Mr. Speaker, I want to commend my NDP colleague for precipitating the discussion we have before us today. The issue of students struggling with their debt loads is very crucial and an issue of great interest to many across the country.
We agree that governments need to help students financially, but what is the best way? I think that would be the crux or the nub of the difference on all sides of the House.
My main contention this afternoon in the matter of the student debt problem will be that since both students and society benefit from education, both should contribute financially. We need a balance here.
Students cannot be without benefits because in this era in which we live an education is the path to a good income. On the other hand, society also benefits because in the economy in which we live Canada cannot prosper without an educated workforce. Hence the balance and hence both should be contributing.
But this particular NDP motion before us puts too much onus on society, letting students off the hook, while the Liberals put too much onus on students, letting society off the hook and without responsibility in this matter.
This NDP motion does not take seriously enough student responsibility in this. It puts too much emphasis on grants. Money does not grow on trees. The taxpayer pocket is not a bottomless pit. I also want to emphasize the fact that Reform does advocate interest free student loans. That is what we mean in this income contingent loan plan and program. I will explain more of that later.
On the other hand, the Liberals are not taking seriously enough society's responsibility for educating students. I will describe for members the Liberal approach and its effect on students. As we know, the Liberals have made some massive cuts in transfers to the provinces. This has led to tremendous problems with student debt. Rather than restore funding for post-secondary education, the Liberals have brought in a number of measures that merely attempt to patch-up the mess they have made of many students' financial situations.
They prefer to help students in debt by means of tax relief on the interest portion of payments, interest relief extended to graduates if they go to the next step and need more help. Before we have any applause from the opposite side of the House, I want members to know that this is going downhill from here. It is a downward spiral and we finally get to the bottom.
I guess the Liberals next stop-gap measure from there would be to provide an extended repayment period for those who need it. If that does not help then an extended interest period for individuals who continue to face financial difficulty. Then they come again with cap in hand, on bended knee if maybe to have a reduction in the loan principal for individuals who still face financial difficulty.
These measures hardly represent a bold initiative to address the problem of student debt levels. They do nothing to prevent students from falling off the cliff of financial disaster. They merely attempt to cushion the impact when they do fall to the bottom. It would be like having a sign around a treacherous corner, a curve with a cliff with a steep drop-off. Instead of having warning signs or doing what can be done to prevent falls off the cliff, they have ambulances at the bottom of the cliff. They are reactive measures rather than proactive measures that provide a genuine solution.
The Liberal approach to student loans makes the following situation possible. I reiterate the example of a student who gets a low paying job. Now he is attempting to make payments on his student loan. The tax relief on the interest portion of his payments does not help because he does not get his refund until after tax time. In the meantime he cannot make the payments. So he applies for interest relief. He jumps through that bureaucratic hoop to qualify. If he is still in trouble he must make another appearance to beg to have that payment period extended.
If that does not solve the problem then he can apply for an extended interest relief period. Once again he goes cap in hand, on bended knee humiliated to beg for assistance with his education. If problems persist he might qualify for a reduction in the loan principal. It is exactly this kind of situation that is repeated time and again across our country with students in respect to debt.
This reveals the inadequacy of the Liberal approach with regard to student debt. It keeps students in debt and offers assistance only after things have gone wrong. Instead of repairing the leaky boat of funding for post-secondary education, the Liberals have offered a hodgepodge of measures to help students after the Titanic is already going down and students are up to their neck in water. At that point they come in with these supposed solutions. Rather than trying to help students from the outset so they can avoid a financial crisis, the Liberals approach appears to be that of assisting students after they find themselves in the middle of the crisis.
It is like a brick wall set up by the Liberals that students have been trying to jump over. Far too many have been breaking bones on the wall, unable to jump high enough. The Liberal response is to have some doctors on hand on this side of the wall as they bounce back bruised, bleeding and broken. They have them there to treat the injured. But the Liberals say that under no circumstances should that wall be lowered so as to reduce the risk of injury in the first place. Students are left to continue worrying, anxious about the matter and damaged and hurt over the course of their lifetime.
Reform believes that it is administratively inefficient to help students in stages like that. On the other hand, Reform's across the board proposal of interest free loans is what students would prefer. I could liken the approach of the Liberals in the matter of student loans and the recent changes even to a patient screaming from pain there in the corridor of the hospital. The doctor kind of saunters in and he gives a little pain killer, just enough to take the edge off but there is still a lot of discomfort. But the patient at least is not yelling any more, at least for a while. Then the doctor waits until the patient is screaming again before administering a little more painkiller again to take the edge off. But there is still lots of discomfort.
My point is simply the doctor never really relieves the pain, just as the Liberal approach never really addresses the problem of student debt. It just catches them one by one trying to soften the impact, as they fall off the cliff and crash, rather than setting up a program that prevents them from crashing in the first place.
Reform's principles with respect to education are fairly clear. I cite principle number six from our blue book: “The people of Canada are this country's most valuable resources and that the nurturing and development of human knowledge, skills and relationships are keys to full participation in the knowledge based service economy of the 21st century”. In other words, people are the resource. People are what counts here. They are the most valuable resource we have.
The leader of the Reform Party said on October 21, 1994 in Commons debate: “One of the few areas where Reform does not advocate any spending reduction is in the area of financial support for post-secondary education. Post-secondary education as an investment in Canada's future is so important that we are prepared to make massive spending reductions in other areas, some focused government spending in areas like health, education and the basic social safety net”. We are prepared to do that in order to make and maintain the current levels of funding for post-secondary education.
I suggest that of all the things the government does, of all the money it spends, its one true investment in the future is its investment in the education and training of the young generation of Canadians.
Reform has a balanced approach where both students and society contribute with federally funded income contingent loans. There has been misunderstanding about what Reform means by income contingent loans, so I will read our policy statement: “The Reform Party believes that the federal government should institute a federally funded income contingent loan plan that is as near to being interest free to students as possible”.
Let us be clear about several things. First, in the Reform Party policy the banks would not be the lenders. I think that should make my colleague from the NDP happy. Rather than the loans being through the banks and therefore making money off our students, the loans would be federally funded. In our plan the student would be lent money and asked simply to pay back the same amount without interest over time at a pace in keeping with the graduate's income.
That proposal then would solve the perceived problem brought forth by the Canadian Federation of Students. It said that in such an income contingent loans program, a misunderstanding of Reform's proposal, the flexibility of the payments geared to a graduate's income works against the student since graduates with lower incomes will by necessity repay their loans over a longer period of time and will be paying a great deal more in interest payments than those with high incomes.
But if they are only paying toward the principal there is no interest. Benefits are extended longer based on that graduate's income and there is no downside to this. Because Reform would like to see students get interest free loans this problem would be completely avoided.
It has been a privilege to speak with respect to this motion. We cannot support the motion as it presently stands, but I do thank the hon. member for precipitating and provoking discussion on this very crucial area of the student debt problem today.