Vol. 151, No. 14 — July 12, 2017

Registration

SOR/2017-131 June 20, 2017

CANADA STUDENT FINANCIAL ASSISTANCE ACT

Regulations Amending the Canada Student Financial Assistance Regulations

P.C. 2017-783 June 20, 2017

His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to subsection 15(1) (see footnote a) of the Canada Student Financial Assistance Act (see footnote b), makes the annexed Regulations Amending the Canada Student Financial Assistance Regulations.

Regulations Amending the Canada Student Financial Assistance Regulations

Amendments

1 Subsection 24(1) of the Canada Student Financial Assistance Regulations (see footnote 1) is replaced by the following:

24 (1) If repayment assistance is granted because of an error by the borrower in their application for repayment assistance, the Minister shall

2 Schedule 3 to the Regulations is replaced by the Schedule 3 set out in the schedule to these Regulations.

Coming into Force

3 (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.

(2) Section 2 comes into force on August 1, 2017, but if these Regulations are registered after that day, that section comes into force on the day on which these Regulations are registered.

SCHEDULE

(Section 2)

SCHEDULE 3

(Paragraphs 14.3(b), 38(1)(d), 38.1(1)(e) and 38.2(1)(f))

Income Thresholds, 2016 ($)

TABLE 1

Province

Ont.

N.S.

N.B.

Man.

B.C.

P.E.I.

Sask.

Alta.

N.L.

Y.T.

Family Size (number of persons)

  

1

25,194

21,301

21,404

25,235

24,586

21,218

21,742

25,159

21,780

24,617

2

31,367

26,518

26,646

31,419

30,609

26,414

27,068

31,324

27,113

30,647

3

38,562

32,601

32,756

38,624

37,631

32,474

33,276

38,508

33,331

37,678

4

46,817

39,583

39,773

46,894

45,687

39,428

40,403

46,753

40,469

45,744

5

53,101

44,893

45,108

53,187

51,818

44,718

45,823

53,027

45,899

51,883

6

59,889

50,634

50,876

59,985

58,442

50,434

51,681

59,806

51,767

58,515

7 or more

66,677

56,372

56,642

66,785

65,068

56,151

57,538

66,585

57,634

65,147

TABLE 2

Province

Ont.

N.S.

N.B.

Man.

B.C.

P.E.I.

Sask.

Alta.

N.L.

Y.T.

Family Size (number of persons)

  

1

45,559

39,172

34,606

38,990

42,665

35,792

38,575

48,547

35,108

46,247

2

63,783

54,842

48,450

54,584

59,733

50,109

54,005

67,966

49,153

64,746

3

79,183

68,241

60,123

68,363

77,601

63,704

67,642

81,464

61,410

76,098

4

90,113

77,742

68,408

78,137

90,274

73,352

77,311

91,032

70,979

84,154

5

98,594

85,115

74,832

85,723

100,102

80,831

84,810

98,465

78,396

90,401

6

105,514

91,143

80,080

91,922

108,135

86,947

90,945

104,532

84,460

95,515

7 or more

111,376

96,236

84,520

97,161

114,928

92,111

96,126

109,663

89,584

99,828

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

There is a need to amend the Canada Student Financial Assistance Regulations (CSFAR) in support of the continued operation of the Canada Student Loans Program (CSLP). The annual update to the income thresholds set out in Schedule 3 to the CSFAR is a routine change that allows the CSLP’s eligibility criteria to be aligned with the growth in the relevant provincial/territorial Consumer Price Index (CPI) and to reflect the students’ real family income. In addition, the amendments to subsection 24(1) of the CSFAR will remove the discretion by setting out the instances when the Minister shall cancel and reduce the repayment assistance that was granted as a result of an error by the borrower in their Repayment Assistance Plan (RAP) application.

Background

Annual income thresholds update

In 2009, the CSLP introduced the Canada Student Grants (CSG) to provide targeted, up-front non-repayable assistance to students underrepresented in post-secondary education (PSE), including students from low- and middle-income families, students with dependants, and students with permanent disabilities. CSG amounts are prescribed in Part VI of the CSFAR.

Since their introduction, eligibility for all CSGs, except those targeted to students with permanent disabilities, and eligibility for Part-Time Canada Student Loans (PT-CSL) have been based on the Low-Income (LI) and Middle-Income (MI) Thresholds tables set out in Schedule 3 of the CSFAR. The LI Thresholds are derived using estimates from Statistics Canada’s Low-Income Cut-Off and are intended to measure the income level at which a student, or a student’s family, would encounter financial difficulties because they are spending a greater share of their income on necessities (e.g. food, shelter, and clothing) than an average family of similar size. The MI Thresholds are derived using the CSLP’s Moderate Standard of Living indicators (MSOL). MSOL is a measure intended to determine the income level at which a student or a student’s family has enough discretionary income to contribute to the costs of PSE.

In order for students to continue to be eligible for the CSG and PT-CSL tied to Schedule 3 of the CSFAR, the income thresholds in Table 1 and Table 2 must be adjusted each year to reflect the annual growth in the relevant provincial/ territorial CPI. This annual amendment is required for the income thresholds to continue to reflect the students’ real family income of students in the subsequent academic year. Without this annual adjustment, the real value of the income thresholds would decrease, and eligibility for these CSGs and PT-CSLs tied to Schedule 3 would become more restrictive. If the thresholds are not adjusted, students in the 2017–2018 academic year may be impacted in the following ways:

In Budget 2016, the Government of Canada proposed two changes to CSGs. The first of these changes came into effect on August 1, 2016, and saw CSG amounts increase by 50%. This change resulted in the CSG for Students from Low-Income Families increasing from $2,000 to $3,000 per year, the CSG for Students from Middle-Income Families increasing from $800 to $1,200 per year, and the CSG for Part-Time Studies (CSG-PT) increasing from $1,200 to $1,800 per year.

The second change proposed in Budget 2016 aims to establish new income eligibility thresholds for CSGs targeted to full-time low- and middle-income students beginning in the 2017–2018 academic year. These new thresholds will replace the existing low- and middle-income thresholds with the new national, single progressive thresholds that will see grant amounts gradually decrease based on family income and family size.

Moving forward, Budget 2017 committed to expanding eligibility for the CSG-PT, the CSG for Full-Time Students with Dependants, the CSG for Part-Time Students with Dependants, and PT-CSLs beginning in the 2018–2019 academic year.

Repayment assistance

In addition to CSGs, the RAP was introduced in 2009 to support borrowers who experience financial difficulties in repayment. Subsection 24(1) of the CSFAR provides that the Minister may cancel or reduce a borrower’s repayment assistance if it was granted because of an error by the borrower in their RAP application.

Subsection 24(1) does not set out the criteria to be used when exercising this discretion. The Standing Joint Committee for the Scrutiny of Regulations (SJCSR) has raised this matter with the Department of Employment and Social Development and has suggested that the CSFAR should indicate, if only in general terms, the criteria to be used when exercising this discretion, if such discretion should remain.

Objectives

Annual income thresholds update

The objective of the annual income thresholds update is to amend the income thresholds in Table 1 and Table 2 set out in Schedule 3 to the CSFAR to account for the annual growth in the relevant provincial/territorial CPI, and allow the eligibility for the CSGs and PT-CSLs tied to Schedule 3 to continue to reflect the students’ real family income.

Repayment assistance

The objective of the amendments to subsection 24(1) of the CSFAR is to remove the discretion in subsection 24(1) by setting out the instances when the Minister shall cancel and reduce the repayment assistance that was granted as a result of an error by the borrower in their RAP application.

Description

Annual income thresholds update

The annual thresholds update will increase the income thresholds in Table 1 and Table 2 of Schedule 3 to the CSFAR to reflect the growth in the relevant provincial/ territorial CPI between 2015 and 2016 (a period during which the overall national CPI grew by 1.4%). The tables set out the income thresholds by province/territory and family size, and will be used to determine eligibility for the CSGs and PT-CSLs tied to Schedule 3.

Repayment assistance

The amendments to subsection 24(1) of the CSFAR provide that the Minister shall (1) cancel the repayment assistance if a borrower made an error in their RAP application that resulted in a determination that the borrower was entitled to receive the assistance when the borrower was not entitled; and (2) reduce the repayment assistance to the extent of the excess in assistance received if a borrower made an error in their RAP application that resulted in the borrower receiving an amount of assistance that was more than $100.00 in excess of the amount that the borrower was entitled to receive for a repayment assistance period.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small business.

Consultation

Annual income thresholds update

Provincial and territorial participants, as well as student and educational stakeholder groups, were consulted during the development and implementation of the CSGs in 2008 and 2009. These partners and stakeholder groups are supportive of the use of the CPI as a proxy to keep the income thresholds in Table 1 and Table 2 of Schedule 3 to the CSFAR up-to-date.

Repayment assistance

Given no associated policy or operational implications, neither provincial/territorial nor stakeholder consultations were held to discuss the recommendation of the SJCSR.

Rationale

Annual income thresholds update

The amendment will benefit low- and middle-income students by ensuring those at the upper limits of the income thresholds remain eligible for the CSGs and PT-CSLs tied to Schedule 3 of the CSFAR. It will also promote the ongoing consistency and fairness of the CSLP need assessment process by ensuring the Schedule 3 tables reflect the students’ real family income.

The additional cost to the Government of Canada of disbursing the CSGs and PT-CSLs tied to Schedule 3 of the CSFAR to low- and middle-income students in the 2017–2018 academic year is estimated to be $60,000, with no associated systems or implementation costs.

Repayment assistance

The amendments to subsection 24(1) of the CSFAR will remove the discretion in subsection 24(1) of the CSFAR by setting out the instances when the Minister shall cancel and reduce the repayment assistance that was granted as a result of an error by the borrower in their RAP application.

There are no costs associated with the amendments to subsection 24(1). There are also no associated policy implications or operational impact on the CSLP. The established process to screen RAP applications for errors will remain consistent, and borrowers will not experience any change in the delivery of repayment assistance.

Implementation, enforcement and service standards

Annual income thresholds update

The amendment will come into force on August 1, 2017, but if the Regulations amending the CSFAR are registered after that day, it will come into force on the day on which the amending Regulations are registered. Provincial and territorial participants will be made aware of the amended income thresholds prior to their coming into force to in order for these updates to be considered in their analysis of student financial needs. Given the amendment is routine in nature, no incremental implementation, enforcement, or service standard activities are anticipated.

Repayment assistance

The amendments to subsection 24(1) of the CSFAR will come into force on the day on which the Regulations amending the CSFAR are registered.

Contact

Steven Coté
Director
Canada Student Loans Program
Employment and Social Development Canada
200 Montcalm Street, Tower II, 1st Floor
Gatineau, Quebec
K1A 0J9
Telephone: 819-654-8775
Fax: 819-654-8398
Email: steven.f.cote@hrsdc-rhdcc.gc.ca