A report from the C. D. Howe institue, a public policy think tank, recommends that education tax credits be made refundable regardless of income.
Under the current model, the children of the wealthy benefit disproportionately; tax credits, which are on average $2000, cannot be transferred year to year, and many students do not make sufficient money to benefit from the deductions. Even though education tax credits can be claimed by the parents of those in school, 42 per cent of tax credits are claimed by the 10 per cent of people who have incomes over $80,000.
The report also argues that RESPs help the children of the wealthy more than those of the poor. A family with three children will get $21,600 over 18 years from an RESP through matching government contributions.
However, the family needs to contribute $2,500 per child per year — a total of $7,500 — a sum many do not have.
With files from Yahoo News
