Human Resources Committee on May 29th, 2007

[The Chair, Conservative, Dean Allison]

Mr. Regan, we have five minutes of questions there. I'm not going to give you five minutes to answer all of them. I probably should, but why don't you go ahead and start?

[Geoff Regan, Liberal, Halifax West, NS]

I'll probably need about ten minutes, because there were a lot of questions.

Mr. Brown asked about 10 or 15 questions, and he's aware of the earlier conversation I had with Ms. Yelich, in which we talked about the data that the department doesn't have at the moment on these things. I guess what's interesting to me is that the Conservative side here doesn't want to talk about this bill itself and what it might do and its benefits. It wants to talk about the 12 years and two months the Liberal government was in power.

Frankly, when we arrived in government, we had a $42 billion deficit left by the previous Conservative government, and in 1995, when the budget was brought forward to make the reductions that helped to balance our books in this country, what did the Conservative Party do? It said the cuts weren't enough, and it voted for a motion that called for greater and deeper cuts to all of these things, including transfers to the provinces. That's what the Conservatives voted for in the House of Commons. Maybe you don't know that. I was here; I saw it. So I think it's a bit hypocritical to come here and suggest otherwise.

In terms of the provinces' clawing back, I think there are two things. First of all, you have to work with the provinces on that and work out an agreement with them not to do that sort of thing. But secondly, that is more of a concern when you have a broad program that applies to everyone, whereas when you have a more narrow program like this, which applies only to low-income people, I think it's much less likely to happen. But it's still worthwhile working it out with the provinces to ensure that doesn't happen. There were certainly large increases in transfers to the provinces when I was a minister in our government, and over the past six or seven years large increases were given to the provinces for health care and other matters because of the fact we put our country in a better situation fiscally and were able to afford to pay for those things.

[The Chair, Conservative, Dean Allison]

Thank you. And thank you for answering all those questions as quickly as you could.

We're going to wrap this section up. We want to thank the three of you for coming in and speaking to the bill. We're going to take just a couple of minutes to transfer over, and then we're going to invite our second set of witnesses to show up, from the Canadian Federation of Students as well as Scott Gorry.

Thank you very much for being here, again.

[The Chair, Conservative, Dean Allison]

Okay, we're going to start with the second part of our questioning.

I want to thank Amanda Aziz, the national chairperson with the Canadian Federation of Students, for being here. Amanda, thank you very much for taking the time to be here today.

We want to thank also Scott Gorry, who is here as an individual. I believe, Scott, you go to Carleton University.

[Scott Gorry, Student, As an Individual]

Yes, I'll be going there in the fall.

[The Chair, Conservative, Dean Allison]

Great.

Welcome both of you. I believe you both have opening statements. If you could try to keep them under seven minutes, then we'll get right to our questions.

Go ahead, Amanda.

[Amanda Aziz, National Chairperson, Canadian Federation of Students]

Good afternoon. Thanks very much.

I'd like to thank the committee for inviting me here this afternoon to present on behalf of the over a half million members who comprise the Canadian Federation of Students, at over 80 student unions across the country.

My comments today will be focused on the importance of non-repayable student financial assistance, particularly as upfront assistance rather than back-end measures.

The Canadian Federation of Students supports Bill C-284 in its efforts to expand the financial assistance provided to students through Canada access grants. However, we also recognize that more efforts are necessary to ensure that all Canadians have access to high-quality post-secondary education.

Today's accessibility gap in Canada's universities and colleges is driven by the high cost of post-secondary education. The defining difference between those who have access to post-secondary education and those who are forced into low-paying, low-skilled work is financial resources.

[The Chair, Conservative, Dean Allison]

Hold on one second.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Could you ask him to speak more slowly? The interpreters can't follow.

[The Chair, Conservative, Dean Allison]

Okay.

It's tough when we only give you seven minutes to fit fifteen minutes in. That's not very fair.

[Amanda Aziz]

I've got to fit it in in seven minutes.

So over 350,000 students in Canada are forced to borrow to finance their education every year. Depending on the province, average student debt for a four-year program ranges from $25,000 to $28,000 per student. Upfront financial barriers, namely tuition fees and other costs associated with pursuing a post-secondary education, have created a profound participation gap among Canadian families. Statistics Canada calculates that students from high-income families are more than twice as likely to attend as those from low-income families.

Although post-secondary education remains a provincial jurisdiction, the federal government has a role to play in providing high-quality education to Canadians. From our perspective, one such role is providing the funding needed through transfer payments, with an emphasis on controlling the costs of post-secondary education, which is obviously of great concern lately. An equally important role is the provision of needs-based financial assistance through non-repayable grants.

Canada remains one of about two industrialized countries without a national system of needs-based grants. Despite the millions of dollars spent each year by the federal government on a patchwork of student aid programs, the failure of federal initiatives to improve access to post-secondary education can be traced back to a clearer vision for student financial assistance.

Although not to be confused with a comprehensive national system of needs-based grants, Bill C-284 has the potential to ensure that more students in need of financial assistance are able to receive it. When the Canada access grants were initially announced, the Canadian Federation of Students advocated for the grants to be expanded to all years of study, as this bill is proposing.

I want to be clear that grants alone are not enough to ensure that low-income students have access to post-secondary education. The fact that education costs continue to rise means that any level of grant will be devalued with each subsequent increase in cost. In addition to grant moneys, it's vitally important that the federal government provide adequate funding for post-secondary education, with a special emphasis on controlling the costs of tuition fees.

The lack of measures to ensure Canadians do not face barriers to participation in post-secondary education will have an effect on the economy and social well-being of the country. Post-secondary education is an issue that must transcend partisan lines, and I hope that all members of this committee realize the important role the federal government must play in ensuring high-quality, accessible post-secondary education.

As I've already stated, the federal government currently provides a patchwork of funding to students and their families through existing aid programs, many of which are inadequate and not helping those who need assistance the most. For the record, the Canadian Federation of Students does not consider savings programs, or education, tuition, textbook, or otherwise tax credits, adequate student financial assistance. Low-income students will not benefit from non-refundable tax credits, nor can they afford to participate in federal savings plans meant for their benefit.

Moreover, since everyone who participates in post-secondary education qualifies for tax credits, regardless of financial need, the federal government is focusing on directing public funding, where it is not necessarily improving access for students who cannot afford high tuition fees.

For example, the average annual income of families making use of federal education tax credits and the registered education savings plan is over $70,000. In their first year, the Canada access grants were awarded to over 30,000 students, costing almost $52.6 million. In that same year, $462 million was paid by the federal government as matching grants to the Canadian education savings grant, to children whose families are investing in RESPs.

The expenditure made on tax credits and savings programs, if offered as upfront grants, could deliver significant financial assistance to students with the greatest financial need. For example, if every Canada student loan recipient received a $3,000 grant, the cost would be approximately $1.13 billion per year. In other words, if the amount the federal government currently spends on the tuition fee and education tax credit, estimated to be about $1.15 billion per year, were simply shifted to a front-end grant, access could be improved dramatically.

Providing student financial assistance through upfront, non-repayable grants is the most effective means to get student aid in the hands of students at the time when it is most needed, when large costs are being incurred, at the time of tuition fee deadlines. After-the-fact tax credits do nothing to improve access to post-secondary education.

I understand there has been some concern raised by members of Parliament as to whether or not this is the appropriate time to be debating such a bill, given the relative newness of Canada access grants. I just want to assure the committee that the measures in Bill C-284 in fact are long overdue and there's plenty of research out there that concludes that upfront financial assistance is the most effective aid measure to improve access to post-secondary education.

In closing, I just want to say that on behalf of the Canadian Federation of Students, we're pleased to see this bill before the House and this committee, and we hope that all members recognize the difficulties facing students these days, in particular, students from low-income and middle-income backgrounds, aboriginal students, students with disabilities, and other minority groups in Canada.

As I've already stated, of course any amount of student financial assistance can become obsolete if the cost of post-secondary education continues to rise, but given that the cost of education continues to be a barrier for many Canadians today, if passed, we believe that Bill C-284 could go a long way in helping many new and continuing students attain a post-secondary education.

I want to thank the committee again for having us here today, and I look forward to some debate and discussion.

[The Chair, Conservative, Dean Allison]

Amanda, thank you once again for being here today.

We're going to hear from Scott before we start our questioning. Scott, you have seven minutes, sir.

[Scott Gorry]

I'm not sure that I'll require all seven minutes. I think most of the points have been touched on.

I am a mature student, and coming back to school, I had the opportunity to speak to you today. It was one that I couldn't pass up. The bill in front of us has highlighted many of my frustrations. Specifically, it's a band-aid approach to fixing the post-secondary education system. I think we need to take a better approach moving forward and we need to take a national approach at it. We need to take a look at putting a solution together that includes one for all prospective students, not just specific groups.

I know for myself, looking at the cost of tuition and looking at the cost of books and looking at the cost of having to pay rent, as a mature student, it's frightening. If you look at spending that was introduced in the 2004 budget, it has made the potential for debt even higher. I took a stat from Amanda's website, from the Canadian Student Federation, where they're looking at by 2009, the debt load is going to be upwards, on average, of $30,000 per student.

However, I was happy to see in the 2007 budget that there was an increase in investment. There was a plan that looked like it was going forward to build a broad-based focus instead of just putting band-aids here and there and trying to fix things. And I think that the problem with this bill is that it specifically looks at two groups. It doesn't take into account mature students. It doesn't take into account middle-class students.

When my sister was going to school, my sister was denied student funding because my parents made $40,000 a year each. Well, as a combined household income, that's $80,000. My parents had a mortgage of $1,000 a month. When you tack in all the bills, you're escaping that middle class, and you're focusing on two specific areas here instead of putting a plan.

And it's typical of in-the-box thinking that has come from the last 13 years of government. If you look at it, when those cuts that other members have been talking about, the transfer cuts that have been passed down to the provinces, they've resulted in service cuts from universities. They've also resulted in tuition increases. And it has been clear that most provinces have stated that they can't handle the capacity to increase the Canada access grant program. They're not in a position at this time.

You look at how many other services that are being downloaded to provinces and the provinces have downloaded to municipalities, it just adds to the enormous amount of strain that's going to be provided in the near future.

I also think it's a lack of concern regarding the position for the provinces. The program is two years old and you want to move forward with expanding a program, and we're not even sure if the program works properly. Member Brown and the Honourable Mr. Chong had asked questions regarding where things stand with this program, and the answers were not there. So how can you move forward on an expansion of the bill when there isn't any information provided by it?

I think you need to take accountability with this in all levels. You need to take accountability spending-wise. We don't need to be spending irresponsibly, but we also need to take into consideration all students instead of just specifically looking at one piece or two pieces, put a plan together.

I've sat here today and I've listened to quite a bit of banter back and forth, and I'm sure I have quite a bit of a differing opinion from some members.

It was highlighted that all members need to come together to make this work, and I think that's where this bill fails. It's not bringing all parties together. It's bringing one person's and one former government's ideas together to try to push their agenda through. If it was such an important agenda for the previous government, they had 13 years to push it through; why didn't they do it then? Why didn't a plan come up in those years to build a foundation for today, so that going forward all students would have the opportunity to receive an education at the post-secondary level?

In my view, it seems as though this is a band-aid bill that focuses on separating the policy into individual groups. It's counterproductive. It's typical in-the-box thinking, which has been constant. Real investment is needed, and I believe that a national focus is the best strategy to fix the problem.

[The Chair, Conservative, Dean Allison]

Scott, you have one minute, sir.

[Scott Gorry]

I think I've highlighted most of the points I wanted to talk about. We need to focus on all students, and I think this bill lacks that focus.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, Scott.

We're now going to try to do the same thing as last time: two rounds of five minutes each.

We're going to start with Mr. Savage for five minutes, please.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Chair.

I want to thank the witnesses for taking time today to come to talk about this bill. I haven't met you before, Scott, but I've met Amanda on a number of occasions. It's always worthwhile to spend time with the Canadian Federation of Students, who I agree with on almost all issues, but not necessarily on all. I know the work they do.

Today there was a report that you may have seen, Ms. Aziz, in The Globe and Mail that the Millennium Scholarship Foundation put out, referring to the fact that the solution isn't playing with the tax system but making direct investment in students. Is this an occasion where you once again agree with the Millennium Scholarship Foundation?

[Amanda Aziz]

“Once again” might be too many times, but certainly we agree with the assessment that tax credits and after-the-fact tax breaks for students are not the means to provide student financial assistance. As I said, most students aren't benefiting from the tax credits. In fact a lot of students, not even realizing that these tax credits are available for them once they start making income are simply transferring these tax credits to their parents. They don't make enough money that they're paying taxes, so these tax credits are not benefiting them.

If we're talking about how to ensure that more Canadian students are able to participate in post-secondary education, the real concern is when you are paying your tuition fees, when you are paying the bills, not when you have gone through your year of university and are filing your income taxes. It's nice to get a cheque at the end of the year, but the concern is assistance up front and not back-end assistance. So we definitely agreed with that assessment this morning, for sure.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Not all students would actually benefit from a tax break at all--is that correct?

[Amanda Aziz]

Yes, absolutely. Most students in fact don't make enough money to be paying taxes.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

One of the things that Michael Ignatieff has said on a number of occasions, and I agree, is that it's a bit of a goal. If you have the marks, you get to go; this shouldn't be the discriminating factor. To me that makes a lot of sense.

Scott, concerning this being a band-aid approach, in a lot of cases private members' bills are not meant to solve an entire federal issue. They're meant to go specifically and are targeted to fixing problems that exist. I think we need to keep that in mind with Bill C-284. If you want to go broader, then we could go broader. The government could introduce, for example, the 50-50 plan we advocated in the last election, which means that all students would have gotten half of their tuition in their first and last year paid for, which is significant especially in a province like Nova Scotia, with high tuitions.

But this is specifically targeted at low-income Canadians and persons with disabilities. Quite often the two are the same. The third group that I think we all would recognize are under-represented are aboriginal Canadians. We need to do something about that situation as well, but this is a specifically targeted measure in a program that exists.

I'd like to ask you, Amanda, to talk.... You talked anecdotally about evidence that Canada access grants, though young, work. Do you have anything else on this program that you can tell us?

[Amanda Aziz]

The point I was trying to make was that up-front student financial assistance is the most effective measure for student financial aid. From our perspective a broad-based system is absolutely necessary, and currently what exists in the country is not a national system of needs-based grounds; we do not have a comprehensive system of financial assistance.

However, the Canada access grants, when introduced, were certainly a measure we supported in terms of the way they were structured within the government coffers rather than in this private foundation that had been set up on the past. Certainly on this idea that there needs to be some consistent financial assistance to students who are wanting to participate in post-secondary education, that assistance needs to be up front, not as a back-end measure.

I don't have specific numbers now, but I think some members alluded earlier to the fact that study after study commissioned by Statistics Canada shows when youth identify barriers to post-secondary education, financial barriers are among the top barriers that they identify, so certainly there needs to be something done at the time that students are paying for their education and paying for their costs to learn.

By no means is this a perfect solution for students who need assistance, but at least it's a measure in the interim when this committee needs to be discussing a broad-based system of national financial assistance.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

We can go back and forth in terms of the cuts to the CHST that happened in the 1990s. I think Mr. Chong actually laid it out pretty fairly that in fact the government had to deal with those cuts; when they dealt with the cuts, they then reinvested. I disagree a little bit with him because the millennium scholarships came about then, and we invested in learning bonds and things like that, but there was unquestionably some work on the tax side. I do believe that direct investment in needs-based grants should be the number one priority of the government.

I have a last short question.

Scott, I assume you are opposed to Bill C-284.

Amanda, as it is, do you support Bill C-284?

[Amanda Aziz]

Yes, I do support the expansion of the grants program.

[The Chair, Conservative, Dean Allison]

Thank you very much.