February 26, 2008

Budget 2008: Millennium Foundation to be replaced

A decade after it was created, the Canadian Millennium Scholarship Foundation will be replaced by a new needs-based, non-repayable grant program to be called the Canada Student Grant Program.

The Conservative government says that, after a year-long review of student aid, it found the Foundation had limited success in encouraging more people to attend post-secondary education and did not provide students with predictable year-to-year funding. The new grant program will replace the Foundation which expires in 2009.

The Canada Student Grant Program will distributed according to income levels. Because the grants will be awarded each year of study, students will know how much to expect in support from year to year. The grants will range from approximately $250 per month for low income students to $100 per month for middle income students. 245,000 studens will benefit from the program each year.

Student groups were split on the issue. The Canadian Alliance of Student Associations, the second largest student lobby group in the country, was disappointed in the dissolution of the Foundation, but welcomed the dedication of its funding to a needs-based grant system.

“Today’s announcement marks the end of Canada’s tenure as one of the few western industrialised nations without a national system of grants,” said Amanda Aziz, chairperson of the Canadian Federation of Students. “It was long overdue.”

“We are cautiously optimistic about the delivery mechanism for the announced grant program and will move forward bearing the responsibility of ensuring that the Canada Student Grant Program is delivered in an efficient and transparent manner,” said David Simmonds, president of the Ontario Undergraduate Student Alliance.

The new program will distribute $350 million in student aid when it begins in the fall of 2009. This amount will match the funds currently provided to students by the Canadian Millennium Scholarship Foundation. Funding will increase by $80 million in 2012/13, to $430 million. This additional funding, which the government is describing as new, is above and beyond the current $138 million a year delivered by current federally-administrated grant programs such as Canada Access Grants and Canada Study Grants. The patchwork of federal grant programs will be integrated into the new grants program.

The government says the new grants problem will address concerns about the operation of the Scholarship Foundation.

“The new Canada Student Loans Program is just a rebrand of a Liberal program,” said Liberal post-secondary critic Mike Savage. “The last time they rebranded a program was with the Canada Summer Jobs program. Their rebrand was a disaster and they restored the Liberal program. We hope history doesn’t repeat itself.”

In the budget speech, Flaherty was critical of the Foundation, saying it “had limited success in encouraging more people to go to college or university, and did not provide students with predictable funding from one year to the next.”

The Auditor General has criticized the Foundation model for lacking the same accountability provisions as government department due to their “third-party” status. The government says that the new program, administered by Human Resources and Social Development, will be more transparent.

When created, the Foundation was seen as by some provinces as an intrusion into the provincial jurisdiction of education. The administration of the Foundation required that agreements between the provinces and Foundation be negotiated. Disputes resulted which resulted in delays in getting aid to students. The new grant program will be administered using the current federal student-aid framework. Provinces that do not participate in the Canada Student Loans Program will receive equivalent funding to administer their own needs-based program.

In order to receive the new grants, students will be required to apply for student loan. If they received a loan, they will automatically be considered for the new grant. Low-income students will receive $2,000 for a eight-month school term and middle-income students will receive $800. The grant will be provided up-front to students.

The grants will be guaranteed for all years of an undergraduate or college program. The government hopes by providing the grants up-front and guaranteeing them for the length of a students program that more low-income students will enter into a post-secondary program.

The Canadian Alliance of Student Associations were also concerned that the research functions of the Millennium Scholarship Foundation would fall through the cracks. “The Foundation was the only group that was doing research on access issues. Looking at Aboriginal students, low income students, and first generation students,” said Zack Churchill, national director of the Canadian Alliance of Student Associations. “We haven’t seen any indication from the government that the federal research will be picked up.”

The government says it will ensure that students receiving Foundation bursaries in 2008-09 will be unaffected by the wind-down of the Foundation.