Debates of May 10th, 2002

Tax Credit

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Mr. Speaker, I too would like to begin my remarks by commending the member for Fundy--Royal for bringing forward the motion. Increasing access to education is an important issue. I am proud to say that the province of Manitoba is one of the leaders in its efforts to ensure access to a wide range of the population to the post-secondary education system. I have much sympathy for his position and his concerns.

The federal government recognizes the important matter of expanding access to post-secondary education. We know that from this flows significant benefits to individuals, to the economy and to society. A cornerstone of the government's efforts is the Canada student loans program which the member is addressing.

From its inception in 1964 to March 2001 the program has indeed assisted four and a half million full time students by providing a total of nearly $20 billion in subsidized loans. The assistance allows needy students to access the knowledge, skills and learning to obtain better jobs and a better standard of living for themselves and their families.

Not only does the Canada student loans program provide loans to needy students it also provides additional assistance to students in school and provides help to graduates to deal with the problems of high student debt levels. Many of these measures were key components of the Canadian opportunities strategy announced in the 1998 budget.

Specifically, the federal government assists those students in school and in financial need in a number of ways. It provides them with access to student loans of up to $5,610 per year to help them with their financial needs. We all know provinces supplement Canada student loans programs with their student financial assistance programs.

The government fully subsidizes the cost of interest on the loans while students are in full time studies at a cost to the government of nearly $250 million annually. Importantly, the government assists students with special needs through grants to supplement their student loans. There are grants for students with dependents, students with disabilities, high need part time students, and women pursuing doctoral studies.

In the recent 2001 budget the federal government increased by $10 million a year the assistance available for students with disabilities. In addition, the Canada millennium scholarship foundation which was established and funded by the federal government provides bursaries averaging $3,000 to 90,000 students annually.

I heard a colleague over there make a disparaging remark about the Canada millennium program. I invite the member to my office to meet with students who came in to thank us. The Canada millennium scholarships indeed reduce student loans and help students reduce their debt load, which is important as we all know.

In recognition of the problems caused by increasing student debt loads the federal government provides significant additional assistance for graduates experiencing financial difficulties in repaying their student loans. Graduates experiencing financial difficulty in repaying their loans are eligible for interest free periods on their loans for up to 54 months after graduation. During these periods of interest relief the government pays interest on the loans so that they are kept in good standing.

If the graduate is still experiencing financial difficulty after interest relief has been exhausted the loan repayment period can be extended from 10 to 15 years. If there are still problems further debt reduction is available. The maximum amount of assistance is the lesser of 50% of the loan or $10,000.

In addition there is a tax credit for interest paid on federal and provincial student debt. On Canada student loans the tax credit reduces the effective interest rate on the loan to slightly above prime.

Together, these measures provide an insurance policy for graduates in repayment. They ensure that those having difficulty repaying their student loans will not have to go into default. Those with the most serious problems will have their debt reduced, unlike the member's proposal for a tax credit for principal paid on student loans. These measures target federal assistance to those who need the help the most. It is a good example of smart spending.

In summary, the Canada student loans program currently disburses over $1.5 billion in loans annually to nearly 400,000 students and up to $120 million in Canada study grants. Annually the program assists over 30% of all Canadian post-secondary students. The cost to the government of the program is expected to be $925 million in 2002-03.

There is little doubt the Canada student loans program has been an effective way to make post-secondary education more accessible for Canadians. The cost borne by Canadian taxpayers to expand access to post-secondary education is a necessary investment in Canada's future and one which will pay dividends in many ways.

Expanding access to post-secondary education must continue to be a priority for the federal government. A key objective of the recently announced innovation strategy is to ensure that all Canadians have access to post-secondary education, be it university or community college. The Minister of Human Resources Development continues to consult with partners and stakeholders to determine how this objective can best be met. There are many strategies that must be explored and as my colleague said, provinces must assume responsibility.

Increased direct funding to universities must be a priority to lower tuition fees. This provides increased opportunities and increased access. In the province of Manitoba lowering the tuition fees has resulted in increased attendance both at universities and colleges. I am advised the number is near 5,000. Direct grants to identified targeted groups are important to increase access, as are increased forms of tax credits for students. Increased private-public partnerships for student support must continue to be explored and built upon.

I am sure there is no member of the House who does not want to ensure that all talented young people have access to the best education opportunities available to them. However we want to be sure that the moneys and support reach those who most need it to gain access to post-secondary education most appropriate for them.

This is an important issue. Discussion must continue. We must have a full and comprehensive understanding of the results of the measures that we take before we jump on a bandwagon.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, somehow I am often the speaker to wrap up the debate on a Friday and I might be again today. I eagerly stand to speak to the motion because of my longstanding interest in education.

I always enjoyed being a student. Teachers told me when I was a very young person, even before I went to high school, that it is important to learn something new every day even after finishing school. It is probably true that with very few exceptions I have learned something new every day of my life. I hope that continues. I learned a few good things today but I will not bother getting into that as that would be what is called a side bar.

I have a great interest in education. As is known by most members now since I mention it frequently in my various speeches, I taught at the post-secondary level for 27 years and I shared with many students the frustrations they had in their education.

Some students came to the institute with an inadequate academic background. Unfortunately, some of them were the victims of an inadequate school system and for some there were other reasons. They did not have the necessary prerequisites and therefore for academic reasons, they could not survive at the technical institute level in the programs I was teaching.

There were other students who had reached the limit of what they could learn. I would tell them there was nothing wrong with that. I personally will never be an Olympic runner. I have a physical limitation which would prevent me from doing that. I told them we all do not have the same mental abilities. A false assumption which is sometimes spread around in educational circles is that all students can be successful. That just is not true. There are some who reach their limit of education earlier than others. That is a reality of life. I do not think it is pejorative statement at all. It is just a true statement.

One situation frustrated me the most. On numerous occasions there were students with more than an adequate ability to learn and who had the prerequisites. They could have received an education and done better in their lives with an education than without but they were forced to leave for economic reasons. It always bothered me when students came to me and said they were dropping out and it was their last day. When I asked them why, the students would say they just could not make ends meet, that they had to work and they could not study and hold down a job at the same time because they just could not do them both.

That always bothered me. I often wished I were a multimillionaire so I could help tide those students over to keep them in school. In some cases they had exhausted their student loan capacity and other methods of financing and were simply forced to leave. I believe a large part of Canada's population is below average on the socioeconomic scale. We have a huge untapped reservoir of talent and ability in young people who will not receive an education because of a lack of financing. That is a very serious flaw in the system.

I commend the member for Fundy--Royal for this initiative because it is well motivated. He wants to do something to solve the problem. However I have some reservations with the motion. One very large one is it promotes a culture of debt. Mr. Speaker, I do not know what you or the other members think but we have an incredible culture of debt. Every Canadian bears a part of the national debt.

If members want to visit my office, I have a picture of my grandson when he was about one hour old. My wife put it together for me. It shows my little grandson Noah who was one hour old. He was still pretty pink. The coloured caption reads “I owe how much of the national debt?” It is on the shelf in my office. He has a $20,000 debt and he is one hour old. Then he has provincial debt.

Fortunately we live in Alberta. We at least have some hope in the near future that the provincial debt will be eliminated. We sincerely hope it will happen. The provincial government is committed to reducing the debt, unlike the federal government which will reduce the debt only if there is nothing else it can think of to do with the money.

Besides that, the students go to school and what we do is provide them with a student loans system. When they graduate from school they will have another $20,000 to $35,000 debt in student loans to pay off. By the time a young person in Canada graduates from university, collectively that person's share of the federal and provincial debt and his or her student loan could amount to a debt of $50,000 to $70,000. That is wrong.

The member has a plan that would enable the students upon graduation to get rid of at least the student loan portion of their debt more quickly. However I think what we ought to do is to push very hard for adequately funded post-secondary education right across the country so that student loans are much less necessary.

There should also be lower tuition. There should be lower costs for books. It is atrocious that the government charges GST on student books. Some of those textbooks cost $100 and the GST must be added to every book they buy.

The Chair knows I am on a roll but no one can argue with the clock in this place, so with that and it being Friday, I wish everyone a good weekend.

[The Deputy Speaker]

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

It being 2.30 p.m., the House stands adjourned until Tuesday, May 21 at 10 a.m., pursuant to Standing Orders 24 and 28.

(The House adjourned at 2.30 p.m.)