The Green Party is promising to eliminate the widely popular registered education savings plans (RESPs) and replace it with a plan for free post-secondary tuition at a cost of $16.4 billion in its first full year, according to the national budget watchdog.
Abolishing tuition fees was among the most expensive items from the Parliamentary Budget Office’s costing of Green Party Leader Elizabeth May’s platform released Wednesday. The PBO estimates are available here.
The PBO estimated the cost by calculating the new funding required by provinces and territories to make post-secondary tuition free, eliminating the non-refundable Student Loan Interest Tax Credit, and forgiving debt for students that are unemployed or earning less than $70,000 per year as of November 2020.
WATCH: Green Party announces costing for platform from PBO
May said that RESPS are popular, but would be redundant once they provide free tuition.
However, the PBO said the estimate of eliminating tuition has “high uncertainty” due to the limitations on data of Canadian Student Loan borrowers.
Other key items costed by the PBO include a universal drug plan, costing roughly $27 billion in 2019-2020 before increasing to $31 billion in 2024-2025, and major spending on early childhood education and care at a cost of $1 billion in its first year rising to $8 billion in 2027-2028.
The Greens are pledging new taxes to help pay for these big ticket items, including a financial transactions tax that would generate $18 billion a year by 2024-2025, increasing the corporate tax rate from 15 per cent to 21 per cent at $16 billion in revenue, and closing a capital gains loophole that would raise $15 billion.
WATCH: Green Party announces platform costing analysis
The platform also includes a new tax on sugary drinks, which the PBO said could bring in more than $300 million annually. However, the budget watchdog noted this estimate has “moderate uncertainty as the data used to make this calculation has “inherent uncertainty.”
“While the research shows that a decrease in consumption is to be expected, there is uncertainty around the amplitude of the reaction to this type of tax,” the PBO said, meaning it was unclear exactly how consumers and producers would respond.
The platform outlines roughly $62.2 billion in new government revenue and $69.9 billion in “spending changes” in 2020-21.
May said the PBO costed 24 major items in her platform, but did not sign off on everything. The main pledge from the Greens is a commitment to a 60 per cent cut in emissions below 2005 levels by 2030 — doubling Canada’s current 30 per cent target.
“We know we have the revenue coming to cover some very large new programs,” May said.
“Our blood, sweat and tears has gone into making sure that we could number-crunch some key promises that we’ve made to Canadians and deliver them.”
May said her party would balance the budget by 2024-2025, though she added that if economic circumstances, like a recession, demanded an increase in spending, a Green government would respond accordingly.
The Liberals have yet to make any major proposals on education, while the Conservatives have promised to increase Ottawa’s contribution to the RESPs from 20 per cent to 30 per cent, up to $2,500 a year.
The NDP have promised to eliminate interest on federal portion of student loans, while increasing access to Canada Student Grants.
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