moved:
That, in the opinion of this House, the government should consider introducing a tax credit based on the repayment of Canada Student Loan principal, to a maximum of 10 per cent of the principal, per year, for the first ten years after graduation provided the individual remains in Canada.
Madam Speaker, it really has become quite a cliché to begin a speech in the House by saying that one is pleased to participate in the debate or the subject before the House. However, I can clearly say that there is no issue of public policy that is more critical to the competitiveness of the nation, that is more important to the nation, than the accessibility to post-secondary education. This is the first time that we have had a comprehensive debate on the issue of accessibility to post-secondary education in the five years since I have been a member of the House. I know that the NDP was generous enough to dedicate one of its opposition days, but this is the first time that we have really had a chance to take up this issue.
There is no public policy issue in Canada that the Government of Canada is not addressing that is more important than the accessibility of post-secondary education. It has been a dreadfully long time since there has been any substantial debate on the accessibility of post-secondary education. I am pleased that the motion we put forward, which is only one component of the strategy that must address the problems with the system, has started this very urgent national public conversation to address this national crisis.
One does not have to travel far or speak to many people to hear appalling stories. There are stories of students who owe so much money in student debt that they will be in their thirties, if not their forties, before they are capable of paying it off. There are stories about Canadians who have chosen to drop out of university or college because the debt burden was becoming that severe. There are stories about young people who have been forced to decide not to pursue post-secondary education in the first place due to inadequate loan programs and ever rising tuition rates. There are stories about new graduates faced with massive debt loads who have now moved south of the border to pay off their debt by seeking opportunities in the United States.
Quite simply, this is a national tragedy. We cannot allow it to continue. There are very specific and enormous consequences of the sorry state of post-secondary education in Canada, from the lack of competitiveness and reduced economic growth and to brain drain.
There are also the more fundamental reasons to make post-secondary education a national priority. Edward Everett wrote “Education is a better safeguard of liberty than a standing army”. A few months ago I introduced two motions to help address the crisis of accessibility in post-secondary education. One is to lessen the financial burden on students, which is the motion we have before us today. It is a surgical strike to address the issue of student debt and provide a mechanism or tool that would empower students to have the capacity to pay back their student loans. The second one is to remove the taxable status of scholarships. I would advocate that this must be one of the most draconian taxes that we have in Canada. We actually shamelessly punish performance by taxing university scholarships.
The principal reason why the motion put forward today has been deemed votable is that it has to be an issue of national importance that the Government of Canada is not taking up. I applaud the members of the subcommittee who have recognized this issue. For the record, the motion states:
That, in the opinion of this House, the government should consider introducing a tax credit based on the repayment of Canada Student Loan principal, to a maximum of 10% of the principal, per year, for the first ten years after graduation provided the individual remains in Canada.
The motion goes to the heart of the Tory conviction that the actual costs borne by students must be addressed. A mechanism must be developed to put money directly back into the pockets of post-secondary education students who on average acquire a debt load of over $25,000 upon graduation or completion of university.
Let us take a moment before I continue on to paint a picture of post-secondary education in Canada today to show why we must address the problems that we have in the system.
The principal reason why student loans have quadrupled in the last decade is because during the same period tuition rates increased 126%, precipitated by the fact that since 1993 the Liberal government cut $5.3 billion from post-secondary education funding in Canada. Using current rates, the federal government's share of university operating revenues has decreased by almost 50% from 1990 levels.
As the government slashed Canadian health and social transfer money to the provinces, tuition rates skyrocketed. At the current rate, in 2008 tuition fees will be 226% higher than they were in 1990. The higher tuition fees have resulted in swelling debt loads. The average student debt load for someone completing four years of post-secondary education now sits at $25,000, up from $13,000.
The Liberal government has claimed that it has made an attempt to do something to help university grads struggling with these unprecedented debt loads. Liberal members sitting opposite are all probably primed to rise and speak about the initiative called debt reduction and repayment, which was announced in the 1998 federal budget.
I am here today to ensure that Canadians know the whole story about the program. When it was announced, the federal government declared that eventually 12,000 borrowers would be assisted each year. By 1998-99 only 44 borrowers were helped and the total cost of the program was under $200,000.
The cost of the program for 1999-2000 was just twice that amount. We are talking about 100, maybe 150 students, who were actually helped, out of the 12,000 who were intended. It is simply preposterous.
Even the finance committee agreed when it said last year in its report:
We recommend that the government re-evaluate the criteria for some of its student debt relief initiatives to determine if they are too stringent.
I applaud the finance committee and I know that the former vice chair of the finance committee is here and is keenly interested in the issue, as well.
It is clear that the one initiative the government has used publicly to counter criticism that it is not doing anything to help students is a farce. To state the obvious, there are serious consequences by the lack of funding for post-secondary education.
First, there is accessibility. The impact of higher tuition fees and debt loads can be seen in exacerbated inequalities of access. There are significant gaps emerging between low and high income students.
Studies show that there is a trend toward a greater proportion of family after tax income needed by low income households to cover costs of tuition and fees. The lowest quintile of families would have had to set aside 14% of their income in 1990 to pay the cost of university tuition. In 1998-99 that rate increased to 23%. In contrast, for the richest families in the nation, the increase went from 3% to a mere 4%. These statistics are worrisome and require urgent attention. They point to further inequalities of accessibility in the years ahead.
The second major consequence of the tragedy of post-secondary education involves Canada's competitiveness and innovation. If Canadians are to prosper in the international marketplace of ideas and jobs in the next century, the serious problems of our post-secondary education system must not only be addressed but resolved.
Market demands, along with the competitive pressures and technological change, are shifting the mix of occupations in Canada. The proportion of new jobs requiring at least 16 years of schooling has risen by about 40%. If current government policy is allowed to continue, many young Canadians will choose not to pursue post-secondary education and that threatens the very competitiveness of our nation in the international arena.
Moreover Canada's demographics are changing and a huge number of baby boomers are retiring en masse just as many thousands of young people become severely indebted with increasing tuition rates and inefficient loan programs. This will have a stifling effect on Canada's economy since these young people effectively are indentured due to excessive debt loads, given that they have significantly reduced spending capacity because of the burden of student debt.