Harper Education Money – RESP with no RESPECT

Citizen Wealth Financial Justice

introToronto Around 2006 the Harper government in Canada had a pretty good citizen wealth idea to advance the educational opportunity for lower income children. They would give a $500 grant to children born after 2005 in a savings instrument for future higher education expenditure, if or when the child went to a university. Furthermore they would match any additional money that the family put aside for the child at 40% of the contribution. The family income needed to be in the neighborhood of $40000 or so for a family of three. The grant would be deposited into the family’s RESP – or Registered Educational Systems Plan. Sounds good!

I listened to Judy Duncan, the ACORN Canada head organizer, describe it as an “American style” benefit and I winced every time as she explained that this meant that the benefit was not awarded automatically or triggered by tax returns, but a family needed to apply for the benefit. Consequently now almost 4 years on, less than 15% of the almost 800,000 children who would have been eligible to have this educational benefit set aside had actually accessed the program. Unfortunately, that did sound very American! RESP without the RESPECT as Aretha used to wail.

Unfortunately it gets even worse, as I listened to the ACORN Canada national board discuss the issue. The conservative government led by Stephen Harper had also done a couple of other very American things. First they made private banks like Scotiabank and others the custodians of the money and the partial handlers of the application process. Secondly they also did not particularly supervise or regulate the other quick buck outfits that swept in to take advantage of the plan. Two extremely savvy members of the ACORN Canada national board, Marva Burnett from Toronto and Preeti Misra from Burnaby near Vancouver had both been duped by predatory educational fronts that swept in on them right after they had babies during the last five years, enrolled them on monthly bank deducts, and now are fighting them tooth and nail after they discovered the huge, hidden “management” fees being charged by the companies, which in Marva’s case are now in excess of $700 CN per year on contributions that are less than $3000 per year.

As we make a plan to achieve maximum eligible participation on this program throughout Canada, it was shocking to hear how “American” our good neighbors have allowed themselves to become under the Harper government in copycatting benefit programs that pretend to be for the poor but are only masking corporate and fast buck pocket lining schemes in a classic political bait and switch.