House of Commons Hansard #99 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was health.

Topics

Mi'Kmaq Education Act
Government Orders

6:05 p.m.

Liberal

Bonnie Brown Oakville, ON

Mr. Speaker, I rise on a point of order.

On the votes that have just been taken, I believe the whip asked that on Government Business No. 13, Bill C-27 and Bill C-30 the vote from the supply motion apply. I did not understand that but I was present and wanted to vote with the government on all three items.

I stood to vote on Government Business No. 13, but the next two votes were applied from the supply motion from which I had abstained.

Could I have my vote count on Bill C-27 and Bill C-30 with the government.

Mi'Kmaq Education Act
Government Orders

6:05 p.m.

The Deputy Speaker

Does the House consent to the inclusion of the hon. member's vote as indicated?

Mi'Kmaq Education Act
Government Orders

6:05 p.m.

Some hon. members

Agreed.

Committees Of The House
Routine Proceedings

May 5th, 1998 / 6:05 p.m.

Peterborough
Ontario

Liberal

Peter Adams Parliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, there have been consultations among the parties and I think you would find unanimous consent for the following motion:

That in relation to its study of aboriginal economic development, 10 members of the Standing Committee on Aboriginal Affairs and Northern Development be authorized to travel to Kuujjuaq, Iqaluit and Chibougimau during the period of May 19 to 22, 1998, and that the necessary staff do accompany the committee.

Committees Of The House
Routine Proceedings

6:05 p.m.

The Deputy Speaker

Does the hon. parliamentary secretary have the unanimous consent of the House to propose the motion?

Committees Of The House
Routine Proceedings

6:05 p.m.

Some hon. members

Agreed.

Committees Of The House
Routine Proceedings

6:05 p.m.

The Deputy Speaker

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Committees Of The House
Routine Proceedings

6:05 p.m.

Some hon. members

Agreed.

(Motion agreed to)

Committees Of The House
Routine Proceedings

6:05 p.m.

The Deputy Speaker

The House will now proceed to Private Members' Business as listed on today's order paper.

Canada Student Loans
Private Members' Business

6:05 p.m.

NDP

Libby Davies Vancouver East, BC

moved:

That in the opinion of this House, the government should reverse the privatization of Canada Student Loans, reject proposals for income contingent loan repayment, and should instead implement a federal student grant program and establish accessibility as a new national standard for post-secondary education.

Mr. Speaker, I am very pleased to rise today in the House to speak to private member's Motion No. 132 which reads:

That, in the opinion of this House, the government should reverse the privatization of Canada Student Loans, reject proposals for income contingent loan repayment, and should instead implement a federal student grant program and establish accessibility as a new national standard for post-secondary education.

The motion has been brought forward for debate because in the last few months, certainly in the throne speech and in the budget, we have seen the Liberal government call itself a government for young people. At the same time we have seen the government engage in a deplorable strategy of gutting funding for post-secondary education, privatizing the Canada student loans program and forcing more and more students into severe debt.

Despite what we heard in the throne speech and the budget about increases in help for students, the stark reality for thousands of students is very severe.

The motion attempts to rectify this injustice but also to highlight Liberal hypocrisy and to make the link explicit between the drive to privatize post-secondary education and the sense of an increased hopelessness that there is among students who are now graduating into unemployment and some even into poverty.

It should also be made clear that as the government retreats from its commitment and public funding of post-secondary education what is really going on in the country and what the Liberal government has allowed to happen is that the banks are moving in. More and more students are forced to borrow more and more money directly from banks to fund their education.

We need to be clear that banks are not publicly accountable organizations. They have as their main interest a maximization of profit and certainly not the well-being of students. Yet students are being left to the mercy of the big banks that are now involved in the Canada student loan program.

The strategy on the part of the Liberals has eroded public funding for post-secondary education to the point where it is now completely within the private sector domain.

With the motion New Democrats are continuing to press the point and to pressure the government for the Liberals to recognize the extent and jeopardy students are now in with this debt crisis. We want the government to listen to what students are saying. We want members of the House to defend public education and to say that we have to take much stronger measures to make sure there is not the severe student debt that we have.

According to Human Resources Development Canada, 45% of new jobs by the year 2000 will require post-secondary education. This means that for many young people attending university or college it is not an option if they want to find work. It is now simply a fact of life that if they want to have a better chance at finding employment they a need to have post-secondary education.

I do not think there is a member in the House who would disagree with that reality. Despite this fact and that the Liberals say they are committed to youth, the Liberal government is continuing to throw barriers in the way of young people who are struggling to develop the skills and talents necessary to get ahead in a cut-throat global economy.

Since 1995 the Liberal government has cut $1.5 billion from federal funding for post-secondary education in terms of transfers to the provinces.

Over the last 10 years tuition fees have climbed by 240%, one of of the steepest criteria increases in inflation. Last year alone tuition fees rose by almost 12% nationally, increasing at a rate seven times the rate of inflation.

Things are so severe in the country that it is probably shocking for most Canadians to learn that tuition fees in Canada have reached a national average of $3,100, which surpasses the average tuition fees at publicly funded universities in the United States.

In 1997 there are many surveys but the particular one done in the maritimes, a survey of high school students asking them why they were not going to university, indicated that 40% of the students responding said they were not going on to post-secondary education because they simply could not afford it.

The average student debt is now $25,000. That is up from $13,000 in 1993 when the Liberals took power. Bankruptcies for students trying to pay off their loans are also at record levels, having increased by 700% since 1989.

Currently there are something like 130,000 who are in default, not because those students want to be in default, not because they do not want to pay back their Canada students loans but simply because the cost of post-secondary education has become so onerous and so severe, particularly for low income students, that more of our students are falling into default and falling into bankruptcy. The number of bankrupt graduates is now estimated to be 37,000. One missing payment determines default.

We need to look at the background of how this incredible, shocking situation has come about, particularly in light of what we heard in the budget that everything is glowing and doing well for students. As we can see the facts present a very different kind of reality.

In 1995 the Liberal government gave financial institutions much broader responsibility in the area of student financial assistance. Before that time student loans, even though they were assessed through banks, were fully guaranteed by the government. But at that critical time in 1995 the federal government ceased to guarantee students and, even worse, it paid the bank a 5% risk premium on all loans to participating lenders. It was the government's way of saying that students are not to be trusted and it was the government's way of saying that the banks can maximize their profits at the expense of students.

As a result there is wide scale evidence that some banks are being incredibly over zealous in pursuing students who are either late in paying or who are incapable of paying their loans because they are on low income and they cannot find work.

As soon as the student defaults their file is deferred to a collection agency which is charged with the task of harassing, degrading and browbeating a young person into submission. That is what our program has come to in terms of Canada student loans, a program of harassment and degradation of students who are simply trying to get through school.

Regrettably in this last budget the Liberal government announced another giant leap toward privatization. Very deep within the budget legislation currently in the committee is a clause which would give banks more power to refuse Canada student loans to individual students. The clause allows the cabinet outside of the scrutiny of the House to determine which students do not deserve access to loans. The implications of this are staggering.

Is this the first step toward giving banks total control over eligibility guidelines? How far are we away from banks being able to determine which areas of study have a better return than others, that is, how profitable is an education in arts? I think there is growing information from student organizations about their concern around privatization and corporatization and this move toward the banks influencing criteria and circumstances in which students will now get loans is cause for great concern.

Student loans are not commercial loans, although they are increasingly being treated as such. By handing student loans over to the banks the loans become potential revenue generators rather than social investments. It means that students are forced to contend with very unreasonable rates. In many cases there are students who are paying 11% to 12% interest on student loans, far above the prime rate. Even though the banks will if they are pushed lower the rates, students are not necessarily informed of this.

This is a very serious part of the privatization in that it forces individual students to deal with very bureaucratic banking structures that have no interest of the student at heart and a lot of students simply are not aware of their rights when they go through the banking system to know what they can access.

There is also a problem with the inflexibility of renegotiation. Many students who sincerely wish to repay their student loans are forced to default because the banks refuse to renegotiate when the borrower's financial situation changes.

The bottom line is that the banks are unaccountable to the public. Banks and collection agencies can be very intimidating and when they deal with an individual, that individual has no sense of advocacy or resources to help them get through the system. When students are faced with this they have nowhere to turn.

I have many examples in my own riding and I know from having spoken with other members in the House that there are many other examples as well across Canada where students are actually harassed and intimidated by collection agencies. I had one young woman in my riding who was a student and had a loan. For various circumstances, she had to go on social assistance. She is now being harassed by a collection agency for the repayment of her loan even though it is completely impractical and impossible for her to do so.

That is what the privatization of Canada's student loans has meant in a very real sense. That is what it means when we have turned the power over to the banks.

The issue of privatization goes even further. It is not just Canada student loans. We are seeing increasingly a trend of CEOs and shareholders of Canada's biggest banks who already sit on the board of governors of many of Canada's universities and colleges.

Privatizing student loans furthers their influence in shaping the direction of post-secondary education in this country. The Canadian Federation of Students has done quite a lot of research on this matter to unmask corporate rule on campuses across the country.

Their document says that privatization is essentially the retreat of public funding as well as public ownership, control and regulation from the post-secondary education system to be replaced by private dollars, private ownership, private controls and no regulation of things such as tuition fees.

They go on to say that corporatization is a term used to describe the influence of business interests in shaping many aspects of post-secondary education systems, including the setting of tuition fee levels, determining what gets taught in a course and by whom, which supplies get used for a course or program or which programs receive funding and which are cut.

We only have to look across Canada at post-secondary institutions such as Simon Fraser University, the University of Calgary, the University of Regina, the University of Toronto, McGill University or Concordia University to see this growing trend, a very alarming trend of increasing privatization and corporatization and an influence of these unaccountable organizations on the criteria, the courses the setting of fees in post-secondary education.

There is no question that trend and alarming increase is directly related to the retreat by the federal government of the public funding of our universities and colleges.

In presenting this motion today, the NDP wants to be very clear that we stand staunchly in defence of and to protect our public education system. We believe as New Democrats that we are not going to let the federal government forget about student debt and the student debt crisis.

Instead of creating scholarship programs, the millennium fund, which duplicate existing scholarship programs and do nothing to help students in need, we have repeatedly and we will continue to call on the federal government to take steps that would not defer student debt but reduce student debt. We think the key way to do that is by increasing funding to post-secondary education.

By the time the millennium fund begins in the year 2000, $3.1 billion will have been cut out from post-secondary education. The amount of funds in the millennium fund at about $250 million a year for 10 years will not even come close to compensating what we have lost as a result of Liberal government policies.

In this motion today we are calling on the government to stand up for public education, to restore the funding to this year's cut of $550 million and, more than that, to follow the lead of a province like British Columbia which has been working hard to make post-secondary education more accessible by instituting a freeze on tuition fees as a first step to making education accessible.

We want this federal government to follow the lead of British Columbia and to say that post-secondary education is a priority, that it must be accessible and that education is not just a privilege for those who can afford it. Post-secondary education is a right that has to be accessible to all Canadians.

What we in the NDP are calling for is a national grant program to assist first and second year students. This must be done in consultation with the provinces.

I think we have had enough of the kind of unilateral actions we have seen in this House around post-secondary education. The millennium fund was introduced with absolutely no consultation with stakeholders, with provinces or anyone who has an interest in this matter. It was an arbitrary measure that was taken by the government with no consultation and no information provided.

We believe that in establishing a national grant program it has to be done as part of a new federalism where the provinces are clearly involved in that. The federal government must take the leadership to establish accessibility as a new national standard. The issue of accessibility must be tied to the funding that comes from the federal government and the funds that flow to provincial governments. That is what needs to be done in Canada. That is what needs to be done by the Liberal government.

As we have seen in this last budget, we are going in exactly the opposite direction. We have seen a gutting of funds for post-secondary education and we have seen more targeting toward individual students based on some the government deems have needs and others who are now left behind. This is completely the wrong kind of approach. We need to restore confidence in the funding of those institutions so that institutions are not forced to increase tuition fees year after year and then we begin to see student debt go up.

The other measure we are putting forward in terms of the privatization of Canada student loans and what has taken place since 1995 is to establish a program of real service to students. In the human resource development committee we had representatives of student organizations come before us. They told us story after story. I know from my riding of Vancouver East that students have no resources or information to help them get through an incredible bureaucratic maze and through the banks around Canada student loans.

If you live outside the Ottawa-Hull area and you have a problem with a Canada student loan your only resource is to call long distance to Hull, Quebec or go on the Internet. The availability of local resources and local service to help students with their individual cases is non-existent. That is something that must be changed by stopping this privatization of Canada student loans and ensuring there is direct service through Human Resources Development Canada for Canada student loans.

There is no question that the millennium fund and the Canada student loan program could be easily administered through Human Resources Development Canada. There is absolutely no objective reason why this program has to be privatized other than to provide more gravy and more profits to the banks which are now living off the misery of students in this country.

In the coming months the members of the New Democratic caucus will continue to work very hard with other members of the House and with student organizations and post-secondary education organizations to make sure that young people from low and middle income families do not have to mortgage their future to attend university or college.

We are really fed up with the kind of hypocrisy that we have heard in the House where we are told repeatedly that this government is interested in the plight of young people, youth unemployment and student debt while we have seen measures introduced to increase the bankruptcy laws to make it more difficult for students to declare bankruptcy. We are seeing the eligibility criteria change and student debt continuing to rise. We are committed to working against that and to bringing accountability to the government to ensure that there is adequate funding for post-secondary education.

Canada Student Loans
Private Members' Business

6:25 p.m.

Western Arctic
Northwest Territories

Liberal

Ethel Blondin-Andrew Secretary of State (Children and Youth)

Mr. Speaker, I am pleased to have this opportunity to debate the motion brought forward by the hon. member for Vancouver East.

Debate on the hon. member's motion is timely. Today the Minister of Human Resources Development tabled the government's response to the first report of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities. The response is entitled “Ensuring Opportunities: Access to Post-Secondary Education”. It is a comprehensive document. It addresses among other things many of the recommendations presented by the standing committee in its report last December.

The standing committee's report provided the government with very helpful advice. I am pleased that many of the committee's recommendations were incorporated and included in our February budget. We are now in the process of working on their implementation.

The Canada student loans program is a model of federal, provincial and territorial partnership. We have been successful in reaching a consensus on the Canada student loans program policy through the diligent work of all stakeholders.

I have had personal experience since 1993 in helping many of the officials, as well as successive ministers on this really important issue, having travelled throughout the whole of Canada to every province and territory to engage students and their advocates, as well as some of their instructors and officials from institutions of higher learning.

Last November the first ever national stakeholders working session on student financial assistance brought together representatives of student groups, educational institutions, banks and credit unions, as well as representatives from the provinces and territories. Working together we identified priorities and followed up with changes in the February 1998 budget.

We are continuing the process of improving the Canada student loans program by pursuing harmonization, which students, financial institutions and provinces have told us is a priority for them, working toward a single loan under the one student/one loan concept. Under this concept a student would receive one loan, rather than a separate loan from the federal government and another from the provincial or territorial government as the system stands now.

The discussions surrounding harmonization are continuing to progress. The hon. member will be pleased to know that this single loan proposal will improve access to the Canada student loans program, provide better service to Canadian students, simplify administration, make communication with borrowers more effective and avoid duplication and overlap.

If the hon. member would like more details on this proposal I would invite her to pick up a copy of Ensuring Opportunities . In fact, I will deliver one to her.

In the meantime the February budget has enabled us to improve the Canada student loans program so we can offer further help to individuals who are encountering difficulties in repaying their student loans.

It has become apparent through consultations that income contingent repayment is not supported by most stakeholders. They prefer other options to help students manage debt. Reforms to the Canada student loans program include: tax relief for interest on student loans, interest relief extended to more graduates, an extended repayment period for those who need it, an extended interest relief period for individuals who continue to face financial difficulty, and a reduction in the loan principal for individuals who still face financial difficulty.

Under the Canadian opportunities strategy we are expanding by 9% family income thresholds that determine interest relief eligibility. This will enable some 50,000 more borrowers to become eligible for the program.

As well, we are making interest relief available for a maximum of 30 months over the life of the loan, not just within the first five years of repayment. Beginning in 1999 interest relief will become graduated.

There is also our debt reduction and repayment initiative under the Canadian opportunities strategy. Effective this year the Government of Canada will, in some circumstances, reduce the principal of a borrower's loan to make payments more affordable. The principal will be reduced if the borrower's annual payments exceed, on average, 15% of the individual's income.

With respect to the implementation of the federal student grant program, the hon. member for Vancouver East proposes that the government implement a federal student grant program. The Canada Millennium Scholarship Foundation will be awarding 100,000 scholarships every year for 10 years beginning in the year 2000.

These scholarships will average $3,000 each and will help hundreds of thousands of low to middle income students of all ages. It is very comprehensive, very accessible and very flexible. It reaches not just those in university, but also those who wish to go to technical institutes or trade schools. It also has a high mobility factor. Students do not have to study in the province in which they reside. Students will be able to study almost anywhere in Canada. This is the way we engender and create a bit of tolerance and understanding; an accepting of other cultures, geography and other ways of life.

Students studying full time or part time in publicly funded colleges, universities, community colleges, vocational and technical institutes, and CEGEPs will be eligible to apply. This is not necessarily the case now. Ensuring Opportunities reiterates the government's commitment to grants as presented in the Canadian opportunities strategy.

The government has responded to that recommendation through the Canadian opportunities strategy. Beginning this August an annual Canada study grant of up to $3,000 will be available to full and part time Canada student loan program recipients with dependants.

The grant will provide non-repayable aid to over 25,000 high-need students with dependants. This is extremely important as it will enable these individuals to continue their post-secondary education.

We are now providing a Canada education savings grant. This grant will give families an even greater incentive to save for their children's education through registered education savings plans. The grant will pay 20% on the first $2,000 in annual contributions for children up to age 18.

The last part of the hon. member's motion calls for establishing accessibility as a new national standard.

Accessibility is the fundamental principle of the Canada student loans program. It is the driving force behind the program and fundamental to the success of the Canada student loans program since its inception in 1964. However, the standing committee recommended that the government work with its provincial and territorial partners to ensure access, fairness and predictability in any upcoming changes.

The hon. member will be pleased to know that Ensuring Opportunities states “Harmonization discussions with the provinces will be based on a series of mutually agreed principles, including those of access and fairness and, to the extent possible, predictability”.

This is the direction in which we are moving. The legislative authority already exists under section 18 of the Canada Student Financial Assistance Act. It authorizes the minister, with the approval of the governor in council, to enter into agreements with the provinces to harmonize student loans.

But to address any fears that the Government of Canada's jurisdiction might be undermined, hon. members should note that, other than fee for service arrangements, harmonization agreements will not transfer responsibilities or resources to provincial or territorial governments.

For the reasons I have outlined, I cannot support the hon. member's motion. I encourage her and other hon. members to read Ensuring Opportunities . It is a well thought out response to the recommendations of the standing committee. In collaboration with our provincial and territorial partners we will move forward to implement its provisions.

The Government of Canada's commitment to post-secondary education and all its various provisions, grants and loan programs is a very real one. We understand the plight of the single mother with dependants who has taken on the opportunity of furthering her education. We also understand the opportunities for persons with disabilities who want to develop some labour force attachment and higher education. We understand that.

We understand that it is not a one size fits all program that we are proposing. What we are proposing is a program to deal with the real world. There are many complications, many different series of events and circumstances that have to be addressed and we feel these measures have done that. In some way they have reached those people who are most in need.

Canada Student Loans
Private Members' Business

6:35 p.m.

Reform

Rob Anders Calgary West, AB

Mr. Speaker, for the folks at home who may be watching this debate I will read once again the motion that we are debating. The motion was brought forward by one of my NDP colleagues and it reads: “That, in the opinion of this House, the government should reverse the privatization of Canada Student Loans, reject proposals for income contingent loan repayment, and should instead implement a federal student grant program and establish accessibility as a new national standard for post secondary education”.

Let us address this motion section by section.

First, the motion is calling for us to reverse the privatization of Canada student loans.

In my assessment the government moved toward privatizing Canada student loans because it had a bad track record on defaults.

In the period 1990-91, 25.78% of student loans had default problems. In the 1991-92 fiscal year 27.23% of student loans had default problems. In fiscal year 1992-93, 28.84% had default problems. Notice that each year the figure is going up. In 1993-94, 29.79% of student loans had default problems. In fiscal year 1994-95, 31.1% of student loans had default problems. According to our numbers 1995 is the last year for which these figures are available. The amount of student loans with default problems crept up each year during the period 1990 to 1995.

There is a combination of problems. There is some form of remission, or there is some form of granting, or there is some form of actual bankruptcy, or there is some form of late payment. There are probably other scenarios that wind up in a default complication.

We are not talking pennies. They are pretty substantial sums of money. Last year it was estimated that student loans in Canada would cost about $643 million. That was the estimate, but the government exceeded that. As a result more people qualified and it wound up costing taxpayers $743 million. That is just for one year.

As of last year there were outstanding loan guarantees of up to $3.5 billion. We are talking about some pretty substantial assets. If we are dealing with close to $4 billion in outstanding assets on student loans we cannot treat this lightly. If the government did not do a good job from 1990 to 1995 in terms of the stats we have seen, maybe privatizing student loans is a worthwhile option to explore.

The government has loaned this money and it has turned the loans over to the private institutions, the banks, because it was not doing a good job. Thirty per cent of the loans were going into default with the government looking after them, so the government finally got them out of its back pocket and gave them to the banks to see if they could do a better job. In order for the banks to pick up this responsibility they wanted a 5% premium.

The government gave out $743 million in loans last year. It was projected that the premium would be $16 million. However, because the government went way over budget with the loans, the premium rose to $29.4 million. Last year the Government of Canada paid the banks in Canada roughly $30 million to look after Canada student loans. That is based on approximately $700 million that was given out in student loans.

The government is looking to loan this money out, but by paying the premium to the banks it is hoping to have the banks pick up the problems of chasing people who default on their loans.

That is one of the problems associated with post-secondary education in this country.

Another problem underpins everything. It is one thing to have a loan, but if the borrower cannot find a job when they graduate they have a real problem.

I remember a party either in the 1993 or the 1997 election. If I remember correctly it campaigned on jobs, jobs, jobs.

Let me think now. It was the Liberals. That is who it was. They campaigned on jobs, jobs, jobs. But those students who got those loans, loans, loans came out of the universities and post-secondary institutions and they could not find those jobs, jobs, jobs. They had debt, debt, debt. As a result we have all sorts of massive default, default, default. There is a serious problem on our hands.

We could go ahead and as the NDP says allow the government to take over the student loans programs again but that would not solve the problem. The real underpinning problem is that there is a lack of jobs for students when they come out of post-secondary institutions. That is the real problem. There has not been a delivery on the jobs front. That is why they are having problems.

If students after their post-secondary education step into jobs, they do not have problems repaying their student loans. As a matter of fact, students in this country only pay a little over 10%, and one of the figures in a Diane Francis article is about 11% of their education. The government covers close to 80% of their education costs and there is the private sector funding which is arranged through alumni associations.

When everything is taken in, students are not paying that much. They are paying around 15% at tops 20%, or a sixth of the cost of their education. If they are able to get a subsidy of five-sixths for their education, as long as they are able to find a job, repaying the student loan is not a problem. The problem is that there are no jobs for them.

The Liberals say they are going to promise jobs and it does not happen. The NDP says we should have the government look after student loans. Unfortunately the government has an abysmal record on student loans. Students are therefore left between a rock and a hard place. And there comes the Reform Party.

In the second aspect of Motion No. 132, the NDP wants to reject proposals for income contingent loan repayment. Let me give a thumbnail sketch for the folks at home and all those Liberals across the way because I know they are paying attention. Education is a big priority for all of them.

An income contingent loan would allow students when they come out of an educational institution and if they get a job right away, the ability to link their salary to their ability to repay their student loan. If students find work when they graduate, they repay the student loan. On the other hand if they cannot find work, or they find only part time work, then they link the amount of money they are making to the loan repayment. As a result they may not be making full repayment, but they are making a partial repayment. This is better than what we have right now.

Right now it is a simple on and off switch. If a student graduates and is able to pay, they pay the full shot whether or not it makes sense according to their budget. If they come out and cannot afford the full amount but can afford a partial amount of the student loan, rather than being able to pay that partial amount, it automatically defaults because of the on and off switch mechanism with regard to student loans. They do not pay any of it. That is not fair to the taxpayer and it is not fair to the students.

As a result, income contingent student loans would allow students who have the ability to pay, to pay. Those who do not have the ability to pay would be able to push repayment on to a later period of time when they finally find work.

One of the ways to make sure the loan is repaid is to take the income out of an income tax refund if they have one. I have encountered examples of students who are not fairly reporting their income to the financial institution holding the loan, or in some way are trying to skirt the process. If it is linked to their social insurance number, we get rid of the default problems and make sure that the loans are being repaid. Therefore with income contingent student loans we take care of both problems.

If a student cannot find a job promised to them by the Liberals, then they are not having to make full repayments. If defaults are a problem, and the NDP is not going to be able to explain that the government cannot do a decent job of collecting on student loans that are legitimately owed by students to the government or to the banks if they may be privatized, then a system is set up where it is linked to social insurance numbers and these things can actually be traced. There is less of a problem for students who are honestly repaying their student loans and we can actually get repayment from those who are defaulting sometimes in spurious circumstances. That addresses two of the big problems.

I would like to address the lack of spending priorities. You will have to help me out again, Mr. Speaker. There was a party which campaigned in 1993 and in 1997. It said it was the party of health care and it said it was the party of education. Its members said that those two things were fairly sacred social institutions and we would have to almost torture them for them to in any way impact the funding for programs in health care and education.

I remember who it was. It was the Liberals. They said they were not going to cut health care and education but they actually did. It was massive amounts of money. In education alone it was $1.5 billion. They cut huge amounts of money out of education.

What about the money we spend on foreign aid? Are students not more important? What about subsidies to profitable corporations, the CBC? I could go on, Mr. Speaker, you know I could.

In any event income contingent student loans are the way to go.

Canada Student Loans
Private Members' Business

6:50 p.m.

Bloc

Paul Crête Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, I am pleased to speak to this motion by the member for Vancouver East.

In my opinion, we are hearing a real heartfelt cry. This is what people have come to recognize in Canada, in every anglophone province, everywhere except Quebec, where the system of loans was established in the 1960s and has remained unchanged. In Quebec, we have established a recognized scheme for providing students with financial assistance, which includes loans and bursaries.

I think today's motion is well placed because for the past week the Standing Committee on Finance has been hearing from people, including representatives from Quebec, who report that the best financial assistance system in Canada is the one set up by the Government of Quebec.

It has been honed into the tool it is today, following action to encourage the participation of students, administrators, officials from educational institutions and representatives of the unions, so that it is based on the student's financial need and excludes the notion of merit, making it the envy of all of Canada.

The member's cry may be summarized as follows: Is there no way to change the way the system works in the rest of Canada to permit it to become more effective? This is quite understandable, since a student graduating in any of the other nine provinces owes an average of $25,000, while the figure for a Quebec graduate is $11,000.

Why is this so? Because we have a system of loans and of bursaries, and if a student who already has loans receives a bursary, this does not increase his debt load. As well, the Government of Quebec has made a choice to keep university tuition as low as possible. It has taken steps to invest in the educational system so that people, regardless of their financial situation, are able to gain access to it and to receive an education.

It is my impression that this was more or less the objective of the hon. member's motion. Unfortunately, we cannot really support a motion like hers, because there are some very concrete examples, in the Canadian system, that show if we agreed to national standards across Canada, there would be horror stories like the millennium scholarships.

The decision was made to create a system of scholarships. There are no grants or bursaries in the other provinces of Canada, so we can see why this would make sense for them. But the decision was made that these scholarships would be awarded on merit and administered by a private foundation at arm's length from the government.

These scholarships will probably be awarded partially according to financial need, but also on merit or other criteria which the foundation will set and over which the government will have no say.

This continues the trend of disengagement which has been going on in the federal government for some years, setting up agencies that are less and less under parliamentary control.

In the motion, where there is reference to accessibility as a new national standard for post-secondary education, I believe that where the problem lies with relation to student funding for academic fees and living expenses has nothing to do with a national standard. The proof is that, since 1964, we have simultaneously developed two different models corresponding to a certain extent, I believe, to the kind of society that people wanted. Quebec's model leaves students less indebted on completing their studies than students in the rest of Canada.

A choice was made. As as people of my generation know, there were several successive battles by students' federations, which led strikes and protest movements to come up with the present system.

The consensus in Quebec today is that the millennium scholarships are unacceptable for Quebeckers. I am not just talking about Quebeckers in the sovereignist movement, but about the Centrale de l'enseignement du Québec, the Confédération des syndicats nationaux, the Conférence des recteurs et des principaux des universités du Québec, the Fédération des cégeps, the Fédération des commissions scolaires, the Fédération étudiante collégiale du Québec, the Fédération étudiante universitaire du Québec, the Fédération québécoise des professeurs d'université and the Fédération des travailleurs et travailleuses du Québec.

All the economic stakeholders who appeared before the committee when we were looking at Bill C-36, which dealt with the millennium scholarships, came to tell us that the model proposed in Bill C-36 is not acceptable to Quebec.

We built a system, made sure it was effective, that the framework and delivery systems were good, and suddenly someone has installed a parallel system. They tell us “If it was costing you 3% or 4% in administration expenses, we don't care; we are going to introduce another system that will cost the same”.

In a Canada that talks about eliminating overlap, building a duplicate system is unacceptable. Things have been running fine for several years and now there are two parallel models.

What the Government of Canada could have done was to amend the legislation on loans and introduce financial assistance legislation that would incorporate the concepts of loans and scholarships and that would contain particular concepts acceptable to Canada's nine provinces. If it were to include the notion of merit, we could have put it within this model. The other provinces of Canada so desiring could make this choice.

However, Quebec came up with a different model. Student associations told us that to include the notion of merit would be to fly in the face of the studies done and various consensus reached. We are not talking about consensus among student associations, but one that included essentially all the members of the current coalition.

So, although the motion is made in good faith and its objective honourable, Quebeckers oppose the inclusion of a national standard in this sector. The federal government is trying every trick to get round the existing system. To officially and formally include the concept of a national standard would amount to delivering oneself bound and gagged to the federal government.

It did not want to allow Quebec to exercise its right to opt out and to be able to say, under current legislation, that the money for the millennium scholarship would be paid to Quebec, which would incorporate it in the system. To avoid that, rather than amending the legislation on loans, the government decided to create a whole structure, a separate foundation.

According to the arguments raised, the foundation has nothing to do with the jurisdiction over education. It will be administered, not by government, but by a private foundation. All manner of aberrations are therefore being created, which will end up with a very negative outcome.

I can hardly wait to hear what the auditor general will have to say about the federal government's decision to invest billions in a foundation with which it will be at arm's length, and which the auditor general cannot scrutinize in order to report to the House that it is or is not being properly administered. No, a foundation is being set up that will be fully autonomous and independent, and yet will be funded with public money.

Quebec today finds itself faced with a lack of understanding by a federal government that is unable to understand that Quebec has developed a different system which must be respected, and unable to understand that financial assistance to students is part of our jurisdiction over education. Those who try to make this a dichotomy, splitting financial aid away from education, are out of touch with reality. When curricula and the workings of an educational system are being determined, aspects such as accessibility must also be addressed. Thus the funding of institutions and of students—both living costs and tuition fees—cannot be separated.

The hon. member does, I must admit, show good intentions. I hope that the government will see reason and change the Canada Loan system accordingly. There is, however, no way Quebec will ever accept having the changes made at its expense. There is no question of Quebec accepting any national educational standards. This is one of the areas of jurisdiction that is the most dear to us, and we will brook no interference by the federal government in this area.

Canada Student Loans
Private Members' Business

7 p.m.

NDP

Louise Hardy Yukon, YT

Mr. Speaker, I am pleased to support the motion. Education should be the foundation of our country and of our future. Unfortunately that is not what is happening and it is not what we are facing.

What I would like to contrast here is Yukon, which is not a rich jurisdiction by any means. It is very poverty stricken in a lot of instances and has boom and bust cycles. For decades it has provided $5,000 a year for five years to any student who graduates from a Yukon high school. They can use that money to attend any institution as long it is accredited and as long as they are accepted. It is a recognition of how valuable education is and how we need to support it in our young so that they can take their place in society.

I contrast that to the proposed millennium scholarship fund which will not be available for another two years. It will provide $3,000 a year for a very few number of students based on merit. We do not know whom they will be. It will not be administered by the government. We will not have any say in it. I am glad there is some recognition and that some amount of money will be there, but it does not form a foundation of an education system, certainly not one for a country that wants to move into the future with strength.

What we have seen happening is the gutting of our post-secondary funding with a cut of $550 million. I know the only college in Yukon is in Whitehorse and it has had to cut courses. HRDC is no longer buying seats for people to be trained in so there is another cut there, causing even more suffering and downgrading of courses that are available to educated and trained students.

The Canada student loans have been privatized. Students are graduating with huge debts and into unemployment with no hope of paying off the debts they incurred for their education in order to benefit not just themselves but their communities.

Where the government has moved out, the banks have moved in. The difference is that the banks have no concern for the education of our students or the development of our country. They are not accountable to the public. They do not have to report to us. They are not concerned with educating our artists, our musicians, our scientists, our economists, our carpenters, our electricians, our humanitarians or our doctors.

This Liberal agenda erodes and destroys publicly funded and supported post-secondary education in more ways than one. By the year 2000, 45% of new jobs will require a post-secondary education, but at the same time in the past 10 years tuition has gone up by 240%. Most people who do not go to university who could, or do not go to college who could, do not do it because they cannot afford it. They will never be able to afford it on a minimum wage job.

Debt per student has risen from $13,000 in 1993 when the Liberals came into power up to around $25,000. In the maritimes I am told it is even more than that, well over $30,000 worth of debt. With tuition that is $3,000 per year on average per student, what kind of summer jobs will bring in enough money for students to pay their tuition, pay their living, pay their books and work to educate themselves? How do banks treat students who have incurred this debt? One missed payment equals a default.

An elderly first nations man called my office in Yukon because he cannot pay his debt. He has phoned every day. It is not that he is trying to avoid paying his debt or trying to avoid work. He takes any kind of work he can get, any little scrap of work he can get to make a living. He is often forced on to welfare, of which he is very ashamed. He bought one small filing cabinet and was hounded. He got it at a garage sale and was hounded because he bought it. He does not even have a bed. He sleeps on a foamy.

He is afraid to answer his phone. He is driven to distraction, and this is a man who was put through the residential school system by this very same government. He pulled himself through that. He educated himself. He wants to work and he does work when he can, but he is hounded every day.

In 1995 the Liberals gave the banks responsibility for the loans. Where they used to be fully guaranteed by the government they no longer are. The last budget provides a clause giving banks more power to refuse student loans. This clause goes on outside the scrutiny of the House of Commons. Will the banks determine who studies, what is profitable to study, and where students buy their products from?

Canada Student Loans
Private Members' Business

7:05 p.m.

The Deputy Speaker

I am sorry to interrupt the hon. member but the time for consideration of Private Members' Business has expired. When this matter comes up for debate on the next occasion the hon. member will have five minutes remaining for her remarks.

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.