Finance Minister and Deputy Prime Minister Chrystia Freeland has announced that the government intends to permanently eliminate interest on federal Canada student loans and Canada apprentice loans. This includes loans that residents are currently repaying.

The measure, introduced as part of the so-called Economic Statement, is expected to cost $2.7 billion over five years and $556.3 million thereafter.

According to the text of the statement, half of all Canadian students studying at universities and colleges rely on student loans to survive. The government says it's intervening to help future graduates manage the rising cost of living.

If their loan becomes interest-free, the average student would save $410 each year, according to the proposal.

Beneficiaries would still be able to access the federal Repayment Assistance Plan, which pauses student loan repayments until the borrower earns at least $40,000 per year.

The federal government first waived interest charges on student loans for a two-year period at the height of the COVID-19 pandemic, when graduates faced a tough job market. That measure is set to expire on March 31, 2023. The permanent elimination of federal student and apprentice loan interest, if it passes Parliament, would take effect on April 1, 2023.

It's part of a larger package of proposed and ongoing federal programs that aim to make life more affordable for Canadians, including housing measures and a credit card transaction fee decrease for small businesses.

"We can ensure that everyone in our country can enjoy the prosperity we are investing in together," Freeland said in a social media post. "That is the future that we can create for ourselves and our children. By building a country where everyone can earn a good living for a hard day’s work. And by building an economy that works for everyone."