NCPA - National Center for Policy Analysis

School Choice Through Tax Credits

August 10, 2001

Canada's Ontario Province has put in place "the best education policy in North America today," in the view of Claudia Hepburn, education policy director at the Fraser Institute. The recently-instituted program is built on tuition tax credits which allow parents to send their children to the school of their choice. Whereas six Canadian provinces currently supply funds directly to private schools, Ontario Premier Mike Harris's scheme credits the savings directly to parents.

  • Parents who send a child to a private school will receive a tuition tax credit of C$700 starting in the 2002 tax year -- which increases by C$700 each year to a maximum of $3,500.
  • When fully phased in, Ontario parents will be able to deduct up to 50 percent of total tuition paid to a private school.
  • There are currently 733 private denominational and non-denominational schools in the province -- split roughly 50-50 between the two categories.
  • About 103,000 students are enrolled in them.

Political observers report that school vouchers have never been particularly popular in Canada. But with a large sector of religious schools, the tax credits are overwhelmingly popular with Christian, Jewish and Muslim groups. There are also mechanisms that allow low-income families with low tax payments to take advantage of private schools.

Some leaders contend it would have been better to allow a credit of 100 percent, up to the maximum of $3,500. Thus, parents of students who attend schools with low tuition would still see some appreciable benefit. And schools with fees below the maximum level would not have had as much incentive to raise them.

But, they reason, Ontario can still refine its tax strategy over time.

Source: Michael Taube (public affairs analyst), "Ontario Shows the Way on School Choice," Wall Street Journal, August 10, 2001.

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