WE fiasco raises many problems.

The uproar over the We Charity fiasco raises a host of issues concerning COVID-19 funding for post-secondary education that have not been properly explored. The ethics commissioner will focus on the prime minister’s potential conflict of interest. My concern is different. Why would an almost $1-billion program starting in July — halfway through students’ summers — even be considered, given how lucrative existing relief programs for students are? Spending seems to be getting out of hand.

As I document below, over $9 billion in new federal spending is estimated to be spent on programs to support students or recent graduates. This vast amount does not include other measures that potentially benefit students, such as the Canada emergency Response Benefit (CERB), the Canada wage subsidy program and increases in the GST low-income tax credit and the child benefit, not to mention various provincial support programs.

About 2.1 million students are enrolled in post-secondary institutions, a half million of them part-time. Many full-time students work while at school or during the summer to help cover the costs of their education. Most part-time students also work, often full-time. On an equivalent full-time student basis, the support being offered to students sums to about $5,000 per student this coming year. (By comparison, the average undergraduate tuition fee across Canada is $6,500).

The largest program is the Canada emergency Student Benefit (CESB), equal to a taxable $1,250 for each four-week period from May to September, plus an additional benefit of

Programs like these distort labour Markets.

$750 per four weeks for those with a disability or a dependent child less than 12 years of age. Whether the student has been enrolled full- or part-time does not matter: the same payment is made even though full-time enrolment is more expensive. Students claiming the CERB, which pays $2,000 a month, or anyone earning more than $1,000 in employment income for the four-week period cannot claim the student benefit.

Between May 10 and July 5, 601,000 people — or 28 per cent of the post-secondary student population — claimed the student benefit, for an outlay totalling $1.42 billion. The department of Finance estimates the cost will be $5.2 billion by the time the program ends after August, which now seems high. That uptake has been only partial also begs the question how other students are covering the cost of their education. Are they claiming the CERB instead? Are they working? We don’t know but I suspect the CERB is an additional level of support for those who lost working hours during the pandemic.

If this is not rich enough, the federal government provides another $900 million to post-secondary students and recent graduates under the Canada Student Service (CSS) grant. This grant is given even to those claiming the CESB (but not the CERB). It is a pretty good deal, with payments ranging from $1,000 to $5,000 for student “volunteers” ($1,000 for 100 hours of work, $5,000 for 500 hours).

The CSS grant is, of course, the program the federal government had awarded We Charity to begin in July. Considering what is already available, it’s hard to see how it was needed. The I Want to Help platform, which was announced in April, remains part of the CSS grant program. In June its Calgary website listed over 102 organizations offering thousands of volunteer positions. And an older volunteer program, the Canada Service Corps, is increasing its microgrants from 800 to 15,000 positions. It is far from clear why volunteer support had to be expanded further by giving a sole-source grant to We Charity.

COVID support also includes wage subsidies for youth employment and skills development programs ($1 billion), as well as enhancements to the Canada Student Loan and grant programs ($2.2 billion). Add it all up and it comes to about $9.3 billion, not counting what is available to students in general programs.

Programs like these distort labour markets. Volunteer programs do give students work experience. But they encourage employers to substitute volunteers for paid employees, just as subsidized workers often replace unsubsidized ones. The various programs also encourage students to refuse summer employment. Coupled with the CSS grant, the CESB provides $6,000 over the summer for as little as 12.5 working days at $20 per hour — which is hard for many employers to compete with. Nor it is clear how well these volunteer programs will be monitored to avoid abuse. It’s easy to say someone will work for 500 hours but there is little financial incentive to make sure the work is actually performed.

If the federal government is willing to shell out so much money for post-secondary education, why not simply provide a grant equal to $4,000 of tuition fees for the 2020-21 academic year? If students can get a job over the summer, they can enjoy it. If they can’t, at least they have the after-tax money, as well as less encumbrance from Canada Student Loans. The government would also save a couple of billion dollars.

All this cries out that we need Parliament back to challenge these overly rich COVID-19 support programs. The government is not wrong to bail out the economy during a pandemic but it should do so with smart program design and accountability. Right now, our parliamentary representatives are being well paid to be absent. That’s not right and should be stopped.