Good afternoon, and thanks very much for the opportunity to speak here today.
We're obviously here to speak today about Bill C-50's implications on Canadian student financial assistance.
The Canadian Federation of Students is Canada's largest student organization. We represent undergraduate and graduate students at Canada's public universities and colleges, both small and large. Altogether, we unite over half a million students on campaigns for affordable, high-quality, post-secondary education.
One of our longest-standing campaigns is for a national system of student grants. The up-front financial barriers to post-secondary education play a major role in explaining the unacceptable participation gap between families in the lowest and highest income quartiles. Grants are a vital tool for giving students and their families the help they need to afford post-secondary education in the face of skyrocketing tuition fees and other costs. Perhaps more importantly, grants, unlike loans, provide that help without mortgaging the future of Canada's young educated workers.
Student debt owed to the federal government through the Canada student loans program is increasing at $18 per second, more than $1.5 million a day. In July this year, student loans owing to the federal government will surpass $13 billion. That doesn't include student loan debt owed to provincial governments, which could add at least $7 billion more to the debt, nor does it include debt from private sources such as banks.
In provinces where tuition fees are the highest, average student debt is more than $28,000, according to the Maritime Provinces Higher Education Commission. This is an embarrassment for a country as rich as Canada.
Ten years ago the federal government created the Canada Millennium Scholarship Foundation and endowed it with $2.5 billion. The size and scope of this investment should be recognized as a substantial and well-meaning attempt at reducing student debt and improving access to post-secondary education. Sadly, the foundation was a flawed mechanism for social programming and, by most accounts, failed to deliver much relief to Canadian students.
Provincial governments widely abused the funding from the millennium foundation, seeing it as a slush fund for their own experiments or tangential priorities. As an arm's-length and private organization, the foundation was never accountable or transparent, and it used this untouchable status for deeply political ends that in most cases ran contrary to its mandate to improve access to post-secondary education. It provided political cover for increased tuition fees, and it enriched former employees with lucrative contracts. It also paid out nearly $250,000 in subsidies to organizations that supported its renewal.
We could argue for hours about whether or not the government should have seen this coming, but I'm here today to suggest that the best intentions led to a failed experiment. This government was right to listen to expert advice and go in a different direction. The proposed Canada student grant program will avoid so many of the pitfalls of its predecessor and will serve as a predictable and stable funding source for Canada's students.
Students need non-repayable grants, and that's not the issue. As the government has recognized in budget 2008, the issue is how grants are administered by this government, and the record is clear. The Millennium Scholarship Foundation has failed in doing so, and there is a more effective way.
In the coming months and years we look forward to providing feedback about how to maximize the new grants' effectiveness and reach, but in the meantime I encourage all parties to implement budget legislation to wind down the Millennium Scholarship Foundation. I assure you, with an HRSDC-administered program in its place, students will not miss it.
In the last few minutes I have, I want to talk about something that this bill doesn't specifically address, but that should be among the top priorities in the debate on post-secondary education policy, and that's the need for this government to invest in education for aboriginal people.
The gap that exists between low- and high-income Canadians participating in post-secondary education is even more pronounced between aboriginal and non-aboriginal Canadians. Completion rates for high school, university, and to a lesser extent, college for aboriginal people lag far behind those for non-aboriginal Canadians. And while this gap continues to widen, the population growth of aboriginal people in Canada is skyrocketing. A study commissioned in 2006 found that over 30% of the aboriginal population is under 24 years old. Despite these demographics, funding for aboriginal students has not increased. In fact, funding for the post-secondary program at the Department of Indian and Northern Affairs has remained virtually stagnant since 1996, with an inadequate 2% annual increase cap.
The Assembly of First Nations estimates that more than 13,000 eligible students in the last six years alone have been denied funding to participate in post-secondary studies. Despite the recommendations in the sixth report of the Standing Committee on Aboriginal Affairs and Northern Development last June, budget 2008 delivered no new funding for aboriginal learners and continued the cap on funding increases in INAC's post-secondary program.
We recommend the federal government immediately remove the funding cap on the post-secondary student support program and explore opportunities to provide support for non-status and Métis students, who are currently not eligible for support under INAC's post-secondary education program.
In closing, I want to thank the committee again for the chance to speak today, and I'll introduce Ian Boyko, who is the government relations officer. Obviously there are many issues in the budget that the time limit didn't allow us to discuss, but I look forward to your questions.
Thanks.