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Alberta

Province caps tuition increases and reduces student load interest rate to make post-secondary education more affordable

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Making post-secondary education more affordable

Alberta’s government is taking action to improve affordability, address inflation and make tuition more stable and predictable for Alberta’s post-secondary students.

Alberta’s economy has recovered strongly, but students are struggling to keep up with the increased cost of living. Alberta’s government is committed to ensuring post-secondary education remains accessible and affordable for all Albertans. That’s why Advanced Education is providing post-secondary students with new, targeted affordability supports.

As part of Budget 2023, government plans to improve affordability for post-secondary students by:

  • Capping domestic tuition increases at two per cent across an institution in 2024-25 and for future academic years.
  • Reducing interest rates on student loans to the prime rate,  which will help reduce the cost of borrowing for both current and future Alberta student loan borrowers.
  • Doubling the student loan interest-free grace period from six months to 12 months to give students more time to find gainful employment without having to worry about student loan payments.
  • Increasing the thresholds for the Repayment Assistance Plan to $40,000 from $25,000 so more students can benefit from the program.

In addition, Alberta’s government is providing additional funding to increase the Alberta Student Grant by $225 per month for each eligible student during the 2022-23 loan year.

“High inflation has made life more expensive for all Albertans, including post-secondary students. These new measures will help all students deal with higher costs during these challenging times.”

Demetrios Nicolaides, Minister of Advanced Education

Alberta’s government recently provided the largest inflation relief package in Canada, with significant broad-based and targeted supports. These actions ensure post-secondary students also receive targeted affordability supports.

“These new affordability measures for students are an important addition to our Affordability Action Plan, and underscore our commitment to students and to keeping Alberta affordable.”

Matt Jones, Minister of Affordability and Utilities

More than 10,000 low-income students receive this funding. The funding boost to the Alberta Student Grant means eligible students willreceive up to a total of $475 per month.

This additional per month funding will be retroactive, meaning students will receive the additional $225 per month effective the beginning of the 2022-23 academic year in the form of a lump sum payment. Students receiving this additional funding from the Alberta Student Grant will be notified by Alberta Student Aid in March. They should also receive the additional funding from student aid during this time.

“This announcement marks the implementation of longstanding requests from student leaders around affordability. On behalf of Alberta’s students, it is great to see increased efforts to ensure that post-secondary is more accessible and affordable for all.”

Samantha Scott, chair, Council of Alberta’s University Students

“Students have been struggling with the rising costs of attending post-secondary. We are happy to see student voices being heard and steps being taken to address affordability.”

Janmejay Rao, co-chair, Alberta Graduate Provincial Advocacy Council

Alberta’s government is committed to ensuring post-secondary education is accessible and affordable. These measures will ease the impact of inflation so post-secondary students can focus on their education and worry less about paying the bills. They will also make it easier for student loan borrowers to make their loan payments and effectively transition into the workforce.

Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

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Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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