Wednesday, March 30, 2011

Mo' Money, mo' problems: Is "free money" for education a fiscal mistake?

According to the Cons, our students are to be trusted
with cash about as much as Fat Joe and Lil Wayne
Yesterday, the Liberals made their first big platform promise for the upcoming federal election, announcing their "Learning Passport," which would provide $4,000 tax-free to every high school student who chooses to go to university, college or CÉGEP. Students from low-income families will qualify for $6,000 or $1,500 for each year of study. 

Reaction from the media outlets not routinely kissing Harper's butt was overwhelmingly positive: See here and here.

Others weren't so jazzed. National Post columnist John Ivison writes,

"All [students] have to do is open an RESP (no need to make any contributions), turn up at college or university and get their $4,000 in free money. For some reason, the words “beer” and “popcorn” immediately spring to mind." 

The Harper camp launched a full-scale attack on the proposal, which I guess is what they're supposed to do and one of the reasons elections can be so dull. Of course, Conservatives are usually pretty hot to trot when it comes to putting money in the hands of individuals (here I think of Harper's clawback of government-funded daycare in favour of cash payments to parents).

So, who is more likely to waste "free money?" Students? Or parents? Or Fat Joe and Lil' Wayne?

Students, you say?

Let's look at it this way. Under this proposal, students must physically go to a bank and open an RESP. They will be able to see the money accumulate. This in itself could instill positive habits, and get them thinking about saving rather than spending

Yes, some students will waste their money. But in the long-run, affordable education for everyone is an investment in our future. Ivison uses the traditional argument that lowering corporate taxes is the way to make Canada attractive to global investors.

Let's be real: Canada would look good drunk at 1pm, in a dayglo tuxedo and fake moustache. Why? Because we have natural resources - aka "stuff the world needs" - the demand for which will only increase. Now if our goverment is stupid, and goes around just giving away our resources and bowing down to the US every time there's a spat (ahem, Harper, ahem, softwood lumber), well, that's a different story altogether...

I say, let's instill some financial literacy and responsibility in our young people. That, coupled with better access to education for everyone could certainly go a long way towards securing our collective financial future.

PS: I often wonder, when rappers throw money on the set of a music video, do they attempt to collect it at the end of the day? Or does a smiling janitor just sweep it into a big, tidy pile?


  1. Found your blog from other site about the Bell rebate and have to say that love your blog. For sure I will be a regular reader. Keep it up.

  2. Hey thanks! I'm glad you like it!

  3. There was someone on CBC talking about how those that had even had an RESP was 50% more likely to get a higher education - FIFTY percent! That number astounded me!

    I think this is a great idea personally. Sure, there could be some waste, but if it means more low-income teens will go to University or College that so be it. Who knows, the next Mark Zuckerberg could be one of these recipients...