Madam Speaker, Canada is part of a fast changing, competitive and interdependent world economy, an economy that is increasingly knowledge based.
This is not only because of new high skill jobs and high tech industries but there has been a steady rise in skill requirements in all sectors of the economy and in most types of jobs.
The facts speak for themselves. Since 1981 jobs for Canadians with a high school education or less dropped by two million but more than five million jobs were created for those with higher qualifications. Not all Canadians are in a position to easily access the knowledge and skills they will need throughout their lifetime to find and keep the jobs in a very different and changing labour market.
Barriers, most often financial, reduce access to post-secondary education for many of our students across this country. While the government cannot ensure that every Canadian will succeed, the government can enhance the equality of opportunity.
That is what our government has done in the 1998 budget. It has introduced a Canadian opportunity strategy which builds on actions in the 1996 and 1997 budgets and it also introduces historic new measures.
The costs of post-secondary education have risen dramatically over the past 10 years. Tuition fees and other student costs have more than doubled and those with low and middle incomes often face a difficult choice, the no win situation of forget higher education or incur onerous student debt.
This is no win for both the individual Canadians facing this dilemma and for Canada's economic future. The Canadian millennium scholarships are the centrepiece of the Canadian opportunities strategy. They are the single largest investment ever made by the federal government to support access to post-secondary institutions for all Canadians.
Through an initial endowment of $2.5 billion the arm's length Canada millennium scholarship foundation will provide scholarships to over 100,000 students each year over the next 10 years. Scholarships will go to Canadians who need help financing their studies and who demonstrate merit.
For full time students scholarships will average $3,000 a year and individuals can receive up to $15,000 over a maximum of four academic years. The Canada millennium scholarships could reduce the debtload that recipients would otherwise face by over half.
Canadians of all ages, full or part time, studying in publicly funded universities, community colleges, vocational and technical institutes and CGEPs will be eligible for the scholarships. The foundation will begin to award these scholarships in the year 2000.
The government is also introducing Canada study grants. These recognize that many student needs are not fully met by scholarships and student loans. Beginning in 1998-99 Canada student grants of up to $3,000 a year will go to over 25,000 needy students who have children or other dependants. These grants will help fund both full and part time students and will cost $100 million annually.
Nothing is more critical to Canada's economic successes in the 21st century than vigorous, broad based research and development. I am a firm believer for all types of R and D in Canada, both basic and applied science.
To support graduate students and researchers as they develop the leading edge skills needed in a knowledge based economy we will increase funding to the three granting councils to provide research grants, scholarships and fellowships. Over the next three years their combined budget of $766 million in 1997-98 will be increased by over $400 million.
By the end of the year 2000-2001, the council budgets, I am happy to say, will be at their highest level in Canadian history.
Student debt has become a heavy burden for many Canadians. In 1990 a graduate completing four years of post-secondary education faced an average student debtload of about $13,000. By next year the same graduate's average debt will almost double to $25,000. At the beginning of this decade less than 8% of student borrowers had debts larger than $15,000. Today and in the near future almost 40% do. That is a heavy load to carry into your future.
Last December federal and provincial first ministers agreed something must be done to reduce the financial burden of students. They asked the federal government to take action in the 1998 budget and we did. I must say that the universities and colleges in London, Ontario are very grateful that we have, and I know parents of future students are very grateful. Down the road, all Canadians will benefit from these highly skilled people.
First, students will get tax relief. There will be a 17% federal credit for interest paid on the student loans.
Second, we are increasing the income threshold used to qualify for interest relief on Canada student loans by 9% and more graduates will be eligible.
Third, we are introducing graduated interest relief which will extend assistance to more graduates further up the income scale.
Fourth, for individuals who have used 30 months of interest relief, we will ask the lending institutions to extend the loan repayment period to 15 years.
Fifth, if after extending the repayment period to 15 years a borrower remains in financial difficulty, there will be an extended interest relief period.
Finally, for the minority of graduates who still remain in financial difficulties after taking advantage of these relief measures, we will reduce their student loan principle by as much as half.
Together, these new interest relief measures will help up to 100,000 more borrowers and over 12,000 borrowers a year will benefit from debt reduction when this measure is fully phased in.
To keep their job or to get a new one, many Canadians who are already in the workforce may want to take time off from work to upgrade their skills through full time study but often lack the resources to do so. Several new measures will improve Canadians' access to learning throughout their lives.
It will start with at least six million Canadians who have RRSPs with total assets of $200 billion. To those people looking to further their education, this represents an important source of their funds. Beginning on January 1, 1999 Canadians will be able to make tax free withdrawals from their RRSPs for lifelong learning.
An individual who has an RRSP and is enrolled in full time training or higher education for at least three months during the year will be eligible. Individuals will be able to withdraw up to $10,000 a year tax free over a period of four years to a maximum of $20,000. To preserve the role of RRSPs in providing retirement income, the amounts withdrawn will have to be repaid over a 10-year period. In many respects, this plan resembles the home buyers plan.
The need to continually upgrade knowledge and skills can be particularly hard for the growing number of Canadians studying part time and trying to manage the difficult balance of work, family and study. We are proposing two new measures to help those people. Beginning in 1998, the education credit will be extended to part time students. They will be able to claim $60 for each month they were enrolled in a course lasting at least three weeks and including a minimum of 12 hours of course work per month. The measure will benefit up to 250,000 Canadians.
In addition, for the first time, parents studying part time will now be able to deduct their child care expenses. I think this is important. There are certain limits but it is important because previously only full time students were eligible to do this. This measure itself will benefit some 50,000 part time students with children. Any long range plan to acquire knowledge and skills for the 21st century must look ahead to the students of tomorrow and the best way to help those children's futures is to save for their education today.
That is why we have registered education savings plan contributions for children up to the age of 18 to a maximum grant of 20% on the first $2,000 in annual RRSPs.
It is unfortunate that I have limited time left. This budget deals with youth employment and offers $250 million over three years for information technology—