Government Operations Committee on Nov. 29th, 2011

[Renée Couturier, Director, Strategic Communications, Department of Human Resources and Skills Development]

It's $4.5 million for senior financial abuse, $2.5 million for the apprenticeship grant, and $2.5 million for access to financial benefits.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

[The Chair, NDP, Pat Martin]

Very good. Thank you for that specific information.

Now for our last round of questioning, Ron Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

I'm going to share my time with Mr. Gourde. I have a couple of quick questions.

I have a daughter in post-secondary, and I know the cost of schooling is quite a challenge. She works hard and has won some scholarships, and I have a registered education savings plan, so we try to help out.

You said the majority of students pay. What percentage of this $149 million represents the outstanding number of student loans?

[Kathryn McDade]

As Mr. Tsang said in his opening remarks, the vast majority of student loans are repaid to the government over the lifetime of the loan. The exact number is about 87.2%.

Taking that another way, almost 13% of loans are not repaid. Of that amount, about 11% is written off, so a writeoff of $149 million is captured in the request to Parliament under these supplementary estimates (B).

The government forgives very small amounts—the difference between 11% and a bit, and 13%—because of the death or severe permanent disability of the borrower, or because, as I had answered in response to a previous question, the borrower is on the repayment assistance plan. While they're on that plan the government may be paying down or forgiving part of their principal. Those are the reasons for the 13% of loans that are not repaid to the government.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Has that percentage been trending for a number of years?

[Kathryn McDade]

We rely on the chief actuary in the Office of the Superintendent of Financial Institutions to forecast for us whether there is an anticipated shift in that amount, either up or down. He is forecasting that for the foreseeable future the amount will stay roughly constant, so the proportion of loans we're writing off is not expected to change over time.

He did identify a small increase in default that he attributes to the recent recession, but he does expect that to be a blip and expects the number to return to its previous level. Because the number of loans that we disburse is going up on an annual basis, the quantum is growing, but the proportion of writeoffs is largely staying constant.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Approximately 62,000 loans have been written off. How many loans have you issued?

[Kathryn McDade]

How many loans do we have outstanding? The portfolio of outstanding direct student loans shifts on a day-to-day basis. As money comes in, obviously the amount of outstanding loans goes down, and as we disburse funds the amount goes up. But the outstanding balance is between $13 billion and $14 billion.

I can't tell you the number of accounts that represents, I'm sorry, but it is—

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

How long has the six-year statute of limitations been in effect?

[Kathryn McDade]

It has been in effect since 2003. One of the primary reasons the number of loans written off is increasing is that of course students are just going beyond the six-year statute of limitations as they get out of school, start the repayment process, and then—

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Why is it six years?

[Kathryn McDade]

Before that six-year statute of limitations was in place, the Government of Canada was basically using whatever statute of limitations was in place in the student's province or territory of residence. Those statutes varied across the country. Some were as low as a two-year statute of limitations. The idea in 2003 was to establish a consistent statute across the country for Canada student loans, regardless of where the student resided. The six years was chosen as the reasonable upper limit of what was in place in the provinces at the time.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Is there anything else we can do, after talking to the Federation of Students or the university groups and college groups, to help them with the repayment strategy or a repayment plan?

[Kathryn McDade]

It's early to evaluate. As I said, the repayment assistance plan has only been in place since the 2009-10 school year, so we haven't undertaken an evaluation yet. We intend to. We expect to find that it's made a significant difference in the ability of students with low incomes or with employment difficulties to repay their loans.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

To change the channel for a minute, I have a question on apprenticeships. I think that's one of our big challenges. With our aging population, we need skilled labour. What's the uptake in the apprenticeship program? Is it meeting our planned uptake?

[Paul Thompson]

I'm afraid I don't have those statistics on hand, but certainly they're available. I'd be happy to provide them to the committee.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I think it's very important.

Thank you.

[The Chair, NDP, Pat Martin]

Thank you. That's very helpful.

That actually concludes this round of questioning. We're right on time for the rest of our business.

We'd like to thank Mr. Tsang and the delegation from HRSDC for helping us understand your supplementary estimates (B) for this budget year. Thank you very much for coming.

[Alfred Tsang]

Thank you, Mr. Chair.

[Mathieu Ravignat, NDP, Pontiac, QC]

Shall I go ahead, Mr. Chair?

[The Chair, NDP, Pat Martin]

Just give us one minute to regroup. There doesn't seem to be any....

[An hon. member]

[Inaudible--Editor]

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Chair, I had asked to be recognized before Mr. Wallace piped up.

[The Chair, NDP, Pat Martin]

Well, I'll recognize you now.