Ottawa to open education savings accounts for all low income kids starting in 2028

A financial incentive aimed at helping low-income Canadians save for their children's post-secondary education is getting a facelift, aimed at shoring up the nation's future workforce by reducing economic barriers to college and university.

Since it was launched in 2004, the federal government estimates it has disbursed roughly $2 billion to nearly two million students through the Canada Learning Bond (CLB).

The grant is open to low-income children born in or after 2004, with the government depositing up to $2,000 into a child's registered education savings plan, or RESP, up to age 15.

While many students have benefited, Ottawa estimates roughly 2.7 million more have missed out because an RESP was never opened for them by a parent or guardian.

As a result, the government says it will start opening RESPs automatically for eligible children born in or after 2024 who don't have one — a change expected in 2028.

"An investment in our youth, that's an investment in Canada's future," said Steven MacKinnon, Canada's employment, workforce development and labour minister on Friday in London, Ont.

The government said it would also add 20 per cent of whatever extra is added by parents, up to $7,200, tax-free.

MacKinnon was flanked by London MPs Peter Fragiskatos and Arielle Kayabaga for the announcement, held at Fanshawe College's Centre for Applied Transportation Technologies.

"We know families need the support," said Kayabaga. "We recognize the importance of building a solid educational foundation for all young people, especially those who face barriers at every stage of their journey toward accessing post-secondary education."

A crowd of Fanshawe students were present for the photo-op, some of whom have never been eligible for the CLB.

"That definitely would have made it a lot easier throughout the first and second year," said Blake Gottschalk, a third-year student  in the Automotive Service Technician Apprenticeship program born in 2001.

Second year was tough, he said, trying to work and keep up marks at the same time.

"I think it's a superb idea. It'll help out a lot of people going through college in the same scenario as me, or, if not, in worse scenarios," he said of the changes.

New trades people needed

Canada is contending with a housing crisis and a looming labour shortage. MacKinnon estimates the construction industry alone needs more than 350,000 new workers by 2033.

Fragiskatos said a stigma had surrounded the trades for years that was beginning to disappear.

"For so long, certainly when I was growing up, the idea was that university, in the public mind, was the way to get success ... It's just not true, and all of you are proving it."

Here and Now Toronto6:51Listeners share what education issues matters to them

Each week for the past month Here and Now has been focusing on the main ballot box issues. Today we are focusing on education. We opened up the phone lines to hear about what education issue matters to you. We heard specifically about education funding. Here’s what Jaleela, a university student here in the city had to say.

Canada also faces threats of tariffs from U.S. President Donald Trump.

On Tuesday, Trump said he intended to impose auto tariffs around 25 per cent as soon as April. It was a concern not lost on attendees. The Oxford Street facility is where Fanshawe's School of Transportation Technology and Apprenticeship is located.

MacKinnon suggested the location was deliberate, referencing the impact tariffs could have on the auto sector.

"The idea you can strengthen North American automotive manufacturing by imposing tariffs on parts of the supply chain is wrong. It will merely increase costs for buyers ... and it will hobble the companies," he said.

A threat to impose 25 per cent tariffs on imports of Canadian goods is paused until March 3, while a separate 25 per cent tariff on steel and aluminum imports is expected March 12.

As the federal government tries to bolster future enrolment, students entering college and university in Ontario do so at a time of uncertainty.

Facing a nosedive in international enrolment, Ontario post-secondary institutions report deficits and are mulling layoffs and program cuts. Fanshawe's projected deficit alone totals nearly $100 million over the next two fiscal years.

"That is a regrettable side effect of the fact we had allowed international students to grow beyond our capacity to house them, to care for them, to transport them," MacKinnon said.

The federal government took "full responsibility" for the challenges facing Fanshawe and others now that it has slashed study permits, he said.

While Ottawa has transferred billions to provinces for post-secondary education, provinces are ultimately responsible for education and should fund colleges and universities appropriately, he said.