Axing grant called ‘ a step backward’
Cancelling RESP program expected to save province $ 19 million per year
Advocates criticized the Progressive Conservative government Monday for cancelling a “visionary” $ 19- million program that offered a $ 500 grant to every Alberta child who opened a Registered Education Savings Plan.
Peter Lewis of the Canadian Scholarship Trust Foundation says the decision to axe the program — made in the spring budget — will drive down savings rates in Alberta at precisely the moment families should be encouraged to save more.
“That $ 500 grant has a catalytic effect. It says: ‘ Here’s $ 500, all you have to do is open up an RESP.’ It builds momentum that gets ( parents) thinking about education savings right from Day 1,” Lewis said. “We believe this is a step backward…”
Then premier Ralph Klein introduced the Alberta Centennial Education Savings ( ACES) plan as the centrepiece of his government’s agenda in 2005.
Between Jan. 1, 2005, and Dec. 31, 2014, nearly 400,000 grants were paid out, representing approximately 280,000 children.
Lewis said the program was “visionary” and the number of Alberta children with RESPs had climbed by 158 per cent since it was implemented. Federal statistics show 49 per cent of Alberta children now have education savings plans.
“We think that it wasn’t meeting the objectives,” Advanced Education Minister Don Scott said
He said the government’s priority is to ensure lower- income Albertans have more opportunity to take part in post- secondary education, and that just 17 per cent of those who used the ACES grant program were low- income families.
The cancellation of ACES is expected to save the government $ 19 million every year.