OTTAWA — NDP leadership hopeful Paul Dewar is proposing a $1.3-billion strategy to provide more education, work and volunteer opportunities for young people.

The Ottawa MP wants the federal government to transfer $800-million annually to the provinces, specifically on condition that the money go to reducing tuition fees at colleges and universities.

He wants to expand the Canada Student Grants Program by $200 million a year in a bid to make post-secondary education more accessible to aboriginal, disabled and low-income students.

He's further proposing to reduce the interest charged on student loans to the prime rate, at an estimated cost of $100 million a year.

And he wants to provide grants of up to $1,500 a month to youths who agree to spend a year working for a non-profit organization at home or abroad -- an initiative he estimates would cost $200 million in its first year.

"Young people shouldn't have to choose between crushing debt and getting an education or helping their community," Dewar says in a written statement.

"Together, we can ensure every young Canadian can be fully engaged in building our country by investing in their access to training, education and community service."

Dewar's "youth opportunities strategy" is one of the priciest proposals to emerge from the federal NDP leadership race thus far. He does not spell out how he would pay for it, although he has said in the past that he'd roll back corporate tax cuts.

The proposals are likely to raise eyebrows in the provinces, which have exclusive jurisdiction over education. Quebec, in particular, jealously guards against federal intrusions into its jurisdictions and has thus always insisted there be no strings attached to federal transfer payments for social programs.

Dewar's proposals could trigger a debate over the extent to which the NDP's traditional belief in national social programs with cross-country standards should be modified to accommodate the party's newfound status as the federalist voice of Quebec.

Quebec delivered 59 of its 75 seats to the NDP in last May's election, vaulting the party into official Opposition status for the first time in its 50-year history.

Dewar argues that tuition fees have ballooned by 400 per cent over the last 20 years, creating an "insurmountable barrier" for disadvantaged youth and leaving graduates with a "staggering" $15 billion in debt.

He says his proposals would shave $700 off a student's annual tuition fee and save the average grad $2,700 in interest on student loans.

Dewar is one of nine candidates vying to take over the helm of the NDP, left leaderless after the death of Jack Layton in August. New Democrats will choose their next leader on March 24.