First allow me to thank you for inviting us to present today.
I'll quickly introduce myself by saying I'm a student at the University of British Columbia, Vancouver, and president of the student society there. We represent about 45,000 students.
Hopefully many of you are also familiar with the Canadian Alliance of Student Associations, which is a national student advocacy organization. On that organization I sit as the board chair, and we represent about 350,000 students, so I hope I won't be guilty of speaking from a UBC or university-centric view. The views we're presenting today are part of a broad consensus of students from across the country.
The things that Canadians hold most dear about their society also come at a high cost: public health care, a national defence program, and a clean environment are merely some of the many national programs that rely on the tax base of this nation in order to function.
In order to ensure a sustainable economy and, by extension, a sustainable tax base, we must show a considerable degree of foresight with regard to our post-secondary education system. The most effective way to ensure that Canada has a sustainable tax base is by fostering greater access to post-secondary education, particularly for those populations with low participation rates, such as first nations and individuals from low-income families and rural communities. By investing in the students of this nation, Canada can ensure we will have a workforce with the skills to keep Canada at the forefront of today's knowledge economy. Canada will have a workforce that is healthier and better educated, sustainable and self-sufficient.
We know that those who graduate from post-secondary education earn more and contribute more through the tax system than non-graduates. Canadian post-secondary graduates provide nearly 60% of government income tax revenues, while receiving only 30% of government spending. In spite of this, we have seen significant cuts to PSE funding since the mid-1990s, and we know students are being asked to cover a higher proportion of the costs of their education. In my case, tuition covers about 30% of the cost of my education; in the 1990s, it was around 20%.
I am also of the view that Canadians have assumed a level of quality exists in post-secondary education, partly because the demand persists, but we know that the demand is within students who are generally from higher-income backgrounds. We know that American institutions enjoy an $8,000-per-student funding advantage.
We also know that inequalities still persist within the system. You are less likely to attend post-secondary education if you're from a low-income background, you're a student with a disability, your parents did not attend PSE, you're from an aboriginal background, or you're from a rural locale. In this we are missing an opportunity to advance Canada and to fund our tax base sustainably.
We have suggestions highlighted in the brief, but I'll briefly prioritize a few of those for you.
The AMS encourages the Government of Canada to improve the national system of student financial aid, including making the Canada student loans program fairer and easier to understand and extending the Canada access grants to cover all years of an undergraduate education; currently that program just covers the first year.
We've asked for a review of student financial assistance. That is something on which the current government took a step in the right direction, but the current review is mostly focused around the Canada student loans program and lacks a holistic look at the interactions between jurisdictions and federal and provincial programs.
The federal government also currently spends about 40% of all student financial assistance in the form of tax credits. The research literature is consistently clear that this is less likely to benefit students who are underrepresented in the system. Those students who are underrepresented are more likely to be debt-averse and to underestimate the returns on an education while overestimating its cost, so it's really important that a review look beyond just the Canada student loans program and look also at the tax credits and the savings programs that represent a big portion of what the government currently provides.
I'll briefly outline the second priority, which is a really important one for us. It's the renewal of the Canada Millennium Scholarship Foundation. It's something we've been talking about a lot. The foundation needs to be renewed this year in order to keep sending students money in 2010, when the program is up. Not renewing the program amounts to a $350 million loss of around 90,000 instances of annual upfront, needs-based, non-repayable assistance to students in Canada.
Grants and bursaries particularly are an important part of the system, because they not only help people get in the door, but also help to improve graduation rates. That's more favourable than a tax credit or a savings program or something that would be delivered as assistance on the back end.
We are part of a broad consensus of students who support the foundation's renewal. Through our partnerships we represent around 650,000 students. That's the largest partnership in Canada. We're also part of a consensus of premiers, ministers of education, and post-secondary stakeholders across the country who are talking about the renewal. It does represent 30% of all student grants in Canada. We're particularly anxious about the lack of conversation around this program. We know there has been conversation about putting this money into other areas where it might be less effective, in the form of tax credits or other programs.
One last thing I'll highlight is dedicated transfer and a pan-Canadian accord. With respect to post-secondary education, Canada is one of the few OECD countries that doesn't have a national vision for education. I know the NDP colleagues have spoken about a ministry. We're talking, first, about a pan-Canadian vision, to get the conversation started. A dedicated transfer is a way of ensuring that the federal dollar that's invested in the province actually goes to where it was intended. This is something we've been talking about for quite a while.
The Conservative government did earmark the $800 million that was announced in Budget 2007, but we're concerned with how that will be continued in future budgets. We see the transparency and accountability that's obtained through a dedicated transfer to be optimal.