Federal education fund largely untapped by Nunavut

Kelsey Budden of Arviat is a mother of two studying aboriginal self-government and administration at Red River College in Winnipeg. In a video recorded for Smart Saver, a non-profit that helps low-income families tap into government programs aimed at encouraging post-secondary attendance, she spoke about how “if you don’t have any money, $2,000 can go a long way. It helps. It really does.” That much money is available via the Canada Learning Bond to children from low-income families attending post-secondary education. But in Nunavut uptake for the program lags far behind the rest of the country. (IMAGE COURTESY OF SMART SAVER)

Some 7,800 children from low-income families in Nunavut are eligible to receive up to $2,000 each in federal cash to support post-secondary studies.

But, as things stand, uptake for this program in the territory lags far behind the rest of the country.

According to the most recently available numbers, only 134 children from Nunavut have tapped into the Canada Learning Bond, a program that has, since 2005, provided education funding to more than a million Canadian children.

This is a missed opportunity, especially since it costs nothing to access the program, provided you enrol through a financial institution that offers no-cost accounts for registered education savings plans, says Talya Rotem.

She’s the digital community manager for Smart Saver, a non-profit that works to reduce financial barriers faced by children from low-income families who wish to pursue post-secondary education.

Last month, Rotem dredged up all the figures mentioned above in a blog post. She reckons that low-income Nunavut families are collectively leaving anywhere between $3.5 and $14 million on the table.

Rotem first took an interest in Nunavut when she heard about Feeding Nunavut, and became a donor and later an occasional blogger for the organization, which aims to reduce food insecurity in the territory.

“That’s how Nunavut got on my radar,” she said.

Later, Rotem contacted several Nunavut students completing post-secondary education outside the territory to better understand how additional money could help them.

These students already received support from Financial Assistance for Nunavut Students, or FANS. But they said they could definitely use more money for flights home or to help cover child-care costs.

One, Kelsey Budden of Arviat, is a mother of two studying Aboriginal self-government and administration at Red River College in Winnipeg. “When you’re away from home and if you don’t have any money, $2,000 can go a long way. It helps. It really does,” she says in a video.

Another student, named Mary, hails from Iqaluit and is studying biochemistry at the University of Ottawa. She’d like to work in a lab as a pathologist or immunologist once she graduates.

Federal and territorial grants cover about three-quarters of the cost of her education, she said. She pays the rest with money earned while working during the summer.

“If I had 2,000 from the Canada Learning Bond, I’d go home for a visit,” she says in her video.

In other jurisdictions, Smart Saver has partnered with local community organizations, such as the United Way or a literacy coalition or post-secondary institution, to help low-income families sign up. The organization doesn’t have a partner in Nunavut, but it would be open to finding one, said Rotem.

“We’d love to get a non-profit or a local Nunavut chapter started, and to provide any support that’s needed: the know-how, the knowledge, the webinars.”

Smart Saver’s website, which helps walk people through the steps involved in applying for the funds, is currently available in 16 languages, including Oji-Cree, but not Inuktitut.

But the organization would also be open to working with a partner to offer help tailored to Inuit.

“I can’t say yes we’re doing something right now, but I’m sure there would be room for discussion for how we could support something,” said Rotem.

To start applying for the Canada Learning Bond, both the parent and child need social insurance numbers. Then the parent must open a registered education savings plan, or RESP, which offers tax-sheltered savings for the child’s future education.

It’s important to note that not all RESP accounts are free of cost, so Rotem said low-income families must be careful to sign up for such a plan.

“We know a lot of families across Canada who, due to low net family worth, had to default on their RESPs,” said Rotem.

“The money goes back to the government, and while they can get that money back again, that family is feeling burned. They’re like, ‘I’ve tried getting money for my kid. I couldn’t keep up with payments that I signed up for.’

“The saddest part of all of this would be if there was a misunderstanding that this can be done for free, and another path was taken through profit. The whole point of the government giving this money is so that low-income families can access it.”

While opening their RESP, low-income families should ask to apply for the Canada Learning Bond. The government will then review the family’s income and, if they’re eligible, make an initial deposit of $500.

The government will then automatically review the family’s income tax filings and, if they’re still eligible, make an annual deposit of $100. These payments continue until the child turns 15, for a maximum amount of $2,000.

The government will also make retroactive payments, for years when the family would have been eligible to receive the funds before they applied, by rolling these funds into the first initial payment.

To be eligible, your child must have been born in 2004 or later and your family income must be less than $45,916. That limit increases for families with more than three children, based on a formula.

About 4,000 eligible children live in Iqaluit, which has two bank branches—RBC and CIBC—that offer cost-free RESP savings accounts. You don’t need to be an existing client with the bank to open such an account.

Low-income households in Nunavut communities without a bank branch could access the program by opening a cost-free RESP account with the Bank of Montreal, which allows clients to complete this process over the phone.

“I haven’t seen it done in Nunavut, but I do know it’s available from BMO, and it’s been done elsewhere,” said Rotem.

There is no urgency for many families to apply for the Canada Learning Bond, since payments could be made retroactively. But, Rotem said, “by encouraging families to start saving as soon as possible, a lot of the research indicates those are the conversations that start kids planning to go to post-secondary.”