Mr. Speaker, I am grateful for the opportunity to respond to the motion of the hon. member for Vancouver East regarding the Canada student loans program.
Let me begin by assuring the hon. member and the House that the government is always very much aware of the needs and problems of young Canadians pursuing post-secondary education. It is this very concern that prompted the government to enter into consultations with the public, the provinces and the territories on ways to improve the system of providing loans to Canadians students.
Indeed, last February's budget incorporated many of the recommendations of the report of the Standing Committee on Human Resources Development, measures which ensure Canadians have access to post-secondary education.
The fact is that developments affecting the student loans program have rendered the motion under discussion largely irrelevant. Let me illustrate.
The motion calls first of all for the reversal of the privatization of the Canada student loans program. But the Canada student loans program has not been privatized.
Prior to 1995 the program provided financial assistance to students in the form of 100% government guaranteed loans from private sector lenders. Lenders financed and distributed the loans to students and were responsible for collection. There was little incentive for the lenders to police the loans, so the federal government ended up holding more than $1 billion in unpaid loans for which it had reimbursed the lenders under the guarantee provisions.
In 1995 new financing arrangements were introduced which enhanced lender accountability and improved client service. But these arrangements do not by any means constitute privatization. Governments, not the lenders, continue to determine student aid policy and the nature of the Canada student loans program.
Under the new risk-shared financing agreement, government payments against loan guarantees will decline from $382 million in 1996-97 to $67 million in 2000-2001. Abandoning these arrangements, which I assume is the intent of the hon. member's motion, would cost Canadian taxpayers a great deal of money. Government payments against loan guarantees would increase. We would lose the benefits of sharing the risk with the lenders and the government would have to pay penalties for breaking lender agreements before their expiry in the year 2000.
Next, the motion calls for the government to reject proposals for income contingent loan repayment. There is no difficulty here since the government has already rejected proposals for income contingent repayment. Students, lenders, the provinces, the territories, education organizations and groups made it clear that they do not consider income contingent repayment a viable option. The repayment schedule would be too long and accumulated interest payments would be too onerous.
Ontario is the only province that has shown any interest in income contingent repayment. But while the federal government worked closely with Ontario to analyse various models of such a system, the government has also respected the view of the remaining provinces, territories and stakeholders.
Lenders declined Ontario's invitation to implement a provincial income contingent repayment scheme for 1999. What the federal government has done, however, is incorporated income sensitivity into the new interest relief program and debt reduction measures announced in the federal budget.
The motion calls upon the government to implement a federal student grant program. Once again the Government of Canada has already done that. Canada study grants are available for the following students: high need part-time students; students with a permanent disability; female doctoral students in certain fields of study and, as announced in the recent budget, students with dependants who can demonstrate a financial need. Canada study grants, totalling $145 million, will be available in 1998-99.
In addition, the $2.5 billion Canadian millennium scholarship fund will provide an average of $3,000 each year, to a maximum of $15,000, to more than 100,000 low and middle income students for the next 10 years.
That leaves us with the consideration of the motion's last recommendation, accessibility as a new standard for post-secondary education.
On this point I should emphasize that accessibility has been a fundamental principle of the Canada student loans program since its inception in 1964. Indeed, the government's ongoing commitment to the principle of accessibility was clearly demonstrated in the 1998 budget. A key element of that budget was the Canadian opportunities strategy which will help ensure that Canadians continue to have affordable access to post-secondary education.
The federal government is working toward harmonization of Canada student loans with provincial student loans. Accessibility is one of the key principles of a harmonized student loan regime.
Since the federal government's interest in post-secondary education is shared with the provinces and the territories, the government carries out continuous consultations with student groups, educators, lenders, provincial governments and the territories. Further developments in financing and ensuring accessibility to post-secondary education will involve all of these groups, as they have in the past.
The Government of Canada is pursuing a course that is in the best interests of students across the country. They are our future. Considered in the light of the work that has already been done, we must conclude that the motion of the hon. member for Vancouver East is irrelevant.