Minimum wage increase causes concern about students’ access to financial aid

Among those presenting information on Ontario’s minimum-wage increase were (from left) Leanne Ballard, Tanya Hilts and Barb Hawke of Cloud Bookkeeping Services in Belleville. Photo by Olivia Timm, QNet News

By Olivia Timm

BELLEVILLE –  A local bookkeeping company is worried that once Ontario’s minimum wage rises to $15 an hour, students could lose out on Ontario’s free tuition policy – but others say there is nothing to worry about.

Cloud Bookkeeping Services hosted a presentation at the Belleville Share Centre Tuesday evening to educate the community about what they say is the downside of the wage increase. The minimum wage will go up to $14 an hour in 2018 and $15 an hour in 2019. Currently it’s $11.40.

“Students who would have qualified for free tuition due to the parents’ low income will now not qualify for the Ontario Student Grant,” according to the presentation read by Leanne Ballard, operations leader at the company.

Ballard said this disqualification is because of the increase in a family’s household income.

“They are still eligible but it changes the numbers, so that program needs to be adjusted to match the increase with minimum wage.”

Jill Raycroft, chief executive officer for Belleville’s Chamber of Commerce, agreed that in some cases families might be ineligible, but added that it depends on the family’s income level.

“If, for example, they have a family income limit at $50,000 and that rises with the minimum wage increase, then (Ontario Student Assistance Program) eligibility may be compromised,” she said. “That said, I don’t know how OSAP defines need. I do know that access to education has been part of the mission for our government, so perhaps OSAP will adjust with rising income levels.”

Raycroft said that despite the planned provincial increase to the minimum wage, the federal government has not adjusted the income levels on which its tax brackets for income tax are set. She understands from Bay of Quinte MP Neil Ellis that there is no intention to do so, she said, so that would mean a person who makes more money will also pay more in income tax.

Ballard and her team calculated how much a typical single parent would earn before and after the minimum-wage increase, and found that if this parent had a child applying for OSAP, the higher wage would essentially take money away from what the student received from OSAP.

If the parent makes $13 an hour, they will make around $27,000 annually. This would allow the student to qualify for $17,000 of OSAP. After the minimum wage increases to $15 an hour, the parent would make about $31,000 per year.  With this, the student would only qualify for $13,000.

“The increase will only be enough to disqualify them but not enough for them to afford the tuition … it really sets the parents back from being able to help the students,” Ballard said.

Barb Hawke, the newest addition to the local bookkeeping team, said she is concerned about the future of her daughter’s education.

Even if she was considering other financial options for her daughter’s post-secondary education, now she will not even have the option of choosing OSAP, she said.

“It will push us into the next tax bracket, which will kick her out of OSAP completely.”

However, Sheila Block, senior economist at the Canadian Centre for Policy Alternatives, says the minimum wage increase will not leave families without financial assistance.

“The higher minimum wage will have little or no impact on the ability of low-income workers or their children to qualify for OSAP grants,” she said.

If a two-income family works at the new minimum wage, they would still receive free tuition grants, Block said. “The student would still be eligible for free tuition at the college level and free tuition or just under depending on university requirements, she said.

“For a single parent making minimum wage, or even over that, free tuition would of course still apply.”

The new minimum wage will increase hourly wages for students who work part time, Block noted.

“It will either allow students to work the same number of hours and take home more money, or work fewer hours and spend more time studying or in other activities. For students whose parents, spouses or other family members earn less than $15 an hour, it will increase their family or household incomes.”

Juhi Sohani, communications co-ordinator for the Canadian Federation of Students, says the new minimum wage will have a positive effect on families.

“The CFS has been supportive of the Fight for $15 campaign and its effort to help the lives of low-income people and low-income families in Ontario. When the new minimum wage laws are introduced, they will make an important contribution to fighting poverty,” she said.

Raycroft says there are still concerns with the act that institutes the minimum wage increase, the Fair Workplaces Act.

“The real concern with the Fair Workplaces Act is if the goal is to put more money in the pockets of Ontarians, we are seeing a number of scenarios where that won’t happen. So this makes us question the real goal.”