Employment Canada will forgive 50 percent of new medical school graduates’ Canada Student Loans, up to $60,000, if they agree to stay working in Canada.
According to a Regulatory Impact Analysis Statement dated June 24, the loan forgiveness will cost the federal government $3.2 million a year, but is necessary to staff rural areas of Canada with doctors and nurses.
“Among the many factors that contribute to the limited access to health care services in rural and remote areas is the challenge of attracting family physicians, nurses and nurse practitioners to these communities,” said the document.
The program would take effect in “late fall 2023,” the report indicated. According to Blacklock’s Reporter on June 26, there was no set start date.
This is not a new program. As of 2013, under the Canada Student Loans Act, new doctors who graduated and then lived and worked in areas with fewer than 50,000 residents could apply for a loan waiver of $40,000, while nurses could qualify for $20,000 over five years.
The new plan proposes to raise loan forgiveness “given inflation” by 50 percent, which would mean doctors could qualify for $60,000 and nurses could qualify for $30,000.
“While the Canada Student Loan forgiveness benefit was put in place to help incentivize family physicians, nurses and nurse practitioners to work in rural and remote communities, the benefit is continuing to decline in value given inflation and the cost of living,” said the report. “The benefit has not increased in value since its implementation in 2013.”
“The maximum annual loan forgiven would increase gradually based on the number of years a family physician, nurse or nurse practitioner works in an under-served rural or remote community,” the report states.
“The loan forgiveness would reduce the outstanding Canada Student Loan balance for eligible beneficiaries at the end of each year of work.”
In the next decade, Employment Canada intends to recruit 3,000 to 8,000 medical graduates per year for rural areas. The government said that while service may be inadequate in cities, “shortages are often most acute in rural and remote communities” nationwide.
“Increasing the generosity of Canada Student Loan forgiveness could result in some federal loans being forgiven faster for some borrowers and is expected to help improve the retention of health care providers in under-served rural and remote communities,” said the statement.
According to a 2022 University of Alberta report, “MD Financial Education Session,” a four-year medical degree costs about $160,000 including $83,000 in tuition and fees. Canada has 94,000 doctors, of which 92 percent work in urban areas, according to data from the Canadian Institute for Health Information.
A report from 2005, Geographic Distribution of Physicians in Canada, found that only 2 percent of specialists opened medical practices in small towns.
