Ontario budget: Free tuition for low-income students

Family income must be $50K or less

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TORONTO – Finance Minister Charles Sousa delivered the Ontario budget on Thursday. Here are some of the highlights:

POST-SECONDARY STUDENTS: College and university students from low-income families stand to benefit the most from the Liberal government’s fiscal plan. Starting in the 2017-18 school year, the province will create a new grant — called the Ontario Student Grant. Under the new system, tuition will be free for students from Ontario families with incomes up to $50,000 who attend any college or university in Canada. More than half of students from families with incomes up to $83,000 will receive non-repayable grants that exceed the average tuition — mostly students who live on their own. No Ontario student will receive less through the new grant than they are currently eligible for through the Ontario Tuition Grant.

Earn free tuition money with an RESP »

CAP AND TRADE: Proceeds from the cap-and-trade system — which is designed to reduce Ontario’s greenhouse gas emissions — are projected to be $1.9 billion in 2017 — up from last year’s projection of $1.3 billion — and will be used to invest in green projects and climate change initiatives. However, the program comes at a cost to Ontario ratepayers. The average natural gas cost to households will increase $5 per month, while the price of gasoline will go up about $4.3 cents per litre — or about $8 per month.

CIGARETTES AND WINE: The prices of cigarettes and wine are going up. There will be a $3 increase in the price of a carton of 200 cigarettes, effective at 12:01 a.m. Friday, and the tobacco tax will keep rising at the rate of inflation each year over the next five years. The minimum price for a bottle of wine rises to $7.95 over the next three years, and there will be a series of increases in the ad valorem tax on wine, starting with a two percentage point hike in June, another two points in 2017 and 2018, and a one-point hike in 2019

Choose a brilliant wine, every time »

— Single seniors earning up to $19,300 per year will be eligible for cheaper drugs starting in August, compared with the previous threshold of $16,018. Couples with an income of up to $32,300 will also be eligible, where before only those earning $24,175 qualified. The costs will be offset by raising deductibles and co-payments for seniors above the new income thresholds. Annual deductibles will rise to $170 from $100 and co-payments will increase by a dollar to $7.11.

— The $30 fee for Drive Clean vehicle emissions tests will be eliminated in 2017-18, but not the tests themselves, which will cost the province $60 million a year.

— Shingles vaccines for seniors, which cost $170, will be free.

— The budget deficit for fiscal year 2015-16 is expected to come in at $5.7 billion, down from the last estimate of $7.5 billion

— The deficit for 2016-17 is projected to come in at $4.6 billion and be reduced to zero the following fiscal year

— Ontario’s net debt will hit $308 billion in 2016-17, the largest of any sub-national jurisdiction in the world, costing $11.8 billion in interest payments, which will increase to $13.1 billion by 2018-19

— Hospitals will get their first funding increase in five years, up $345 million, plus $12 billion over 10 years in capital grants for about three dozen major hospital projects

— There will be $333 million over five years to redesign and improve autism services

 

5 comments on “Ontario budget: Free tuition for low-income students

  1. so what will happen if you has RESP and you are low income . and my child will get free school , am i able to withdraw this money .

    Reply

    • The qualification for Educational Assistance Payments (EAPs) out of an RESP is connected to enrollment in a qualifying educational program, not the actual cost of tuition to the student. RESP funds can be used to fund books, housing, and food so the fact that tuition may be free through the Ontario Student Grant or the child’s own scholarships, this does not prevent the withdrawal of an RESP. However, remember that EAPs are taxable income to the child so the withdrawals may affect the student’s future entitlement to the Ontario Student Grant. You may want to consider how to allocate the RESP withdrawals between the non-taxable return of contributions with the taxable EAPs to retain grant entitlement, minimize tax, and maximize use of CESGs during your child’s educational years.

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  2. I really hope that the “free” tuition is tied to performance. As in, if you fail out, you pay out.

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  3. I’ve been trying to figure this out too. I’m guessing the RESP is handled in the same way as if you don’t use it. You will have to give back the Government contributions, the Canada Education Savings Grant and the Canada Learning Bond, pay the deferred tax on your contributions and the penalties. RESP accounts can remain open for up to 36 years in case they need to go back to school for additional diplomas or degrees.

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  4. This Ontario tuition thing seems really dumb. It no longer ties in with the federal tax credits and makes the students who earn summer/co-op pay and RESP grant income probably significantly taxable. All because their parents are over a threshold and other parents are lower, when neither kid may be getting support from their parents…this kind of system might force kids to be dependent on parents who might not be otherwise. Socialism run amuck, destroy their work ethic at a young age, hopefully the follow up will be lots of government jobs for them.

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