House of Commons Hansard #137 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was amendment.

Topics

The House resumed from October 21 consideration of the motion and of the amendment.

Student Loans
Private Members' Business

11 a.m.

Liberal

Roger Gallaway Sarnia—Lambton, ON

Mr. Speaker, I am pleased to be able to join in the debate this morning on the important subject of Canada's post-secondary education system. I commend the leader of the Reform Party for having taken the initiative to place the issue of federal support for our colleges and universities on the parliamentary agenda, as he did last spring, and for his suggestions regarding the concept of income contingent repayment or ICR of student loans.

I believe this debate is helping members of the House gain insights into the importance of higher education to our country's future and how the federal government can work with the provinces to assist our colleges and universities. Since this motion was introduced last spring, however, there have been several important developments.

First, the government moved the new Canada Student Financial Assistance Act, which is known as Bill C-28, through Parliament to receive royal assent. The new legislation, which provides the framework for reforming the Canada student loans program, will be proclaimed in 1995. The new act provides the flexibility to implement the ICR pilot projects with interested provinces. This possibility is being pursued as a means of learning more about how an ICR scheme might be designed to meet Canadian conditions.

The government has moved quickly to implement its students' assistance reforms by increasing assistance for those students who need it the most. In August of this year the full time Canada student loan limit was increased from $105 per week to $165 per week and the limit on part time loans was raised from $2,500 to $4,000.

Over the next five years the changes already announced to our existing student assistance program will provide $6 billion in loans, which is over $2 billion more than during the last five years. The reforms include not only higher loan limits but special grants for students with disabilities, part time students and women in certain fields of study at the PhD level.

In addition to the reforms already under way in the area of student assistance, the government has demonstrated its keen interest in the future of post-secondary education by informing Canadians about federal assistance to the post-secondary system and putting forward an innovative approach for discussion.

The social security green paper provides two options for the future of established programs financing arrangements for post-secondary education. Under the first, total transfers would be frozen at the 1993-94 level starting in 1996-97. The result would be that as the tax portion of the transfer grows with the economy, the cash transfers will decline correspondingly, disappearing altogether within about ten years' time.

On the other hand, if we have an opportunity, we could transfer the declining cash into a sustainable system of loans and grants. These new loans could be based on the concept of income contingent repayment. For those who enjoy relatively high income after their studies, the rate of repayment would be rapid. Those who experience periods of low income would repay only when they were in a position to do so. The repayment would adjust automatically to income, thus reflecting the ability to pay rather than the amount borrowed. Those of us in riding offices know a lot about that.

We are discussing this concept with interest groups and provinces, examining how such a system might work in Canada. The government is guided by the principle of equality and at the same time the belief that those who benefit from post-secondary education have a responsibility to pay a fair share of the costs of their education.

We believe that every Canadian has the right to an equal opportunity in the workplace and in the classroom, consistent with the ability to do the job or handle the course work. At the same time, government resources are very limited and must be directed to those who need help to help themselves. It is true that students are often needy while they are in post-secondary

education, but thereafter their employment prospects and incomes usually improve dramatically. On average, post-secondary graduates earn 40 per cent more than the general workforce over their careers.

Once graduates begin to reap the benefits of higher education it seems reasonable that they should pay back part of the costs which society has invested in them. We are proposing that students take on a greater share of the costs of their education. We are asking them to invest in themselves. This is the option we want to discuss with Canadians.

The potential advantages of income contingent repayment or ICR have been widely discussed in recent years and several countries, including Australia and New Zealand, have moved to introduce ICR schemes. Clearly, in making his original motion, the hon. member concluded that ICR could be an important tool in assisting students in financing their education.

An ICR loan program would be fairer and less risky for students. Payments would be geared to income. If a year's earnings fell below a certain level, repayment of the loan could be suspended.

ICR has the potential of making loans available to all students without the means testing used in current student loans programs. If the government was not paying the interest on the loans while the students were still in school, there would be no need to limit eligibility.

The ICR concept, as it could apply, is currently being explored. The specific design would have to be tailored to reflect the Canadian environment. The government is undertaking work in this area in consultation with various student and other interest groups and will involve the provinces fully in such consultations.

We believe that ICR loans have a role to play in helping to maintain a high quality system of post-secondary education through the provision of a sustainable source of funding.

As I have indicated, the discussion paper on social security reform suggests a new approach to how the federal government might transform its decline in cash transfers into a sustainable system of income contingent loans and grants. This represents an innovative approach to dealing with the challenges ahead. The idea is receiving considerable support and the option deserves consideration.

To successfully face the challenges of the future, Canada needs well-educated young people and citizens who will continue to learn throughout their lives. The government is seeking ways to help Canadians achieve their learning goals through improved access to higher education.

As part of our social security reforms, we must enable Canadians to develop the tools they need to become productive and self-sufficient members of society. Our objectives must remain consistent with the Canadian value of fairness and generosity to those in difficulty while recognizing that governments have limited resources. Quite simply, we must help people to help themselves.

The government is listening to Canadians. We have put post-secondary education high on our list of priorities through reforms to the existing student assistance program and proposals in the social security reform paper.

The standing committee has already started its consultations from coast to coast and many members are conducting forums on social security reform in their own constituencies.

We look forward to hearing from Canadians in all walks of life.

Student Loans
Private Members' Business

11:10 a.m.

Bloc

Philippe Paré Louis-Hébert, QC

Mr. Speaker, as someone who has spent the best years of his professional career working as a teacher, guidance counsellor and school principal at the secondary level, I welcome this opportunity to take part in the debate on motion M-291, introduced by the Reform Party. The purpose of this motion is, basically, to amend the Canada Student Financial Assistance Act to include a loan repayment system that would take into account the employment income of students after they have finished their education.

At first glance, we might think this measure would be to the students' advantage. It seems reasonable to adjust the terms of repayment to the income of the person who contracted the loan. However, when we look at what the Reform Party has in mind with this motion, our support for this proposal quickly disappears as it becomes clear there is no benefit in this for students. The objective is clear:

reduce the cost to taxpayers of financing post-secondary education by reducing the number and dollar amounts of loans defaulted upon, by charging accumulated interest, rather than simple interest on default loans, and by reducing the number and dollar amounts of collection fees for defaulted loans.

The Reform Party's first objective seems to be based on the false premise that former students do not repay their loans because they do not feel like it. There is a tendency here to forget the economic problems facing young people today. Even for those with a university degree, the unemployment rate is close to 15 per cent. And there is also the troubling fact that many university and college graduates are underemployed and, as a result, underpaid.

In addition to the Reform Party's failure to realize that such situations exist, it is clear that if we want to reduce the cost of education for the taxpayer, someone will have to pick up the slack and pay the bill, and obviously, that onus will now be on the students.

This point of view is short-sighted on several accounts. First, it ignores the social situation of a great number of students. Second, it does not take into account the significant changes in lifestyle of every class of society. Today's students are the product of what is known as the consumer society which, as a social model, constitutes the basis of our western economies. How could we confine our young people to a ghetto and believe that they will take part in mass consumption only when they graduate?

A recent survey conducted in Quebec shows that high school students spend one billion dollars a year. This means that half the students in their last year of high school are working part-time. Nobody will deny the impact of this new reality on school results, but we must accommodate these new needs. We created them from scratch and ubiquitous advertising fuels them.

Transferring greater financial responsibilities to post-secondary students will only increase the tendency of students to go to school and hold a paid job at the same time. Faced with increased tuition fees resulting from the government's so-called social program reform, and the Reform Party's intentions, as described in motion M-291, students will react quite normally by trying to increase the number of hours they spend on the labour market, in order to limit as much as possible the need to borrow money. The consequences will be disastrous: time spent studying will diminish, the failure rate will go up, courses and even whole years will have to be repeated, resulting in increased costs for the governments subsidizing education. Basically, it is a vicious circle.

Transferring heavier financial responsibilities to students in such a manner is short-sighted for another reason. It ignores the fact that with the globalization of the economy, the quality of human resources is the key to competitiveness. It is by taking advantage of knowledge, research and development that Canadian and Quebec businesses will be able to penetrate a trade arena with no borders and maybe no rules.

Any increase in the financial burden of post-secondary students flies in the face of this universal reality. Instead of limiting access to higher education, as the Liberals and the Reformers are planning to do, we should do the exact opposite. That is a major reason for not supporting Motion M-291, a motion which, by its objectives, is anachronistic.

The third objective of the Reform motion also reveals the fallacious nature of their project. It reads as follows: "ensure that post-secondary institutions in Canada receive the funding necessary to maintain the high quality of services they presently provide".

This is not very subtle! This objective acknowledges that students, by bearing a larger part of the cost of their education, will contribute to generate resources for universities and colleges. Moving in that direction is refusing to recognize that knowledge and know-how are the keys to any modern economy. In this regard we should stress the vision of the Quebec Premier who announced last week, in his speech from the Throne, that he was freezing university tuition fees and removing the failure tax at college level. This is the direction to follow if we want to be able to compete with our trading partners under NAFTA and the Uruguay Round.

We sense that the government as well as Reformers are doing their best to gradually withdraw from the area of education. We, of the Bloc Quebecois, believe that the federal government must withdraw entirely from that area of provincial jurisdiction, an area that it invaded not to serve the interests of the people, but to enslave, to dominate and to impose its national standards on the provinces. By withdrawing from that field, the federal government could transfer tax points to the provinces. They would then be in a better position to deliver to their people education services geared to their needs and realities.

In so doing, the federal government would go beyond speeches and do something concrete to reduce the duplication of services delivered by both levels of government. However, to act in that direction would require great discernment and common sense.

These ingredients do not seem to be on sale in the federalist supermarket. To conclude, I urge all members who still care about the future to vote against motion M-291, a dangerous and anachronistic motion because of the objectives its seeks to achieve.

Student Loans
Private Members' Business

11:20 a.m.

Reform

Daphne Jennings Mission—Coquitlam, BC

Mr. Speaker, I am pleased to rise today to lead this debate for my party.

This motion is about Canada's future. It is about the future because it is about education. Education is the key to the future for Canada's young people.

I have spent virtually all my adult life in the teaching profession. Conveying knowledge to our young people was for me a most rewarding vocation. We must ensure the future of our educational system in Canada, and part of that is ensuring that as many students as possible can take part in it.

As literacy critic for my party, I recognize what happens if people do not take advantage of our education system when they are young. If you do not learn to read and write when you are young, you are going to have to learn when you are older through the various literacy programs sponsored by communities across Canada.

Reading and writing are learned either young or old but have to be learned at some point if one wants to become a fully functioning member of society. That is why it is so important

that everyone who wishes has access to education at every level of our school system.

Years ago, back in the 1950s, 1960s and 1970s, I believe we thought we had licked the access problem for education and if we had proceeded with balanced budgets from the 1970s through until today, I suppose we could have been right. However with the advent of budgetary deficits and the recession from which we are desperately trying to emerge, access to education has been called into question.

It has been called into question by two groups, the students and by us, the politicians representing the people of Canada. Students are concerned that through the Canada student loan program they will receive insufficient funds to allow them to attend university without worry.

At the same time because of the repayment scheme attached to these loans, students are concerned they will emerge at the end of their university careers with a huge debt which they are unable to discharge in the amounts and in the time required.

The repayment problem for student loans is alarming. At present one in five borrowers is in default on their student loan. About two-thirds of these eventually repay but only after the federal government assumes the debt from the bank and has launched some form of collection activity.

The other third, about 7 per cent of all student loans, are never repaid and become simply bad debts. In all, we are talking about $1 billion in bad loans, money the treasury may never see.

That is why the Reform Party felt it important to look at the whole scheme of financing again; look at it with a view to making it easier to fund a student's education, making it easier for the student to repay and therefore making it easier on the country's finances because the loans would eventually be repaid, perhaps with lesser amounts, but repaid nevertheless.

Let me explain how the Reform Party's income contingent loan repayment program will work. It is designed to allow students to pay back their student loans over a period of time based on their annual income after leaving university. The concept is funded on two fundamental principles, the full use of the income tax machinery in monitoring and collecting student loans, and the implementation of an income contingency principle whereby students pay back a set percentage of their income.

Upon graduation a student would begin to pay back their student loan. There is no eight-month delay period as there is presently. The repayment of the loan however would link the repayment plan to a student's earnings or ability to pay. Precisely how much a former student pays back would vary from year to year depending on his or her salary level.

A specific amount set as a percentage of income would be paid through the tax system. If a person's income does not reach a specified minimum amount, the payment would be deferred until earnings go up. This repayment system, however, depends on the supply of accurate income statements long after the individual has left the institution of higher education.

Revenue Canada could therefore supply the necessary data automatically and cheaply through income tax statements. This would necessitate the recording of student borrowers with the tax department and the inclusion of social insurance numbers on student loan forms.

With the possession of the full details of most students changing future incomes and geographic locations, the income tax authorities could then act as the primary monitor subsequent to loan collection.

I do not believe the use of SIN numbers in this context should be objected to. The end result of a more equitable loan scheme justifies this requirement.

We in the Reform Party like the idea of income contingent loans for three basic reasons, the first being the reduced cost to the taxpayer. Under the current Canada student loans program taxpayers end up footing the bill for defaulted loans. The difference between the simple interest paid by borrowers and the accumulated interest paid by the government and the collection fees charged on defaulted loans is charged to the taxpayer.

Two, there would be greater flexibility and fairness for students under the program. Under the Canada student loan program borrowers and taxpayers are discriminated against and repayment terms are onerous and rigid. The current program discriminates against borrowers in two ways. First, it discriminates against the poor and unemployed by forcing them to pay back their loans at the same rate and at the same level as those who are gainfully employed and who can afford to pay off their loans. Second, the prospective borrowers are discriminated against on the basis of their parents' or partners' income potential through means tests.

This often means that students whose parents are well off are ineligible for student loans even if they receive no assistance from these same parents. Low income taxpayers are especially discriminated against, as they are less apt to send their children to university.

The burden falls especially on those who pay taxes but do not use post-secondary education services. By 1990 two-thirds of the adult population did not possess post-secondary credentials. In other words, under the Canada student loan plan the poor or

those without university education as the case may be have been subsidizing the rich.

The repayment plan is inflexible because it forces former students to begin repaying their loan only eight months after graduation irrespective of their income. The income contingency plan in contrast involves no burden of debt that must be repaid unconditionally. Repayment falls only on the prosperous; that is, upon those persons who graduate and earn income at or above the given level.

Three, the maintenance of high quality educational services. The government is broke. As such both federal and provincial jurisdictions are grappling with the problem of how to finance post-secondary education. The financial pressure on higher education through reduced public funding has been inevitable in an era of growing deficits, high taxation and the increasing competition of health, environment and other lobbies for a greater share of public spending.

As governments contribute less and less funding and costs increase at the same time the quality of education has and will continue to decline. The bottom line is that governments can no longer finance post-secondary education at a declining level and expect the quality of the service to remain constant.

One cannot increase tuition and other fees charged to students without making the cost of a university education more and more prohibitive under the current system. If students were to be permitted to repay their loans on an income contingent basis over a longer period of time if necessary tuition fees as a percentage of the total contribution to post-secondary financing could easily be increased. This would ensure that the quality of educational services would remain strong and that those who benefit most from the system are those who contribute their fair share.

The position taken on this subject by the academic world is heartening. Mr. Clark Lajeunesse, president of the Association of Universities and Colleges of Canada stated the current student loan program is outdated as it does not meet students' needs and it does not meet university needs either.

The income contingent repayment loan is seen by universities as allowing them to maintain accessibility and qualify by making more effective use of tuition fees.

Under the ICR program universities can be more realistic about the cost of the programs that they offer. Some fees might increase for high cost programs while other fees might decrease for low cost programs. While some student groups have expressed concern that such a method of financing education could lead to higher tuition fees, other students and student organizations have expressed support.

The Ontario Undergraduate Student Alliance believes that ICR holds promise for protecting accessibility to and the quality of post-secondary education. The most important matter for this group is not so much that costs may increase marginally but that the education received by students be worth something. The key to the ICR program for this Ontario group is that it is never an unmanageable debt load.

I believe we should now look seriously at changing the method by which university education in Canada is financed, especially the financing available for students. The proposal from the leader of the Reform Party represents a scheme which is fair and equitable to students but is also inexpensive to administer. I would urge all members of the House to support this motion.

Student Loans
Private Members' Business

11:25 a.m.

Liberal

John Finlay Oxford, ON

Mr. Speaker, I am pleased to rise today in response to the member's Motion No. M-291 and make some comments about the financing of post-secondary education using an income contingent repayment plan. I would like to offer some comments on investment in post-secondary education.

All of us recognize that the income contingent repayment principle is intended to facilitate investment by individuals in their own future. It therefore offers a way for public policy to foster what the social security reform discussion paper calls mutual responsibility, governments helping people to help themselves.

Canadians collectively make a greater investment in learning than practically anyone else in the world. Few industrialized countries spend more of their gross domestic product on education than we do. No country spends more than the 2.6 per cent of GDP that we spend every year on post-secondary education. This represents $16 billion per year, nearly 80 per cent of which comes from taxpayers through federal and provincial support.

Indeed our public investment in post-secondary education is also the highest in the OECD countries measured in relation to our overall economic activity. The result is some of the best and most accessible post-secondary education in the world.

We have in relative terms more adults with post-secondary qualifications than many other countries and we have more people enrolled at any given time. There are currently nearly one million full time post-secondary students in Canada, about 70 per cent in universities and the rest in colleges and institutes of technology. Because of its shorter duration programs the college level actually produces more graduates than the university sector. Both of course make equally essential contributions to individual opportunity and national development.

In addition to the full time students there are also hundreds of thousands of students enrolled in part time programs. Still more take short courses, specialized training and other learning opportunities. Indeed, one in every four adult Canadians is engaged in a learning activity in any given year, an increase of

about 20 per cent during the last decade. Canadians understand the importance of investing both time and money, public and private, in learning to adapt to new challenges and opportunities.

A recent survey by EKOS Associates showed that some 25 per cent of the adult workforce are keen to improve their qualifications and move up to better jobs through their own efforts. These so-called bootstrappers are prepared to work hard at self improvement and self investment. They typically have adult responsibilities, modest incomes and limited opportunities for learning on the job. Their learning needs are widely divergent and may range from literacy training to advanced education or technical training.

Despite our record in creating across Canada an excellent and accessible post-secondary education system, many of these people still have great difficulty in finding the optimum combination of time and money in order that they can participate. There are no easy solutions but we need to ask ourselves how we can improve this situation.

The social security reform discussion paper therefore raises two basic questions about federal investment in post-secondary education. How can we help to ensure long term stable and sustainable support for post-secondary education in a context of increasing financial restraints by all governments? How can we at the same time not only maintain our accomplishments in making post-secondary education accessible but broaden and expand that access to more people?

The social security paper outlines two options for future federal support of post-secondary education. Under the first option the current established program funding for post-secondary education transfer arrangements would be maintained. The total amount would be fixed at the 1993-94 level in keeping with the government's restraint on transfers announced in the 1994 budget. With total entitlements thus restrained but the tax portion of the transfers growing with the economy, the cash transfer portion would decline correspondingly.

In 1996-97, the first year of any new arrangements, tax transfers are projected to be about $4 billion and cash to be about $2 billion for a total of just over $6 billion. While this total remains fixed, the tax portion is projected to reach $5 billion by the year 2001, meaning that the cash will be automatically reduced to about $1 billion at that point.

Finally, about 10 years after the new arrangement starts the value of the tax transfer would exceed $6 billion and the cash transfer would be virtually zero. The federal government would no longer provide cash support to provinces for post-secondary education.

We think there is a better way to invest the available cash. Instead of just letting it dwindle away to nothing, the green paper suggests using it to create a new $2 billion per year loan scheme on income contingent repayment principles. This would help students to meet the rising cost of tuition and thereby contribute an increasing portion of the cost of post-secondary education. It would thus help to ensure both the availability of high quality relevant opportunities for higher education and career training, but also their affordability.

The ICR principle as other hon. members have pointed out can ensure that an individual's payments on student loans do not become unmanageable. In a sense the income contingent repayment plan means sharing the risk between government and the individual, guaranteeing that payments will adjust automatically to income and therefore to ability to pay.

This second option would provide support to the post-secondary education system in two ways: first through a permanent and growing endowment of tax points that provinces can use to help finance their grants to colleges and universities, and second through loans that enable students to contribute to their own education.

Over the 10 year period beginning in 1996-97 the first option of the continuing current arrangements would provide a total of just over $60 billion to the post-secondary system. By contrast the second option would provide around $70 billion in tax transfers and loans over the same period. That is a difference of $10 billion in favour of the alternative approach.

This approach depends on the creation of a new student loan system that would ensure affordable payments for borrowers as well as simple and efficient means of repayment that would avoid problems of default. The scheme must be both fair and efficient.

The income contingent repayment approach properly designed could offer an answer to this need. The government is consulting interested groups about the specifics of design and welcomes their input to the process.

The options in the green paper for enhancing our national investment in post-secondary education are proposals, not decisions. The government is looking forward to reviewing these ideas in light of the many valuable comments and alternative proposals now being put forward. Not the least of these will be the suggestions of members of this House offered through the current debate.

Student Loans
Private Members' Business

11:35 a.m.

Bloc

Pierre Brien Témiscamingue, QC

Mr. Speaker, it is with pleasure that I speak on the motion put forth by the Reform Party, but it is with no pleasure that I read and consider it. It

seems to me that much of this motion is contrary to the principles young people have been given for many years.

If you take a look at what is underlying this motion, because there are the words of the motion but there is a lot more to these words, to what lies under all this. Reference is made to reducing the number and dollar amounts of loans. We understand that the intent is to recover a larger part of the defaulted loans that are presently difficult to recover and that we should be shifting toward a university tax situation.

This smooths the way for what follows: to ensure that post-secondary institutions receive all the funding necessary, while the goal-as previous Reform speakers have conceded-is to reduce the cost of education to taxpayers. So, if the necessary funding is to be maintained while you reduce the cost to taxpayers, of course someone else's costs will have to go up.

Whose costs? Probably the students'. They are told: "Your costs will increase but you will be able to repay based on a fixed percentage of your income-what is commonly called university tax, or post-graduate tax, among students". We are told that this is a good idea, one that was always considered in academic circles as potentially interesting-a post-graduate tax- but not as part of a system that doubles their indebtedness.

In that sense, I fail to see the difference between the Reform motion and the social program reform proposed by the HRD minister, who is basically suggesting the same thing. He is not as direct, though. Perhaps the one thing that can be said to their credit is that the Reformers are more direct. The documents tabled by the Minister of Human Resources Development talk about cuts in cash transfer payments to the provinces-this will amount to $324 million for Quebec-as well as cuts in income tax points-over $700 million-which will have the direct effect of increasing students' indebtedness and doubling tuition fees.

I now want to come back to indebtedness from a student's perspective. I was one myself not so long ago and I have been fortunate in that I have a good job and have been able to repay my student loans. I am very proud of having been raised in a good, accessible education system. I am one of those who first saw tuition fees rise every year and those who followed me have seen them rise even more because of subtle cuts in cash transfers.

How can we hope for a competitive, highly qualified labour force ready to take up challenges, when our young people look at the labour market with little hope while we encourage them to increase their debt load for their own good? Well, that is a major problem.

Why not give them a chance to get through the system and then increase their contribution? I think this would be a better approach that will ensure greater access. Is this the new system you are proposing for something that has always been a top priority in this country? Is this the new alternative you will try to sell Quebecers when the time comes to make collective choices? Is that the system you want to give us?

Both Liberals and Reformers see eye to eye on this. The third part of the motion would ensure that post-secondary institutions in Canada receive the funding necessary. I told my colleagues: "They have the wrong level of government; they should ask their provincial legislatures". Education is not an area of federal jurisdiction; our Constitution clearly stipulates that it comes under provincial jurisdiction.

But they always find a way. Liberal and Reform members would like to campaign on improving the education system because it is a priority for people. They do not have the courage to tell them that it is in provincial jurisdiction and explain power sharing under the present system to them. This leads to a lot of confusion and debt. Let this be a warning to this government.

There is no question of letting them meddle in education. It makes no sense. They will not repeat on a large scale with education what they are doing with occupational training. We should not let them. This paragraph about ensuring that educational institutions receive the necessary funding is not the federal government's role. So far, the federal government's only role has been to provide funds for the provinces, which reinvested them as they wished, and if this government wanted to be consistent, it would let the provinces that so desire collect these funds themselves by giving them the tax points or achieving their objectives like reforming the sales tax.

Why not take the opportunity to see how the provinces could do it themselves and at the same time ensure that they have the necessary funds so that they would no longer need to constantly ask the federal government, which always wants to centralize more with a cumbersome bureaucracy that always wants to meddle and control more?

It has been a long time since the government-in fact it probably never happened-downsized its operations and made real transfers to the provinces.

Let us take a look at the situation of students. Quebecers and Canadians in general often live far from educational institutions. In order to pursue studies at the university of college level, students often have to leave their place of permanent residence. Not always, but very often. It was the case for me. Except for those enrolled in a few training programs, every university student from my region of Timiskaming or from Abitibi-Timiskaming must move to some large centre.

Obviously, we could provide more university programs in the regions and that would be a good thing, but it will always be necessary to go somewhere else to get specific training. This means that students will have to pay for rent and other expenses. There are certain related benefits in that these students develop a certain independence; they learn to become part of society and they gain a greater autonomy. However, there are related costs

which, traditionally, had been partly met by society, through loan and bursary programs.

However, for the last ten years or so, the proportion of loans and bursaries has been reversed. Greater emphasis is put on loans now, since it costs students more to pursue studies. The user pay principle is being implemented in the field of education; yet, education is really a collective good in that everyone can benefit from it.

Now the government wants to restrict that access in a very underhanded manner. Attending university can cost around $10,000 for a student from my region. Increasing, if not doubling tuition fees would translate into an additional $2,000 per year for every student enrolled in a university program. Let us not forget that, since many students must already work part-time to pay for their studies, very few manage to complete their program in the normal time frame. Many students need four years to complete the three-year program leading to a bachelor's degree. Many students take three years instead of two to get their CEGEP diploma and they even take four and a half years to get their university degree because they have to work while completing their education.

What would happen if we were to implement the proposals made by the Liberals and the Reform Party? What impact would it have on full-time versus part-time students, on the quality of education, on the quality of graduates? They do not seem to be thinking about that. They just look at the financial situation, and that is a real cause for concern.

If the debt incurred by students is supposed to double, do you think that our young people will attend university in larger numbers, especially since they often have to face a new requirement? They must have a microcomputer, which has become an almost essential tool. Of course, many universities provide microcomputers on site. Also, there are loans guaranteed by the Government of Quebec to help students afford a microcomputer, but it is another loan and this ever-growing debt becomes more and more of a burden to the system.

Students look at Canada's fiscal situation and they see that we have an enormous debt, but they also see the cuts that are being made. For example, our young people today will never benefit from the capital gains exemption that was available to previous generations. Many of the incentives and tools that Canadians used to become successful are being eliminated. Our young people are willing to accept that, but at the same time they are being told that they will have to pay more for their education.

They are being asked to do the job the government is no longer able to do with regard to the debt and we are supposed to believe that it will be better for them, that it will improve our education system.

Canadians are being deceived and the Bloc Quebecois will never support such a motion that goes against all the principles that society as a whole must contribute for the benefit of all, whether for health or education.

Student Loans
Private Members' Business

11:45 a.m.

Reform

John Williams St. Albert, AB

Mr. Speaker, I rise today to speak in support of the motion by my colleague, the member for Calgary Southwest, on the income contingent repayment of student loans.

For the record let me assure the House that my position and that of all the Reform Party caucus is that we wholeheartedly endorse all aspects of education. The country needs as much as it possibly can get. The debate this morning seems to have centred around education. The motion before us today deals with the collection of outstanding amounts owed by students in order for Canada to ensure the money that is being lent to students is being returned.

I listened to the debate and the nonsensical rant of members of the Bloc Quebecois going back to the idea that only Quebec can handle the problems. The arguments they put forward seem to be rather ludicrous, looking at the motion put forward by the member for Calgary Southwest.

The Liberals have talked about fairness. When we take a look at outstanding loans we see that 90 per cent of Canadian students repay their loans with or without hardship but they do so. Ten per cent have been written off. If we are talking about fairness, surely we should expect all students to live up to their financial obligations rather than 10 per cent being allowed to walk away from their responsibilities while the other 90 per cent act responsibly and repay the debt.

Today we have a very difficult financial situation in the country caused by previous governments and a current government that refuses to grasp the situation and ensure that we get our finances in order. By the admission of the Minister of Finance we are going to add another $100 billion to our debt in the next three years, thereby squeezing the amount of money we are going to have available to pay for education and the other services we so desperately need.

We also know that the young people are going to pay back the debt on top of their education. They are the ones who are getting squeezed twice. We are asking them to pay more for their education as we continue to consume the assets of the country. The students who graduate statistically speaking earn 40 per cent higher incomes than those who do not have higher educa-

tion; but we must look to the idea that higher education is very expensive. It must be handed out to those who have the desire to take that education, go forward, help develop the country and use it for the betterment of Canada.

Higher education is not a place where people can fritter away some time and borrow the money from the Canadian taxpayer and hope that if they have some money they will pay it back at a later date.

Lets look at some statistics. I have the 1994-95 estimates from Human Resources Development Canada, the part III expenditure plan. Looking at page 5.4 under the social development and education program, we find that claims paid by the government, it is estimated for 1994-95, will be $195 million. That has been increasingly steadily. Working backward, the forecast for 1993-94 was $162 million. The actual for 1992-93 was $175 million and back in 1991 it was $147 million. The amount is getting larger all the time.

Can we expect the Government of Canada to continue to provide education free for some who want to flaunt the rules and expect those who abide by the rules to have to pay for it? I do not think so. We have to remember that 90 per cent of students pay their loans back.

Let us take a look at the defaulted loans. On page 5.39 of the same book, in the 1992-93 loan year the student assistance branch reimbursed lenders' claims for 29,079 defaulted loans. Let us take a look at the dollar amounts. Under $2,500 there were 8,180 claims. Between $2,500 and $5,000 there were 10,642 claims. Well over half of all student loans that have been written off were for less than $5,000. Five thousand dollars does not buy a decent used car today. It is not a downpayment on a house. It does not go very far.

The average income in the country is around $24,000 a year per individual. We are talking just a few months of income. Surely it is only fair, when we are talking about the obligation people assume to go to university to get a higher education, that these people live up to their responsibilities and repay the loans.

Regardless of the Bloc Quebecois talking about how hard it would be, we must remember that only 10 per cent are abusing the privilege. Of that 10 per cent more than half of them are for less than $5,000. If these individuals whose student loans are written off have financial difficulties because they have no job and have no income, they should be allowed time to repay the debt.

However when they become employed, when they start to generate some income, surely we can expect them to live up to their obligations. Therefore the motion by the member for Calgary Southwest is perfectly in order. We should recognize that when there is hardship we should allow them the opportunity to defer payments. When they have the opportunity to pay back the loans they signed up for which provided for their education, provided for the betterment of their lives and presumably added to their standard of living and quality of life, the 10 per cent, like the other 90 per cent, should be expected to repay the loans.

We must remember that over half of the 29,000 who defaulted last year defaulted on an amount that was less than $5,000. Let us be realistic. Let us talk about being fair. Let us talk about fairness for everybody rather than just those who want to live up to their education.

Student Loans
Private Members' Business

11:55 a.m.

Liberal

Anna Terrana Vancouver East, BC

Mr. Speaker, I am delighted to be able to address the House on the crucial subject of federal support for post-secondary education.

The motion before us which was introduced in the spring by the Reform Party has taken on new meaning in the context that has evolved since then. Not only has legislation been passed to overhaul the Canada student loans program but the government has released its social security reform discussion paper. Both these initiatives reinforce the notion that income contingent repayment of student loans is a potential important component of the future post-secondary education financing scene in Canada.

As a further example of the interest in income contingent repayment loans demonstrated in the past few months, I would like to point to the conference in September sponsored by the Government of Ontario with financial assistance from the federal Department of Human Resources Development. It brought together leading experts from across Canada, Australia and the United States and gave some 300 participants a chance to exchange views and argue the issues.

The arguments in this area often involve strongly held views as we have seen in the debate in the House. Throughout the debate all sides of the House stress the importance of post-secondary education to the future of individual Canadians and of our country.

I believe none of us questions this basic value but we do have differing views as to how best the federal government can contribute to ensuring that Canadians continue to enjoy access to post-secondary education over the long term.

In our red book we did admit that "we must make better use of the $44 billion we spend on education every year". Many Canadian students already receive assistance from the federal and provincial governments to finance their studies. The costs to students of post-secondary education have increased significantly in recent years. The government has introduced reforms to the Canada student loans program to help today's students handle the increased costs.

There is no doubt that in the past significant numbers of students have difficulty repaying existing fixed payment loans. The government has moved to address the problem by introducing grants and expanding interest relief to include borrowers of low incomes.

The government will soon be entering into contracts with lenders for the Canada student loans program whereby the institutions making the loans will assume greater responsibility for servicing and collecting them.

Under this new financing arrangement lenders will have a much greater incentive to provide income sensitive terms to borrowers. This flexibility will assist former students in repaying their loans.

More fundamental than the question of the operation of existing student loans problems is that of the share which tuition represents of higher education costs. Canadian post-secondary students contribute through their fees on the average about 20 per cent of university operating costs. We know that post-secondary graduates have much greater employment prospects and income potential than those who have not undertaken such studies. Should they perhaps contribute more toward the costs of this education?

As the House knows, the standing committee on human resources-

Student Loans
Private Members' Business

Noon

The Deputy Speaker

With profound apologies to the hon. member, she will have six minutes when the matter comes up for debate at the next occasion.

The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 93, the order is dropped to the bottom of the order of precedence on the Order Paper.

The House proceeded to the consideration of Bill C-51, an act to amend the Canada Grain Act and respecting certain regulations made pursuant to that act, as reported (without amendment) from the committee.

Canada Grain Act
Government Orders

Noon

The Deputy Speaker

There are eight motions in amendment standing on the Notice Paper for report stage of Bill C-51, an act to amend the Canada Grain Act.

Motion No. 1 will be debated and voted on separately. Motions Nos. 2, 4 and 5 will be grouped for the purposes of debate but voted on separately.

Motions Nos. 3, 7 and 8 will be grouped for debate but voted on as follows. Motion No. 3 will be voted on separately. A vote on Motion No. 7 applies to Motion No. 8.

Motion No. 6 will be debated and voted on separately.

The Chair would now propose that Motion No. 1 be debated.

Canada Grain Act
Government Orders

Noon

Bloc

Jean-Guy Chrétien Frontenac, QC

moved:

Motion No. 1

That Bill C-51, in Clause 2, be amended by replacing lines 42 to 45, on page 2, with the following:

"4.(1) The Governor in Council, on the recommendation of the committee of the House of Commons that normally considers agricultural matters, shall designate one of the commissioners to be chief commissioner and another commissioner to be assistant chief commissioner."

Mr. Speaker, this is the second time I rise in the House to speak to Bill C-51. The bill was discussed at length in committee, mainly so that we could provide some clarification.

The House will recall that the purpose of this bill is to clarify some procedures with respect to contracts concluded by the Canadian Grain Commission with grain elevator operators and producers.

I will first comment on the amendment I proposed to improve Bill C-51. The amendment in question does not affect the main thrust of this bill. According to the government, the bill will impose greater responsibility on grain producers to secure payment for their grain from elevator operators and grain dealers licensed by the Commission. The government is telling producers: Look, you know how this works. We now have to make some adjustments to make things work more smoothly.

The amendment I am proposing to Bill C-51 is along the same lines, in that its aim is to provide for more effective and, above all, more transparent operations.

The proposed amendment affects the government body that is involved in all these operations, the Canadian Grain Commission-and more specifically, section 2 of the bill which concerns the appointment of the chief commissioner and the assistant chief commissioner of the Canadian Grain Commission.

The section reads as follows:

The Governor in Council shall designate one of the commissioners to be chief commissioner and another commissioner to be assistant chief commissioner.

Before the amendment provided in Bill C-51, the governor in council only designated the chief commissioner. Bill C-51 adds the appointment of the assistant chief commissioner to this section. The motion I am presenting this afternoon in the House would involve the Committee on Agriculture and Agri-Food in the process.

As amended, the section would read as follows:

The Governor in Council, on the recommendation of the committee of the House of Commons that normally considers agricultural matters, shall designate one of the commissioners to be chief commissioner and another commissioner to be assistant chief commissioner.

The governor in council appoints the seven commissioners of the Canadian Grain Commission. Of course, if you want to be naive-I remember very well how the commissioners were appointed under the previous government. I have some friends who sat on the Immigration Commission, and I can assure you that the Conservative Government did not appoint any Liberals. These were well-paid jobs. You were paid to work not too hard for five or six years, depending on the appointment.

The Liberal Party will be no exception. In appointing these commissioners, it will make sure to select good red commissioners, making partisan appointments. What we would suggest is to enhance slightly the role of the MPs sitting on the Standing Committee on Agriculture and Agri-Food. Our proposal is that, within the committee, which is-need we remind you-dominated by the Liberals, the Liberal Party could nominate a chief commissioner and an assistant chief commissioner. The Liberals are in the majority on the committee, but at least we would get the impression that the opposition parties had a say in deciding which of the seven commissioners would make the best chief commissioner.

I sometimes wonder if committees are not used a little bit like so-called occupational classes in a school, where you stick less-gifted or motivated students who nevertheless have to attend school.

But here, if we want our committees to have a degree of credibility, we must give them responsibilities and roles to play. With this motion, the Bloc Quebecois would give them some role to play and slightly reduce this shameless partisanship.

As it currently stands, the clause allows these appointments to be made unilaterally by the Governor in Council, that is, by the government.

You will understand that it is out of concern for transparency that I am suggesting that the government consult the appropriate committee so as to appoint the best qualified people to run the Canadian Grain Commission.

I think it is only fair to say that the credibility and importance of the commission are well established. That is why is must raise above any partisanship and the best qualified individuals, regardless of their political colour or affiliation, must be put in charge of it. Such a unilateral approach has often led to unfortunate situations in the past.

A competent person can be appointed to be chair, only to be replaced by someone who is a little closer to the party forming the new government. I imagine that certain very political positions can only go to people who agree with the government's policies and can implement them. But I do not feel that CGC positions fall in this category.

Furthermore, when someone is fired for partisan reasons, the tab for breaking this person's contract is often picked up by taxpayers. If this person worked on implementing initiatives, we hope that the whole process will not come to a stop while we wait for someone else to be appointed and start carrying out the new policies.

Several people came to testify before the Committee on Agriculture and Agri-Food, and I remember very well one witness who was very interesting and especially quite eloquent. A lady told us her story. She said that she used to sit on the CGC and that she was fired when the former Conservative government took office. Until we find evidence to the contrary, the Liberal Party resembles the Conservative Party in all respects. It will not hesitate either to get rid of someone even if that person is doing a good job.

The members opposite will respond that they do not engage in such practices. If all their decisions in situations such as this are devoid of partisan considerations, they should be happy to shout it from the rooftops today. As nothing lasts forever, they should think about their successors who will have total faith in them.

Incidentally, this approach would also avoid many recriminations since representatives of all political parties would have their say on who is appointed to these two positions, in the Committee on Agriculture and Agri-Food.

In closing, I urge once again all members, at least all members of the Committee on Agriculture and Agri-Food, to vote in favour of this motion.

Canada Grain Act
Government Orders

12:15 p.m.

Prince Edward—Hastings
Ontario

Liberal

Lyle Vanclief Parliamentary Secretary to Minister of Agriculture and Agri-food

Mr. Speaker, I would like to make a few comments on Bill C-51 which is before the House this morning. Probably the best way is to sum up what this bill is all about and then I will make a couple of specific comments about the motion before us.

I would like to quote part of the speech the Minister of Agriculture and Agri-Food delivered to the House when the bill was put forward some weeks ago.

The grain industry is changing and the pace of change is accelerating. To remain competitive in global markets, and global markets are where Canada sells most of its grain, we need a regulatory and legislative framework which protects the shared interests of all stakeholders. At the same time it must assist the individuals and groups within the industry to compete successfully, adding value where possible to their efforts.

The minister made that statement a number of weeks ago and I can assure the House and the industry that this very comprehensive consultation process has taken place as we have moved through the bill.

As far as the motion that has been put forward is concerned, I would like to assure the members of the House that as the government reviews the appointments, we can guarantee that they will be filled with competent, capable, enthusiastic and qualified people. When those appointments come along they will be advertised in the Canada Gazette. There is nothing prohibiting any member of the industry or anybody else suggesting that the minister consider someone. There is ample opportunity for all of that to take place.

However, we must recognize in the final analysis that the chief commissioner and the commissioners are responsible to the minister. The best way to ensure that the minister is comfortable with those appointments is to leave things as they are at the present time, with the minister having the final say. But I can assure the House that anyone whose name is put forward will be reviewed in the same manner as everyone else. The House does not have to be concerned about the quality, capability and competency of those with whom the government fills the positions.

Canada Grain Act
Government Orders

12:15 p.m.

Reform

Leon Benoit Vegreville, AB

Mr. Speaker, I rise to support the amendment brought forward by the hon. member this morning. From the parliamentary secretary's statement it seems he really supports the motion as well.

This motion does not take final authority to make the appointments from cabinet. All the motion does is give the agriculture standing committee the power to discuss and to recommend. I do not believe there is any disagreement and the Liberals should support the amendment.

The amendment allows the agriculture and agri-food committee to recommend names to cabinet for the Canada Grains Council's chief and assistant chief commissioners. Our party supports this because it will allow for discussions to take place, at least in the standing committee, which is better than only in cabinet.

Even with a Liberal dominated committee, as the committees are now, it would still give opposition parties the ability to put forward suggestions and to talk about the qualifications or the lack of qualifications of these appointments.

Where Reform and Bloc members do not agree with the appointments the Liberals are making, we can talk about it in committee and get some public involvement in the discussion. It would make it more difficult for government to make appointments strictly based on patronage. It would take that aspect out of it to a large extent. At least if the minister did make appointments strictly based on patronage and the qualifications of the person appointed were not there, then the public could make him pay the price because there would be open discussion.

I would like to close by asking a question of the parliamentary secretary. Who could possibly oppose a motion which will provide for more discussion of these appointments and still leave the final authority to appoint with cabinet? I think I heard the parliamentary secretary say that so why would he or his party oppose the motion? They should not, based on what he has said.

Canada Grain Act
Government Orders

12:20 p.m.

NDP

Vic Althouse Mackenzie, SK

Mr. Speaker, I listened with care to the member for Frontenac. While I agree with his sentiments, he is attempting to define a role for the agriculture committee in the appointment of personnel for boards such as the grain commission.

In reading the motion carefully I see that the amount of leeway available to the agriculture committee is very limited. Essentially all its members will be doing is deciding among the three to five people who currently are appointed to the commission which would be the chief commissioner and which would be the assistant chief. I get that reading in either language.

Essentially what you will have, even if this becomes part of the law, is the governor in council or the cabinet appointing the three to five commissioners. After that process is finished the agriculture committee or designate would then recommend to the agriculture minister and to the governor in council, the cabinet, which of those three to five-however large the commission happens to be at the choice of the government of the day-would be the chief commissioner and which would be the assistants.

That is not particularly important. I have no objection to it going into the bill but it does not change the power of members of the committee to decide which of a bunch of Liberal appointees, Conservative appointees, Reform appointees, or Bloc appointees might be considered the chief and which would be the assistant chief in the event that the chief could not act.

I liked the arguments that the hon. member for Frontenac made when he argued that committees should have more power in the management of these commissions by proposing names. Unfortunately that is not what the proposed motion does. It only picks the three to five appointees and ranks them. That is really not a very important job even though it might set a bit of a precedent.