For the Undergraduates of Canadian Research-Intensive Universities (UCRU) to suggest that the federal tuition tax credit be eliminated to reallocate funds into student grants is a step backwards. And even more troubling is UMSU’s decision to back the call to eliminate the tax credit without student consultation.
After the removal of the federal education and textbook credits — as well as the Manitoba government abolishing the provincial tuition, education and textbook tax credit — eliminating a universally applicable tax credit in favour of providing more funding for a means-based grant program is not as helpful as one might think.
One of the reasons UMSU president Jakob Sanderson gave for advocating for eliminating the federal tuition tax credit is that those in the lowest income brackets can not really take advantage of the credit.
Of course, Sanderson would also have you believe leaving the Canadian Federation of Students — which advocates for universal and free access to post-secondary education — is good because membership in the federation does not provide economic value for dollars spent.
Sure, those who earned income in the lowest tax bracket would not receive a refund in the year they claim their tuition fees. Luckily, the Canada Revenue Agency (CRA) performs what is called a “carry forward.” If you do not have taxable income available to claim with the tuition tax credit, you can carry forward the potential credit amount to the year you have taxable income on your return. This carry forward amount is also cumulative and the amount that was carried forward from the first year claimed is added to the amount available to be claimed in the next year, and so on.
So, if a student during the entirety of their four-year degree earned no taxable income and then landed a job after graduation in which they began to earn taxable income, the total amount of the credit carried forward from when they initially began university kicks in.
For someone who may have had to take out a loan during their studies, this would be a boon to easing them into their careers.
UMSU and UCRU apparently cannot imagine how they might use their organizations to advocate for additional grants while — hold on, here it comes — maintaining the tuition tax credit.
What UMSU and UCRU completely miss in their rush to forfeit the tax credit is how means-based grants are blind to the realities of most families.
The Canada Student Grant Program — that will administer these proposed grants — determines a student’s financial need based on gross family income.
A typical university student will live at home with their parents. The usual condition for this living situation is the student works and pays for their tuition. Many also pay for rent, food, insurance, a car and all of life’s bountiful expenses while living at home.
Yet when it comes time to assess the size of a grant a student will receive, the student’s parents’ income is also taken into account.
The federal tuition tax credit can provide a cushion. If the grant is not enough to sustain a student, the tax credit can provide some relief. Of course, some might be denied a grant entirely because of their parents’ income, despite receiving no assistance.
Additionally, students whose assessed financial needs are not met entirely by the grant are saddled with federal student loans to cover the rest of their needs automatically. Canadian students already owe $28 billion in loans and graduates pay over $600 million in interest on those loans each year.
So it seems UCRU’s suggestion does little to help all low-income students, while also harming middle-class students for no discernible reason.
UCRU is a coalition of eight student associations from the following universities: University of Waterloo, Western University, McMaster University, Queen’s University, University of Toronto, University of British Columbia, University of Saskatchewan and, of course, the University of Manitoba. This equates to a representation of more than 240,000 students across these schools.
Rather than strip away existing tools students use to pay for their education and budget for the year, this powerful organization should demand more grants. They might even consider advocating for universal and free access to post-secondary education.
Anyone who pays tuition fees receives a Form T2202A for the tuition fees they paid.
If one problem about the federal tuition tax credit is that not enough students know about it — as Sanderson argued before the UMSU board — then it is incumbent upon the student union to use its access to every student email to remind them of the Form T2202A.
UMSU could have made a video tutorial explaining how to use the form for a fraction of the cost it spent flying Sanderson and two other UMSU representatives to Ottawa trying to obliterate the tax credit.
UMSU used to operate a free tax office which used the tax filing service Ufile.ca. Ufile.ca is free to use for U of M students because the Canadian Federation of Students developed a partnership with the service to ensure all federation members had access to a high quality — and user friendly — tax filing program. The UMSU tax office seems to no longer exist. However, you can still use Ufile.ca as a federation member — for now.
The CRA publishes an annual list of approved personal-use software for filing a return electronically. Even better, these programs “hold your hand” through the process and also help to ensure you’re taking full advantage of any credits you may be eligible for.
Students across low and middle incomes are already reeling after the removal of the provincial tax credit and cap on tuition.
The answer isn’t to increase the burden for future students by eliminating tax relief.
If this is the best that the UMSU Elevate executive can offer, perhaps it’s time to measure and judge the value students are receiving from all the money we fork over to them.