On October 5th, 2022, The Newfoundland and Labrador (NL) government announced that it is providing a one-time payment of $500 for cost-of-living relief for adults making less than $100,000 per year between now and Christmas.
392,000 residents in the province are expected to receive a cheque based on adjusted incomes of $125,000 or less.
The government’s breakdown is as follows:
- $500 for taxpayers with an income of $100,000 or less
- $250-$500 for taxpayers with income between $100,00-$125,000
- Must be 18 years old and have filed a 2021 tax return as of December 31st, 2022
- No application required
While many working students are taking a deep breath following the announcement, unemployed, international, and non-provincial students are not eligible.
MUNSU called out the government for the announcement on Twitter, advocating for the accessibility of education.
CFS-NL tweeted, “Students are often unemployed. While this ‘Cost of Living Relief’ will provide aid to those working, many students living in poverty who are unable to work due to the intensity of their programs, will be INELIGIBLE for this money.”
MUNSU also tweeted that the relief plan costs nearly three times what the Government of Newfoundland and Labrador will cut from postsecondary education over the next five years– totalling $68.4 million.
This is a small sum compared to the projected $194 million the government will giveaway for the one-time cost of living relief payments, an initiative as part of a $416 million plan to help residents with rising living costs.
Good politics, bad policy
A MUN Political Science Professor calls the plan “bad policy, good politics”.
Dr. Russell Williams says the money could have been invested into public services beyond education– like healthcare, which faces critical strain due to physician shortages.
However, the cost of living relief payment initiative has been highly partisan as the Liberal Party of NL advertises its affiliation with the decision. In contrast, Newfoundland and Labrador’s opposition has been quiet.
Conservative MPs in Ottawa, however, oppose low-income housing and dental relief cheques, arguing that such relief packages would have the opposite effect than intended because they would drive up inflation while offering only a little relief to people.
Read more: CTV News
The student struggle
Students are among those who struggle financially the most.
While eligible students will temporarily benefit from a $500 payment, whether put towards rent, groceries, or tuition– the payments are unequally targeted.
“The government has decided that the people who need help and relief are much higher on the income spectrum,” said Williams.
The low-income bracket in NL is $38,081 or less. Meanwhile, the $500 payment is for anyone earning under $100,000, and dual-income households making anywhere between $0-$200,000 will receive $1000– no questions asked, no application needed.
Many Newfoundlanders have speculated on Twitter following the announcement arguing that the government is trying to buy people’s votes.
Williams explained that if the government were genuinely concerned about the implications of the rising cost of living on its population, the lower-middle income earners would receive more than what is “essentially Christmas cash” to high-income earners.
Postsecondary combats austerity
Austerity is an economic term that refers to official action by a government to reduce spending and public debt.
In a CBC article, Lori Lee Oates explains that “austerity takes away the spending power of people who need to go out and buy if there is going to be an economic recovery. It imposes fees and consumption taxes on those who can least afford to pay them.” The newly imposed Sugar Tax is an example of a consumption tax that directly impacts low-income earners who struggle to afford healthier options.
Newfoundland and Labrador have the most debt in Canada. Higher-income earners are crucial to the Liberal provincial government during election season, because these individuals vote and are unlikely to leave the province.
Students, however, are perceived as “not important to politics” in the government’s perspective, as Williams claims, because students are less likely to vote.
In 2021, Elections Canada revealed the turnout for voters aged 18-24 was 47%, and motivation and access were the significant barriers that inhibited participation, yet “Newfoundland and Labrador’s single greatest revenue-generating measure to address the deficit problem was Memorial’s tuition increases” Williams says.
According to the current tuition framework, MUN’s tuition rate will increase by 4% annually. International students, who will not receive $500, are paying the highest tuition rates at $2000 per course in the 2022-2023 academic year.
Fight for accessible education
Postsecondary students are affected by politics and government decisions regardless of individual interest or lack thereof.
The lifting of MUN’s tuition freeze directly impacts students, just as the lack of investments in public services like public transit or healthcare does.
On November 2nd, CSF-NL and MUNSU are holding a provincial day of action: All Out Like ’99 to fight for accessible education in Newfoundland and Labrador.
In a study by Anna Valero and John Van Reenen, postsecondary institutions correlate with future economic growth through its enhancement of human capital, innovation, democratic values, and demand effects as “increased consumption from students and staff and the universities’ purchase of local goods and services could have a material impact on GDP.”
The recent investment in a one-time cost of living payments could have kept MUN’s tuition freeze for at least two more years.
In August 2020, Statistics Canada revealed that one in two postsecondary graduates had student debt at graduation– a statistic that will only rise as tuition rates increase and the cost of living skyrockets.
As a result, students who choose to stay in NL will weigh the heavy burden of the province’s debt due to Muskrat Falls in addition to their student debt as tuition and cost of living rise.
Short term solution
The government’s $500 one-time payment will provide some relief for low-income earners temporarily.
If you have not filed a 2021 tax return yet and are otherwise eligible for the payment, contact MUNSU’ ‘s free Tax Clinic before December 31st, 2022.
The clinic provides free tax preparation services to students and others with simple tax situations and modest incomes: firstname.lastname@example.org.
According to Williams, the cost of living relief payment is not taxable income. However, individuals will pay it back because the government is 18 billion dollars in debt.