Increasing Loan Forgiveness for Doctors and Nurses in Rural and Remote Communities

Increasing the maximum amount of forgivable Canada Student Loans by 50 per cent, from $40,000 to $60,000 for doctors and from $20,000 to $30,000 for nurses working in underserved rural or remote communities. This policy will be effective April 1, 2023.

• Estimates are presented on an accrual basis as would appear in the budget and public accounts.
• A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).

Canada Student Financial Assistance (CSFA) Program administrative data for fiscal year 2020-2021 was used to calculate average loans and loans forgiven for eligible doctors and nurses to determine the utilization of additional loans. A projected growth rate was applied to the amount of loans forgiven based on the current Actuarial Report on the CSFA Program.

The PBO Student Financial Assistance Model was used to estimate the net expense of the CSFA Program under current policy parameters and the impact of the increase to the maximum amount of forgivable loans for eligible doctors and nurses.

The impact to the non-refundable Student Loan Interest Tax Credit was estimated accordingly.

The main sources of uncertainty relate to projected expenditures on student support, the size of the eligible population as well as the outcome of a review of the definition of rural communities under the program by the federal government. A behavioural response was not incorporated.