Mr. Speaker, I really appreciate the generosity of the members opposite.
Census data show that Canadians with bachelor degrees on average earn higher incomes than Canadians with lower levels of educational attainment. The present value of these lifetime income premiums is much greater than the costs involved in obtaining the degrees. These costs consist of tuition fees at recent levels, costs of books and supplies and, quantitatively dwarfing all the other costs, the earnings forgone while in university.
The rates of return on these investments in recent decades have been about 7 to 10 per cent. This is a very good rate of return. It is capable of absorbing very substantial increases in tuition costs without becoming less than the real long run rates of return available in financial market instruments.
Students concerned about the fairness of our society's spending and taxation system should be aware that the vast bulk of university graduates come from families in the middle and higher end of the income distribution. Yet a substantial proportion of the tax revenue used to pay for their education is collected from Canadians with lower incomes. In effect, the present system forces low income earners to subsidize those with higher incomes to get their university education.
The proposed system will correct this inequity. Middle and higher income families will pay a larger share of the higher education benefits they receive. If bad luck prevents them from enjoying the benefits of higher education, these students will not have to repay.
Students concerned about the access of the poor to higher education are reminded that under the present system the poor are often excluded because they do not qualify for fixed repayment loans. Under this system, no questions are asked and they will have access without any difficulty. They have to repay only if they are able to do so.
Finally, I would like to raise a point that is not often discussed. Under the present arrangement, students choices are severely limited. Programs offered by state monopolies of higher education have been slow to react to the demands of students in a changing world. It is well known that the solution to these problems lies in the use of vouchers, that is, non-repayable certificates given to students and cashable at institutions of their choice. The Reform Party supports the use of such vouchers and the resultant empowerment of students.
The income contingent loans program moves the system closer to the ultimate goal of vouchers. It similarly empowers students to obtain study programs that they like rather than those that professors and bureaucrats think they should like. By spending their loan money in institutions of their choice, they encourage them to grow and force others to shrink. Since they spend their own repayable money, they have the proper incentives to make wise choices.
The time for income contingent loans for students in higher education has come. This proposed system offers an efficient and equitable way out of the problems created by the country's financial crisis.
I hope the government will take note of this private member's bill introduced by the Reform Party and debated today and that it will offer promptly legislation to put it into effect.