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opinion

Lisa Philipps is provost and vice-president – academic (interim) and professor, Osgoode Hall Law School, at York University.

It was only 20 years ago that Canadian policy makers decided the tax system was their best lever to promote access to education. Liberal and Conservative governments pursued this strategy with equal vigour.

The trend began in 1998 with major enhancements to the Registered Education Savings Plan (RESP), a policy move hailed as a lucrative incentive aimed at making sure more young people had the chance to earn a postsecondary education.

More tax benefits followed. The Education Tax Credit was doubled in 2001, then augmented with a Textbook Tax Credit. In 2004, came the Canada Learning Bond (CLB), an incentive for lower-income families to set up an RESP to send their children to college or university. As Canada's population was flatlining, governments saw an untapped opportunity in the potential of hundreds of thousands of lower-income children who stood to benefit from better access to postsecondary education.

The key question remains: Is tax policy the best way to improve access to postsecondary education? Count me as one who says it's not.

Five years into the Canada Learning Bond program, few of the eligible children had received the grant. The CLB was not meeting its primary objective. The problem with all of these targeted tax incentives is they are aimed at parents and create an advantage for those with higher incomes.

Fast-forward to 2015, and the way many Canadians embraced our current federal government's unabashed support of gender equity, Canada's youth and recognition that decades-old tax policies once seen as progressive missed the mark.

Governments' fiscal policies must reflect changes in demographics and in our society. They need to respond to anxieties about a shrinking middle class, persistent gender wage gaps and questions of generational equity as Canada's young people struggle to gain a foothold in a fast-changing economy.

What we are witnessing now is the beginnings of a shift in thinking away from tax credits in favour of more direct and targeted support of individuals. When it comes to postsecondary education, this shift is moving us toward treating young people as adults who own Canada's future and who should have more autonomy now.

Finance Minister Bill Morneau announced last year a plan to enrich the non-repayable Canada Student Grant for low- and middle-income students and ease repayment rules for Canada Student Loans. Both measures will benefit students directly.

The plan is being financed in part by eliminating the Education and Textbook Tax Credits. Ironically, those credits often could not be claimed by students when they most needed the support, because their income from part-time and summer jobs was too low to benefit. Data from 2014 show that more than half of those claiming the education tax credits were the parents or spouses of students, rather than students themselves. What is more, that group of parents and spouses was predominantly male even though women students slightly outnumber men in universities.

At York University, we support this shift toward increased direct support for students. With one of the largest student populations in the country, at nearly 53,000 in 2017, we know that this new approach will be a real benefit to our students – many of whom have part-time jobs, are mature students, pay for their own education, are people new to Canada and often first generation university students.

York saw a 9-per-cent increase in applications this year, representing one of the biggest increases among all Ontario universities. It is our job to not only offer – but advocate for – the best possible supports for our students.

Good tax and spending policy can and should improve gender equity, income equality and access to opportunities for low-income families in a way that the broader economy does not. Mr. Morneau is leading a wider review of the tax benefits that have unwittingly but unfairly helped the wealthiest of Canadian families. He has also committed to reporting every year on how the budget affects women's equality, launching the first Gender Statement in Budget 2017.

Twenty years after the RESP stormed onto the Canadian policy scene, the re-balancing of public support for postsecondary education toward direct spending on students is an important and necessary shift that levels the playing field regardless of gender, generation, or income.

An RESP can help parents save for their children’s schooling costs, but what if your kid doesn’t end up going to college or university? A certified financial planner outlines options for avoiding penalties.

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