Good evening.
My name is Adam Awad, and I'm the national chairperson for the Canadian Federation of Students.
The Canadian Federation of Students is Canada's largest and oldest national students' organization, representing more than 600,000 students in all 10 provinces. Our organization advocates for an accessible, affordable, high-quality, public post-secondary education system.
Our budget recommendations focus on how to make education more affordable for students and address mounting student debt in Canada. Ensuring that all people in the country are able to pursue a higher education and training must be part of any significant, stable, long-term recovery for our economy. Relatively high youth unemployment, record levels of personal debt, low levels of industry research and innovation, and a rapidly growing income gap all compound the problems of the global financial crash and subsequent recession and must be addressed.
In its most recent global economic competitiveness report, the World Economic Forum ranked Canada 15th in the ability to compete economically with other countries around the world, down from 12th last year and 8th the year before. This is a worrying trend. In its explanation, the forum noted that Canada's disjointed and inefficient post-secondary education system was one of the main reasons for this slide.
The OECD has also highlighted that participation rates will have to grow significantly if Canada is going to address changing labour market demands and an aging workforce. Unfortunately, the cost of post-secondary education continues to be downloaded onto students and their families, despite the significant public rate of return on investments in post-secondary education: every dollar invested into post-secondary education brings in $1.63 in return, so there is a 63% return on that investment.
As a result of high tuition fees, student debt has increased substantially. Average public student debt is now over $27,000 after an undergraduate degree alone. Paired with rising tuition fees, it's easy to understand how we've arrived at a situation in which Canadians collectively owe $15 billion to the federal government alone, not including the billions more that they owe to provincial and private loans.
Credit agencies and major banks are now warning that student debt has reached unstable levels. The long-term impacts of carrying such debt include delayed participation in the economy, the inability to invest or save for retirement, choosing to move out of the country in order to find work, starting a family later in life, and the aversion to taking on further financial risks, such as starting a business. Those in finance have finally caught on to what students have been saying for years: that debt is an issue, and it's not going away.
Today, over 25% of the Canada student loan borrowers are on the government's repayment assistance program, meaning that they do not make enough money to make their monthly loan payments. Over 147,000 Canadians are currently unable to make any payments on their loans from month to month. In conditions like these, how could we possibly expect students and graduates to participate fully in the economy?
Students are putting forward a vision that would work to address the root cause of the debt crisis and address the debt itself.
First, the government should implement a federal post-secondary education act modelled on the Canada Health Act and create a dedicated cash transfer for post-secondary education. Provincial governments must be accountable for the transfers they receive from the federal government, and an act would ensure that federal funding to the provinces for post-secondary education would actually be spent on just that. The lack of a national vision has resulted in significant disparity in tuition fee levels and per-student funding across the country, with students in Ontario paying almost three times more than students in Newfoundland and Labrador and students in Alberta receiving almost double the rate of per-student funding than those in Quebec. Students are calling on the government to ensure that merit, and not geography, determines whether someone can go to college or university.
The government also needs to address the historic underfunding of post-secondary education that results from the cuts to federal transfers in the late 1990s. By filling the gap left by two decades of inadequate funding, the federal government could take action to reduce high tuition fees, which are the heart of the student debt crisis.
We're also recommending that in order to stop the federal student loan debt from increasing, government should redirect the $2.52 billion currently allocated in ineffective education tax credits and savings schemes into the Canada student grants program. This simple solution would remove the need for the $2.3 billion the Canada student loans program gives out every year, and such a change would have a significant impact on students' ability to both get an education in the short term and to contribute meaningfully to Canada's economy and society in the long term.
In order to address the existing debt, we recommend reducing student debt by half, bringing it down from $15 billion outstanding to $7.5 billion by 2015. By consulting with the provinces and national stakeholders, the government would be able to effectively distribute this debt relief to have the greatest measurable impact.
I certainly appreciate the opportunity to address the committee this evening. Five minutes is not quite enough time to do justice to all of the recommendations included in the book that was handed out, “Public Education for the Public Good”.
I am more than happy to answer any questions, should members have any.
Thank you.