Patty Hajdu asks Ontario to reverse student loan changes In pre budget letter

Employment, Workforce Development and Labour Minister Patricia Hajdu speaks to the media in Ottawa on November 23, 2018. The feud between the federal Liberals and the Ontario Tories is taking another turn in the run up to the Ford government's first provincial budget. Labour Minister Patty Hajdu, who oversees federal student support programs, is asking one of her provincial counterparts to rollback changes the Progressive Conservatives made in January to the Ontario Student Assistance Plan. THE CANADIAN PRESS/Adrian Wyld

The federal labour minister is asking the Ontario government to reverse changes to its provincial student-assistance program in a letter that serves as a pre-budget salvo against Premier Doug Ford’s Progressive Conservatives.

Patty Hajdu, who oversees federal student-support programs, asked her provincial counterpart to stop charging interest on student loans for a short period after their holders graduate.

In January, the Ford government announced it would start charging interest on loans during the first six months after graduation to reduce complexity for students and match rules for the federal Canada Student Loans Program.

Except the Trudeau Liberals announced changes to the federal program in their March budget to waive interest charges during the six-month “grace period.”

In a letter sent Tuesday to Merrilee Fullerton, Ontario’s minister of training, colleges and universities, Hajdu (who represents a riding in northern Ontario) asked the provincial government to abandon the change in the provincial budget and align again with federal standards to “make it much easier and fairer for students.”

On Thursday, the Ontario Tories present their first spending blueprint since being elected last year. Revisions at this point are unlikely.

Employment, Workforce Development and Labour Minister Patty Hajdu and Minister of Immigration, Refugees and Citizenship Ahmed Hussen vote in favour of closure of debate on back to work legislation Friday November 23, 2018 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

“With your budget being tabled on Thursday, I hope that you will reconsider changes to student-loan repayment,” Hajdu wrote in the letter. “If you don’t reconsider, it will make post-secondary less affordable, but it will also make it harder for businesses to access the skilled workforce Ontario needs to continue its growth.”

The letter is the latest shot in a feud between the two governments, with battles over the carbon tax the Liberals have applied in Ontario, how the Ford government has promoted federally backed infrastructure programs, and the costs federal immigration policies impose on the provinces.

The change to the Ontario Student Assistance Program was among a number the Tories made because they said the program had become unsustainable after the previous Liberal government under premier Kathleen Wynne decided to cover all tuition costs for low-income students.

A Fullerton spokeswoman said costs for the provincial program, which administers loans and a range of grants for post-secondary education, would have risen to $2.7 billion by 2023 _ more than double the price tag in 2017.

“Nothing the federal government has announced changes our responsibility to ensure that OSAP is sustainable for future generations,” Stephanie Rea said. “Just like the Wynne Liberals, the federal government is engaged in a vote-buying exercise ahead of an election.”

Separately, the federal parliamentary budget office is to release a report Thursday projecting costs and revenues from federal student loans.

Weeks before the Liberals tabled their last budget before an election this fall, federal officials were provided a research report that showed the cost of post-secondary education, and an aversion to go into debt to pay for it, were top concerns for at-risk youth _ a group that includes immigrants, Indigenous people, people with disabilities, and those living with low incomes.

The public-opinion research report, which cost $79,987, notes concerns about repayment conditions, including interest rates and penalties.

“Some described the choice they face as a ‘gamble’: the gamble being that they will get a job after investing time, effort, and money into their education,” reads the report, a copy of which The Canadian Press obtained under the access-to-information law.

“The words of one participant succinctly capture a widespread opinion (about taking out a loan): ‘it makes it a realistic option, but it is not a desirable option.”’

Borrowers typically take between nine and 15 years to fully pay off their federal loans. But the government periodically gives up on some of the $19 billion owing in student loans for a number of reasons: a debtor files for bankruptcy, the debt itself passes a six-year legal limit on collection, or the debtor can’t be found.