Debates of May 25th, 1994

Petitions

[Murray Calder, Liberal, Wellington—Grey—Dufferin—Simcoe, ON]

The second petition pursuant to Standing Order 36 is a 200-name petition from the Stayner area of my riding requesting the following:

We the undersigned, your petitioners, humbly pray and call upon Parliament to urge the Government of Canada to ban the sales of the serial killer board game and to prevent any other such game or material to be made available in Canada in order to protect innocent children.

(Questions answered orally are indicated by an asterisk.)

Questions On The Order Paper

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, Question No. 35 will be answered today.

Question No. 35-

[John Williams, Reform, St. Albert, AB]

What were the names of the federal statutory programs that expended over $250 million in the fiscal year 1993-94, and under what department or departmental jurisdiction did each of these programs fall?

[Art Eggleton, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

There is a table at the front of the 1993-94 main estimates (pages 1-54) which identifies all statutory items in the estimates for that year by program.

The individual items which exceed $250 million are:

-Payments under the Farm Income Protection Act in the agri-food program of the Department of Agriculture,

-Payments to international financial organizations in the financial and economic policies program of the Department of Finance,

-The public debt charge program of the Department of Finance,

-The fiscal transfer program of the Department of Finance,

-Military pensions in the Department of National Defence,

-Payments to provinces and territories for hospital and medical care in the health program of the Department of National Health and Welfare,

-Payments to the provinces and territories under the Canada assistance plan in the social program of the Department of National Health and Welfare,

-Old age security, guaranteed income supplement, and spouse's allowance payments in the social program of the Department of National Health and Welfare,

-Grants to municipalities and other taxing authorities under the real property program of the Department of Publics Works,

-Post-secondary education payments and interest and other payments under the Canada Student Loans Act by the Secretary of State, and

-Payments to railway companies by the National Transportation Agency under the Western Grain Transportation Act.

The above programs account for approximately 97 per cent of total statutory spending.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I would ask that all remaining questions be allowed to stand.

[The Deputy Speaker]

The question, as indicated by the hon. parliamentary secretary, has been answered. Shall the remaining questions stand?

[Some hon. members]

Agreed.

Motions For Papers

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I would ask that all notices of motions for the production of papers be allowed to stand.

[The Deputy Speaker]

Shall all notices of motions stand?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I must inform the House that pursuant to Standing Order 33(2)(b) Government Orders will be extended by 28 minutes because of the ministerial statements.

Ways And Means

[David Dingwall, Liberal, for the Secretary of State for International Financial Institutions]

moved that a ways and means motion to amend the Excise Tax Act, the Excise Act and the Income Tax Act, laid upon the table Tuesday, May 24, be concurred in.

(Motion agreed to.)

The House resumed from May 24 consideration of the motion that Bill C-28, an act respecting the making of loans and the provision of other forms of financial assistance to students, to amend and provide for the repeal of the Canada Student Loans Act, and to amend one other act in consequence thereof, be read the second time and referred to a committee.

Canada Student Financial Assistance Act

[Jan Brown, Reform, Calgary Southeast, AB]

Mr. Speaker, I am pleased to rise to speak to this bill this afternoon. I say that because it gives me an opportunity to address the House on a bill which affects the very group on whom we place great hope for our future, our youth.

I am going to approach the bill from three advantage points: as a parent, as a women previously in pre-doctoral studies, and as an elected representative; but first let me set the stage in terms of our current employment scene because it is inextricably linked to the financial security of our students.

It is alarming to know that Canada is described as a country of structural unemployment. This means that after each of the recessions experienced over the past 20 years unemployment has declined but overall has remained higher than before each of the recessions.

The International Monetary Fund has placed the blame squarely on generous unemployment benefits which discourage job hunting; greater unionization, centralized wage bargaining and high minimum wages which reduce labour market flexibility; and high non-wage costs which discourage hiring. These are the realities of our job market, not a promising set of circumstances by any stretch. Yet this is what awaits those with high hopes, those who graduate from our universities and colleges and enter this jobless market.

The effects of this situation spill over into summer job opportunities, jobs which mean financial survival for most students. Recent figures show an alarming trend in summer employment opportunities. Current unemployment rates for 15 to 24 year olds remain at 1993 figures, that is 18.1 per cent. This is up from 17.9 per cent in 1992, 14.5 per cent in 1991, and 10.5 per cent in 1990. Students have expressed outrage and now many feel apathetic toward a system of diminishing options.

This bill is not only timely. It is absolutely necessary to meet the needs of students in a recovery where there are few jobs, little choice and scarce money. Bill C-28 contains some positive elements and as a parent I commend the government for recognizing that our present system for educational funding is outdated.

Like most families with children in university, mine had to find a balance between parental financial support and other sources to sustain a university education. Our children have worked part time to augment their costs and until they reached 21 years of age this was a satisfactory arrangement. However it was our family's choice beyond that point that our children looked to extending that support network to include government student loans.

It should be noted that it has become increasingly expensive to sustain a reasonable standard of living while attending university. Even with the combination of parental support, a part time job and a student's loan, financial worries remain a consideration and a burden to most students. Our children were no exception.

I recognize like most Canadians that in 1994 our colleges and universities are in a state of crisis. Nobody agrees with this more than administrations, faculty, staff and students either attending or looking forward to attend university or college.

Here are some examples of the problems that post-secondary institutions face today. Federal transfers to provinces fail to keep up with the rate of inflation. Tuition fee increases are inflexible and capped at low levels. There is an ever increasing demand by the public for access to institutions of higher learning. University and college staff unions are demanding and

winning continuing wage increases that are higher than those in the private sector.

The Canada student loans program or CSLP is an important program. I am pleased the government recognizes that it needs reforming to make it more effective. However it is unfortunate that the government sees the CSLP as the only problem with Canada's post-secondary educational system.

Any student loans program should preserve and enhance the quality and accessibility of post-secondary education, but Bill C-28 fails to do so to any meaningful extent. Despite significant changes in post-secondary education and its clientele, student assistance programs have remained relatively unchanged since coming into existence in 1964-65. Although joint studies of student aid needs have been undertaken on occasion they have not resulted in any formal agreement among federal and provincial governments for a new a comprehensive students assistance program.

In the five-year period between 1988-89 and 1992-93 the university tuition fee price index for Canadians increased by 58 per cent. This means that during that five-year period the adjusted cost increase to a Canadian student was 58 per cent. When one factors in the cost of living adjustment it is easy to see why students are clamouring so loudly about increased costs of education.

During that same time period there was no commensurate increase in loans for students to access. Students were expected to pay substantially increased costs. Yet they were provided with no opportunity to access more funds. As a result more students took jobs to pay for their courses. The effect of this has been to increase the average length of study to five years for what was once a four-year degree program. Because the degree takes five years the student's gross costs increase. This means a student is required to access yet more loan support.

In effect by allowing costs to increase in this manner without increasing access to loans, the government increases its cost to itself. When students are in the system longer they take up more resources. When their loans are larger they are more inclined to default given the repayment system of the past. Ultimately the decision not to increase student loans cost the government more than giving the loans would have done.

The best proposal in the bill is to increase by 57 per cent the limit on the loans to students. Interestingly the increase to 57 per cent on loan limits was a recommendation made in a study commissioned by the department of the secretary of state in 1990. However the study made 13 recommendations and this is only one of the 13 recommendations that the government is implementing. Even more intriguing, the government is choosing to implement some proposals that were not recommended by the study at all.

The government says that it is interested in hearing constructive ideas to help it do its job. However it seems content to ignore constructive suggestions commissioned by the government from independent non-political organizations and paid for by the taxpayers of Canada. It ignores them unless the ideas fit with its preplanned agendas. These are often developed in the back room with little attention paid to the realities facing Canadian families.

One of the proposals in the legislation which does not come from the government study is a plan to provide grants to meet the exceptional cost of women students in doctoral studies. I should remind the House that the study of the secretary of state made no recommendations for any grant or loans to women in doctoral studies. For that matter, it made no recommendations for any grants or loans whatsoever that discriminate on the basis of gender.

The wording of the legislation suggests that women have to endure more or exceptional costs as doctoral students. However I believe that women do not incur any more exceptional cost as doctoral students than men do. Many of us have families and mortgage considerations at this point in our careers. When I was a masters candidate and a Ph.D. candidate I did not incur any cost that would not have been equally carried by any of my male colleagues.

The intent of the legislation must not be to redress exceptional costs that women face but to redress the fact that there are limited post-graduate opportunities for mid-career professionals in Canada. Our current programs are inflexible, lacking creativity, and most certainly do not respond to the private sector needs of advanced training and skills requirements.

As well an attempt to redress the statistical difference in the larger numbers of male candidates over female candidates should not be accomplished in such a blatantly discriminatory fashion. The numbers of women in post-secondary institutions have been increasing steadily without violating the Charter of Rights and Freedoms. I do not understand why there is such focus on affirmative action tactics when in my view they are completely unnecessary.

In fact the number of women enrolled full time at universities increased by 79 per cent between 1975 and 1990, while during the same time period the number of men increased by only 19 per cent. Presently women constitute at least 50 per cent of full time students in both colleges and universities and 54 per cent of all part time university students. In 1990-91 women constituted 55 per cent of students at the college level, 53 per cent of full time undergraduates, 45 per cent of masters graduates, and 34 per cent of Ph.D. candidates.

It is clear that women are very well represented in our colleges and universities. They have managed to do so without affirmative action. The implication that women are unable to compete adequately at the doctoral level without special assistance is quite unacceptable to me. I am sure this assumption is one that I and most women and men reject. There is ample evidence to suggest that women can compete fairly on an even playing field at the doctoral level in their studies.

In 1975, 23.9 per cent of all doctoral students were women. In 1993 the 35 per cent figure that I mentioned demonstrates this. This is an increase of 11.1 per cent in 18 years. It is a healthy increase. Yet we must do more to ensure that these numbers grow by ensuring opportunities for both men and women who reach this level of their academic careers.

What is needed is a student assistance program that allocates funds to students on the basis of need. When need is the sole criterion, gender fails to be a consideration. Everyone may apply for a loan regardless of their gender. They must only be able to demonstrate a need for the loan.

When this bill goes to committee I am certain the House will see the wisdom in removing such an uninspiring and discriminatory program and will include male doctoral students also.

I stated earlier that I would also speak as an elected representative and offer helpful alternatives to deal with the crisis our students in post-secondary institutions are facing.

The unemployment rate is still 11 per cent. The government seems content to undertake little action and to let it remain at that high level. It was reported in this weekend's Financial Post that the unemployment rate for 18 to 26-year olds is close to 18 per cent. Given these staggering figures, it is clear that students will have problems getting jobs and repaying their loans.

The Canadian Federation of Students, the Association of Universities and Colleges of Canada, and the federal government's commissioned study are all recommending income contingent repayment programs. This legislation only waves a hand in the direction of this recommendation by introducing pilot projects. It should put its fist firmly down and introduce the program in its entirety across the country.

As well, the government has spoken of its commitment to quality education in Canada. It has a wonderful opportunity to show Canada the depth of its concern. It could make the transfer payments for education to the provinces indexed with the annual rate of inflation.

What is also needed today is leadership that will establish a national standard of post-secondary education in a flexible environment. More and more Canadian businesses are introducing flexible work hours for their employees. What is needed in the educational system are equally flexible study programs that meet the needs of professionals who are attempting to re-enter the post-secondary education system.

What we need today in Canada is not a government that simply looks at short term solutions to problems. We need a government that cares enough to look to the future in order to provide solutions that will guarantee long term, high quality education in Canada. This government should appreciate all of the ideas shared in this debate.

[The Deputy Speaker]

There are 10 minutes for questions or comments. Is there any member wishing to do that? Resuming debate.

Colleagues should know that we have now passed the five hours, therefore we have gone to 10-minute speeches with no questions or comments. I understand the member for North Vancouver has unanimous consent to speak for slightly longer than 10 minutes. Is that correct?

[Some hon. members]

Agreed.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I will try to be as brief as I can and I do thank the House for agreeing to extend my time.

The present student loans program is a program under which the federal government-for which one can read taxpayers-pays interest on loans negotiated by students at the banks. In 1991-92 the cost was around $465 million, less about $110 million recovered on defaulted loans. The program assisted about 235,000 students.

One of the improvements to the program which has been proposed by the Reform Party is the adoption of a repayment system similar to that already in place in Australia, Sweden and New Zealand. The repayment system would be income contingent and would work in conjunction with a more generous loan program.

Such a change would recognize the need by students to have funding available for their education, but it would also ensure that taxpayers were repaid at a future time at a rate dependent upon the earning power of the student.

A carefully instituted income contingent loan program would make university education more accessible. It would move more of the responsibility for the cost of university education on to the students themselves, albeit on a deferred basis.

I have met some students who feel that society should bear the entire burden of their education costs with no loans and no repayment ever required. It would be nice if it were as easy as writing a cheque, but reality is now dictating a more prudent approach.

For those members opposite who rolled their eyes skyward when I said that more responsibility for the cost of education should fall upon the students, I ask that they consider the ability of taxpayers to continue to foot the bill.

Two of the countries I mentioned which have instituted the income contingent loan program, Sweden and New Zealand, have faced debt crises within the last decade. We should talk about these things before we are also forced into a situation where a cash crisis makes us make hasty decisions.

I would like to quote from an editorial entitled: "The universities we deserve" which appeared in the Globe and Mail on July 27, 1993. It describes how an ICR loan program would work. To quote:

Every university student would be offered a government sponsored loan. These loans would be available not only to poor students, but to anyone who wants help supporting themselves through university. After graduation, the student would begin paying the loan back, with collection taking place through the income tax system. And here is the key to ICR: repayment is income contingent. Everyone would pay back a set percentage of income, not a set amount. Those making a higher income would have to pay their loans off sooner than those making a lower income who would pay it off over a longer period of time. Combined with greater freedom for universities in setting tuition, ICR loans would make it possible for universities to charge a realistic price for their services without harming accessibility.

It would in fact make it easier for some people to go to university, by giving loans to the middle class who are not now considered to be poor enough to merit a Canada student loan. And ICR recipients could rest assured that the government would not, the minute they graduated, be breathing down their necks for payment.

The current Canada student loan plan has a very high default rate. It is only available to people from low income families and has a tough repayment schedule regardless of post-graduation income. ICR would address these problems whilst also helping to deal with the funding crisis in the universities.

The general thrust of Bill C-28 is good but it would be even better with the incorporation of an aggressive income contingent repayment scheme. I hope that government members will support an amendment along these lines at some stage.

In 1991 the Smith Commission of Inquiry on Canadian University Education concluded that: "A preoccupation with underfunding pervades every campus-.The effect is extremely negative". Unfortunately, the solution to that funding problem is not going to come from the federal government. The deficit and debt burdens will prevent us from increasing allocations. Creative approaches are needed and Sweden, Australia and New Zealand have shown that income contingent repayment schemes can assist students and universities at a time when funding is a problem.

A spinoff benefit for taxpayers would be the knowledge that defaults would be all but eliminated. Loans would be repaid over time and in a manner sensitive to the long term earning ability of the student.

By 1992 defaults under the present Canada student loans program had reached almost one-third of the student loans which were at repayment stage. The value of defaults accumulated on the books since 1964 has reached almost $1 billion and there are significant costs to the taxpayers for the hiring of collection agencies to try to collect on these defaulted loans. The costs are currently reported to be in the range of 18 to 29 per cent of the loans recovered.

Enough is enough. Society is prepared to help students to pay for their education. In fact it wants to help students pay for their education, but some responsibility to repay those loans must be part of the contract. An income contingent repayment plan automatically deducting at source is the fairest and most efficient way to protect the interests of students, universities and taxpayers alike.

It is a fact that individuals with university degrees have a considerably larger lifetime income than those whose highest level of education is high school. In fairness to the taxpayers who helped them get this higher education, students should be prepared to begin repaying their loans as soon as their income permits. This might sometimes mean that loans would not be fully repaid until students were into their 30s or even early 40s, but at least there would be assurance of eventual repayment without the need for collection agencies.

One practical problem that must be overcome is the actual funding of an ICR program. Our cash strapped finance minister is not in any position to raise additional revenues or increase deficits, even for such a commendable cause. We again need to look for alternatives.

We could continue to try to raise the necessary money through the commercial banks of course. Alternatively the lending program could raise funds through the issue of bonds. A stock exchange market for second-hand bonds could be subsequently developed, similar to the system used by the Student Loan Marketing Association of "Sallie Maes" in the United States.

What an opportunity for parents, to invest in bonds which would be used to fund income contingent loan programs for students, an investment in the future with the knowledge that repayment would occur through automatic deductions at source. Students applying for loans would of course have to supply their social insurance numbers and their loan contracts would have to be registered with Revenue Canada.

The ICR system is supported by the Association of Universities and Colleges of Canada. The system would remove the present interest exemption during attendance at college and university. This would result in worthwhile savings to the

taxpayers without having any significant effect on student loan repayments.

In 1987-88 the interest payments by government for students still at college amounted to over $150 million and collection costs that year were almost $11 million. The cost of exempted interest payments and collection procedures falls directly on to the taxpayers, but two-thirds of those taxpayers do not have post-secondary credentials. In other words, the present system places an unfair proportion of the cost of the present student loans program on a segment of taxpayers who receive no benefit in return for their generosity. It only seems fair that students who benefit should ultimately be responsible for the cost of the assistance they receive from the taxpayers.

Subsidies in our society are usually justified on the basis of a social benefit of some sort, but in the case of student loans the recipient can expect to receive significant long term private benefits. While these private benefits are accruing the present loan subsidies represent a transfer of income from taxpayers who do not use higher education services for their families.

The sighs and eye rolling on the opposite side of the House may be reaching epidemic proportions so I feel I should give an example of an income contingent loan payment plan.

Let us say that when a student first graduates he or she does not immediately secure a long term job but settles for a temporary job at $12,000 a year, quite a low salary. The payments on the student loan would be 3 per cent of earnings, or $360 a year. That is just $30 a month, hardly likely to cause hardship.

Let us say that as time passes the student secures a job earning $50,000 a year. The payments could increase to maybe 5 per cent per annum, or $2,500 per year. It is not an excessive amount but enough to get previous student loans paid off fairly quickly.

If the student became unemployed, then payments would be deferred until his or her annual income rose above the preset threshold once again.

Many students who oppose the ICR program do so because they do not like the idea that responsibility for loans should be more firmly placed upon individual students. They feel that society should pay the full shot. Unfortunately the reality is that the money is not available and unless we introduce programs like income contingent loans, there will be a continuing deterioration in funding levels for higher education.

I might suggest that if the government wants to free up a little more money it would be well advised to take note of an item sent to me by Evelyn Leeburn of North Vancouver. It is a newspaper clipping which reads: "Two Clayoquot protesters themselves facing contempt charges have won a $16,000 Canada Council grant to do a documentary on women at the anti-logging blockades". What sort of nonsense is this? This money would be much better spent on higher education.

In summary, I would like to say that Bill C-28 does improve the present situation, even though it fails to show strong and decisive leadership in terms of ICR loans. I give the government credit for including clause 15, part (o) of the regulations, which provides for some experimentation with ICR. We in Reform hope that this will lead to a much larger scale ICR program in due course.

[Raymond Chan, Liberal, Secretary of State (Asia-Pacific)]

Mr. Speaker, I am very pleased to have the opportunity today to speak to Bill C-28 dealing with the federal government's plan to reform its program of student assistance.

In my role as Secretary of State for Asia-Pacific, I am well aware of the importance of post-secondary education to Canada's economic and social development in the global economy.

As a member of Parliament I am aware of the crucial role that the Canada student loans program has played in ensuring accessibility to post-secondary education. At the same time, as a parent I recognize the need to modernize and improve the federal government's effort in this area.

As we consider this bill we must learn from the flaws in the current system, for there are flaws. However, we must leave in tact and strengthen the four key principles which have provided the framework for the Canada student loans program over the years; namely, access to assistance for all students in financial need, emphasis on the responsibility of individual students to progress in their studies and to contribute to the cost of their education if they have the means, a balance between public and private sector roles in financing student aid, and a client centred approach to the delivery of student assistance programs based on federal-provincial collaboration.

I would like to suggest a fifth principle, the need for flexibility to adjust to the dynamic learning environment and changing economic circumstances. As we have learned from past experience, change is inevitable.

The student assistance program must be able to adapt to new realities. Therefore the bill has been drafted to allow flexibility to respond to the challenges of the future.

Provinces are aware of the need for greater flexibility and have suggested how the federal and provincial programs may work together more efficiently by further streamlining the financing and administration of our activities.

Far from being an intrusion into an area of provincial jurisdiction, the Canada student loans program is a model of federal and provincial co-operation. Under this program the federal government has worked closely with provinces for almost 30 years to help equalize access to post-secondary education and training for students in need.

I would also note that the Canada student financial assistance bill continues to provide for provinces to opt out of the federal program and receive compensation. While Quebec and the Northwest Territories have withdrawn from the program, other provinces have not.

In fact, participating provinces have encouraged the federal government to continue to occupy this field and to expand its efforts in the area of student assistance.

Enhanced assistance for needy students is the main reason for this bill. The maximum level of aid has been frozen for 10 years while costs have gone up by 57 per cent. We are acting now to restore a viable and efficient student aid program. Loan limits will be increased to the level they would have been without the 10-year freeze. The full time loan limit will rise from $105 to $165 per week, and the part time limit will be increased from $2,500 to $4,000.

Debt load will be controlled through the introduction of deferred grants. Interest relief will be expanded to include low income borrowers, and special opportunity grants will be established.

Under the new financing arrangements, all eligible students will have access to loans and income sensitive terms in repayment. In total, the amount of aid to be provided over the next five years will be $2.5 billion more than over the last five years.

Individual Canadians are willing to take responsibilities for their own futures by investing the time and money in post-secondary education and training to equip themselves with the knowledge and skills for success. This is apparent from the fact that Canadians are attending Canada's universities, community colleges and private schools in record numbers.

The question that the government asked itself when considering how to reform the student assistance program was how can we help Canadians undertake the post-secondary studies they need.

The answer came back from the students. Give them the right tools, they said. That is why we are proposing fundamental changes to the student loans program to provide more aid to students and to introduce new forms of non-repayable assistance.

The flaws in the existing student aid programs have become increasingly evident in recent years. Every member of Parliament in this House has encountered students and former students who have had problems obtaining enough resources to study, or who have had difficulties in repaying their loans.

The proposed legislation would address both of these problems by increasing aid to students and introducing measures to ease the repayment burden on graduates. The reform of the student assistance program will increase educational opportunities and accessibilities for young people and for mature students returning to school, including single parents on income support and unemployed older workers who require training. Unless we can meet the needs of all of these people we are denying them opportunities and we are denying Canada the benefit of their skills and energies.

I would like to stress that the proposed act works for students with disabilities whose numbers in colleges and universities do not come close to reflecting the numbers in Canadian society. Students with disabilities confront many obstacles to full participation in Canada's economic mainstream. Learning should not be one of them. It is believed that fewer than 3 per cent of Canada's full time university and college students are persons with disabilities. This bill will deal effectively with those situations in which a barrier to post-secondary studies has been a lack of resources.

In addition to the increased loans, under the new legislation students with permanent disabilities may qualify for special opportunity grants of up to $3,000 per year to help cover costs relating to special transportation, interpretation services and technical aids. As well, we will allow flexibility for students who because of their disability must take fewer courses and who require more time to complete their studies.

This legislation will enable Canadians with disabilities to obtain the financing they need for the exceptional costs which they must incur to undertake their studies. Many of the challenges they face can be overcome with their ingenuity and perseverance and a little financial help from government.

Similarly, this legislation will address the special needs of women who wish to pursue doctoral studies in non-traditional fields. Special opportunity grants of up to $3,000 per year will be available to help women who are taking doctoral degrees in fields of study such as the applied and physical sciences, mathematics and engineering. There will also be special opportunity grants of up to $1,200 annually for high need, part time students to assist them in pursuing their studies.

The student financial assistance bill is an important step in our social security reform process. We are moving quickly in this area because the need is so great.

To summarize, let me put the reforms provided for in this bill in human terms.

Let us think about the students who are considering post-secondary studies who come into our constituency offices. What would the reform mean to them?

First, because of the new need assessment process, the financial need will be determined based on up to date objective national data which will reflect cost variations across the country.

Second, the maximum loans that they can expect to receive will be increased by 57 per cent to reflect current education costs.

Third, there will be non-repayable grants assistance for students with disabilities, high need, part time students and women in certain doctoral studies.

Fourth, students may be eligible for a deferred grant to help maintain manageable debt loads after graduation.

Fifth, when the time comes to pay back their student loans, they will be dealing with a lending institution which views them not as problems but as long term customers. Lenders will have an incentive to keep student loans in good standing by providing better service and income sensitive repayment. Both the lender and the borrower will view the student loan as the first transaction a long and mutually beneficial business relationship.

This is what the reforms provided for in the bill will mean to students. We are working to improve aspects of the social safety net but this legislation will help steer thousands of Canadians away from the safety net altogether.

Canada must look to its people for growth and prosperity in the years ahead. The new Canada student financial assistance program addresses that reality in a creative and fair minded way.

It will help individual Canadians meet the challenges ahead and build their futures in an atmosphere that encourages and supports their aspirations.

Let me conclude by saying that I am proud to be able to support this bill and I hope it will receive early passage so that we will be able to get on with the job at hand of helping Canadian students look toward their futures.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I noticed the hon. member in his presentation mentioned special funding for certain-

[The Deputy Speaker]

I do not think the member was here when it was announced that we are now past five hours, and so there are no questions or comments any more. It is strictly 10-minute speeches.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, the Canada Student Loans Act and the activity of it has an impact on five basic segments in our society: the students, obviously; the parents and family members; the university or college boards; the teaching staff and administration of those institutions; and of course society at large, all Canadians through our economy.

I would like to speak today specifically to the issue of the income sensitive repayment loans in this proposed legislation. Another title for that might be an income contingent loan repayment program.

The reason I address this specifically is that the government has started to take a positive step and will form an element of where we must be going in terms of reforming our institutions for higher learning.

What is an income sensitive repayment loan or income contingent loan repayment program? Simply put, it is a scheme for post-secondary education and it is designed to allow students to pay back their student loans over a period of time based on their annual income.

Upon graduation, the student would begin to repay his or her student loan. The repayment of the loan, however, would link the repayment plan to a student's earnings or ability to pay.

Exactly how it would work has been described earlier in the House, but in summary the income tax machinery could be used in monitoring and collecting student loans and in the implementation of an income contingency principle whereby students would pay back a set percentage of their income.

I mentioned that a number of elements within society are impacted. Let us talk briefly about students. Our students are the future of Canada. It is their training that will be pulling our economy forward. Indeed the strength of our economy lies in society at large and within the education that society gains.

However in doing some research for this presentation I took the time to contact some people at the East Kootenay Community College in my constituency. They wrote to me and gave an idea of some problems students are facing as they go through the present system. Perhaps I could make a very brief summary of some problems that faced the students on September 17 last year.

Of the 300 loans that had been submitted to Victoria it is estimated that 100 students had not received the loans as at September 17, obviously the start of the calendar year. It is estimated that 25 per cent of the students who had received loans had the calculations of their awards done incorrectly. Many students were in the process of appealing or reassessing their loans because of application errors. The financial aid office of the community college had been issuing emergency loans and tuition and book deferrals to students who were waiting for their loan documents to arrive or had pending applications. At the end of the month, and they were looking forward, they expected that emergency moneys would have to be made available to the students. I have three children who are now in their mid-twenties and have been through this process with them. I know,

particularly at the start of a college or a university year, this could be very disconcerting. They had to look for emergency moneys.

Approximately 25 per cent of those students who had not received the loans, believe it or not, had been referred to social services. The report says that because of uncertainties produced by the system, that is their applications went missing or they could not get access to information, many students were actually in panic. The report goes on and on. Clearly this is not acceptable to our future society and to the people who are there for training. That is the present situation.

The second group of people currently impacted by the student loans are the supporters, the parents and the families of the students. Having been through the experience I can report that some calculations occur because the existing formula is absolutely bizarre and would create a financial drain the average family could simply not afford.

The third would be university and college boards. They are dealing with the reality: as there is more and more of a squeeze on resources in Canada and our financial ability to pay, there is more and more of a shrinking of their ability to be able to fund these institutions. They have a strong sense of responsibility.

The fourth area is the staff, be they teaching staff or the staff who support the functions that are happening in the college. It is rather interesting that the vast majority of people involved in the training and teaching of our children, our young people, are very dedicated. There seems to me to be something of an unreal level of expectation on the part of some staff in terms of funding; in other words the bottomless pit or the attitude that we have the ability in Canada to keep on digging the hole deeper and deeper.

I believe in the concept of an income sensitive repayment loan because of its inherent fairness to students. First off I believe that students should know it is society's responsibility to create opportunity. They should know that in our society there is no free lunch, that the money must come from somewhere, and that the government is simply redistributing funds it has taken from someone else. They should also know that as they gain their education it obviously opens more jobs for life. On the other hand it is not fair to saddle the students with an inability to be able to repay the loans as our present Canada Student Loans Act has done.

Under income sensitive repayment loans the second segment is the people who are supporting these students. They would also be freed from the responsibilities or freed from the pressure that many of them are feeling at this time. In other words it would be the students' responsibility to negotiate and to repay. They would have the responsibility for these loans, thereby freeing up the families to the greatest extent possible. As I have indicated, in many situations as it presently stands families are saddled with responsibilities they simply cannot follow through on.

For those people involved with the university and college boards there would be the ability to know what is coming, in other words to be able to deliver services. All Canadians will end up benefiting. The entire economy will end up benefiting as we gain a handle on the whole area of funding student loans and the ability to be able to train all Canadians.

I believe in the income sensitive repayment loans and in the idea the Reform Party has put forward on the education voucher system. Basically the purpose of both these things is to accomplish what we need to accomplish, that is to train our young people but to lighten the necessity for further deficit spending. It has the potential to eliminate deficit spending. The Reform Party is noted for its commitment to reducing the deficit and ultimately getting the deficit to zero so we can start to work on the debt. At the same time the Reform Party is committed to student training.

In summary I say that students do not want a handout; they want a hand up. Income sensitive repayment loans are an important part of the hand up process for students. Therefore I strongly encourage the government to move quickly to expand the proposed section in the new Canada Student Loans Act.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.