Mr. Speaker, we are here tonight to debate a bill which I consider very important for Canadian students.
This bill is aimed not only at helping students have access to post-secondary education by allowing them to deduct their annual interest payments from their taxable income for a particular fiscal year, but also at reducing their overall tax burden.
It is worth mentioning that, for the 1997-98 school year, each student who graduated had a average loan of $25,000 to pay off. If that loan is paid off over a period of ten years at a 10% interest rate, the person will pay almost $15,000 in interest charges alone.
For the majority of students, monthly payments leave very little money, even for their basic needs. By amending the Income Tax Act to give students the possibility of reducing the interest payments on their loans, this bill recognizes education as an investment in our country's future.
As a government, we firmly believe in the importance of education for the future of our young Canadians. This responsibility belongs to us all. For this reason, we have taken the necessary measures to invest in education. We recognize the need to remain competitive in a global economy. That means we need workers who have the required education and training to provide a skilled workforce. This benefits the Canadian economy, but it also benefits young workers who, with a good education, are in a better position to find permanent jobs.
We need only look at the figures to see that education is increasingly important for the future of our students. The number of jobs requiring university graduation or college training has increased by 1.3 million since 1990.
On the other hand, the number of jobs available to individuals without education has dropped by more than 800,000. These figures clearly show the need to promote education among young people.
As a government, we put a lot of our efforts into measures promoting education. In September 1997, we proposed a strategy to give young people scholarships for the new millennium. Regardless of the objections put forward, the essence of these initiatives is that the scholarships will give students additional funds to help with the cost of their education. As a Quebecker, I am proud to be part of a government that invests in such projects.
Starting in 2000, this money will provide thousands of scholarships annually to help young Canadians with low and modest incomes to continue their college and university education. This fund will be managed by an institution at arm's length from the government and will further eliminate barriers to education while rewarding scholastic excellence. Through this program, even more young Canadians will have the skills necessary to develop in a society increasingly focussed on information and new technologies.
The scholarships will support a wide variety of knowledge acquisition and skills development programs. They will be available to Canadians of all ages studying either full or part time at universities, community colleges, CEGEPs or state-supported technical facilities.
This new initiative is in addition to the numerous measures announced in the 1997 budget to reduce the barriers to education. For example, the amount on which post-secondary education credits are calculated has already been raised from $100 to $150 a month, and will go to $200 after January 1998.
In addition, the education tax credit has been expanded to include additional charges by the universities, such as those for library and other services. By virtue of these changes, a student who received combined federal and provincial assistance of $900 in 1995 got $1,200 in 1998.
In order to help parents put more money aside for their children's education, the maximum annual contribution to a registered education savings plan was doubled to $4,000. Now parents will also be able to transfer funds from an RESP to an RRSP if they have unused amounts.
Graduates who are unable to pay back their loans may, since August 1, 1997, defer their payments for 30 months, after the standard six-month period. This change also gives new graduates the time to get more solidly established in the work force before starting to pay off their loans.
In today's society, we know that having a diploma does not immediately open doors to the work force. Experience is also an essential requirement. This is a reality with which young people in search of work are very familiar. We know that it is not always easy to get that work experience, particularly in our field of study. Managers want employees who are qualified, educated and experienced.
The Liberal government is promoting concerted efforts to help young people gain the knowledge and know-how necessary to meet labour market requirements. This is why the Liberal government also included in its youth employment strategy initiatives that will allow young Canadians to get their first work experience.
In February 1997, the Liberal government launched the youth employment strategy, which seeks to help young people make the transition from school to the labour market by developing long-term opportunities for meaningful careers.
This initiative provides young people with training and internship opportunities, job opportunities, and information on the job market. For 1998-99, the strategy has a budget of $427 million. It is estimated that this initiative, which includes the efforts of the private sector and associated groups, will provide at least 95,000 internship opportunities per year.
For example, the federal public service internship program will provide a one-year apprenticeship to 3,000 young people. Other internship programs will also provide a work experience to 8,000 graduates, in growth sectors such as science and technology, the environment and international trade.
By investing today in helping young Canadians gain the knowledge and experience necessary to work in an economy dominated by new technologies, the government is ensuring Canada's future prosperity.
We are aware that students' indebtedness is a real problem. This is precisely why the 1998 budget was called the “education budget” and included major measures to help students manage their debt. These initiatives include the millennium scholarships, to which I just referred.
In the last budget, we also introduced the following changes: tax relief for interest payments on loans; extension of the interest exempt period; and assistance to reduce the debt.
As for adults who wish to update their skills, we allow them to take money out of their RRSPs.
All these initiatives show that this government firmly believes in the importance of education. It is a priority for us. We want to invest in future generations to ensure the best possible future for Canadians.
