moved:
Motion No. 205
That, in the opinion of this House, the government should consider eliminating the parental contribution standard from the Canada Student Loan program.
Madam Speaker, I am very pleased to have an opportunity to rise in the House today and speak to a private member's motion that I tabled on behalf of the Progressive Conservative Party. It calls upon the government to take a leadership role in dealing with a national crisis in Canada, that of the accessibility of post-secondary education.
The motion reads, “That, in the opinion of this House, the government should consider”, consider being the operative word, “eliminating the parental contribution standard from the Canada Student Loan program”.
The Canada student loan program is flawed and is in desperate need for renewal. In fact, the program has not been updated or adjusted in the last eight years. Its design flaws are numerous. Its need for renewal is clear. Its inadequacies are affecting students, when this program is supposed to be the pillar of student aid. It is a tragedy. Unfortunately it is more like a black comedy. I believe the inadequacy of this program illustrates the lack of vision for post-secondary education within the Liberal government.
Tuition rates have increased 130% over the last decade. Debt loads have quadrupled. The average debt load, after a four year undergraduate degree, is about $25,000. We essentially have indentured an entire generation of young people, our best and brightest. All these factors lead to difficulties in the accessibility of post-secondary education.
I was very careful with the wording of this motion. I am asking the government to consider the elimination of the parental contribution standard. Of course we are looking for improvements. Clearly I am amenable to adjusting, renewing or reviewing the standard in the first place.
Here is the problem with the parental contribution standard in the Canada student loan program. According to Statistics Canada, 50% of parents expect that their children will require additional financial resources, such as loans, to pay for post-secondary education, regardless of whether they have education savings set aside. For 94% of those children, these loans were, and were is the operative word, expected to take the form of government student loans, not bank loans or loans from family members.
Currently the Canada student loan program demands that parents provide financial support to students for their first four years after school. The amount of support expected is based upon what is deemed a moderate standard of living. The money parents are expected to contribute is then deducted from the student's assessed need.
Just to illustrate how out of touch this expectation is that we have today, a family of four in Ontario, with a gross annual income of $55,000, is expected to contribute up to $9,000 toward their children's studies. This leaves in the end many students short on the funds they need to go to school, to finish the year and to fulfill their studies.
A recent study by the Canada Millennium Scholarship Foundation released last week entitled, “Making Ends Meet”, found that 60% of parental contributions to students under the age of 22 was less than $2,000. In other words, if the student's parents cannot or will not contribute the money the government expects, there is no recourse for that student. If students are lucky, maybe one recourse might be that they spread out their undergraduate degree from a four year process to a five year process. However the result of that is actually more punitive because more often than not students incur more overall debt. Another recourse is that many students do not finish their year and do not finish their degrees.
The expected amount of parental contribution is based upon a government standard of a moderate standard of living. The standard examines only two factors: family size and the province of residence. The Canada student loan program does not recognize that parents have other obligations in addition to contributing to their children's education. In a study by Ekos, commissioned by the Canada Millennium Scholarship Foundation, the results showed that one-third to half of all students under the age of 22 received no financial support from their parents.
We need to address this clear and unmet need with respect to the Canada student loan program itself. Addressing the unmet need is critical. Recent research by the millennium scholarship foundation has found that an inability to access necessary funds may in fact be a bigger barrier to accessing post-secondary education than student debt itself. Clearly the government's assumption that parents can or will contribute to the degree that the Canada student loan program expects does not ring true for many students. Economic realities that are not part of the eligibility formula are ultimately denying funding to many students in need.
It is clear, and in fact well known by a myriad of bureaucrats within the government machinery, that the Canada student loan program is not filling the objectives that we and, in particular, the students, those who are our best and brightest, are seeking. This program's inadequacy is a glaring illustration that there is no political accountability for post-secondary education from the current government.
That is why earlier today, on behalf of the Progressive Conservative Party of Canada, I called on the government to establish a minister of state responsible for post-secondary education to coordinate all programs on post-secondary education.
I know that the member for Peterborough is an advocate for that particular issue. It is advocated by the Graduate Students' Association of Canada, and I have reason to believe that the Canadian Alliance of Student Associations is amenable to the concept. I do hope that we hear comments from the alliance in the coming days and weeks as well.
A common vision and clearing house is required to maintain and coordinate the existing framework. With the creation of a ministerial position, post-secondary education in Canada would be better supported, funded and managed. The minister of post-secondary education would be responsible for the coordination of post-secondary education initiatives and innovation agendas as well as communicating those goals with our provincial partners.
The Canada student loan program is virtually broken. Tuition rates, as I said earlier, have sky-rocketed by 130%. Debt levels have quadrupled. There is no mechanism to assist students who are paying back their student loans. The Canada student loan program has not been reviewed since 1995. That would be the minister's responsibility. Clearly we would not have these runaway problems if we had a minister responsible for post-secondary education initiatives.
Given the fact that the Prime Minister, human resources, industry and science, research and development, finance, the Department of Foreign Affairs, CIDA, citizenship and immigration, and intergovernmental affairs all play a role in post-secondary education, that is why we are calling on a coordinator to develop a vision and manage these already existing issues that we have.
As Progressive Conservatives, we are very respectful of provincial jurisdiction. Our approach is to coordinate the existing programs to have a common vision and be a facilitator to our provincial partners.
Intellectual capital is the basis of today's knowledge economy. In fact, Human Resources Development estimates that 73% of all new jobs in a knowledge based economy will require some form of post-secondary education. An educated and innovative society is today's instrument of growth. Federal leadership is desperately required for post-secondary education that is visionary and activist.
According to polling done prior to the last federal election by Earnscliffe for the former minister of finance, 85% of respondents placed making education more affordable as either a high priority or a priority, and 77% of respondents believed that funding access to education would help stimulate the economy. This was the most popular response and was scored above a balanced budget, lower taxes or even infrastructure spending.
Intellectual capital is the driving force in a knowledge based economy. I believe as the Canadian Alliance of Student Associations believes: that education can in fact build a nation. Current government policies across the board, I believe, are out of touch with Canadian realities. Government policies on post-secondary education need to be modernized in order to coincide with government expectations of the Canadian public. I believe that above all we need to have accessibility to post-secondary education and a visionary approach to publicly funded research, which has to be a national project and a pan-Canadian agenda.
There are some other problems within the Canada student loan program itself. There is the fact that the loan limits have not been adjusted since 1995 and 42% of students are now already at their loan limit maximum. That is a point of fact. The loan limits have not been addressed since 1995, but over the same period tuition rates have gone up 100%. That does not reflect the reality that students are facing right now. We also need to ensure that the factor in place to increase these loan limits is actually benchmarked against a student price index, to factor in the cost to students and to ensure that the loan limits are increased based on the student cost of living. I think those are approaches that we need to take.
I would like to highlight a very stark fact. In the next 10 years, there will be a 30% increase in demand for post-secondary education. Hon. members should think about that number: a 30% increase. That equals one new major university in every province of Canada: a new University of British Columbia, a new University of Alberta, a new University of Saskatchewan, a new University of Manitoba, a new University of Toronto, a new McGill, a new UPEI, a new UNB, a new Memorial and a new Dalhousie. A 30% increase in demand will take place over the next 10 years and the government we have in place right now is not making those investments that we will categorically need to have.
There are solutions that will come into play, such as a more integrated approach with respect to the very progressive college program that we have right now so that students can actually do their first year or perhaps two years at a community college. Those college credits could be transferred to university. The colleges could actually play a role in fulfilling some of these infrastructure needs.
If I may, at this time I would like to highlight a couple of other issues pertaining to post-secondary education. Principally, core funding that is long term, stable and predictable has to be put in place so that our provincial partners can do their jobs and our universities can make the investments where needed in the first place. Student aid has to take place in terms of having a modern Canadian student loan program. We believe that the third pillar of the equation is the fact that we need to have a debt repayment program that actually rewards students for taking on these risks and these debts.
Just over a calendar year ago, the Progressive Conservative Party of Canada proposed an amendment that was six votes short of actually passing in the Chamber. It would have empowered students to deduct up to 10% of the value of their student debt and interest off their income tax each year for a period of 10 years after graduation. What would that have done? First, it would have helped to mitigate the impact of student debt incurred through the years at university. Moreover, those students would have been able to take advantage of that program only if they were paying taxes in Canada. It would have had an immense benefit in terms of reversing the problem of brain drain as well.
Another issue the Progressive Conservative Party of Canada would like to bring forth at this time is in regard the need to invest in the indirect cost of research. We are one of the few countries that did not even have a program in this regard, until last year, and we still only fund 20% of the indirect costs of research when the western norm is 40%.
The motion calls for the elimination of the parental contribution component under the Canada student loan program. We need to ensure that students have access to capital so that if they want to seek higher learning they can access those funds for school. We have to recognize the fact that certain families cannot or will not contribute. There has to be an appeal mechanism in place to address that particular issue. We need to eliminate the parental contribution component or at least adjust it and have an appeals mechanism.