Something absolutely huge has happened in Canada for students

The Government of Canada has announced a package of supports to students worth C$9 billion (₤5.14 billion) to assist them through the coronavirus crisis.

It’s a package which as far as one can tell seems to be the largest anywhere in the world, and those in the UK thinking about students and student support should take a close look both at the detail, the framing and the sheer scale.

As young people, what you’re going through matters. We want to make sure that you’ll be OK. So today I’m announcing our plan to support students right across the country. We’re launching the Canada Emergency Student Benefit to provide immediate help. At the same time, we will create new student jobs and double student grants, among other things. All of these measures will add up to approximately $9 billion for students.

The two main components of this package are an increase in student loans and grants (mainly the latter) and the introduction of a universal student benefit of C$1250 (₤714) per month from May through August, the period between the Winter and Fall terms when students are typically working full-time.

The story so far

To understand these benefits requires a little bit of context for how Canada has handled the coronavirus crisis to date.  Like most of the world, Canada has been under stay-at-home orders for about five weeks now.  These orders are by no means as extreme as the full lock-downs we have seen in places such as Italy and Spain, but they were enough to stall the economy.

By mid-March – even before the stay-at-home orders had full kicked in, the number of unemployed jumped by a million, and the figures for April are likely to see a similar or even larger rise.

Most of these people went immediately into the Canadian equivalent of the Jobseeker’s Allowance, which is known in Canada as Employment Insurance, or EI.  However, it immediately became apparent that there were millions of people who could not be helped through this route because they had not worked enough hours over the past year to qualify (the pandemic has been very good at showing up the inadequacies of existing systems).

And so the government created something called the Canada Emergency Relief Benefit (CERB) – a flat two thousand dollars per month to anyone who had lost their job in March and who had at least $5,000 in earnings over the past 12 months.

Today we are introducing a $9 billion program for students. We are introducing the Canada Emergency Student Benefit to help people who are going through tough times because of COVID-19. From May to August, you will receive $1,250 a month. And if you are caring for another person or you are living with a disabilities, you could receive $1,750 per month. This benefit was designed to help you.

Working 9 to 5

In Canada, working during the school year is not uncommon: in any given month somewhere between 50-60% of full-time students will have some employment income and around 40% have steady work throughout the term.  Such students, at least those who lost employment in March (and most did) were eligible for the CERB from the moment it began.  However, students who were not working and were either looking for summer jobs or graduating and looking for full-time employment were ineligible.  And so the hunt for a solution began.

Some suggested that all these students be included in the CERB, but this was probably never in the cards.  A four-month $8,000 benefit would be about equal to 16 weeks work at 40 hours a week and minimum wage, but the average student works considerably less than that (and a significant percentage do not work at all).  At a time when so many people are out of work, the idea of giving students more in wage replacement than they would have received from actually working was probably not a workable solution.

For a lot of students the month of May normally marks the start of a summer job, but right now it might be really tough to find something. You may have been looking for weeks without any success. So we’re going to help. Our government is creating 76,000 jobs for young people, in addition to the Canada Summer Jobs Program. These placements will be in sectors that need an extra hand right now or that are on the frontlines of this pandemic.

And so what the government came up with, the new Canada Emergency Student Benefit (CESB) was effectively CERB minus: exactly the same application procedure, only no requirement to prove work status in the month of March and a payment of $1,250.  All Canadian students and Canadian universities are eligible (the regulations appear to leave out Canadians abroad and international students still in Canada) and the best guess is that somewhere between 1 and 1.2 million students will be able to take advantage of this.

And there’s more

In addition to this, the government of Canada is pouring money into student assistance.  Student aid in Canada is somewhat more restrictive than the English one generally – it is means-tested rather than universal – although on the whole it is more generous in terms of maintenance than English system (for real student assistance nerds, the UK system it most closely resembles is the Welsh one).

It is also fiendishly complicated to describe because both provincial and federal government are involved, which in effect creates thirteen different system (Canadian federalism is significantly more rambunctious than, say the German variety).  But the upshot of yesterday’s announcement was to double the size of the maximum federal grant from $3000 to $6000, increase the amount of federal loans available by 66% or $140/week, and eliminated the expected student and spousal contribution (though it retained parental contributions).

So for the 300,000 or so students already on maximum grant (a number which will swell with lower personal contrbutions), they are in effect getting an extra $8,000 per year between the two main measures.  Which is not bad.

And more and more

There were also a raft of other measures – an extra $75 million for First Nations (who each run their own student aid programs), $291 million for grants and scholarships to graduate students and post-docs, some of which will go to extending current scholarships for four months and the rest to some kind of unspecified “expansion” of awards to be overseen by the research granting councils.

And, on the extreme flaky end of the package, an announcement for wages for student involved in some kind of “national service” though the country has no national service scheme and no details were released as to how it would work, who would run it, or anything else. Put that expenditure down as “speculative”.

Of course, the paying job isn’t the only valuable way to spend your summers. Volunteering can be a fantastic way to build skills, make contacts or just give back. If you’re volunteering instead of working, we’re going to make sure that you have support too. Students helping in the fight against against COVID-19 this summer will soon be eligible for $1,000 to $5,000 depending on your hours through the new Canada Student Service grant. Your energy and your skills can do a lot of good right now.

All told, it was a very bold and unprecedentedly generous set of actions from the federal government. In total the CESB and student aid changes represent something between a three-fold and four-fold increase in non-repayable aid to students (excluding merit scholarships and graduate support).

Canada spent decades keeping its fiscal house in order – and maintaining the lowest net-government-debt-to-GDP ratio in the G7 – and it is very definitely using that margin now to make sure Canadians get through the crisis with as little scarring as possible.