Bill C-5 (Historical)

Canada Education Savings Act

An Act to provide financial assistance for post-secondary education savings

This enactment is intended to encourage the financing of post-secondary education through savings in registered education savings plans. It provides for the payment of Canada Education Savings grants in relation to contributions made to those plans. The amount of the grant is increased for children of lower- and middle-income families. It also provides for the payment of Canada Learning Bonds in respect of children of families receiving the National Child Benefit Supplement.

Canada Education Savings Act

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, the government is stating, by introducing Bill C-5, that it is a key priority to have more people access post-secondary education. I sit on the aboriginal affairs committee and we have heard our Minister of Indian Affairs and Northern Development say that one of his number one priorities is to get more aboriginal students into post-secondary education, so as to give them the administrative capacity to lead their people out of poverty.

As of January 1 this year any tuition money or living costs given by a first nation to an aboriginal student to go to university will in fact be taxed. This is a first. This is new. The government will begin taxing these benefits and the predictable result will be that the student will have less money to pay for income costs associated with being at university and the first nation will be able to send fewer aboriginal students to university.

Would the member, in his background and knowledge on post-secondary education, share the view that it is completely contrary to getting more aboriginal students into university by taxing their tuition and living costs paid by the community which sent them?

[Alain Boire, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, we did hear representatives of the Quebec Federation of University Students at committee. As the hon. member indicated, the federation certainly takes a position for which we have great respect. However, I do not think they did the same research as us. Of course, the federation would like to resolve the problem for all of Quebec.

At present, Bill C-5 is designed to provide financial assistance to less well-off families, which means to individuals who cannot afford to go to university. That is why the bill provides for students in financial difficulty to receive $3,000 toward starting a university education.

There is no doubt that this bill will help families who are cash strapped. It cannot hurt. It is better than a pat on the back. What the QFUS states specifically in its report is that it wants the program in Quebec to be improved so that the problem is resolved once and for all. That particular problem cannot be resolved through Bill C-5.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, our research into this bill tells us that virtually no one across the country thinks this bill is a good idea or thinks this methodology is wise. Almost every stakeholder that came before the committee objected strenuously and said that the government was going in the wrong direction in the introduction of this bill for some of the reasons cited by my colleague from Hamilton.

There was a representation made to the committee in the province of Quebec. I have one reference from one of the witnesses to the committee on Bill C-5. His name was Mr. Pier-André Bouchard St-Amant, the President of the Quebec Federation of University Students. He represents 140,000 university students in the province of Quebec. He clearly stated:

We feel that this program provides assistance to people who don't necessarily need it. When you can already save $2,000 for post-secondary studies, it's not particularly useful for the government to supplement that with $400 in a registered savings plan. Therefore, the FEUQ believes that assistance should focus on those people who do not necessarily have the means to save for postsecondary education.

In other words, if people already have the ability to put money away from their income, that is not the group that should be targeted. Our focus should concentrate on those who are unable and there should not be any complicated scheme associated with it. It should simply be an access issue. The province of Quebec has done very well to keep tuitions down. I compliment the province of Quebec for the priority it has put on post-secondary education. Even though the federal government has cut and hacked, and slashed transfers for education to the provinces, Quebec prioritized education and I admire that.

I would like him to comment on the remarks from the president of the Quebec Federation of University Students. I would also like him to comment on the remarks from Professor André Lareau from Laval University. He criticized Bill C-5 by saying:

However, one of the objectives of the tax system is to distribute wealth fairly. How can we justify a government financial assistance program that targets the well-off members of society? To summarize, richer families are the big winners in the income splitting that results from the education savings plan, and they benefit from these amounts, because their children are less likely to have to work.

We have two credible authorities from the province of Quebec who are very critical of Bill C-5. I ask the member if he has taken those remarks into consideration as the Bloc Quebecois supports this bill.

[Alain Boire, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, the Bloc Québécois supports the social principle of Bill C-5, because creating an education savings bond program will help lower-income families generate savings so their children can have access to post-secondary education, which the Canada education savings grant did not do.

The Bloc Québécois is also in favour of enhancing the Canada education savings grant, a tax measure that benefits lower- and middle-income families.

Bill C-5 also helps lower-income families take advantage of the benefits of registered education savings plans and Canada education savings grants, which already benefit wealthier families.

However, this bill contains several flaws. The learning bonds will not help Quebec and the provinces provide quality education, because they do not provide any concrete measures to do so. They make students pay for part of their post-secondary education but do not improve the quality of that education.

The Canada education savings grant and the education savings bond program are not the best ways to fund and promote post-secondary education. An increase in direct federal transfer payments to Quebec and the provinces remains the best and cheapest solution.

Forty million dollars has been allocated to administer the program during the first three years. The administrative costs seem excessive. It is costing more than $13 million per year to distribute $80 million.

As a result of the fiscal imbalance that it created, the federal government must now provide financial assistance so students can access post-secondary education, since transfer payments to the provinces for education have been slashed.

Neither the education savings bond program nor the enhancement of the Canada education savings grant are helping Quebec to provide quality education. The bill must be accompanied by an increase in the CHST, since now is when students in Quebec need financial assistance and a quality education, not just 18 years from now.

Correcting the fiscal imbalance and reinstating equitable transfers between provinces would permit the Government of Quebec, which is the best placed to understand the reality in Quebec, to support Quebec's students appropriately. Quebec already has a loans and scholarships program, which it could greatly improve if it had the funds provided for under the Canada Education Savings Act.

The budget of this program includes funding for the creation of a management system to administer the registration of children born after 2003. As well, there needs to be an advertising budget for encouraging families to take advantage of the new measures in this bill, in order to avoid a repetition of the situation with the guaranteed income supplement, with those eligible not having any idea that they were.

We are quite used to the federal propensity to underestimate costs. One need look no further than the firearms registry for an example.

The government has no idea what the annual costs of administering the measures announced in Bill C-5 will be. These will, according to it, be determined after an analysis of the first three years of the program's operation.

The Government of Quebec could have distributed this money to students in greatest need at no additional cost, if the Canadian health and social services transfer had been increased. We could then save the annual administration costs of the program, which total $13 million, and improve equalization payments to the provinces.

We also again deplore the federal disengagement from education. Since the early nineties, federal transfers for post-secondary education have dropped drastically, and this bill will not, of course, compensate for the 40% that has been lost

We have long been aware of the federal government's decision to give priority to debt repayment, excessive spending and its own bureaucracy, rather than to health, education and social services. That is how the fiscal imbalance was created. The federal contribution to total expenditures in education and social programs is now less than 12%.

Instead of creating a learning bond program, would it not be wiser for the government to give the provinces the means to fund their own educational system and to use part of the recently announced federal surplus of $9.1 billion to invest in youth?

Remedying fiscal imbalance would be an absolutely simple solution to the post-secondary education funding shortfall, and would result in a substantial increase in post-secondary funding.

The Quebec education system is suffering from insufficient resources because of the cuts to the transfer payments. Both financial resources and teaching resources are lacking, despite the valiant efforts made by the Government of Quebec with what little it has.

The Fédération étudiante universitaire du Québec and the Canadian Federation of Students have also denounced the federal government's refusal to increase post-secondary education transfer payments by $4 billion to compensate for the cuts during the 1990s.

This money would have given Quebec more room to manoeuvre in order to reinvest in universities and reduce tuition fees. Over the past 40 years, Quebec has had the lowest rate of post-secondary enrolment in North America. In 1960, only 63% of students who entered primary school completed their seventh year, barely 13% of francophones completed 11 years of schooling and only 3% went on to university.

Quebec made a decision to increase access and the results have been spectacular. Enrolment in Quebec has almost reached the level of the rest of Canada in certain fields and has even surpassed it in others. This emphasis on accessibility is supported by three elements.

First, Quebec enjoys a level of public financing for education higher than that of the rest of Canada. Second, the tuition fees are lower. Unlike in Quebec, 75% of university under-funding in the rest of Canada is covered by tuition fees. In Quebec, average university tuition fees are $1,625 annually. In English Canada, they are three times higher, at $4,825 a year. Finally, Quebec has a more generous financial assistance program. Quebec is the only part of Canada with a program of loans and bursaries.

When they complete their studies, Quebec students face an average of $13,000 in debt, whereas students in other provinces are faced with a debt of $25,000. Once again, Quebec provides a model for Canada with its free education system.

In conclusion, when Ottawa wants to interfere in provincial jurisdictions, it is to standardize rules across Canada. But in a number of fields, Quebec stands out as an example, with specific programs better tailored to meet the needs of its population.

Given the current context, the Bloc Québécois will vote in favour of Bill C-5, while reminding the government that if it were to accept its own responsibilities at last, and stop spending money on a vast range of programs that are expensive to administer, it could return to the provinces the money that rightfully belongs to them and that has been denied to them by the fiscal imbalance. In Quebec, we would be able to ensure once and for all the accessibility and quality of the higher education system.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I know my colleague knows that tuition fees are in the jurisdiction of the provinces. Therefore, the federal government cannot do anything about controlling those fees.

However, this government has improved the Canada student loan beyond recognition, billions of dollars have gone to students, admittedly in loan form. It set up the millennium scholarship program. A million students, mainly low income students, will receive millennium scholarships. It has set up other scholarship programs. In the last budget it established the $3,000 first year tuition payment for low income students. It established the $3,000 per year, of the current undergraduate year, for disabled students.

I would suggest that the government, given that it cannot control tuition fees, has done more than any other federal government ever has to support students. As a result, we have the highest participation in post-secondary education in the world.

The member is right. There are still many problems. Bill C-5 is a different tactic. We know that despite the fact that enrolment has gone up in the post-secondary institutions and despite these scholarship, grant and loan programs which we have established, participation in the low income groups is not there. There are a variety of reasons for that. This is a different point.

I believe the bond and the money that it will provide to young persons when they reach the age of majority is very useful. They will be able to use that for apprenticeships or any sort of post-graduate education. It is in some ways not a huge sum of money.

The important thing is that from birth, a family will know that it is helping to put aside some money for that child's post-secondary education. It will make these families think throughout the child's growth that post-secondary education is possibility. Our target is to encourage these families to look at post-secondary education. Many of them, if they did, would already discover that their children could afford to go to higher education. At the present time they simply do not.

Therefore, I would say to may colleague, and I know his interest in these matters, that the purpose of the bill is different than scholarship programs, loan programs and the like.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I listened to the hon. member's speech. His party has put forward the point of view that it will solve the problem of high tuition fees and, generally, access to post-secondary education with virtually every idea but what is really needed, which is out and out grants to enable more people to get into post-secondary education.

I heard the head of the Canadian Alliance of Student Associations say that it viewed the scheme under Bill C-5 as comparable to giving students a $500 grant and a Mercedes-Benz, then making them make the rest of the payments on a car they could afford. In other words, it does not address the basic issue of access to post-secondary education in its purest form.

The hon. member is very knowledgeable of these things. I know he comes from a background of the post-secondary education system. However, he has danced all around the main fundamental issue of access for students and crippling and spiralling out of control tuition costs, which means fewer and fewer people from low income families can afford to go to school.

Does the hon. member honestly believe that Bill C-5 answers the pertinent questions about access to post-secondary education?

[Peter Adams, Liberal, Parliamentary Secretary to the Minister of Human Resources and Skills Development]

Mr. Speaker, I especially welcome the opportunity to join in the debate on third reading of Bill C-5. I have participated in discussion on the bill both in this place and in committee. I am concerned that many of the comments I hear are not about Bill C-5 at all.

Bill C-5 has three key objectives. It complements the many other ways the government is working to ensure that students who need help with the costs of post-secondary education are able to get it. It will assist and encourage families to save for their children's education by making it easier for them to build the assets they will need in later years. It follows through on a commitment in the Speech from the Throne to increase access to post-secondary education, especially for low income families.

I will expand on this last point a bit, helping lower income families save for post-secondary education. One of the key features of the bill is that it brings a new focus to ensuring that low and middle income families can participate initiatives like the registered education savings plan, the RESP program, and the Canada education savings grant program. These are proving to be very popular with many higher income Canadian families.

Last March the Minister of Finance said in his budget speech that he was concerned that too many Canadians, especially those in low and middle income brackets, see post-secondary education as unattainable, not because of the academic challenge but because the costs are too high. That is why the budget for 2004 provided a needs based grant up to $3,000 for students from low income families to go toward their first year of university.

Bill C-5 includes specific ways the government can move to make it easier for low and middle income Canadians to save for their children's educational needs. For example, the bill introduces the Canada learning bond, which is an innovative way the government can provide families with an upfront cash contribution of $500 to kick-start their education savings plan and to build on it with annual instalments.

Up to and including the age of 15, children born after 2003 into low income families who receive the $500 bond will continue to qualify each year for a $100 Canada learning bond instalment, if the family is entitled to the national child benefit. Over a 16 year period, families could receive a total Canada learning bond of $2,000 per child. If parents never open an RESP, the child will not be penalized. Children will never lose their entitlement for the bond because, at the age of majority, they can then open their own RESP and claim their entitlement up to the age of 21 years.

The Canada learning bond serves as a kick-start to savings. After opening an RESP to deposit the bond, the bill supplies an incentive to save even more by increasing the Canada education savings grant match rates to low and middle income families, increasing them up to 40%. In other words, the bond will provide an important incentive for low income families to set up an RESP, and the enhanced education savings grant match rates will help those savings grow over the years.

If the bill is passed, we estimate that 120,000 newborn Canadian children will benefit from the Canada learning bond this year alone and another 4.5 million could benefit from the enhanced Canada education savings grant.

I do not want to see any of these children left behind. That is why I support this bill, and I urge all of my colleagues to do the same.

[Joe Comuzzi, Liberal, for the Minister of International Trade]

moved that Bill C-5, an act to provide financial assistance for post-secondary education savings, be read the third time and passed.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, we will continue this afternoon with the opposition motion.

Tomorrow we will commence with the third reading debate of Bill C-5, the learning bonds legislation. When that is completed, we will return to the second reading debate of Bill C-22, the social development bill. We will then return to the second reading debate of Bill C-9, the Quebec development bill; followed by second reading of Bill C-25, respecting RADARSAT; reference to committee before second reading of Bill C-27, the food inspection bill; and second reading of Bill C-26, the border services bill.

On Monday and Tuesday we will start with report stage and third reading of Bill C-14, the Tlicho bill, before going back to unfinished business.

Pursuant to Standing Order 53(1) a take note debate on credit cards will take place on Tuesday evening, December 7.

The business on Wednesday will be second reading of a bill to be introduced tomorrow respecting parliamentary compensation.

Next Thursday shall be an allotted day.

Finally, the government made a commitment to Canadians to treat compensation of parliamentarians separately and apart from that of judges. It is quite logical to take that step in an independent bill that deals only with the compensation of parliamentarians and to deal with the question of judges in a subsequent bill.

The hon. member seems to suggest that parliamentarians and judges should be treated exactly the same. We think that Canadians recognize that their respective duties, tenure and roles are quite different and that in fact they should be dealt with differently and separately. That is why we will be introducing the bill on MP compensation and dealing with it next week.

Canada Education Savings Act

[Joe Volpe, Liberal, Minister of Human Resources and Skills Development]

moved that Bill C-5, as amended, be concurred in.

[The Acting Speaker (Hon. Jean Augustine)]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded divisions on the motions at the report stage of Bill C-5.

Call in the members.

(The House divided on the motion, which was negatived on the following division:)

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, I want to say for the record that I am disappointed in the position that the Bloc has taken on Bill C-5. I always felt that the Bloc was a kindred spirit in many ways on issues of social policy and in understanding what is really needed for those of modest means to fully participate in our society. Quebec has done some very progressive things that members of the Bloc have had a significant hand in. They were very progressive, but this is not a progressive piece of legislation. This is not progressive public policy in any way, shape or form.

I am really disappointed, though, in the disrespectful intervention by the member from the Liberals, the member for Glengarry--Prescott--Russell. To suggest for a second that he as a member of Parliament going to university on the side, I guess, in his off hours, was in any way similar to a family living on low income and the struggles it has to face to send either the parents or the children to university, sends us the message that he does not understand. He does not understand what is going on out there. He does not understand the challenges that are faced by poor and modest income families. He does not understand the passion and the understanding of the member for Halifax, who has put forward the amendments we are considering this afternoon.

As a matter of fact, it is not just the members of the New Democratic Party who do not believe that this bill is going to do what the government is suggesting it may do. Every person connected at all with the post-secondary education system who came before the human resources and skills development committee to speak about the bill opposed it. They encouraged us to oppose it as well. If that does not tell us something, I do not know what will.

The second NDP amendment that we are looking at today sought in committee to ensure that the bill would require the minister to clearly define what constitutes undue hardship. Again, when we listened to the intervention a few seconds ago by the member for Glengarry--Prescott--Russell, I guess we began to understand why the minister was not willing to accept that very simple amendment and why the minister would not put something more concrete on the table that would help those folks out there who are trying to get their heads around how this piece of public policy would help them.

Bill C-5 would give the minister broad authority to subjectively assess, in an unaccountable and non-transparent manner, whether a student is experiencing undue hardship. What could be defined by one MP as undue hardship being experienced by a constituent could be rejected by the minister, with no means of appeal.

As a matter of fact, I served for 13 years as a member of the provincial parliament in Ontario and over the last 6 to 10 years I have seen in that province a deterioration in the ability of families and students to appeal when they have applied for assistance to get relief from the pressure of a loan or debt they incurred because they tried to better themselves to go to post-secondary education.

That appeal system has become almost impossible to access and to get some positive response from. We can imagine a family of modest means or poor means trying to appeal a decision made by government regarding their participation in this program and how difficult and frustrating it would be in the end for them to actually achieve that.

I am standing in my place today as the member for Sault Ste. Marie to support the member for Halifax in her very sincere attempt to bring at least a modicum of sanity to the bill in terms of the two amendments that she put forward so eloquently and effectively at committee only to be defeated by every party in the House with the exception of the New Democratic Party.

They obviously did not understand that this is a bill which from its very inception is nothing more than an exercise in smoke and mirrors by a government looking to curry some favour as it prepares itself to go to the electorate yet again. It in fact would do nothing to better the lot of many Canadian citizens who want to better themselves by going to post-secondary education.

The bill is smoke and mirrors, but it is more than that for me. It is also a very dangerous piece of legislation because what it is doing is encouraging people who are already making some basic decisions on a day to day basis about where they will spend the little bit of money they have.

Many members may have heard of the project out of Ottawa. Low income individuals got together and started a project called “Pay the Rent or Feed the Kids”. That is the kind of decision that families of low and modest incomes are making in our society today. It is not about whether they can afford to go to post-secondary education or not.

These people are at a more basic level than that. They are trying to decide from one day to the next whether they will pay the rent or feed the kids, never mind paying the hydro or providing transportation for themselves or their children to get to places they need to go. It gets boiled right down to whether they can actually feed themselves or feed their children or pay the rent.

This group of people is acting on that level in terms of their income. These are people who are trying to make do and in fact in many instances are making do with the little bit of money they have. They are doing way more than those of us who are in this position of privilege as members of Parliament would be able to do.

To suggest for a second that they should somehow, if they could find some money, perhaps by cashing in the bottles at the end of the month, put that money into some kind of savings plan that will see them into the marketplace, is hocus-pocus. Because that is what this is all about. It is about the managers of funds, those who play the stock market, identifying another source of money that they can actually use to better their own fortune.

It is dangerous to veil that in the cloak of how this is a good program for low income people to set money aside for themselves so they can send their children to school. It is a dangerous road to be going down; it is the same road that we are trying to push workers down when we determine that their pension plan should be an RRSP program instead of a fixed pension plan such as that which is championed by organized labour in this country.

It is the same kind of hocus-pocus that is being perpetrated on working men and working women in this province. Now, by means of this bill, it would be perpetrated on some of our lowest income families. It suggests that they might set aside some money, throw it into the market and see it grow. Yes, it will grow, all right; it will go is what will happen to it. It will not grow. In fact, that money, if in the first place they have been able to find it to put in, will be gone at the end of the day. It will not be there to help them and their children.

I suggest that this government, if it really wants to put its money where its mouth is, if it really wants to do something, not only for poor families and families of modest income in this country but where post-secondary education is concerned, it should cast its sights across the water to Europe.

Many countries there have decided that post-secondary education is now so important to their economy, their community and their people that there will be no tuition fee for post-secondary education. They have decided to invest in post-secondary education in such a way that those who qualify, those who want to go and take advantage of that opportunity, will in fact not have that obstacle put in front of them. These students can go, maximize the potential they have to be educated, and then come back and participate in their community and the economy of their country.

[Alain Boire, Bloc, Beauharnois—Salaberry, QC]

Madam Speaker, concerning the learning bonds bill, as we announced at a previous reading, the Bloc Québécois supports this bill because one could hardly be against investing in making post-secondary education more broadly accessible, contrary to what the NDP is asking for.

The Bloc Québécois is in favour of the establishment of the learning bonds program, as this would directly help lower-income families. Families who could not afford it otherwise will be able to save for their children's post-secondary education.

The Bloc Québécois is also in favour of increasing the Canada Education Savings grant because this is a tax measure that benefits middle and lower-income families.

Bill C-5 will allow less well-off families to take advantage of the benefits of the registered education savings plan and the Canada education savings grant, as better off families already do.

I would like to remind the House, however, that neither the learning bonds nor the increase in the Canada education savings grant will help Quebec provide quality education, because they do not give Quebec the means to do so. They force students to cover part of the cost of their post-secondary education, without improving the quality of this education.

This bill should be combined with an increase in the CHST, because now is the time when students in Quebec need financial assistance and quality education, not 18 years from now.

Correcting the fiscal imbalance and restoring fair transfers to the provinces would enable the Government of Quebec, which is in the best position to understand the Quebec reality, to support Quebec's students appropriately.

Quebec already has a loans and grants program, which it could substantially improve with the funding provided under the Canada Education Savings Act. A $40 million budget has been announced to administer the program during its first three years of operation. This budget includes an envelope for setting up the computer system to manage the registration of children born after 2003.

An advertising budget should also be included in order to encourage families to take advantage of the new measures contained in the bill and to avoid the kind of problem encountered with the guaranteed income supplement program and having people who are eligible for the program but do not know that this bill exists

We are used to the federal government's propensity to underestimate. We need look no further than the firearms registry for proof of that. The government does not know what the annual cost of administering the measures set out in Bill C-5 will be. It will be determined by an analysis of the first three years of the program.

It will cost more than $13 million annually to distribute $80 million over the first three years of the bill. The Government of Quebec could have distributed this to students in greatest need at no additional cost if the Canadian health and social services transfer had been increased. We could then save the annual administration costs of the program, which total $13 million, and improve equalization payments to the provinces.

The hon. member for Halifax has brought in a motion today concerning clause 3, calling for its deletion. As presently worded in the bill, clause 3 reads as follows:

The purpose of this Act is to encourage the financing of children's post-secondary education through savings, from early childhood, in registered education savings plans.

Hon. members will understand that clause 3 is the very heart of Bill C-5. Deleting it is tantamount to doing away with the entire bill.

The Bloc Québécois is in favour of the principle of this bill on learning bonds. It is in favour of the implementation of the learning bond program, because it will provide direct assistance to lower income families. It will enable them to have access to post-secondary studies and not to be penalized for not being able to save money for that purpose.

As well as being in favour of the purpose of the bill, the Bloc asked for an amendment to clause 3 in committee. That amendment reads:

3.1 The Minister shall take measures necessary to carry out the purpose set out in section 3, including making known to Canadians, through informational and promotional activities, the existence of CES grants and Canada Learning Bonds and any terms and conditions.

With this addition, the Bloc Québécois wishes instead to see the object of the bill realized and not have it share the fate of the guaranteed income supplement which some people are not receiving because they are still unaware of its existence.

In conclusion, the Bloc Québécois is opposed to the NDP motion calling for deletion of clause 3 of Bill C-5.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, as we resume proceedings, we are debating two report stage amendments to Bill C-5, an act to provide financial assistance for post-secondary education savings.

The stated purpose of the bill is:

--to encourage the financing of children’s post-secondary education through savings, from early childhood, in registered education savings plans.

The effect of this first amendment, to delete clause 3, would be to actually delete the stated purpose of the bill. Let me be clear about what we are talking about here. Clause 3 purports to serve the purpose of introducing so-called incentives to encourage families to save for their children's future. However, it fails to take into account the reality that many low and fixed income families cannot afford to put money into RESPs.

We heard from witnesses, who appeared before the human resources committee on Bill C-5, that the stated purpose was bogus and that the provisions contained in the bill could not possibly come close to achieving the stated purpose. It was the view of all but one witness of the many who appeared before the committee that Bill C-5 would actually widen the gap between upper income families who can afford to open RESPs for their children and those living on low and fixed incomes who cannot.

It cannot be ignored if there is not to be a total democratic deficit in the work of the human resources committee. Every single organization that spoke to the bill said to scrap it. Fundamentally, there were two reasons why they said to scrap it.

The provisions of the bill do not achieve the stated purpose. It could be documented in dollars and cents that low and modest income families would not be the chief beneficiaries of the bill. The greatest benefits of the bill would go to upper income families who could afford to set aside savings and who could draw down the benefits that are contained in the bill in a way that lower income families could not do.

Student representatives, spokespersons for anti-poverty groups and single parent groups spoke against the bill because it completely failed to address what was really needed to achieve the purpose of opening up accessibility for low and modest income students to our post-secondary education institutions.

There is absolutely nothing in the bill that even purports to address the current post-secondary education crisis that is sweeping this country. Every single education stakeholder who appeared before the committee as a witness demanded that what was needed instead was a needs based grant system instead of this woefully inadequate piece of legislation.

I have heard some people argue that Bill C-5 is better than nothing. The bill would not achieve its stated purpose and that is why we are proposing the deletion of the stated purpose because it is bogus. If it does not actually achieve its stated purpose, at least it does attempt to do something. There would be some people in the low and modest income family category who would benefit from it. It is true that some would benefit. One must take into account whether this is the best use of the money that would be invested.

The reality is that the principal beneficiaries of the money invested will be upper income families and therefore we have to take into account the opportunity cost.

As is proposed in Bill C-5, the forfeited use of that money would be invested. It was the overwhelming contention of everyone that if the government is sincere in its intention to do what is most cost effective in achieving the stated purpose, then that same amount of money will be invested in a needs based system of grants. Anything short of that would be bogus and should not be supported.

For that reason I am appealing to members of all political parties, particularly those who heard the witnesses again and again say that this was not where public dollars should be spent. They said that public dollars should be spent on addressing the crisis in post-secondary education to ensure we have a system of needs based grants, something for which we could all be proud and which together we could all support.

I want to be perfectly fair. We did hear one representative of an organization, unapologetically, which is fair enough, say that his organization supported the bill because his organization was in the business of dealing with registered education savings plans and therefore would be a principal beneficiary of the provisions of the bill.

However I do not think the purpose of the bill is to enrich the investment activities of an organization that is in the business. Nothing is wrong with that, and if that is the intention of the bill, then there will be such beneficiaries, but the stated purpose of the bill is to deal with low income students and families who face a major accessibility problem in gaining entrance into or maintaining their status as students in post-secondary education institutions.

With regard to the first amendment, I ask all members who heard those pleadings and the overwhelming evidence from witnesses, and representatives of all of our respective caucuses who are here to support this amendment, to recognize that the stated purpose of the bill is bogus and to vote in favour of the amendment that is now before us, which is to delete clause 3.

[Alexa McDonough, NDP, Halifax, NS]

moved:

Motion No. 1

That Bill C-5 be amended by deleting Clause 3.

Motion No. 2

That Bill C-5, in Clause 13, be amended by adding after line 32 on page 10 the following:

“(l) establishing a process for defining the conditions that constitute undue hardship under subsection 9.1(1) for a beneficiary or the primary caregiver of a beneficiary.”