Mr. Speaker, I appreciate the opportunity to speak in the House today.
Six weeks ago the Minister of Human Resources Development released a discussion paper on social security in Canada in order to engender a lively debate across this country about what kind of social security system we want in the future. A debate should be based on facts not rumours and scare stories so let us make sure we all understand those facts.
We have created an excellent and highly accessible post-secondary education system in Canada but it is increasingly under pressure. Resources for everything are tight and there is a growing need for more access to the system. Our challenge is to ensure that we maintain and improve the system and broaden access.
First, why broaden access? Because there are three million people already in the workforce who want to improve and upgrade their skills in order to keep jobs. More and more people should be getting a post-secondary education. Of the new jobs created during the last three years 17 per cent went to people with university education. There were 19 per cent fewer jobs for those with less than high school.
Governments do not have any more money to pay for education. In fact most governments have less money to spend. The federal government is not proposing that we cut $2.6 billion out of the system as some people would suggest. Our proposal will put more in the system as I will explain.
Let us look at how education is paid for. Students pay about one-fifth of the costs of their college or university education through tuition fees. More than half of the students graduate without borrowing money or by borrowing very small amounts. Taxpayers pay about four-fifths or 80 per cent of the cost of post-secondary education, whether or not they personally benefit. That is a lot more than in most countries where students pay a larger share of tuition costs in recognition of the fact that they earn higher salaries and wages during their working lifetime.
Provincial governments are responsible for education, but the federal government pays half the costs for colleges and universities, about $8 billion a year. This currently includes $3.5 billion in tax points that allow the provinces to collect taxes for colleges and universities and $2.6 billion in transfers to provinces in cash. There is an additional $2 billion, mostly in support to university research and the cost of student loans through the Canada student loans program.
The $3.5 billion in tax points will always be there and it will keep growing. The tax points contribution will grow by an estimated $2 billion over the next decade, replacing the cash portion that will run out over the next 10 years.
Under the present system the cash will run out in about 10 years. Without extra government money it is likely that tuition fees will keep rising. That is why the government is considering an alternative, taking some of that cash before it disappears and using it to set up a permanent expanded student aid program. This would provide as much as $2 billion extra in student loans each year.
Under such a scheme the total amount of federal contributions to post-secondary education would increase by more than $10 billion over the next 10 years. Instead of leaving the system as it is now, which would put the federal government contribution at a total of about $60 billion over 10 years, it would be about $70 billion.
A new kind of student loans program would make it easier to finance education, not just for traditional students but for older Canadians who want to go back to school but do not qualify for student loans now. More people would be able to go to college or university. College and university fees could rise but it seems like a reasonable investment given the fact that university graduates' lifetime earnings will be 40 per cent higher than if they had not made that investment. That is about one-quarter million dollars more.
In addition if we were to make the replacement of student loans contingent on earnings after graduation, students would have a guarantee that their investment in learning will not burden them with impossible loan payments.
These are the ideas we have put forward for discussion. Canadians will have an opportunity to respond. They can fill out the work book which we have available for all Canadians to have their say on the reform of social programs. The booklet is available in postal outlets, Canada Employment Centres, YM-YWCAs and many grocery stores or by calling the toll free 1-800 number.
Social security reform affects all Canadians. The government encourages open debate to find the best solutions to take us into the next century.