A couple of years ago, the local paper ran a story with the following headline: “Low-income families not using program meant to help save for kids’ education”.
This is the thing that Conservatives and Liberals can’t seem to get through their heads. Poor people can’t afford to save. They can’t afford to spend in order to later receive a tax break. Tax breaks, top ups, matching funds—none of them help poor people because they all require poor people first spending money they don’t have: if you don’t have the money to spend, you can’t benefit from these programmes.
Take the Canada Education Savings Grant, for example, which was the programme referenced in that news story. The CESG is money the federal government adds to a registered education savings plan, up to a maximum of $7200. To get the grant, parents must already have an RESP set up for their child.
The table below shows that for a family to receive $1,500 in the CESG, they first would have to deposit at least $7,000. They have to first save 4.5 times as much!
Tuition for 1 year at the University of Lethbridge is $5000, which increases to $6,500 once you factor in fees and $9000 with books and supplies. That $1,500 won’t cover even one semester of tuition, let alone the other costs of education. Even if the family maxes out their grant, it still wouldn’t be enough to cover even one year of schooling.
These programmes exist as ways for governments to make it seem like they’re helping the poor, but they know very well that most people won’t take advantage of them. Because poor people can’t afford to save.
Our first year of marriage, our household income was $13,000 a year. We entered our marriage with both of us already in debt. We lived off a lot of margarine and rice. We received food hampers at Christmas time. We had no vehicle. I was still wearing my worn out mission suits to church on Sundays.
When a company came along that promised to give us a year’s supply of groceries that would could pay off in installments, it felt like a godsend. We were so elated that we had no idea that we were signing a 5-year loan with an interest rate above 30%. That, of course, put us further into debt, and the food we got was either non-perishable or frozen, so we still had to buy groceries every month.
When we moved to Lethbridge three years later, we lived off under $10,000 a year. We had no access to hunting, no food storage, no vehicle, no transit pass, no bike, no eating out, no prepackaged food, no space for a garden, no bartering groups, no extra deductions, no credit cards, no date nights, no cell phones, no laptops, a small townhome, no gaming systems, no smoking, and no drinking. No way to cut our expenses.
I couldn’t hold down more than one job because I was going to school, and the job I did have was only part time. And tuition ate up most of our money.
We had to roll pennies to buy one bag of fruit. We stole toilet paper from the church and brought it home to use. I had to walk downtown from the Westside to cash a paycheque because we had no money for the bus.
And all this was before our first child was born. Once they was born, our expenses increased. Sometimes, we had to choose between food and diapers.
We had no money to save. We didn’t even have money to pay our bills. Our bills got so behind, they went to collection agencies, one of whom even took us to court. Having no money is why I dropped out of school the first time.
Not everyone can save.
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