Question Period Note: Alternative Payments to Quebec (Student Financial Assistance)

How will students from Quebec benefit from the Government of Canada permanently eliminating interest on Canada Student Loans?

• Quebec, along with the Northwest Territories, and Nunavut do not participate in the Canada Student Financial Assistance Program, and receive annual alternative payments from the Government of Canada to administer their own student financial assistance measures.
• Over $927 million was paid in alternative payments in January 2022, an increase of 90% over the previous year. Quebec received over $915 million.

• The Government of Canada’s permanent elimination of interest on Canada Student Loans will be considered in future alternative payment calculations for each non participating jurisdiction.

• Quebec, the Northwest Territories and Nunavut do not participate in the Canada Student Financial Assistance (CSFA) Program and receive an alternative payment from the Government of Canada to administer their own student financial assistance measures.
• To receive compensation, non-participating jurisdictions must offer supports that have “substantially the same effect” as the program elements delivered by the CSFA Program, and must annually provide statistical data and descriptions to support the calculation.
• Total alternative payments to these jurisdictions have been growing in recent years as a result of new CSFA Program investments introduced by the Government.
• The non-participating jurisdictions received the following alternative payments in January 2022 for the 2020-21 school year:
o Quebec: approx. $915.7 million;
o The Northwest Territories: approx. $5.6 million; and
o Nunavut: approx. $5.9 million.
• The alternative payment amounts made in January 2022 reflect measures implemented by the Government of Canada forthe 2020-2021 school year. These changes included, among others, (i) a moratorium on payments and interest accrual on all Canada Student Loans that was implemented for six months (March 30 to September 30, 2020); and (ii) suspension of interest accrual on Canada Student Loans introduced for fiscal year 2021-22, which was later extended and is set to expire on March 31, 2023. For both measures, Quebec followed suit and implemented similar measures for their program.
• In the 2022 Fall Economic Statement, the Government announced the permanent elimination of interest accrual as of April 1, 2023, to help ensure that borrowers’ student and apprentice loan payments remain manageable.
• As per the Canada Student Financial Assistance Act, the three non-participating jurisdictions will receive compensation for this measure once it has been implemented, if their programs have “substantially the same effect”. The “substantially the same effect” test does not require exact replication of the measure, rather it is an overall assessment of the impact on students; this assessment is carried out annually as set out in legislation.
• An article appeared in La Presse on December 2, 2022 regarding the impact of the Government of Canada permanently eliminating interest on Canada Student Loans on Quebec. The article included some inaccuracies, including a reference to negotiations currently underway. The Alternative Payment process does not involve any negotiation, and is based on measures a non-participating jurisdiction has implemented and how their impacts compare to measures that the federal government has put in place.

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