The governing Liberal Party released its entire platform all at once on Sunday (the costing document is here), and there are a bunch of interesting things pertaining to PSE.  Let’s dig in.

(For those of you looking for extra thoroughness, you may want to review my assessment of the Liberal record over the past four years first.  Finished?  Ok, onwards.)

Without question, the most disappointing thing in the platform is the scientific research plank.  It consists of a $30 million commitment for pediatric cancer research in 2020-2021.  That’s it, that’s all.  Disappointing for anyone who thought this might be an occasion for the party to finally fulfil the Naylor commitment, but as I pointed out on Friday, research tends not to be a file that parties campaign on and virtually none of the major new research spends of the past forty years were contained in an election manifesto.  So the absence of this area is not a total surprise.

On skills, the Liberals have put forth an intriguing – if somewhat vague – promise on apprenticeships which does not appear to have been submitted to the Parliamentary Budget Office.  The problem it seeks to solve is apprenticeship time-to-completion, which is often delayed because employers have no apprenticeship places available.  The solution, apparently, is to pay employers up to $10,000 per apprentice to open up spaces.  One of the weaknesses of the Canadian apprenticeship system is that it is brutally pro-cyclical, as employers tend to take on apprentices in good times and lay them off in bad times, leading to a weird boom-bust cycle. We might do well to emulate some European countries in supporting employers to keep apprentices working during recessions.   But without more details, it’s hard to assess this idea: given the wording, one could imagine this program ending up paying companies to do what they were going to do anyway.  Let’s reserve judgement on this one.

Finally, there is student assistance, where the Liberals are promising an increase around $1 billion per year when all changes are factored in (PBO costing document here), nearly doubling the program’s budget.  The promise involves four separate elements, namely:

• Increasing the Canada Student Grants by 40%.  No changes to eligibility, but the amounts available increase by 40%, so current $3000 grants go up to $4200 and current $1600 grants go up to $2240.  
• Raising the Repayment Threshold from $25,000 to $35,000.  Currently, borrowers in repayment pay nothing on the first $25,000 they earn per year, and a maximum of 20% of their income above that level, up to the point where their payments equal a regularly-amortized loan (beyond which point they just pay the flat amortization amount).  So, someone earning $40,000 would pay, at most, $300 per month.  Under the new rule, the threshold would kick in at $35,000, which means a number of borrowers would be exempt from repayment, and the borrower in our earlier example earning $40,000 would see their minimum payment reduced to $100/month. 
• Extending the grace period from 6 months to 2 years. Self-explanatory.
• Allowing parents of young children to automatically enter into a grace period.  All parents of children under the age of five would automatically be relieved of the need to make student loan payments.

What to make of all this?  Well, the increase in grants is unequivocally a good thing: it is a targeted measure proven to have access results.  Also, in theory, at least, it more than makes up for cuts to student aid in several provinces.  By my back-of-the-envelope calculations, with these new, larger grants, the governments of both Ontario and New Brunswick could re-introduce the targeted free tuition programs they killed in their 2019 budgets with no additional expenditures of their own.  If the Liberals win and these governments choose not to re-instate the programs, we’ll all know that the cuts weren’t so much about fiscal responsibility as they were about screwing low-income students.  In addition, Manitoba would also be in a position to introduce a similar program at no cost (Newfoundland and Quebec already have the means to do so but choose not to).

The other measures, being related to repayment, won’t have an impact on access, but will make life easier for people under varying degrees of financial stress.  The increase in the repayment threshold is probably the best-targeted of the measures because it helps people with below-average graduate incomes and will probably do the most good.  The extension of the grace period is less targeted but will be popular among students trying to get a foot in the labor market.  The debt relief for new parents is even less targeted, but certainly hits a segment of the population that always feels squeezed, what with the cost of childcare.  Still, you can make a case that all three measures are partially targeted, or at least primarily benefit people who could use a break the most, something which at this point does not appear to be true of any other party’s platform. 

That said, it’s not clear that these measures will have quite the effect the Liberals think.  If provinces choose not to match these pieces of repayment assistance, students with outstanding loans from both sources will find themselves getting relief from federal loans but not provincial ones, potentially complicating repayment.  Moreover, the 2-year grace period might lead to trouble in tracking graduates and lead to higher numbers of technical defaults because borrowers do not consolidate in time.  Neither is a strong argument against the proposed measures, but they do suggest that claims on behalf of the efficacy of the measures may need tempering.

To sum up: there’s nothing really useful here on research.  There’s a proposal on apprenticeships which is interesting, vague, and could go either way as far as being a useful investment goes.  And there’s a student aid proposal which is, frankly, pretty spectacular.  Certainly, I can’t remember any manifesto proposal which is both this large and this targeted.  I don’t think it’s a stretch to say that – subject to provinces matching the federal program design – Canada would have the world’s most equitable and efficient student aid system if it were adopted.