Finance Committee on Oct. 24th, 2006

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chairman, and welcome to everyone this morning. It was a while ago now, but I was president of the University of Guelph student union at one time, so someday you might be sitting here.

I am going to stick with education. I had the opportunity recently to meet with the presidents of McMaster and Ryerson, and two vice-presidents, one from York and one from U of T, and part of the discussion was not about tuition fees, to be frank with you, but about quality, and not quality because of the quality of the students we're having, but the quality of the education that's happening inside the building. And their view, to put it in a nutshell, was that it's an issue we're not spending a lot of time on. We're talking about tuition fees and so on, but they had a concern about the quality of education being provided. I wouldn't mind hearing Mr. Parsons' or Mr. Keys' response to what they thought of that issue.

[Spencer Keys]

Thank you for the question. I think it's actually a very valid one, and it's one of the things we're pointing to when we say we should be thinking about what is the share that students are paying for their education, because if we start thinking of it in that sort of proportional sense and thinking about what's the value students get back for what they invest in it, then we do start to address that question in some way.

One of the problems is that tuition is rising, and it's offsetting provincial spending, so we certainly think that would point to either a degradation in quality or it would simply keep things at the status quo. If we were to be looking at what that share was, I think we'd see that if tuition was rising, then necessarily that would require provincial spending to be rising. So the overall quality would be maintained.

I think that's a way to look at it, but it's obviously a very difficult question.

[Chris Parsons]

I think it's important also to look at the way in which tuition fees also affect quality. The quality of education someone receives when they're forced to work 25 hours a week in a part-time job, or work two jobs over the course of a summer, or delay graduate or professional school, is considerably of lower quality than if they're able to devote themselves full time to their studies.

One thing we're seeing is that in addition to the fact that the quality of education--in the sense of how universities are capable of paying teachers, and providing research and providing infrastructure--has decreased due to the drop in federal funding, we actually haven't seen an increase in the quality of education with increased tuition fees. Part of it is because students are also incapable of fully devoting themselves to their studies. So I think when we talk about quality of education, we also have to talk about the quality of education individuals are receiving because of the time and energy they can devote to their studies.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

I have a question for Ms. Schultz. I know this is a budget meeting, but one of the individuals I met with was a vice-president of research, and there was a discussion about post-graduate work. It was a bit of a surprise to me that they're having some difficulty attracting particularly foreign students who have the qualities to do appropriate grad work. Do you have any comment on that at all?

[Dr. Katherine Schultz]

Thank you.

There are a number of issues we find with graduate students. One is the increasing global competitiveness. We are seeing that universities in other parts of the world--India, China--are able to retain their own graduates and then have their students engage in post-secondary education. So that's one issue.

I think on the more local issues and the things that we are able to do something more about, one of the difficulties we have is lack of funding to provide post-graduate students with sufficient resources. These are people who have completed one degree. The kind of stipend they would normally be allowed under the federal funding programs that are available through research would be about $18,500 a year, and these are people who are at an age where even if they're living on their own and haven't yet started a family, that's not a living amount of money.

We have that difficulty. Some of that difficulty has been alleviated by the ability for our international students to work off campus, and I think that's a key initiative and needs to be broadened and continued. But then we get into the difficulty that my colleagues at the other end of the table were speaking about, where if you're both trying to do a full-time post-graduate degree and work off campus, you have difficulty.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Wallace.

We'll continue with Madam Wasylycia-Leis now.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you, Mr. Chairperson.

Thanks to all of you for your presentations.

It's really unfortunate that these great in-depth presentations have five minutes to cover off everything, so let me ask a general question, and anybody who wants to answer can jump in. Maybe we can go down the row.

We started this pre-budget process with an announcement from the government that it was putting $13 billion of surplus money all against the debt. It was cutting $1 billion in programs that included adult literacy, some career and job placement programs for young people, any kind of research programs that were new and innovative, and the list goes on and on. That was followed by the finance minister's announcement that he was going to bring in more tax cuts. It seems that's one sort of scenario we've been dealing with for a number of years.

Do you have some advice in terms of a new set of parameters for budgeting how we can achieve this competitive agenda with another scenario?

Ian, do you want to start?

[Ian Johnson]

Thank you.

Mr. Chair, it was a broad question, as was suggested.

What we are saying is not that there shouldn't be payments on the debt or attention to taxation levels, but balanced with that should be the social deficit and the cost of what's happened over the last ten to fifteen years in terms of the various social programs and services that have been available. We have to adopt--we have to come to grips with the impact. We haven't really done that, so we need to balance that. That's where some of the things that have been suggested in terms of national dedicated funding for post-secondary education, Jeanne Fay's suggestion of a national strategy in terms of anti-poverty--we need to put in place some of the infrastructure, to use another term, that will help us address what has been a significant social deficit in terms of levels of poverty, levels of income, all of those. We need to develop those things together, and a budget process could help lead the way.

I have the experience of working on the alternative budget, both provincially and federally, which sets out a pretty clear vision of how to do things differently with the same amount of money. For several years, succeeding governments have apparently underestimated the amount of money available for social spending. That has to be taken into account as you set priorities for what can be done.

[Chris Parsons]

I'll try to be quick, so that everyone has a chance.

A national post-secondary education act that would set out spending guidelines would be a key component. If you look at some of the recommendations in the federation's brief, almost all of them are revenue neutral, which is important in that there are more efficient ways of spending--not sinking money into arm's-length unaccountable organizations, not spending money on tax credit systems that don't really work, although it is important to have a forward-looking view and recognize that education is the only way that regions such as Nova Scotia are going to be able to turn the ship around.

The cuts in job and career placements are a good example. About 25,000 student summer jobs, that are good jobs and that provide career experience, were cut. We have to look at exactly how money is being spent, not just the amount that is being spent.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Jeanne, you have touched on some of the cuts. Would you elaborate a bit?

[Jeanne Fay]

Thank you.

I'm looking at the figure of $13 billion against the debt, and, as Ian Johnson said, there is an alternative budget. The last one I looked at said, let's put $8 billion against the debt and let's look at social programs, health and education re: funding or funding new initiatives.

A balance is required. It is also, as I said earlier, a political and even an ideological question, in my view. It's a choice. We have a choice as to where we put the money. One of the things that really disturbs me, as an anti-poverty activist, is the cutback in literacy programs. Again, one of the things we have to come to grips with is that as we move into a job market that seems to be dichotomizing, if you will, to jobs that require technical skills, that require a significant education...on the other hand, we're creating jobs at the other end, and they're in the service sector. They're low-paying. They're not a way out of poverty.

On literacy and post-secondary education, if you look at Statistics Canada figures, year after year after year, the best indicator of getting people out of poverty is education.

[The Chair, Conservative, Brian Pallister]

We appreciate that.

I have the chair's prerogative to ask a couple of questions and will do so now.

A friend of mine who runs a food bank says there's a fine line between assisting those in need and perpetuating dependency unnecessarily. That balancing act--anyone who's in the area of social work, social policy, understands the challenges that are faced in that area. There's been a pretty well-acknowledged understanding that the old methods of handing out social assistance have perverse outcomes. A report just a couple of years ago from the Manitoba chiefs talked about access to post-secondary education and so on for aboriginal people today, as an example. The Manitoba chiefs report said that welfare has become a right of passage for healthy young aboriginal people and that it was discouraging aboriginal people from going into post-secondary education.

A lot of research has gone on throughout the OECD on this issue. Jeanne, you're an expert in this field. I understand other countries are taking steps to address the way they deliver. I'm not talking here about handicapped people. I'm not talking about that at all. I'm talking about healthy young people who get caught in the trap, or are discouraged from pursuing their own betterment because of ill-designed social programs. I'm interested in what ideas you may have on how we can encourage a better, more intelligent and effective delivery of social programs. I realize it's a massive topic, Jeanne, but any thoughts?

[Jeanne Fay]

I'm used to massive topics. If I could make a comment about current social assistance programs, there's no question that they're inadequate financially. Before I went to the School of Social Work, I worked at the Dalhousie Legal Aid Service for twenty years. I used to teach a seminar on our current social assistance and previous social assistance systems. One time, one of the law students said to me, “This is more complicated than tax law”. One of the problems is that we spend money on bureaucracies and infrastructure that we don't need.

We can streamline the system. There are different ways of getting people out of poverty. Maybe for young healthy people there is a different way than for persons with disabilities.

Single mothers in Nova Scotia--I wanted to get this in earlier, because, and I'll say it on the record, it's a stupid social policy. One of the ways the Nova Scotia government is saving money on its social assistance program is by cutting off people on assistance if they go to university. They lose their funding. Student loans have a cap, and people with families, primarily single parents, can't live on their student loan.

[The Chair, Conservative, Brian Pallister]

It's almost a reverse of the British model, where they require you to enter training or a work-related activity as opposed to punishing you for doing so.

[Jeanne Fay]

Exactly.

[The Chair, Conservative, Brian Pallister]

I'll let others have a chance too, but thank you very much for your observations.

[Jeanne Fay]

Okay, thank you.

[The Chair, Conservative, Brian Pallister]

We'll continue now with four-minute rounds.

Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, and thank you to the witnesses. I thought there were particularly perceptive comments this morning, which I enjoyed.

I would like to start with one comment of my own, more as an economist than as a politician; that is, your proposal for grants to universities to be per student rather than per capita makes total sense, not just from the point of view of fairness to Nova Scotia, but the efficient functioning of Canada as a single country and a single economic union. We want people from across the country to go to university where they think it's best for them within the country, and the per student grants would reduce the impediment we now have.

I want to conduct what one might call a little poll, which I've also done in other parts of the country. One of our jobs is to make recommendations about the overall priorities and funding for the budget. One of the government's ideas is to have a second point of the GST cut, which would be extremely expensive, like $6 billion a year, and crowd out much else that we might want to do in this upcoming budget. My question to you, either representing your organization or in your private capacity, is whether you think it would be a good idea to proceed with the second phase of the GST cut, or to use the $6 billion saved for other priorities. If you could just say, “No, don't proceed with the GST cut”, “Yes, do”, or “No comment”....

Maybe we could start with Mr. Johnson.

[Ian Johnson]

Thank you, Mr. Chair and Mr. McCallum.

No, we wouldn't support a further cut. We think it's not the best use of the money that's available. What we do see is the need to remove the GST from essentials—

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. Thank you.

[Chris Parsons]

The federation would much rather see that money put into a dedicated transfer to education, rather than through tax cuts.

[Spencer Keys]

In my private capacity, my issue with the GST was that I had to find another seven cents for my Whopper Junior. I would just rather have it included in the price. The actual difference doesn't make a difference to me.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Ms. Warren.

[Jane Warren]

I think I'm perhaps going to agree with Spencer. The GST was only supposed to be on essentials or necessities, and it's not. The rearranging of the whole program is preferable to cutting it.