Mr. Speaker, on behalf of the residents of Waterloo—Wellington I am very pleased to speak on this motion.
While I share the member's concern for students and their ability to finance higher education, I do not see how the proposals presented here in this motion would produce a better system than the one we now have.
For example, the motion calls on the government to reverse the privatization of the Canada student loans program. The implication is that we have changed from a publicly funded program to a private one, and yet the Canada student loans program has always been based on private capital. That has not changed so there is nothing to reverse.
The student loans program has been financed by private capital since it was first introduced in 1964. There were some changes made to the program in 1995 but the objective was not to privatize the plan. These changes were made in order to broaden risk sharing and to put more decision making into the hands of the private lenders. The changes were designed to improve the way the plan operated, not to privatize it.
When the plan was first introduced in 1964 the federal government provided guarantees to private sector lenders who in turn financed and dispersed loans, but this system gave little incentive to private lenders to maintain their loans in good standing, to prevent defaults or to form a close service relationship with the borrower. If the loans failed, the lender simply called in the guarantee from the Government of Canada.
This resulted in significant extra costs for the federal government under the original program design. In fact, by 1995 when changes were made the Government of Canada held over $1 billion in defaulted loans for which it had reimbursed lenders under the guarantee provisions of the plan.
Under the new risk sharing arrangement private lenders assume responsibility for both servicing and collecting the loans as well as dispersing them. As its contribution to the risk sharing approach, the federal government pays private lenders a premium of 5% of the face value of the loans when they go into repayment.
The government estimates that this risk sharing approach will significantly reduce the cost of the student loan program without reducing the money available to students from private lenders. Thus we have brought the federal government and private lenders more closely together in a public-private sector risk sharing approach to achieve a reasonable balance between costs to the federal government and loan availability.
The second part of the motion asks us to reject proposals for income contingent loan repayment plans. While it is true that the question of income contingent repayment plans was discussed with varying degrees of interest by other parties, including the provinces, discussions were broken off, and that is unfortunate.
The Government of Canada was alone with the Government of Ontario among the provinces in advocating this approach. The lenders and Ontario did not come to an agreement.
The motion proposes the implementation of a federal student grant program. The Canada millennium fund will go a long way toward providing financial assistance to improve access to education and these scholarships are to be based on need and on merit.
This $2.5 billion program will provide scholarships averaging $3,000 each to cover over 100,000 low and middle income students each year. Eligible individuals will be able to receive up to $15,000 over a maximum of four years toward undergraduate degrees, diplomas or certificates.
The budget also recognized the changing demographics of our student population as more and more of them who have been in the workforce return to their studies to upgrade their skills.
The budget introduced a new Canada study grant for students with children or other dependants. These grants came into effect August 1, 1998 and are expected to help over 25,000 students over the next year.
There is also the Canada education savings grant to help families save for their education, and the Government of Canada will give a grant of 20% on the first $2,000 invested in a registered education savings plan.
The motion proposes the establishment of accessibility as a new standard for post-secondary education. Accessibility can mean many things. In terms of program funding accessibility has been a fundamental principle of the Canada student loans program since it was introduced in 1964, and it remains so.
If the motion refers to accessibility to education we must remember there is a shared responsibility between the federal government and the provincial and territorial governments on matters related to higher education. Traditionally the operations of an education system are seen as outside the federal area of responsibility.
Any proposal to establish national standards for access to education would have to be considered within the wider and broad context of shared responsibility between the federal government and our provincial and territorial partners. It could not be unilaterally imposed by the federal government.
Thus we cannot support the motion for a number of reasons. First, the system has not been privatized as the motion implies. We have moved to a system of sharing the risks of the Canada student loans program with the private sector but we have not privatized the program. Any moves to change a risk sharing arrangement would cause potential extra costs to the Government of Canada and would upset the existing program.
Second, the Government of Canada has already committed $2.5 billion to the Canada millennium scholarship fund which will provide students with financial support. We do not believe it is prudent to add further to our grant programs at this time.
Third, accessibility is already a fundamental principle of the Canada student loans program and will remain so. Issues of accessibility to education in the operational sense are matters for discussion at the provincial and territorial government levels. The Government of Canada believes in a partnership approach to policy development and has no intention of formulating and
or imposing any national accessibility standards in this regard.
We do not believe the proposals presented in the motion are necessary, nor would they improve the existing system in support of Canadian students. While the government is always willing to listen as always to constructive advice and to make helpful changes, we are not persuaded in this instance that the actions proposed in this private member's motion will provide the kind of result needed. It is for these reasons that I ask that we oppose the motion.