In early July, Canada’s Auditor General released a report that called on the federal government to step up its recovery of outstanding student loans, stating that outstanding student loans were an unfair burden on taxpayers in BC.

Yet the report ignores the root cause of student debt – historically high tuition fee levels – and instead seeks to further penalize people who cannot afford to pay for their post-secondary education up-front.

According to the Report, nearly a quarter of people with student loans are in the Repayment Assistance Plan to receive relief with their loan payments. Of these, 87% were reportedly unable to make the payments necessary to pay off their loan.

With so many people struggling to repay their loans, why is it that the Auditor General’s solution to the problem is to create “incentives” for repayment such as requiring the CRA to report defaulted student loans to credit bureaus? The report states that “in order to qualify for repayment assistance, your need is determined by the CRA based on your annual income”. If this is the case, how then does the Auditor General believe that people may be playing the system?

Wealthy Canadians and corporations hide as much as $240 billion in offshore tax havens, effectively stealing $3 billion each year from the government – and from citizens who rely on taxpayer-funded programs and services (which is almost everything we utilize each day). What is the government doing to close tax loopholes and ensure all Canadians and all businesses are paying their fair share? By most accounts, very little.

In fact, during the COVID–19 pandemic, Prime Minister Justin Trudeau stated that he would provide the wage subsidy to corporations who use off-shore tax havens. To put it another way: giving taxpayers’ money to those who do all they can to avoid paying taxes. It was only due to the pressure from some opposition parties that this was avoided. Yet here we are, reading a report that says the government should do more to make life difficult for those who have borrowed money to go to school but are struggling to repay these loans.

The same report admits that the government doesn’t do enough to properly inform borrowers of their financial obligations when it comes to repaying the loans. According to research from the Ministry of Employment, Workforce Development, and Disability Inclusion only 44% of student loan borrowers were aware that interest would accrue on their loans, and only 19% knew about repayment assistance options. So while the government wants to punish students for being unable to repay their loans, they also admit to not giving students the necessary financial literacy to do so.

According to the Report there is currently $2.4 billion in student loan debt that has the potential to not be repaid. That is a burden on the government’s coffers to be sure, but being punitive to those who can least afford to pay is not a way to strengthen Canada’s economy.

Canada’s student financial assistance system clearly isn’t working. Students and their families shouldn’t be forced into debt just to get education and training in order to participate in the workforce and contribute to Canada’s economy. And it’s clear that a loan system is costing the government millions of dollars each year.

There is a better way. The Federal Government should eliminate student loan debt by enhancing the Canada Student Grant Program to a level that removes the need for loans altogether.

Now is the time for investments in post-secondary education and trades training. The economy will benefit, businesses will benefit, and Canadians will benefit.

BC Federation of Students


The BC Federation of Students represents over 170,000 students from 14 institutions across BC. Together these students advocate for affordable + accessible post-secondary education.