Evidence of meeting #216 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was division.
A recording is available from Parliament.
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
The default rate on student loans has been steady. It's been 9%. Is that what you're referring to?
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
That's been fairly steady. It has gone down over the last couple of years. Our forecasters at the office of the chief actuary expect the default rate to remain fairly stable over the next number of years.
Liberal
The Chair Liberal Wayne Easter
On Tom's point—if you want to talk about interest rates—in the late 1980s, I was paying 23.5%, so things have changed.
Mr. Dusseault.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
We are resigned to this when our banks and credit unions are charging the interest. However, it is more difficult to accept that governments are charging their fellow citizens interest.
That is the confirmation that the government has given us today, from the lips of Mr. Sorbara. The government is not at all embarrassed to go looking for billions of dollars in students’ pockets. The money goes directly into the consolidated fund and is used to finance all kinds of other measures. Basically, this is a revenue stream for the Government of Canada.
I am a little disappointed that we still lack ambition in this area, exactly as I was saying yesterday about other areas. The government has no ambition and takes only small steps forward, when it could do much more by leaving the money in the pockets of former students who have sacrificed a lot and borrowed money from their government. We are taking billions of dollars in interest right out of their pockets today. It is not the banks demanding that interest, it is the Government of Canada.
Liberal
The Chair Liberal Wayne Easter
Thank you, Mr. Dusseault.
I have a point of clarification, Ms. Gulia. You said the cost to the government; therefore, the savings to students would be $1.7 billion with the current measures. Is that annually or what?
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
It wouldn't be the savings to students. The average savings to students over the lifetime of their loans would be $2,000 under the proposed amendments that are currently before order in council, not through this legislative process. The $1.7 billion is the investment.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
I have more questions now. Does the default rate that you quoted include provincial and federal? Different provinces sometimes have provincial loan programs.
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
That applies only to the Canada student loan.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Do you know what the default rate is in Ontario, Quebec or B.C.—the larger provinces?
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
I wouldn't know off the top.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Okay.
What about the writeoffs for uncollectible loans in the past few years? I'm assuming the government sometimes can't collect on certain student loans. Is there a procedure by which it writes them off? What is that amount?
I'm thinking that the impact of Mr. Dusseault's amendment would be to perhaps alleviate some of that concern. I'm trying to get at the numbers here.
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
In the grand scheme of the entire portfolio of student financial assistance, I would just like to point out as a point of clarification that the overall operating cost of the Canada student loan program in 2017-18 was $2 billion.
The program itself includes a number of components, as you know. There is the repayable portion, which is the actual Canada student loan. There's also the non-repayable portion, which refers to our Canada student grants and our repayment assistance plan. The balance of that $2 billion reflects the full cost of all of those components of the program.
As a point of clarification on a point made earlier, I believe that the $700 million that was referred to, in terms of coming in through our interest rate charges, reflects the interest rate investments coming in, but it also helps to defray the costs of the non-repayable portion of the Canada student loan program, which includes the Canada student grants and the repayment assistance program features as well.
In regard to the default payment, the writeoff for 2018-19 was just over $160 million, approximately. In the grand scheme of this portfolio, it is quite small.
Conservative
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
I don't have that figure right off the top of my head.
Conservative
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
Sure.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Please provide previous years, if you have it, as a point of reference.
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
Yes.
Conservative
Director, Policy and Research, Canada Student Loans Program, Department of Employment and Social Development
I don't think so. I'd have to double-check that.
Liberal
The Chair Liberal Wayne Easter
Does anyone else have questions?
We'll have a recorded vote on NDP-28 amendment to clause 323.
(Amendment negatived: nays 5; yeas 3 [See Minutes of Proceedings])
(Clause 323 agreed to on division)
(Clause 324 agreed to on division)
(On clause 325)
We have amendment NDP-29.
The floor is yours, Mr. Dusseault.