I just want to thank the committee for this opportunity to present again on behalf of more than half a million university and college students at over 85 student unions across the country.
I only have a few minutes today, so I'm going to focus my remarks on a few key areas: replacing the Millennium Scholarship Foundation with a system of need-based grants, increasing transfers to the provinces, and redirecting money currently being spent in areas that are of little assistance to those who need help the most. Of course, I'm very happy to take questions on anything that's in the brief after my presentation.
Current enrolment data suggests that students from the highest income quintile are more than twice as likely to participate in post-secondary education than those from the lowest income quintile. When discussing participation rates between aboriginal and non-aboriginal Canadians, the gap is even more pronounced. Of those who are able to access post-secondary studies, students who have to borrow the most to participate, and as a result carry more debt, are twice as likely to drop out of their studies as students with little or no debt.
The key policy question for the government, then, is how to close the gap in participation and create an equitable and high-quality system of post-secondary education. The Canadian Federation of Students has long advocated that post-secondary education be paid for through a progressive system of taxation rather than through upfront fees. Graduates of post-secondary education earn more through their lifetime, thereby contributing more in taxes to pay for the cost of their education.
The accessibility gap in Canada's universities and colleges is driven primarily by the costs of a post-secondary education. Over the past decade, tuition fees have more than doubled because universities and colleges have scrambled to make up for the lost revenue from federal funding cuts. With the increasing core funding announced in the 2007 federal budget, the next logical step for the federal government is to institute federal legislation to guide the funding set aside for post-secondary education. In cooperation with the provinces, the federation recommends that the federal government create a post-secondary education cash transfer payment for the purpose of reducing tuition fees and improving quality at universities and colleges. We believe the transfer should be guided by the principles set out in a post-secondary education act; obviously a specific part of it would have regard for Quebec and Quebec's ability to opt out.
On the student financial assistance side, at present Canada has a confusing patchwork of student financial aid programs, many of which are probably too generously labelled “aid”. Student debt, under the existing model of financial aid, has ballooned to more than $12 billion in federal debt alone. Average student debt now ranges from $21,000 to $28,000, depending on the province of study.
The main federal responses to the student debt crisis, tax credits, and the Millennium Scholarship Foundation, have failed to improve access to post-secondary education or make a noteworthy dent in student debt for differing reasons. Hundreds of millions of federal dollars are spent each year on tax credits but are blind to financial need and are not available to students when most of their expenses are due. In addition to tax credits, the federal government spends millions on ineffective savings programs that are disproportionately being utilized by wealthier families, hardly the demographic they were created to assist.
Although the foundation is calling for its own renewal, there's very little evidence to suggest that the foundation is the most effective delivery mechanism to improve access and reduce student debt. In fact, the foundation is rife with accountability concerns, and its organizational culture confirms that it must not receive another cent of public funding.
According to its own reports, the Millennium Scholarship Foundation's administrative costs have increased over 500% since its inception, and literally millions of dollars have been funnelled to a foreign company run by two former employees of the foundation. Just two months ago, we learned, through access to information, that the foundation has also transferred close to a quarter of a million dollars to an organization that vocally supports the foundation's renewal. The management of the foundation is out of control.
Of course, students need non-repayable grants, and that's not the issue. The issue is how the Government of Canada administers grants, and the record is clear: the foundation has failed in doing so. We believe there is a better way.
To avoid the accountability pitfalls of a private foundation, we recommend replacing the Millennium Scholarship Foundation with a new system of need-based grants administered through the Canada student loans programs and phasing out the education, tuition fee, and textbook tax credits, as well as savings programs, and redirecting the money currently allocated to each of these programs into a new national system of need-based grants.
We believe the timing for an ambitious reorientation of student financial aid could not be better. Not only is the foundation's tenure coming to a close, but the federal government has the tools and opportunity to cut student debt by at least half if the political will exists.
Finally, I just want to talk about the need to decrease the gap in participation between aboriginal and non-aboriginal Canadians. Funding for the Department of Indian and Northern Affairs post-secondary student support program has remained frozen at the same level since 1996, with an inadequate 2% annual increase. 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.
The federation, therefore, recommends that the federal government immediately remove the funding cap on the post-secondary student support program and increase funding to and opportunities for all aboriginal learners.
In closing, I just want to thank the committee again for the opportunity, and I look forward to your questions.