Motion No. 1
That Bill C-5, in Clause 104, be amended by replacing lines 32 to 39 on page 62 with the following:
"104. Section 177 of the Act is repealed."
Mr. Speaker, I am very pleased to speak today on this piece of legislation to amend the Bankruptcy and Insolvency Act, and specifically on the clause relating to student loans. In fact, this is why I decided to wear the crest of the university closest to my riding, the Université du Québec à Chicoutimi, which is located in the riding of my colleague from Chicoutimi.
When an individual declares bankruptcy, the court usually makes an order of discharge, which releases the individual from all claims or, in other words, from his or her debts. However, section 178, appendix I, provides for six claims that are not released from
by an order of discharge. The bankrupt is thus required to pay off his or her debts in spite of his or her bankruptcy.
Clause 105 of the bill adds a paragraph to section 178 of the Act that stipulates that any debt or obligation in respect of a loan made under a federal or provincial student loans act cannot be discharged if the bankruptcy occurred before the date on which the bankrupt ceased to be a student or within two years after the date on which the bankrupt ceased to be a student.
Everybody knows that it costs a lot of money to go to college or university. The costs are constantly going up, year after year. Students have to work and get a summer job. That is fine, except that some students have trouble making both ends meet, and, at times, this is almost impossible. They cannot repay their student loans, which may reach around $30,000, or even higher for the students who are from remote areas and have to move to Montreal, for instance, to study and have to pay for an apartment, over and above their tuition fees. All of this costs a lot of money.
When there is no other way out, a student has the right, like any individual or small business in this country, to go bankrupt. However, this new bill says that they will no longer be able to do so.
Some people may say: "Of course, students go to university, spend years studying and then, when the time comes to pay back their student loans, they can look at all their debts and decide to go bankrupt. And then, the government has to foot the bill".
Of course, some may think that, but I have personally met with members of student associations from Quebec, who told me this is not so. Going bankrupt is not an option for them. You cannot think that you can snap your fingers and all your student loans will have disappeared. This is a very sensitive issue. Yes, there may have some abuse in some areas, like anywhere else, but I think this is a sensitive issue, because what we are talking about here is education and that, to me, is not an expense for our country, or should I say for both our countries, but rather an investment. But I do agree that it is expensive.
This bill raises some concerns. Could it lead some students to be afraid of attending post-secondary institutions? One has to wonder about that, especially since ten years ago students had the right to go bankrupt, that is obvious. But then, the situation back then was different. After graduating from university, it was much easier for students to find a job and therefore to repay their loans.
According to the government, there are much too many bankruptcies today. These are not voluntary; people have no choice. Most of the time, young people go bankrupt because they cannot make both ends meet. Thus, it is rather a pity to look at the situation this way.
Furthermore, we know there was some disagreement in the task force, in particular concerning the special immunity for student debts and its possible effect on access to higher education, as I mentioned earlier.
So, why am I against the government's proposal? Clearly, the government went along with the task force's proposal without asking itself what really was behind this change. For the government, mere fiscal considerations took precedence over the logic of the proposal.
Is education an expense or an investment? Sure, when we promise to cut the deficit, we have to make all kinds of cuts, I agree, but cutting funding for education may not necessarily have a negative impact now and allow us to boast, a couple of years from now, that we have reduced the deficit. However, I worry-and this is quite legitimate at my age-about possible negative effects in the long run, since education is a long term investment.
Moreover, I think this proposal is discriminatory. The government gives special treatment to student debts, which it does not do for other similar categories of debts owed to the government. Section 178 of the act lists other categories of debts that cannot be released by an order of discharge.
However, these other categories apply to people such as defrauders, convicted offenders who have to pay a fine, people who default on their alimony payments, people who obtained property under false pretences, and now the government is adding students to that list. Wow! This is putting students who, I think, are the future of our nation in the same boat with convicted offenders and people who default on their alimony payments.
The government is including students in the same category as these people who break the law and who do not respect court orders. Treating students like this is totally unacceptable and discriminatory.
Moreover, this proposal was made without a careful study of the situation. All the government did was look at the figures and say: "The student bankruptcy rate is increasing and it must be because of abuse. Therefore, we will take away their right to declare bankruptcy". It did not take a close look at what is really going on and did not take the economic climate into account.
Some blamed students, saying that they party a lot, they travel, etc. Not all students do that. Yes, some students are well off, they use their parents' car to go to school and have no problem at all going to university. But what concerns me is those who are not in that situation and who will be affected by this bill. It is thought that there are abuses, so it is decided to cut assistance to students, but there has been no study or survey to look at what prompts students or graduates to declare bankruptcy.
Given the rate of unemployment and the economic difficulties facing young people, it is somewhat cynical to claim that students are deliberately declaring bankruptcy. Therefore, in the absence of a serious study of the reasons why students or those who have just completed their studies declare bankruptcy, it is completely irresponsible to introduce a discriminatory, unfair and inequitable measure on the mere strength of an increase in the number of bankruptcies among those with student loans.
Furthermore, this increase is probably due to the poor economic situation in which young people find themselves, to the high rate of unemployment they are experiencing and to increases in tuition fees that are not unrelated to federal government cuts. Members will recall the Axworthy reform. I took part in a march to protest these measures. All this is having the repercussions we see.
I could also speak about the last question I put to the Minister of Human Resources Development about the Young Canada Works Program. There were $60 million remaining and the government did not seem to know where, to spend them is not how I should put it, but to invest them. This is what makes me wonder today.
It is in light of these facts that we have moved the amendment to eliminate this paragraph. I hope that the government will not turn a deaf ear and that it will keep one foot in reality. We have been told that a university education is an investment in our future that will lead to a job. I would agree that that is still the case and I recommend it. But the good old days are gone, and now that the economic situation is worse, we are making it harder for students.
We will therefore vote against this bill, unless our amendment is carried.