Canadian taxpayers will lose billions with a federal waiver on Canada Student Loan interest payments, new figures show. The Department of Employment said interest charges since 2016 totaled $3.38 billion, according to Blacklock's Reporter..The department in an Inquiry Of Ministry tabled in the House of Commons said interest charges in the last pre-pandemic year in 2019 totaled $749.7 million. That year the department collected $414.9 million in interest. Collections were suspended from 2020 as a COVID relief measure..The figures were disclosed at the request of New Democrat MP Blake Desjarlais (Edmonton Griesbach). Desjarlais asked, “What is the total amount of interest charged on student loans since November 2015?”.Parliament on December 15 passed an omnibus budget bill C-32 An Act To Implement Certain Provisions Of The Fall Economic Statement that abolished interest payments under the Canada Student Loans Act. The Liberal Party in its 2021 election platform Forward For Everyone promised elimination of interest at a cost it put at $538 million a year..The $749.7 million annual charge disclosed in the Inquiry Of Ministry is the highest cost figure revealed to date. The employment department in a November 22 submission to the Senate national finance committee acknowledged the program was expensive..“Right now the investment is $2.7 billion over five years, but then there is an ongoing cost as well of $556.3 million per year,” testified Erin Hetherington, director of the loan program. Hetherington said the “purpose behind this measure is to provide relief for borrowers who are experiencing long term affordability pressures.”.Federal student loan debts average $14,000. Loan managers in November 21 testimony at the Commons finance committee said they did not know if the interest waiver would boost enrollment for poor students. “I do not have the number,” testified Atiq Rahman, assistant deputy minister at the Department of Employment..“How many students who otherwise are not accessing postsecondary education will be eligible?” asked Conservative MP Adam Chambers (Simcoe North, Ont.). “It is difficult to say,” replied Rahman..“Is there a number?” asked Chambers. “This measure is targeted at making loan repayment more affordable so I do not have the number,” replied Rahman..“We are going to spend $500 million helping students who are already in postsecondary education as opposed to providing the same amount of money in grants to help students who couldn’t otherwise go to school,” said Chambers. The MP said he “just wanted to put that on the record.”
