life.

To demonstrate eligibility for the disability-related grants, students have been required to submit a medical certificate, a psycho-educational assessment or documentation indicating they receive federal or provincial/territorial disability assistance. Stakeholders have long argued that the list of documents required is overly restrictive and does not reflect the realities of different types and experience of disability. For example, a psycho-educational assessment can range from $2,000 to $5,000 and waiting lists to be assessed can be several months long, especially outside of urban centres.

Since 2019, the Government of Canada has made a number of investments in the CSFA Program to help students and borrowers with disabilities access and afford PSE, such as the following:

• increased the cap on the Canada Student Grant for Services and Equipment for Students with Permanent Disabilities from $8,000 to $20,000;
• expanded eligibility for the Severe Permanent Disability Benefit so that more borrowers with severe permanent disabilities can qualify for loan forgiveness; and
• made it easier for borrowers with permanent disabilities to access further funding to return to school by removing restrictions on borrowers who have used the Repayment Assistance Plan for Borrowers with Permanent Disabilities.

Students and borrowers with disabilities also benefit from recent CSFA Program improvements that are available to all students and borrowers. For example, since 2019 the Government of Canada has

• lowered interest rates; specifically, the variable rate was reduced to prime (from prime plus 2.5%), and the fixed rate to prime plus 2% (from prime plus 5%);
• eliminated interest on student loans during the six-month period after a student loan borrower leaves school;
• implemented interest-free and payment-free leave for a maximum of 18 months for borrowers taking temporary leave from their studies for medical or parental reasons, including mental health leave;
• doubled the value of non-repayable Canada Student Grants for full- and part-time students, students with disabilities, and students with dependants for 2020–2021, 2021–2022, and 2022–2023, in response to the employment and financial impacts of the COVID-19 pandemic;
• waived the accrual of interest on CSLs and CALs from April 1, 2021, to March 31, 2023, in recognition of the financial hardships faced by students and youth during the COVID-19 pandemic; and
• supported adult learners to up-skill or re-skill by extending the $1,600 Skills Boost adult learner top-up to the full-time Canada Student Grant for 2021–2022 and 2022–2023.

The CSFA Program operates under three separate acts and three separate regulations. The Canada Student Loans Act (CSLA) and the Canada Student Loans Regulations (CSLR) provide authority to administer guaranteed CSLs (issued from 1964 to 1995), whereas the Canada Student Financial Assistance Act (CSFAA) and the Canada Student Financial Assistance Regulations (CSFAR) provide authority to administer risk-shared CSLs (issued from 1995 to 2000) and direct CSLs (issued since 2000). In addition, the CSFA Program administers CALs under the Apprentice Loans Act (ALA) and Apprentice Loans Regulations (ALR).

CALs were introduced in 2015 to make funding available to apprentices registered in a Red Seal trade to help with the cost of technical training needed to complete their apprenticeship program. CAL borrowers are able to benefit from the same Repayment Assistance Plan for Borrowers with Disabilities offered to CSL borrowers.

Permanent disability benefits were first introduced in 1983 with a provision allowing for loan forgiveness for borrowers with permanent disabilities. Further supports that shared the same definition of permanent disability were introduced over the years. This shared definition diverged in 2009 when the loan forgiveness measure was revised to support those specifically with a “severe permanent disability” rather than a “permanent disability.” Permanent disability continued as the required disability status for other supports.

Objective

The objectives of the regulatory amendments are to remove barriers to inclusion faced by persons with disabilities by making CSFA Program disability supports available to students and borrowers with a persistent or prolonged disability. This is accomplished by modernizing the CSFA Program’s definitions of disability in keeping with the Accessible Canada Act definition of disability and by providing greater flexibility in the documentation to demonstrate eligibility for the Canada Student Grant for Students with Disabilities and the Canada Student Grant for Services and Equipment – Students with Disabilities.

Description

The amendments to the CSFAR include the following:

• amending the definitions of permanent disability and severe permanent disability to add functional limitations caused by intellectual, cognitive, learning, communication and sensory impairments to better reflect the variety of impairments experienced by persons with disabilities;
• adding a new definition for persistent or prolonged disability;
• amending the definitions of full-time student and part-time student to allow students with a persistent or prolonged disability taking a reduced course load to have the option to be considered either a full-time student or a part-time student; and
• adding students and/or borrowers with a persistent or prolonged disability as an eligible group for
  • the 520 maximum weeks of total student financial assistance,
  • the Repayment Assistance Plan for Borrowers with Disabilities,
  • the Canada Student Grant for Services and Equipment – Students with Disabilities, and
  • the Canada Student Grant for Students with Disabilities.

The amendments to the CSLR include

• amending the definitions of permanent disability and severe permanent disability to add functional limitations caused by intellectual, cognitive, learning, communication and sensory impairments to better reflect the variety of impairments experienced by persons with disabilities;
• adding a new definition for persistent or prolonged disability; and
• amending the definitions of full-time student and part-time student to allow students with a persistent or prolonged disability taking a reduced course load to have the option to be considered a full-time student or a part-time student.

The amendments to the ALR include

• amending the definitions of permanent disability and severe permanent disability to add functional limitations caused by intellectual, cognitive, learning, communication and sensory impairments to better reflect the variety of impairments experienced by persons with disabilities;
• adding a new definition for persistent or prolonged disability; and
• adding borrowers with a persistent or prolonged disability as an eligible group for the Repayment Assistance Plan for Borrowers with Disabilities.

Additional amendments made following prepublication (see Consultation section for more detail) include

• clarifying that permanent disabilities are excluded from the definition of persistent or prolonged disability (CSFAR, CSLR and ALR);
• further amending the definitions of permanent disability, severe permanent disability and persistent or prolonged disability from “a functional limitation caused by an impairment” to an “impairment or a functional limitation” in keeping with the Accessible Canada Act definition of disability (CSFAR, CSLR and ALR); and
• replacing the list of documentation required for the Canada Student Grant for Students with Disabilities (and the Canada Student Grant for Services and Equipment – Students with Disabilities with a broader criterion that permits greater discretion and flexibility in the types of documents that can be accepted (CSFAR only).

Regulatory development

Consultation

The CSFA Program regularly engages with stakeholders, including student groups, borrowers, and provinces and territories, through the National Advisory Group on Student Financial Assistance (NAGSFA) and the Intergovernmental Consultative Committee on Student Financial Assistance (ICCSFA). NAGSFA is comprised of student associations (e.g. National Educational Association of Disabled Students (NEADS), Canadian Alliance of Student Associations (CASA)), post-secondary institutions and associations, student financial aid administrators, and federal and provincial representatives. ICCSFA is comprised of all provinces and territories participating in the CSFA Program and the Government of Canada.

In addition, for these amendments, the CSFA Program has reached out to the broader disability community, with support from the Office of Disability Issues in Employment and Social Development Canada. Through this connection, the CSFA Program leveraged consultations and outreach that was done during the development of the Accessible Canada Act as well as ongoing engagement that the Office of Disability Issues is leading to remove barriers to inclusion faced by persons with disabilities (including engagement on the Disability Inclusion Action Plan). Furthermore, the CSFA Program engaged the Minister of Employment, Workforce Development and Disability Inclusion’s Disability Advisory Group.

Consultation prior to prepublication

In 2018, NAGSFA raised concerns regarding the use of permanent disability as the eligibility criterion for CSFA Program disability supports. Specifically, they noted perceived limitations of the permanent disability definition and recommended that funding policies for students and borrowers with disabilities be revised to provide greater assistance, in particular to those students and borrowers with non-visible disabilities. As a result, NAGSFA expressed support when the proposal to expand eligibility for CSFA Program disability supports to those with a persistent or prolonged disability was announced in Budget 2021.

At a NAGSFA meeting in August 2021, the CSFA Program updated members and sought feedback on plans to implement the expansion of supports, as well as to modernize the regulatory definitions related to disability. As a result of the August meeting, general support was reiterated from NAGSFA members. NAGSFA members also urged the CSFA Program to continue consultation and outreach with student stakeholders and to consider revisiting the requirements to demonstrate eligibility for disability-related supports.

In response to increased pressures on provinces and territories to improve financial aid for students and borrowers with disabilities, ICCSFA has had a long-standing subcommittee, the Students with Disabilities Committee, to look specifically at policy issues related to students with disabilities. The Committee has found that the permanent disability criteria are restrictive and has expressed strong support for expanding disability supports to a wider group of students and borrowers with disabilities and reducing the burden and cost of obtaining the documentation required.

As a result, ICCSFA endorsed the Budget 2021 announcement of the Government of Canada’s intention to expand CSFA Program disability supports to students and borrowers with a persistent or prolonged disability. In part, ICCSFA’s strong endorsement is due to the fact that provinces and territories are responsible for delivering CSFA Program supports, and they often rely on CSFA Program definitions for the purposes of their own student aid measures. Many ICCSFA members have indicated that they will likely pursue a similar change for their own student aid measures.

In July 2021, CSFA Program officials presented the proposed measures to the Minister of Employment, Workforce Development and Disability Inclusion’s Disability Advisory Group and sought feedback. Advisory Group members broadly supported the proposals; however, they urged that episodic disabilities also be included. Advisory Group members also suggested that the CSFA Program reconsider the requirements to demonstrate eligibility for disability benefits, such that they questioned, among other things, whether an exclusive reliance on assessments by medical professionals is appropriate. This feedback informed the amendments to the requirements to demonstrate eligibility which are included in this regulatory package.

Prepublication

The proposed regulations were published in the Canada Gazette, Part I, on December 18, 2021, followed by a 60-day comment period. A total of 28 comments were received, 26 through the Government of Canada’s Online Regulatory Consultation System and 2 by email. A longer period than the standard 30-day comment period was provided in an effort to allow stakeholders with disabilities a greater opportunity to participate.

Social media posts targeted for the general public and the disability community were used to raise awareness of the opportunity to provide feedback on the draft regulations. In addition, NAGSFA — including NEADS — agreed to circulate links to the prepublished materials and encouraged their members to participate in the consultations.

Feedback during prepublication was generally positive, with stakeholders expressing strong support for the proposed definition of persistent or prolonged disability, modernizing definitions of disability, and expanding eligibility for the CSFA Program’s disability supports. For example, the Canadian Association of Student Financial Aid Administrators noted that changes to the definitions of disability are “welcome” and will result in an increase of supports to students with a disability. NEADS stated that, “It’s a terrific new direction for this funding program that will benefit many disabled students who were previously ineligible for grants!” A few stakeholders explicitly noted these regulatory amendments are a good example of a collaborative approach to inform decision-making to benefit students.

Some stakeholder groups and one individual with lived experience argued that episodic disabilities and conditions such as chronic pain or complex pain syndrome should also be eligible for CSFA Program disability supports. Students who take a temporary leave from their studies for medical reasons, including mental health reasons, can be eligible for interest-free and payment-free leave from their student loan obligations for up to 18 months. However, disabilities that are present for less than 12 months, including episodic disabilities, are not included in the definition of persistent or prolonged disability. While this suggestion is beyond the scope of the measures announced in Budget 2021, it could potentially be considered in the future.

Also beyond the scope of the present regulatory amendments were suggestions to provide more flexibility in supporting students with a disability who are taking a reduced course load of less than 40% (i.e. those who do not qualify to be considered a full-time student), and to provide students with access to the same supports and funding under universal definitions of disability regardless of the jurisdiction.

Other comments emphasized the need for clear and proactive communications to ensure newly eligible students and borrowers are aware of CSFA Program disability supports and how to access them. Suggestions included ensuring the changes to the definitions are available as part of the application forms for student financial assistance (for which the CSFA Program will collaborate with provinces and territories) and working with student groups (such as NEADS) to develop accessible communications targeted to students and borrowers with a disability. The CSFA Program will also use social media, web platforms and news releases to communicate the new measures.

On December 20, 2021, both NAGSFA and ICCSFA members were advised of the publication of the draft regulations in the Canada Gazette and were invited to provide feedback. NAGSFA members particularly emphasized the need for engagement and targeted communications with students to facilitate implementation of the new measures. ICCSFA members reiterated their overall support for the proposed measures and emphasized the need for clear and timely direction from the CSFA Program on plans for their implementation.

At a meeting in January 2022, the Minister of Employment, Workforce Development and Disability Inclusion’s Disability Advisory Group was informed that the draft regulations had been prepublished and members were invited to provide input. If members provided input via the Online Regulatory Consultation System, their affiliation with the Advisory Group was not provided.

Additional amendments

In addition to the draft regulatory text published in the Canada Gazette, Part I, the CSFA Program consulted NAGSFA and ICCSFA on two additional potential amendments:

• Further modernizing the definitions of permanent disability, severe permanent disability and persistent or prolonged disability from a “functional limitation caused by an impairment” to an “impairment or a functional limitation” in keeping with the Accessible Canada Act definition of disability; and
• Replacing the list of documentation required for the Canada Student Grant for Students with Disabilities and the Canada Student Grant for Services and Equipment – Students with Disabilities with a broader criterion that permits greater discretion and flexibility in the types of documents that can be accepted.

The CSFA Program sought feedback on the proposed additional amendments at a meeting with NAGSFA on January 19, 2022. During this engagement, feedback was positive. No concerns were raised with the additional amendments to the definitions of disability or to provide greater flexibility in the documentation required for the two disability-related grants. Members re-emphasized the need for engagement and targeted communications with students to facilitate implementation of the new measures.

Some ICCSFA members attended the NAGSFA meeting on January 19, 2022, where the proposed additional amendments were discussed. On February 17, 2022, the CSFA Program met with ICCSFA to consult on the proposed regulations, including the proposed additional amendments. ICCSFA and its Students with Disabilities subcommittee were supportive of the additional amendments to further modernize the definitions of disability and provide greater flexibility in the documents required for disability-related grants but re-emphasized the need for clear and timely direction from the CSFA Program. The CSFA Program will continue to work closely with ICCSFA to respond to identified implementation challenges and ensure consistency across jurisdictions.

Given that no concerns were raised with the additional modernization of the definitions, and that stakeholders, including student groups and student financial aid administrators, have long advocated for greater flexibility in the documentation requirements, both proposals have been included in the final regulatory amendments.

Modern treaty obligations and Indigenous engagement and consultation

The regulatory amendments are not expected to have differential impacts on Indigenous peoples or negative implications for modern treaties, as per Government of Canada’s obligations in relation to rights protected by section 35 of the Constitution Act, 1982, modern treaties and international human rights obligations.

The proposals included in Budget 2021 were assessed for modern treaty implications as per the Cabinet Directive on the Federal Approach to Modern Treaty Implementation. The assessment found no immediate impacts on modern treaty obligations.

Instrument choice

Expanding access to disability supports to students and borrowers with a persistent or prolonged disability, modernizing the language used to describe impairments experienced by persons with disabilities within the definitions, and providing greater flexibility in the documents required to demonstrate eligibility for the disability-related grants could not be addressed by means other than regulatory amendments. As a result, non-regulatory options were not considered.

Regulatory analysis

Benefits and costs

A cost-benefit analysis was conducted to assess the incremental impacts to stakeholders of extending disability supports to students who have a persistent or prolonged disability, updating the definitions of permanent disability and severe permanent disability, and allowing greater flexibility in the documents that can be accepted for disability-related grants. Comparisons were made to a baseline scenario in which these regulatory amendments are not made. No costs or benefits are anticipated related to the amendments to clarify that permanent disabilities are excluded from the definition of persistent or prolonged disability or to amend the definitions of disability from a “functional limitation caused by an impairment” to an “impairment or a functional limitation.” These changes to the regulatory language would not affect students’ eligibility for CSFA Program disability supports or their ability to access them. The complete cost-benefit analysis report is available upon request.

The stakeholders that are most directly affected are students and borrowers with disabilities and the Government of Canada. The 10 participating provincial and territorial governments that work in collaboration to deliver the CSFA Program will be affected indirectly. They will retain the flexibility to decide whether to align their policies with those of the Government of Canada. In addition, Canadian society will be affected indirectly given that PSE helps to mitigate overall income inequality.

Key data sources for this cost-benefit analysis include the CSFA Program’s 2018–2019 Statistical Review (e.g. number of student borrowers with disabilities, spending on disability-targeted supports in past years), external literature on students with disabilities (e.g. labour market outcomes, PSE experiences, financial barriers), and actuarial forecasts provided by the Office of the Chief Actuary (e.g. projected growth in the population of CSFA Program recipients in future years), which are based on demographic information, economic conditions, and the policy parameters of the CSFA Program as of March 2021. In addition, a review of research literature helped to identify the impact of non-repayable funding on student groups, such as low- and middle-income students and older learners, among other student populations.

All monetized costs and benefits were estimated on an annual basis over a 10-year period from the 2022–2023 loan year to the 2031–2032 loan year. The 2022–2023 year is the first year in which the amended regulations will be in effect, and 10 years is the regular span for cost-benefit analyses as it allows sufficient time for the impacts of regulatory amendments to fully materialize. A discount rate of 7% was applied for present value calculations.

Although the amendments to allow greater flexibility in the documents that can be accepted for disability-related grants could have a small impact on monetized costs and benefits, the impact is not expected to be significant. While the amendments may allow some students to more easily access the grants, the eligibility criteria will not change. Furthermore, the number of students with a permanent disability currently denied grants due to issues with documentation is very low because assessors work with students to resolve issues with insufficient documentation (e.g. by accepting supplemental information to demonstrate the disability) rather than simply denying an application for disability supports. Provinces and territories participating in the CSFA Program were surveyed to provide estimates of how many students might gain access to the disability-related grants due to these amendments. Jurisdictions representing more than two thirds of the CSFA Program’s recipients indicated that no data were available to inform an estimate, but that they expected the impact to be low for the reasons outlined above. Given that data to inform an estimate is limited, the benefits were evaluated on a qualitative basis rather than a quantitative basis, and a sensitivity analysis using the limited data provided by jurisdictions was done to test hypothetical effects on the quantified benefits and costs.

Monetized benefits

The total monetized benefits are estimated at $1,058 million (present value) over the period of analysis. This includes $868 million in increased cash transfers to students and graduates, $166 million from increased future earnings resulting from improvements to drop-out rates from PSE, and $23 million from additional income taxes on future earnings.

Increased transfers in grants and repayment assistance

The regulatory amendments will result in approximately 30 000 post-secondary students becoming newly eligible for a Canada Student Grant for Students with Disabilities, of which 22% will utilize the Canada Student Grant for Services and Equipment – Students with Disabilities. This represents a direct transfer to student borrowers. The cost of disbursing additional grants is identified as a cost to the Government of Canada and is equal to the benefit of the direct transfer to student borrowers. The associated cost savings related to the lower amount of loans disbursed (i.e. because a greater portion of borrowers’ financial need is met by grants) are counted separately. Associated costs related to loans include the risk of default and Government interest payments during the in-study and grace periods.

Furthermore, the regulatory amendments will result in approximately 10 000 CSFA Program borrowers becoming newly eligible for the Repayment Assistance Plan for Borrowers with Disabilities who will therefore receive direct transfers in the form of enhanced repayment assistance. All graduates who are newly eligible for the Repayment Assistance Plan for Borrowers with Disabilities will benefit from the Government of Canada making payments toward the principal loan, as this feature is specific to the Repayment Assistance Plan for Borrowers with Disabilities and cannot be received in Stage 1 of the standard Repayment Assistance Plan.

Benefits for students who are in provinces and territories that do not participate in the CSFA Program are also included, as the analysis includes costs for additional alternative payments, which are directly equal to the benefits.

Future earnings potential from reducing the number of students dropping out of PSE and new students pursuing PSE

By increasing access to non-repayable grants, the Government of Canada is improving affordability and encourages students with disabilities to complete PSE and continue on to higher levels of education, which in turn leads to higher future earnings potential. Future earnings potential is monetized for students who would have dropped out from PSE for financial reasons in the absence of having access to the CSFA Program’s disability-targeted supports. On average, 1 400 beneficiaries who would have dropped out of PSE in absence of these supports would enter the labour market each year and would see an average gross income premium of $12,500 per year. The earning benefits accrued by those otherwise unable to pursue PSE under the baseline scenario are offset by the tuition fees under the regulatory scenario, as this is an additional cost for students who would not have decided to pursue PSE without these regulatory amendments. These benefits are also netted of taxes as these can be considered a separate benefit to the Government of Canada.

Additional federal income taxes from future potential earnings

As the taxes have already been subtracted from future earnings potential figures for students pursuing PSE, it is essential to estimate the additional income taxes the Government of Canada can collect from these higher future potential earnings. On average, an additional $2,200 in income taxes will be collected per student per year.

Qualitative benefits

Students with disabilities who will become newly eligible for the CSFA Program’s disability supports, as well as students with a permanent disability who might newly access grants due to greater flexibility in the documentation that can be accepted for disability-related grants will experience the following benefits:

• Increased likelihood of completing post-secondary education: Students with disabilities face greater barriers to completing PSE, with affordability challenges being one of the most cited reasons for withdrawing from study prior to completion.^{footnote 3} The CSFA Program’s 2019–2020 administrative data shows that more than 60% of recipients of the Canada Student Grant for Students with Permanent Disabilities were low- and middle-income students. Through reducing financial barriers, research finds that there are positive impacts on PSE completion and persistence.^{footnote 4} Furthermore, those who complete PSE experience demonstrated socio-economic benefits associated with post-secondary attainment, such as reducing the earnings gap between Canadians with and without disabilities.^{footnote 3}
• Reduced PSE-related financial difficulties for grant recipients and recipients of the Repayment Assistance Plan for Borrowers with Disabilities: Students with disabilities often require more time to complete their studies and require accommodations and supports, which can lead to the accumulation of higher debt loads and present additional PSE expenses for this population. New access to the Canada Student Grant for Students with Disabilities will increase the share of grant funding relative to total funding, which is particularly crucial for Canadians with a persistent or prolonged disability, who face greater challenges with PSE affordability, loan repayment and with the transition to the labour market.^{footnote 5} For example, in 2017–2018, the three-year default rate of CSFA Program borrowers with disabilities was five percentage points higher than the overall average. Furthermore, periods of economic downturn exacerbate these challenges, as they present negative effects for recent graduates and borrowers; Canadians with disabilities are particularly vulnerable to these effects.^{footnote 6} The provision of additional grants and enhanced repayment assistance will help more students with disabilities afford PSE and offer greater repayment support.
• Decreased unemployment rates and shorter unemployment spells for PSE graduates: Through increasing PSE attainment, more Canadians with disabilities will experience the relatively lower unemployment rates associated with PSE credentials, compared to individuals with high school diplomas or less.^{footnote 7} The ability to complete PSE is expected to contribute to higher employment rates and greater labour market participation for this population.
• Positive intergenerational effects of parental education on children: PSE attainment can have long-term benefits for one’s children. Studies suggest that parental educational attainment has been found to contribute to improved cognitive child development, increased parental investment in child health and education, higher post-secondary enrolment for children and, eventually, higher future earnings.

Canadian society will experience the following benefits:

• These regulatory amendments may help reduce income inequality between Canadians with and without disabilities, as recipients will receive higher financial support and enhanced assistance in the repayment of their federal student loans. As cited in McMahon,^{footnote 8} Leslie and Brinkman provide an extensive survey of research on the effects of post-secondary education and conclude that post-secondary education tends to lead to reduced income inequality in Canada. These regulatory amendments may also result in greater productivity to businesses and society as they may reduce dropout rates, therefore resulting in more PSE graduates.

Monetized costs

The cost to the Government of Canada for providing additional grants under the amendments is based on estimates using CSFA Program administrative data and projections from the Office of the Chief Actuary. The calculation of the estimated costs also heavily relied on information gathered from Statistics Canada’s Canadian Survey on Disability (2017) and the 2018–2019 CSFA Program Statistical Review, which were used to develop assumptions and estimates concerning the number of beneficiaries who will become newly eligible for the CSFA Program’s disability supports.

As stated above, the cost of distributing additional grants to students (30 000 students per year on average) under the regulatory amendments is the dollar-for-dollar amount of additional grants plus the cost of alternative payments paid to non-participating jurisdictions on these additional grant disbursements. Access to the Canada Student Grant for Students with Disabilities will also reduce the need for student loans leading to cost savings associated with these loans.

The costs of increased access to the Repayment Assistance Plan for Borrowers with Disabilities consist of the costs associated with additional borrowers who now qualify (10 000 per year), plus the cost of alternative payments paid to the non-participating provinces and territories. The net cost is the difference between these costs and the savings in program costs related to not disbursing as much in CSLs to students as a result of providing additional grants. This considers three different types of CSFA Program savings, such as

• cost savings of supporting students during and after their studies, such as the in-study interest subsidy;
• program risks, such as the provision for bad debt and loans forgiven; and
• alternative payments on loans.

The increased volume of applications for the CSFA Program’s disability-targeted supports associated with the regulatory amendments will require hiring additional full-time employees to validate and process applications, which present minor administrative costs to the Government of Canada.

The total monetized costs are estimated at $822 million (present value) over the next 10 years.

Cost-benefit statement

• Number of years: 10 (loan years 2022–2023 to 2031–2032)
• Base year for costing: 2022
• Present value base year: 2022
• Discount rate: 7% (Canadian Cost-Benefit Analysis Guide: Regulatory Proposals)

Table 1: Monetized costs (in millions of Canadian dollars)

Impacted stakeholder	Description of cost	Base year 2022–2023	Second year 2023–2024	Final year 2031–2032	Total (present value)	Annualized value
Government of Canada	Cost of disbursing additional grants and enhanced repayment assistance (net cost of reduced loans)	73	110	122	819	117
	Administration / Additional full-time equivalent	0.3	0.3	0.3	2.1	0.3
All stakeholders	Total costs	73	110	122	822	117.3

Table 2: Monetized benefits (in millions of Canadian dollars)

Impacted stakeholder	Description of benefit	Base year 2022–2023	Second year 2023–2024	Final year 2031–2032	Total (present value)	Annualized value
Students	Increased transfers in grants and repayment assistance	76	116	129	868	124
	Increased future potential earnings of students who otherwise would have dropped out of PSE	−8	−12	91	166	24
Government of Canada	Additional income taxes from future potential earnings	1	2	4	23	3
All stakeholders	Total benefits	69	105	224	1,058	151

Table 3: Summary of monetized costs and benefits (in millions of Canadian dollars)

Impacts	Base year 2022–2023	Second year 2023–2024	Final year 2031–2032	Total (present value)	Annualized value
Total costs	73	110	122	822	117
Total benefits	69	105	224	1,058	151
NET IMPACT	−4	−5	102	236	34

Table 4: Quantified (non-$) and qualitative impacts

Positive impacts	Base year 2022–2023	Second year 2023–2024	Final year 2031–2032	Total (present value)	Annualized value
Number of students benefitting from increased grants, Repayment Assistance Plan	39 000	40 000	44 000	N/A	N/A
Business — additional number of skilled workers available	510	1 026	1 631	14 215	N/A

For borrowers who are newly eligible to receive disability supports due to extending disability supports to those with a persistent or prolonged disability, as well as a small number of students with a permanent disability who might newly access grants due to the change in the documentation that can be accepted for disability-related grants:

• Reduced PSE-related financial barriers for students who are now eligible to receive non-repayable disability-related funding;
• Reductions in student debt amounts for students who already face high financial need, higher debt, and poverty;
• Increased likelihood of completing PSE for those who benefit from higher levels of non-repayable funding;
• Better academic achievement due to reduced need for employment during studies;
• Increased potential earnings due to higher wage premiums associated with PSE for those who complete PSE due to increased non-repayable funding; and
• Decreased unemployment rates and shorter unemployment spells for those who complete PSE due to increased non-repayable funding.

Additional benefits for Canadian society and businesses:

• Reduced income inequality as those who will most benefit from additional grants are people who are lower income; and
• Greater productivity to businesses and society due to potentially more people gaining PSE credentials.

Sensitivity analysis

One way of assessing how sensitive the results of the cost-benefit analysis are to uncertain variables is to observe changes by varying the value of those variables while holding all else constant.

Discount rates of 3%, 5% and 10% were tested in addition to the discount rate of 7% used in the central analysis. Adopting different discount rates does not alter the overall result of the analysis.

Impact of changing the discount rate on the benefits and costs (millions of Canadian dollars)

Discount rate	Present value benefits	Present value costs	Net present benefit
3%	1,281	970	311
5%	1,161	891	270
Central analysis: 7%	1,058	822	236
10%	927	733	194

Differences in median incomes and the estimated income premiums students with disabilities will derive from completing PSE were also examined. Three scenarios were simulated by adjusting the median incomes of the general Canadian population:

• Scenario A: Canadians with disabilities earn 20% less than the Canadian median; this gap remains consistent at all levels of education.
• Scenario B: Canadians with disabilities earn 10% less than the Canadian median; this gap remains consistent at all levels of education.
• Scenario C: Canadians with disabilities earn less than the Canadian medians at all levels of education, but this gap decreases as educational attainment increases (25% less at high school level, 15% less at college level, 10% less for bachelor graduates, and 5% less for degrees above a bachelor’s degree).

In all scenarios, the present value of the costs was unchanged at $822 million. In scenario A, the present value of the benefits was $976 million, for a benefit-cost ratio of 1.2:1. In scenario B, the present value of the benefits was $1,017 million, for a benefit-cost ratio of 1.2:1. In scenario C, the present value of the benefits was $1,253 million, for a benefit-cost ratio of 1.5:1.

Impact of differing earnings on the benefits and costs (millions of Canadian dollars)

Scenario: income premium produced	Present value benefits	Present value costs	Net present value
Central analysis: 11,937	1,058	822	236
A: 9,550	976	822	154
B: 10,744	1,017	822	195
C: 16,104	1,253	822	431

While the amendments to provide greater flexibility in the documentation that can be accepted for disability-related grants would not change eligibility for these grants, by making it easier for some students to apply, a small increase in access to the grants could result. However, this number is not expected to be significant because, as explained above, assessors work with students to resolve documentation issues rather than simply denying the application. Nonetheless, since data to inform an estimate is limited and impacts may vary across jurisdictions, a sensitivity analysis was performed to test the potential effect of the amendments on the calculated costs and benefits in a hypothetical scenario where an additional 3% of students became eligible for the grants. The outcome increased the present value benefits to $1,108 million and present value costs to $859 million, producing a net present value of $249 million.

Small business lens

Analysis under the small business lens concluded that the regulations will not impact Canadian small businesses.

One-for-one rule

The one-for-one rule does not apply to these regulatory amendments, as there is no change in administrative burden on businesses.

Regulatory cooperation and alignment

The regulatory amendments are not related to any commitment under a formal regulatory cooperation forum. The ICCSFA is the federal-provincial-territorial body for student financial assistance in Canada, but the organization does not focus on regulatory cooperation. However, the CSFA Program has consulted with provincial and territorial stakeholders, and they have been supportive of the measures. Québec, Nunavut and the Northwest Territories do not currently participate in the CSFA Program. However, as per the CSFAA, these three jurisdictions receive an alternative payment contingent on their programs having “substantially the same effect” as the CSFA Program.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus (GBA+)

These regulatory amendments will support various vulnerable groups of students and borrowers and are expected to have significant benefits from the perspective of gender and diversity. The gender-based analysis plus did not identify any unintended adverse disproportionate or differential impacts resulting from the regulatory amendments.

While the amount of the Canada Student Grant for Students with Permanent Disabilities and the Canada Student Grant for Services and Equipment – Students with Permanent Disabilities provided to a student is not based on income,^{footnote 9} in 2019–2020, 81.3% of Canada Student Grant for Students with Permanent Disabilities recipients were low- or middle-income students. Literature shows that regardless of the nature of disability, Canadians with disabilities are more likely to have a low income; therefore, it is expected that newly eligible recipients will mirror similar income levels. As a result, households who face the deepest challenges in affording PSE will benefit most from these increased amounts. Since students from families in the lower income quintiles are less likely to pursue higher education than their high-income peers, lowering economic barriers for low-income students through non-repayable grants can also promote persistence and likelihood of graduation.^{footnote 10}

Increased access to grants for students who are disadvantaged in the labour market, such as students with disabilities, can increase graduation rates and narrow gaps in PSE attainment and earnings between these populations.^{footnote 10}

Research shows that women are more likely than men to have a disability, which is consistent with the CSFA Program’s administrative data; in 2019–2020, 61.7% of Canada Student Grant for Students with Permanent Disabilities recipients were women. The CSFA Program’s data also indicated that women tend to graduate with debt loads that are approximately 8% higher than the average for men. Therefore, these regulatory amendments are expected to benefit more women than men.

In addition, the regulatory amendments benefit Indigenous students and Indigenous borrowers. The CSFA Program’s administrative data shows that Indigenous students are overrepresented in the population of students with disabilities within the Program. Furthermore, in 2017, it was found that approximately 19% of the Indigenous population aged 15 to 24 years in Canada reported having a disability compared to approximately 12% of the non-Indigenous population in the same age demographic.^{footnote 11} In the Canadian population, First Nations, Inuit and Métis are less likely to report good health than non-Indigenous people, with First Nations and Métis being more likely to report chronic health conditions.^{footnote 12} Indigenous Canadians face affordability challenges that have been exacerbated by the COVID-19 pandemic; in 2020, research found that Indigenous Canadians with disabilities or a long-term condition more frequently reported that the COVID-19 pandemic had a significant impact on their ability to meet basic needs, such as food and transportation costs.^{footnote 13}

In the 2019–2020 loan year, approximately 24% of CSFA Program borrowers with a disability had been out of high school for 10 years or longer. As research demonstrates higher levels of education result in a higher wage premium, some older Canadians with a disability may be looking to up-skill to increase their income, while others may have faced barriers that prevented them from participating in or completing PSE earlier in life. The literature suggests that delays entering PSE are more common for Canadians with a disability; while 77% of Canadian youth without diagnosed health conditions enroll in PSE by their early 20s; this is true for only 70% of youth with neurodevelopmental conditions, and 47% of youth with mental health conditions.^{footnote 14} These barriers are even greater when older Canadians pursuing PSE also have dependent children. CSFA Program data shows that the total calculated financial need of students with a disability increases when factoring in time out of high school and presence of dependent children. Through improved access to disability-targeted supports, older learners with a disability will be able to receive greater financial support, both while in study and in repayment. Unlike other grants offered by the CSFA Program, the amount of the Canada Student Grant for Students with Disabilities is not based on income, which can particularly benefit older students who may have higher incomes due to spending more time in the labour market.

While the CSFA Program does not collect information on sexual orientation or gender minorities, LGBTQ+ people are more likely to report having a disability; 39% of transgender people, 40% of bisexual men, 36% of lesbian women, and 36% of bisexual women report having a disability.^{footnote 15} LGBTQ+ students face significant financial barriers when attending PSE, being more likely to have low incomes and to face high levels of student debt.^{footnote 16} Research demonstrates that increases to student financial assistance result in lower barriers to accessing and attaining PSE. Given lower incomes and higher prevalence of mental health conditions and disabilities for LGBTQ+ people in Canada, it is expected that this population will benefit from the regulatory amendments, through increased access to non-repayable funding and enhanced repayment support.

While the CFSA Program does not currently collect data on visible minority groups and immigrant students, it is expected that the regulatory amendments will benefit students from these groups. Research demonstrates that visible minorities in Canada are more likely to have low incomes compared to the white population.^{footnote 17} Furthermore, approximately 54% of visible minority Canadians with long-term conditions and disabilities report that their well-being declined since the beginning of the COVID-19 pandemic.^{footnote 18} Additionally, research shows that low-income immigrants and refugees are at higher risk of reporting poor health. Approximately 25% of Canadians who immigrated before 2001, 11% of Canadians who immigrated between 2001 and 2010, and 9% of Canadians who immigrated between 2011 and 2016 report having a disability.^{footnote 19} New Canadians also experience slower integration into the labour market and greater challenges with PSE attainment.^{footnote 20}

Implementation, compliance and enforcement, and service standards

Implementation

The regulatory amendments will come into force on August 1, 2022, to coincide with the beginning of the 2022–2023 school year. This will allow disability-targeted benefits assessed under the revised requirements to be disbursed at the same time as other student financial assistance. This requires coordination with the third-party service provider who operates the National Student Loan Service Centre and with participating jurisdictions that are responsible for assessing students’ eligibility for disability supports. The assessment of eligibility would remain unchanged:

• For the Canada Student Grant for Students with Disabilities and Canada Student Grant for Services and Equipment – Students with Disabilities, students must provide a document or documents that demonstrate that the student has a permanent disability or a persistent or prolonged disability, such as a medical certificate, a psycho-educational assessment, or documentation indicating receipt of federal or provincial disability assistance;
• For the Repayment Assistance Plan for Borrowers with Disabilities, borrowers with a permanent disability must either have had their permanent disability validated previously (e.g. by receiving the Canada Student Grant for Students with Disabilities or Canada Student Grant for Services and Equipment – Students with Disabilities or provide a verification questionnaire). Borrowers with a persistent or prolonged disability will have to attest that their persistent or prolonged disability is ongoing, and every five years will be asked to submit documentation to verify that their persistent or prolonged disability is ongoing; and
• For the Severe Permanent Disability Benefit, borrowers must provide a medical report completed by a licensed physician or nurse practitioner.

Existing federal-provincial-territorial and stakeholder forums will be used to notify all stakeholders of the changes, and to explain how they support making student financial assistance more accessible and affordable for students and borrowers with a disability. Social media and web platforms and news releases will communicate the new measures to student borrowers and other interested stakeholders.

Compliance and enforcement

To support effective management and accountability to students, the CSFA Program will continue to be monitored to ensure effective program performance and integrity. The CSFAA requires that the Minister of Employment, Workforce Development and Disability Inclusion table an actuarial report at least once every three years. This report provides an estimate of program costs and revenues, a 25-year forecast of future program costs and revenues, and an explanation of the methodology and actuarial and economic assumptions used to produce the figures presented in the report. The CSFAA also requires that the Minister table in Parliament an annual report on the CSFA Program, which provides detailed statistics on the program (including the value of the portfolio) and outlines key objectives, initiatives, and accomplishments achieved over a given academic year.

The regulatory amendments do not necessitate changes to the CSFA Program’s compliance and enforcement tools or strategies. The CSFAA also provides sufficient authority for the CSFA Program to ensure that disability supports are not granted to students and borrowers who are not eligible. Subsection 17(1) of the CSFAA provides for a fine of up to $1,000 for students and borrowers who knowingly provide any false or misleading information, including by omission, in an application or other document. In addition, section 17.1 of the CSFAA allows for any such student or borrower to be denied additional student financial assistance as well as certain other CSFA Program benefits, including, but not limited to, interest-free periods or repayment assistance periods.

Contact

Jennifer Balcom
Senior Policy Analyst
Canada Student Financial Assistance Program
Employment and Social Development Canada
Email: EDSC.PCAFE.DEF.INV-DIS.DEF.CSFAP.ESDC@hrsdc-rhdcc.gc.ca