FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 28, 1998

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[English]

The Vice-Chair (Ms. Paddy Torsney (Burlington, Lib.)): I'll call this meeting to order.

This is the Standing Committee on Finance. We're considering Bill C-36, the budget implementation bill.

As for our witnesses today, we have one from

[Translation]

the Fédération étudiante collégiale du Québec, Mr. Philippe Leclerc, and from the Association étudiante du collège de l'Outaouais, Mr. Guy Riel. You will each have about five or ten minutes to make your presentation.

Mr. Philippe Leclerc (President, Fédération étudiante collégiale du Québec): Ten minutes. Five minutes for both. That's fine.

The Vice-Chair (Ms. Paddy Torsney): For both or for each of you?

Mr. Philippe Leclerc: That's about the amount of time we will need. We will do our best.

The Vice-Chair (Ms. Paddy Torsney): If the presentation takes more time, there will be that much time less for questions.

Mr. Philippe Leclerc: Fine. Thank you.

The Vice-Chair (Ms. Paddy Torsney): It's as you wish. You have 45 minutes in all.

Mr. Philippe Leclerc: Perfect.

The Vice-Chair (Ms. Paddy Torsney): Will Mr. Leclerc be speaking first?

Mr. Philippe Leclerc: Yes. Good afternoon, ladies and gentlemen. It is a great honour for us to appear before the Committee this afternoon to present our views on Bill C-36, that the federal government will soon be passing into law.

We will be making our comments today in French, not out of a lack of good will, but simply because it is the language we feel most comfortable speaking.

Let me introduce myself. My name is Philippe Leclerc and I am President of the Fédération étudiante collégiale du Québec. I am accompanied today by Mr. Guy Riel, who is the Coordinator of Policy and External Affairs for the Association générale des étudiants et des étudiantes du collège de l'Outaouais.

The Fédération étudiante collégiale du Québec represents more than 90,000 students in eleven different regions across Quebec. It is the official spokesperson for college-level students and makes representations to the Government of Quebec with a view to defending their rights and interests. On a number of occasions, we have also appeared before the federal Parliament to present the views of college-level students on a variety of issues affecting them.

But let me move directly to the subject at hand, Bill C-36, a bill containing legislative provisions with respect to the Millennium Scholarship Fund, which was announced in September of 1997 by the Right Hon. Jean Chrétien and which had its official launch in February of this year. Our brief, which addresses six essential points, presents the reasons why we believe this bill should be modified.

It is with a desire to be constructive, rather than negative, that we appear before you today. We would like to be able to reach some agreement so that the bill and the philosophy that underlies it can remain in place and thus allow Quebec students, like their counterparts in other provinces of Canada, to take full advantage of the Millenium Scholarship Fund.

The first part of our brief is entitled: "Funds taken directly from the 'mortal' sacrifice of our educational institutions". The term "mortal" is anything but an exaggeration. Indeed, budget cuts in recent years have meant significant losses for our colleges and universities—losses in terms of the quality of the training, guidance, support and resources available to students, including teaching staff. There has been a significant decline in all of those areas.

Over the past four years, we have seen budgets, particularly in the CEGEPs, cut by approximately $260 million. Just for your information, over a little less than 15 years, from 1982 to 1995, approximately $300 million was cut from their budgets. Recently, CEGEPs were asked to make cuts over the next four years equivalent to those made over the previous fifteen. So, that has certainly caused a great deal of hardship.

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One of the reasons for that hardship is clearly the cuts to provincial transfers. In Quebec, 60 per cent of those cuts were reflected in cuts to education, particularly to educational institutions but also to programs providing financial assistance to students.

Now the federal government wants to reinvest $2.5 billion taken from the budget surpluses accumulated as a recent of cuts to provincial transfers.

College students in Quebec, having been directly affected by federal budget cuts, in terms of not only the quality of the training they receive, because of the cuts made by educational institutions themselves, but also their ability to access that training, because of cuts made to student financial assistance plans, believe that these surpluses should serve to restore the situation to what it was previously in educational institutions, or be reinvested in the financial assistance program.

That brings me to the financial assistance program and the Millenium Scholarship Fund per se. I'm sure you are aware—you must have heard this repeatedly, since we are not the only ones to have come before the Committee to promote this Fund—that Quebec administers its own scholarships through its financial assistance program. The fund would thus make for unnecessary duplication.

In addition, it will be far more costly, in that managing the Millenium Scholarship Fund will cost double the amount currently devoted to managing the Quebec loans and grants program. Under Bill C-36, 5 per cent is earmarked for management costs; under the Quebec program, it is 2.5 per cent. Five per cent represents 1,000 scholarships that automatically will not be available to students, whether they are from other parts of Canada or Quebec. When I say "students", I mean it in the broadest sense. The Government of Quebec already has its own grants system.

Also, we think it would be a shame for an agreement that goes back more than 34 years—you may recall the agreement between the provincial government of Premier Lesage in Quebec and the federal government as represented by Prime Minister Pearson—to be violated because of a project put together by an individual concerned with optics more than anything else.

As far as we are concerned, the Millenium Scholarship Fund and anything that has to do with student debt and student financial assistance are far more important than the fact of whether it is done under the Quebec flag or the Canadian flag. We want this initiative to really help students all across Canada, so that it can truly be constructive. As far as we're concerned, this is not about a flag war.

As regards data collection, assessing students' financial requirements and defining eligibility criteria, the Millenium Scholarship Fund unnecessarily duplicates existing structures, as well as having higher operating costs. It simply exacerbates an existing dispute over a jurisdiction which was and remains exclusively provincial and thus falls within the purview of Quebec.

It is important to state, however, that even though we have referred to the useless duplication it represents, we are not against the idea of establishing the Fund. We simply wonder why the government would want to establish a fund that use large amounts of tax dollars, when a similar system is already in place in Quebec.

We believe it would be to the advantage of the federal government, as we state further on, to take the following position: we understand the current situation in Quebec, realize that it is different and are aware of the way the Quebec loans and grants system operates there; we are prepared to invest in Quebec a sum corresponding to its share.

Finally, the provisions of the bill that deal with the Millenium Scholarship Fund do not provide for any appeal mechanism in cases where students wish to challenge the decision rendered regarding their scholarship application. Either the Fund does not establish an appeal process, in which case Quebec students in need will have to go to some expense to defend their rights, or the Fund does establish such a process, which would make for unnecessary duplication, given the two mechanisms already in place in Quebec.

The fact is the Fund, as currently conceived, and based on the structure provided for here, makes no provision for an appeal. Thus, a student who applies for a scholarship has no recourse whatsoever. In Quebec, we have the Comité des demandes dérogatoires and the Bureau de révision de l'aide financière aux études. There is no provision for anything of a similar nature in this bill.

Finally, since the Fund would be completely independent and thus not be required to account to the federal government for its use of the $2.5 billion—something we consider extremely dangerous—the next logical step would seem to be privatization of financial assistance.

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Indeed, a broad public debate is needed regarding the way in which private donations would be provided to the Fund, because if businesses, with their usual generosity where tax relief is involved, set specific conditions for such donations, the Fund's vocation will become completely meaningless. In other words, depending on the specific wording of the bill as it relates to the Foundation, a business making a donation could require that certain conditions be met. We believe that this would leave the door wide open for interference on the part of private corporations. The money thus provided would no longer serve its original purpose, namely to help needy students to pursue their studies.

Similarly, the Fund, if it so desires, may draw all its money from private donations and distribute the public monies that should in fact go to the Government of Quebec, specifically some $670 million that the latter could invest more effectively and appropriately in measures to reduce the loan ceiling, increase the grant portion and improve the debt remission program.

Finally, public money should also be used to make massive investments in our post-secondary institutions which, as we mentioned earlier, have suffered enormous losses in terms of the quality of life and training they provide.

I will now turn it over to Mr. Riel, who will complete our presentation.

Mr. Guy Riel (Coordinator of Policy and External Affairs, Association générale des étudiantes et des étudiants du collège de l'Outaouais): Good afternoon, ladies and gentlemen. When the President speaks, it shows.

We believe it is essential to remember that the primary goal of financial assistance is to make it easier for students to get post-secondary training in Quebec. So, excellence and need do not really go hand in hand. There are quite a few students in Quebec and across Canada who are in the position of having to manage their own grant in order to survive. Those students tend to be in a very precarious situation and cannot achieve as much as students who live at home with parents who support them financially. We feel very strongly about one thing in particular: monetary favouritism and elitism. That is the danger posed by the Millenium Scholarship Fund.

And one should not be tempted to believe that Millenium scholarships will actually put an end to student debt. In a way, the money being invested is wasted. That is the real point. In Quebec, it would be possible to bring down the loan ceiling. If that were to happen, the number of grants provided to students would go up.

Also, we could have more generous debt remission programs and refundable tax credits for interest on that debt, as well as improvements to deferred repayment programs.

I think it's important to point out here that college students in Quebec are very much on the side of the Quebec government when it comes to the Millenium Scholarship Fund and Bill C-36. The real question is: is this actually a democratic initiative or is it only the result of one politician's power? That is the real question we should be asking ourselves. Will the problem of student debt really... Does anyone have the right to use the student debt issue to score Brownie points in anticipation of the next election?

We hope our federal Members of Parliament will fully grasp the importance of the Coalition québécoise pour l'éducation, as well as the importance we attach to this issue.

It is also our hope that a substantial and consensual agreement will flow from these consultations. As Mr. Leclerc said, we are not here to declare war. We are here to reach a consensus with you. The fact is we did not come to wage an ideological war. Today, we wave not the Quebec banner, but the student banner.

Thank you for your kind attention.

The Vice-Chair (Ms. Paddy Torsney): Thank you very much, Mr. Riel. We now have about five minutes for a question from Mr. Ritz.

[English]

Mr. Gerry Ritz (Battlefords—Lloydminister, Ref.): Can I just defer for a minute?

[Translation]

The Vice-Chair (Ms. Paddy Torsney): Fine. Mr. Crête.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata— Les Basques, BQ): Thank you for your presentation.

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Coming after the Fédération des cégeps, the Fédération étudiante universitaire du Québec, the Coalition des anciens leaders du mouvement étudiant québécois and la Fédération québécoise des professeures et professeurs d'université, who already appeared before us, your comments certainly seem to reflect the consensus in Quebec. However, I would like a little more information with respect to the nature of this opposition.

In your brief, you say that the fundamental problem is the deterioration of colleges and universities in the province and student debt levels, whereas the Millenium scholarships will be awarded on the basis of merit. Could you clarify that for us and describe the impact on Quebec colleges of these merit-based scholarships, that will reward only certain students, as opposed to the impact of investing that money in the educational system, particularly at the college level, through provincial transfer payments? Although I already have a pretty good idea of what your preferred option would be, I would like you to support your answer by providing examples of what this might mean for the college system and for students.

Mr. Philippe Leclerc: First of all, with respect to merit- based scholarships, I think it's important to state that real financial assistance should be provided on the basis of student need. A student's main activity is study, and their living conditions are not always the best. Although people only ever seem to notice what a minority of young people are going through, the fact is that a large majority of students are suffering the negative effects of poverty. When we say that one student in two benefits from loans and grants in Quebec, that is still quite a high percentage. Also, approximately 70 per cent of those students cannot rely on a parental contribution. The parental contribution is the amount the parent must provide the student when he applies for a loan or grant; it is often between $3,000 and $6,000. This is an amount that 70 per cent of students are forced to borrow. As far as Millenium scholarships are concerned, we believe merit is not the most important criterion; what counts is assessing student needs and ensuring that students are able to access the educational system. That is the real benefit, not only for the student, but for a developing society.

As for the current state of our educational institutions, perhaps I could talk a little bit about CEGEPs. I must admit that for them, it is truly a life-and-death situation at this point. Some are thinking that they may have to shut down. Students sometimes have to wait three or four months to see a guidance counsellor who can set them on the right track. There are only six psychologists left on staff for all 47 CEGEPs in the province. Half of the guidance counsellors have disappeared. In October, it happens quite often that you have to postpone your appointment to the next session. The number of teachers is also dropping. All of these changes have made for a decline in the guidance and support available to students, as well as the quality of the teaching.

Mr. Guy Riel: Here in the Outaouais, we have experienced first hand the effects of cuts to provincial transfer payments. Our neighbours are the Anglophone Heritage College, and the Cité collégiale, also located in the Outaouais. The Collège de l'Outaouais is in the process of losing its competitive edge within the region.

Budget cuts also affect the quality of the teaching students receive. As a result, when students leave college, their diploma is no longer competitive. Those are the issues we are currently facing. Here in the Outaouais area, it is we, the students, who are paying for the services of a psychologist. That is the reason why our college is one of the few that still has one. His services are paid for through students' contributions.

Mr. Paul Crête: If I understand you correctly, rather than awarding scholarships on the basis of merit to 20 or 25 college- level students, you would prefer to see the government provide an overall envelope through transfer payments, part of which would go towards reducing student debt and the other part, towards college administration, so that institutions would be able to pay the salaries of guidance counsellors and so on.

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Mr. Guy Riel: Yes, exactly. There are quite a number of issues there. We referred to the fact that this is a provincial jurisdiction. Education has always been considered a provincial jurisdiction. One has only to look at all the political ideology in the area of education. The Government of Quebec has the necessary skills to manage those transfers and knows which part of the system most needs the funds. That is the reality of education as it is delivered in Quebec, as well as in all the other provinces.

The Vice-Chair (Ms. Paddy Torsney): Thank you very much. Mr. Nelson Riis.

[English]

Mr. Nelson Riis (Kamloops, NDP): Thank you very much, Madam Chair.

On the matter of merit, gentlemen, you might be pleased to know we had the architect of the millennium foundation before us at the beginning of this process, and the question was put to him as to what was meant by that part of the legislation, in his judgment. He felt that merit to the foundation would likely be interpreted as simply being admitted to a college or university and showing progress. So, upon admission, you would demonstrate merit. So in a sense, need would be a vital criterion. I just thought I'd pass that along, because it might be helpful to you in terms of your concerns.

I have two questions. One, would you feel it would be appropriate to enable career colleges offering programs of maybe four months or 10 months, very job-specific programs, to be eligible for funding under the millennium fund for their students? That's my first question.

Two, part of the bill refers to the scholarships being allocated on a fair and equitable basis. The province of Quebec has 24% or 25% of Canada's population. Would it be reasonable to suggest that Quebec then should get about 24% or 25% of the scholarships offered in this millennium fund?

[Translation]

Mr. Philippe Leclerc: First of all, I believe your first question had to do with part-time students taking short-term training. Is that right?

[English]

Mr. Nelson Riis: No.

We have universities, colleges, CEGEPs, and so on. We also have many private colleges in Canada offering short-term programs of ten months, twelve months, six months, and that sort of thing, or let's say apprenticeship programs with unions in the workplace. A number of these kinds of educational programs appear to be exempt from qualifying, if you're a student in these areas, for this millennium foundation. I was wondering if you would have any feelings as to whether it would be appropriate for these kinds of students to be also eligible to receive scholarships under the millennium fund. These would be short-term students—not part-time, but people pursuing maybe a ten-month course in computer training, for example.

[Translation]

Mr. Philippe Leclerc: That's an interesting question, because we have always maintained that part-time students or students taking short-term training should also be entitled to financial assistance. You have raised an interesting issue.

It seems to me that very often, short-term training is very costly for students. Let me give you an example. At the CEGEP level, when a student has completed a technical training course, he is given what is known as an Attestation of Collegial Studies or AEC. According to what we've been told, over the next two or three years, students taking courses leading to an AEC will be able to study for free at the college level. In two or three years time, as you know, there will probably be a Cabinet shuffle or an election shake-up. When that happens, the deck can change often. So, we don't know whether that AEC will still be free after those two or three fateful years.

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At that time, it might be worthwhile to consider investing in that or at least providing that option. But I still believe—and this is simply a matter of respect for the province's jurisdiction, that it will be up to Quebec stakeholders, and to stakeholders in other provinces, to decide whether they want to avail themselves of that right and determine the selection criteria for distributing that money, if indeed it is distributed in the form of grants. I still strongly believe that.

Since we are part of the Coalition québécoise pour l'éducation, we have always said we have nothing against the federal government's wanting students to know that they are supplying the money. On the contrary, we see it as a sign of the federal government's commitment to education, which I feel is very positive. Most members of the Coalition agree with that idea.

But we also believe that this goes beyond a simple question of image. This money, which is public money, belongs partly to Quebec; that is why we are asking that those funds be repatriated to Quebec where they can be managed more efficiently. Once that money is being managed efficiently, the matter of the federal or provincial government's image or visibility is no longer an issue, as far as we're concerned. We don't want to turn this into a flag war. That is something that should be considered.

[English]

Mr. Nelson Riis: That's 25%?

[Translation]

Mr. Philippe Leclerc: Yes, exactly. It's important to note that student debt levels in Quebec are lower than in the rest of Canada. Quebec already provides loans and grants, so that Quebec students generally have a debt load of between $11,000 and $15,000, whereas Canadian students tend to have a debt of approximately $25,000. There is quite a difference.

Extrapolating from that, we assume that most Canadian students outside Quebec will be the ones most in need, because the number of scholarships awarded to young Quebeckers will surely be lower. Why? Because debt levels are lower in Quebec. The only thing left will be such factors as merit and mobility. First of all, the merit and mobility criteria are already part of our loans and grants system, and mobility is not a priority for students in general. The real priority is need, and if there is a desire to distribute that money in the form of scholarships, it should be distributed primarily and solely on the basis of need. When it comes to mobility and excellence, there are already private funds that consider those factors when providing loans and grants. There are foundations and other organizations that provide them, and I see no reason to duplicate a system that is already in place. I think we have to innovate, but if we intend to innovate, let's do so based on due consideration for every individual's circumstances and by doing whatever it takes to reach a substantial and acceptable agreement.

[English]

Mr. Nelson Riis: Thank you.

[Translation]

The Vice-Chair (Ms. Paddy Torsney): Mr. Riel, do you want to add something?

Mr. Guy Riel: Yes. On the issue of merit, you told us that it was a matter of accepting colleges at the university level. I think there is a real danger as far as student debt loads are concerned, namely the vicious circle that just about every Canadian student currently finds himself in. The fact is, the more debt a student is carrying, the less likely he is to be able to improve his marks. That is the problem. And when we're talking about merit, that is the real danger. Students are carrying more and more debt. Some have parental responsibilities, like myself, and that's exactly what is happening. Personally, I don't have either the time or the energy to improve my marks. That is the danger. We're walking a very fine line when we talk about merit. So, we really have to be careful there.

[English]

Mr. Nelson Riis: Guy, I apologize, but I missed your point.

Mr. Guy Riel: I'm just talking about merit. When we're talking about merit, there's always a level that we have to....

[Translation]

The Vice-Chair (Ms. Paddy Torsney): Make your comments in French, if you prefer.

Mr. Guy Riel: Yes, that would probably be better. I think I will find it easier.

I think we have to be very careful when it comes to the issue of merit. Students like myself have to work 40 hours a week. I am entitled to loans and grants, but that just isn't enough to live on. I have to work, because I have parental responsibilities.

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So, I have to spend a great deal of my time performing paid work, and whatever time is left over is spent studying, which makes it difficult for me to improve my marks. Students who live at home have a much better chance. They have more time to study. Students such as myself just don't have the time.

[English]

Mr. Nelson Riis: That's a good point.

The Vice-Chair (Ms. Paddy Torsney): Mr. Valeri.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Madam Chair.

I want to start off by saying that the whole intent of the millennium scholarship is to assist students in gaining access to post-secondary education. I think you would agree that the federal government has always played a role in access to post-secondary education, and certainly the jurisdiction of education itself has always been the domain of the provinces and will continue to be the domain of the provinces with this particular program.

Mr. Riel, you made a couple of points, and you indicated in your comments that the millennium fund may assist in student debt. That's good to hear.

You also talked about the fact that maybe there could be some sort of tax credit for deducting interest. That is part of this bill as well. There will be a tax credit provided so that you can deduct for interest. It is part of the bill that we're talking about.

But you also made a couple of other comments about the democratic process and whether this would be a democratic project. I would like to remind you that individuals are elected democratically; they come to Ottawa, as they do to the province of Quebec, and put forward programs on the basis that they were democratically elected. So I want to assure you that this is also a democratic project.

I have a couple of points. No one is discounting or saying that it would not be possible to in fact use the method of evaluating student needs that Quebec uses right now. So the argument about merit versus need, in this particular instance, would not really be a factor. If agreement is reached with the foundation to use Quebec's assessment, then I'm sure you wouldn't see any difficulty in that.

Also, no one is saying that a foundation would not in fact accept the names from the Government of Quebec as to who should be the recipient of a millennium scholarship. So at the same time, I don't see why you would be objecting to that sort of process if your concern is the need-merit concept and how this would actually occur.

Lastly, your own minister of education has said any savings that would be achieved through the millennium scholarship fund to the province of Quebec would be reinvested in education. So you would have the situation like you described, of that CEGEP in that particular area that may in fact benefit, because the province would have additional moneys that they would not be putting out in bursaries, and reinvesting that back into the educational system. In fact, the buildings, the curriculum, and all of the other aspects of education are the jurisdiction of the province.

You may have a situation where you actually have the loan ceiling reduced because the province is now able to do that with additional moneys because they're replacing those moneys they would have been putting out in bursaries.

So we are certainly benefiting from the comments you made earlier. We really appreciate that and appreciate the fact that you've come before the committee not to be negative about anything but to provide constructive input into the debate that's going on and certainly information that we could use in our deliberation among committee members to ensure that we get it right, because we do want to get it right.

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We do not want to duplicate programs that are out there, because that doesn't work for anyone. But at the same time, a national scholarship fund could certainly be of assistance to students in gaining access, and to some students certainly in reducing debt.

I have some comments and a couple of questions in there. Perhaps you could react to the comments. I was certainly quite interested in perhaps hearing your reaction to the comment made by your Quebec minister for education, who in fact said that any savings the Province of Quebec would gain would be reinvested back into education, and whether you agree with that.

[Translation]

Mr. Philippe Leclerc: I should point out that a tax credit has in fact been created through this legislation and we very much appreciate that. It will certainly provide relief to those students carrying a debt.

There are a couple of points I would like to respond to, however. First of all, we obviously are not against the idea of a foundation or organization giving money to help students. We have no objection to that, nor do we object to the philosophy that underlies the Millennium Scholarship Fund. It is really the technical features we are critical of.

First of all, it is important to give some thought to the duplication issue. I heard someone say earlier that he saw no reason why the same lists of names and process that Quebec currently uses to award grants could not be used elsewhere.

Let me give you a completely different example. If the Quebec government suddenly decided to establish its own armed forces, people would surely say that made no sense, since we already have the Canadian Armed Forces. What would be the point of setting up a parallel structure and creating something that already exists? People would surely say that the money to be used for that would be better spent meeting other needs. The logic is the same in this case. I don't really like using the army example, but it is actually a good example, since the army is an exclusively federal responsibility.

[English]

Mr. Tony Valeri: I might disagree with that, because you indicated it was exclusively a federal responsibility, and we're talking about a situation where there is a bonus possibility.

[Translation]

Mr. Philippe Leclerc: That's why I didn't want to go too far out on a limb.

Mr. Paul Crête: You are talking about responsibilities which we have no business being involved in. I have every right to react. The other member expressed his views. And you are not the supreme authority here.

Mr. Philippe Leclerc: What we are really saying is that we don't want that money to be used for political or constitutional purposes. We know what we're talking about, because this has been going on for quite some time now. Students believe that student debt is a social issue, rather than a political one. We are simply saying that the Millennium Scholarship Fund will be spending a great deal of money to develop its own process for administering scholarship funds, when we believe it would be preferable to use that money for something else.

At the risk of repeating myself, I want to make it clear that we are not against the idea of creating the Fund or of the federal government's telling Quebec students that the money they receive through their government and the Quebec loans and grants system comes from federal coffers. I really don't think anyone sees that as an issue. However, we do believe that money should be used effectively.

What really scares us is the non-accountability of the Fund and its total independence from the federal government, which in fact established the Fund, and from the other provinces. The Fund alone will be responsible for deciding on the recipients and it is important to make that distinction. When a student feels his rights have been violated through the Quebec loans and grants system, he can use the appeal process or other mechanisms to try and have the decision overturned. But the Fund will not be doing that sort of thing. That's what scares us.

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As regards the announcement made by our Minister of Education, who said that any money recovered by the government would be spent entirely on education, I must say that I would be very surprised to see her break a promise that she made to us personally. She told us that part of that money would go to education, and part would go to student financial assistance. And of course, we believe the main object of the Millennium Scholarship is to help students. So, we want most of that money to in fact be spent on student assistance.

I just want to say to Mr. Valeri that students in Quebec will be very vocal in expressing their dissatisfaction if the Minister does not keep her commitments. As you may know, students in Quebec are fond of demonstrating to make a point and to be sure that promises are kept once they've been made.

I would also point out that we didn't come here to criticize the government's actions. We came here to ask you to make sure that the money students are supposed to benefit from goes to those most in need, and that it is not used for political purposes; we want it to truly meet the needs and objectives of the Quebec loans and grants program. I also hope it will meet the objectives set by the other provinces for their loans and grants programs.

One thing we definitely do not want is for the Millennium Scholarship Fund to be used by the two levels of government to make claims of duplication or interference. We want this to be something that transcends political convictions and individual or corporate interests; we want the focus to be the cause of today's youth. We believe this money could be more usefully spent by being invested in other more appropriate ways. As we see it, this is an investment the federal government could obviously take the credit for, but it would remain an investment to benefit those students in need.

[English]

Mr. Tony Valeri: Thank you.

I have just two final points on a comment made. One, precisely for the reasons you provided, an independent foundation was set up because we feel the issue is so very important and should not be politicized. You don't want to have two governments fighting. There's an independent foundation made up of experts in education and students, who will be able to assess how the foundation will work.

On the issue of redress or appeal, certainly nothing would prevent the foundation from putting in place the opportunity for appeals if a student or anyone felt they were not treated properly or they were in some type of contradiction with anything that might happen.

I thank you very much for your comments.

The Vice-Chair (Ms. Paddy Torsney): Thank you.

Mr. Szabo.

Mr. Paul Szabo (Mississauga South, Lib.): Yes, thank you.

I would have thought some people would have come here and said the principle was good and let's try to figure out a way to make it work as well as possible, regardless of the problems. The fact remains that every province doesn't have what Quebec has. The fact remains there will be a millennium foundation. It will be set up, and the fact that it has to be set up doesn't necessarily mean it's a duplication, simply because Quebec has some mechanism.

I think you have to acknowledge that as a national program, something has to be set up, because there are many provinces that don't have that.

With regard to the merit, I thought Mr. Valeri's point was well taken. The people who set this thing up basically told us you should have the academic aptitude to be able to complete the program, and I guess acceptance to the institution is certainly one of the criteria.

To argue somehow that merit and need are incompatible.... Merit is necessary because it would be quite an embarrassment for any group to give money to people who didn't have the aptitude to complete programs, and failed. Merit, you have to admit, is necessarily a part of the process.

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I just want to explore one thing. It seems to have come up so often how cheap the tuition is in Quebec compared to Canada, as you put it. I would say the rest of Canada, but I note you said “compared to Canada”. I thought about it for a little while, looked at some numbers, and I think I have a pretty good idea why. In Canada, the high school drop-out rate is 30%. That means 70% of the students at the secondary level are candidates for post-secondary activity—those who choose.

In Quebec, the high school drop-out rate is almost 50%. That means there is, relatively, a substantially smaller population from which to feed universities and colleges in Quebec. In fact, the only way to attract enough students into the Quebec system of post-secondary education is to offer comparatively lower tuition rates. The provincial government in fact is buying students to go, just the way it's paying parents to have kids.

The fact remains that the province with the highest divorce rate in Canada is Quebec. The province with the lowest birth rate is Quebec. You have to look at what responses the government makes to social situations and maybe why.

I suggest you consider that only half the students generally in Canada have any debt at all, 93% pay it off, only 7% default at all, and 80% of them declare bankruptcy before the interest relief period expires within a two-year period. That means the debt situation you've been harping about here represents, in terms of Canada as a whole, only about 3.5%, but given the substantially lower tuition rate, the number of students you're talking about is approximately 1% of all students, and that's who you're arguing for.

I really have to ask whether you care to comment on any of those figures. We have to understand where you're coming from, whether your rationale is motivated by some other special interest, or whether you're legitimately concerned about making sure students who need the help can get access to post-secondary education, so they can participate fully in the life of Canada.

[Translation]

Mr. Philippe Leclerc: I think certain clarifications are in order. First of all, I would just like to say that the Fédération étudiante collégiale du Québec has both Anglophone and Francophone members, which means that we have neither a sovereignist nor a federalist mandate. We are apolitical when it comes to constitutional matters.

If I referred to Canada when making comparisons with Quebec, I apologize. I was not intending to exclude one or the other. I want that to be clear, because we have English-speaking members, just as we have both federalist and sovereignist members. We have no position on that. I think it's important to make that clear.

First of all, we are trying to agree on something. Quebec and the rest of Canada—I will be careful to say "the rest of Canada"—have always had different cultures. It is important to recognize that two different languages and two different cultures have always co-existed peacefully. And if you were to look at the history of Quebec, you would see that Quebec has always been very socially oriented.

You may recall the Parent Report on Education in Quebec back in 1964, which said that Quebec's primary goal would be to make its educational system more democratic. It is our conviction that access is the key to making Quebec's educational system more democratic. And it is clear that raising tuition fees will not guarantee access. I think we have to respect the fact that there are differences in tuition.

Quebec has developed a more socially-oriented system of education which is not necessarily worse. That is something that has to be considered.

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Between 1990 and 1994, the Conseil supérieur de l'Éducation du Québec produced a study that said that if 70 per cent of students under the age of 20 had not accessed post-secondary education by the year 2000, Quebec would be mortgaging its labour force and the quality of its labour force training, both in the mid-and long terms.

We believe, as does the Quebec government, that raising tuition fees hinders access. However, the fact that they have lower tuition does not mean students are any better off.

I was saying earlier that students have an average debt load of between $8,000 and $9,000. When they graduate from university, it is more like $11,000 to $15,0000. That is a reality. Students feel it is important for the government and society as a whole to make a pledge to support education.

The Fédération étudiante collégiale du Québec believes that the government must be the main player. That is the reason why we agree that merit is an important factor. We could never be against the merit principle.

However, there are other ways of awarding scholarships than on the basis of merit. Those scholarships could be awarded to people in need. And in terms of merit, would it not be nice to know that if you completed your training in two or three years, you would have a lower debt? The government could say to a student who had completed his training in two or three years that his debt level would be lower. That would be one way of showing merit. For the student, it would be a chance for the government to tell him that it is investing in him because it understands his circumstances and knows that he is working at his studies and going into debt to that end. That would be one way of looking at merit.

And that is much closer to my conception of merit than the idea of saying that merit is important. What we are trying to do is reach an agreement, not criticize. What we want is to agree. And the way to agree is not necessarily to make comments about divorce rates being higher or education levels being lower. We did not come here to talk about that. We came to talk about student debt levels. That is where we must find agreement.

In order for that agreement to be achieved, the federal government has to recognize that there is already a system of grants in place in Quebec. That has to be recognized. The rest of Canada does not have a grant system. I hope that it will be able to establish one through the Millennium Scholarship Fund, so that students in debt can benefit.

So, if a grant system already exists in Quebec, why would we want to duplicate it? Why duplicate the work that has allowed that to happen, when doing it once was enough and would allow us to maintain the same visibility? That is the point.

We have considered this very carefully and we have weighed the pros and the cons. We have spent months looking at this. So it's important to know the history before you start making assertions.

The history of Quebec clearly shows, Madam Chair, that irrespective of the fact that Quebec has the highest divorce rate and of what is said about poverty and our unemployment being higher than elsewhere, need is something fundamental, just as success is. As students, we are just as successful if not more so than our fellow Canadians. It's important for you to know that.

We did not come here to start a debate between two individuals or between the two levels of government, federal and provincial. We came here to tell you why we think that Quebec's share of the $2.5 billion should be re-invested in more appropriate ways.

Nobody is behind us. No one is egging us on. The best proof of that is that we left the Coalition québécoise pour l'éducation and eventually returned. Why? Because we were demanding that student debt be taken into consideration and that there be re- investment in measures that address student debt loads.

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So, that is the reason why we went back to the Coalition québécoise pour l'éducation. We will be making representations to the Government of Quebec. I want you to know we will never agree with the choices made by either the Government of Quebec or the federal government in terms of the cuts made. But I want you to know our position is one of neutrality as regards both the Constitution and our reasons for making these representations. Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you very much, Mr. Leclerc. I believe Ms. Redman has one last question.

[English]

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you, Madam Chairman.

We have heard both inside and outside Quebec that the funding situation in Quebec is one that's working. Is there no student debt problem in the province of Quebec?

Mr. Philippe Leclerc: Is there a—

Mrs. Karen Redman: As for the student debt problem in the province of Quebec, is debt load an issue for students?

Mr. Philippe Leclerc: Yes.

Mrs. Karen Redman: I guess I would have to react a bit to the fact that the millennium scholarship has somehow.... My sense of it through your presentation has been characterized somewhat in a public relations effort. Because I would tell you that I think this entire budget was good news for education. As much as the millennium scholarship may have been the centrepiece, throughout this budget you will see attention given to students' debt loads and ongoing education funding for people who find themselves downsized and have to go back into the educational system maybe at a more mature age. This millennium scholarship is actually a reaction through broad-based consultation and the need that we heard from students across Canada who said they had a debt load they wanted to have addressed.

When we did our pre-budget consultation, again, across Canada, in all major cities, we heard in many provinces a real suspicion about merely putting more money back into the CHST. I don't think there's a member in the House who wouldn't acknowledge that those were difficult decisions to make and that yes, they did have fallout. However, we heard from different provinces that we should not just pour money back into that particular system, because it is not colour-coded and they are not convinced that those dollars are going to the things they feel have suffered the most in those cuts.

So I would tell you that I think the millennium scholarship is a sincere attempt by this government to do what's best. Notwithstanding the fact that Quebec's system may be slightly different from those in the rest of Canada, the intent is to help students who are bearing debt.

[Translation]

Mr. Philippe Leclerc: Indeed, we were consulted by Mr. Paul Martin, whom I met along with my colleague, Mr. Nikolas Ducharme, President of the Fédération étudiante universitaire du Québec. We spoke to him about the problems associated with the Fund. We met with him in early February. Mr. Martin listened to our comments and said it might be possible to do something. Indeed, that is the reason why there are currently talks underway between the Quebec government and the federal government about how to go about coordinating the two processes.

We are aware that the purpose of this legislation is to directly address the problem of student debt. Naturally, we are not against that. But we want you to know that we are not trying to be petty; we are reacting this way just because this is a federal initiative. If I were from British Columbia or Newfoundland, my position would have been exactly the same if Newfoundland or British Columbia already had the system of loans and grants that Quebec does. I also would have said that this is a provincial responsibility and that duplication makes no sense. I have nothing against the federal government's wanting to tell people that it has invested in this initiative. I have nothing against that. But I wonder why you would want to set up something in Quebec when it already has its own system, a system that doesn't exist in the rest of Canada. On the other hand, I do think this would be a very positive development for our fellow Canadian students, whom we meet with often. But why spend twice as much money in Quebec to develop something that already exists? That would simply be a duplication of effort. I'm not talking about interference here, simply duplication. That is the point. We want that money to be used as effectively as possible. We don't want it to be wasted. And when I say wasted, I'm not being petty or ironic.

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I am perfectly sincere when I say that we don't want that money to be wasted. And if we don't want it to be wasted, we have to be sure that it is used in a way that reflects Quebec's circumstances. We already have a loan and grant system and would like to see that money used in other ways. Obviously, students in Quebec, just as in the rest of Canada, can and should know that this money comes from the federal government. The only criticism we are making is with respect to the duplication that would result. I don't think we can afford to waste money. Two and a half billion dollars is a huge amount of money, and we think it should be re-invested appropriately, not wasted. I would repeat what I said earlier, namely that beyond individual interests, government interests and corporate interests, it is the cause of youth in Canada, of which Quebec is still a part as far as I know, that must be our primary focus.

Personally, I feel I'm just as much a Canadian as I am a Quebecker, and it's important that you know that. So, it is as both a Canadian and a Quebecker that I question the decision to create a parallel structure in Quebec, when that money could be more appropriately re-invested to act on the problem of student debt. Look at the money we will be wasting: I mentioned earlier that every year, 5 per cent of that $2.5 billion will be spent on administrative costs—on paperwork, mailings, and so on. In Quebec, it's 2.5 per cent. Those are figures we obtained through our research; 2.5 per cent is only half of that. So, it seems to me we should avoid wasting that 2.5 per cent. And the 5 per cent we've referred to represents approximately 1,000 scholarships of $3,000 each over a ten-year period that we would losing as a result. Why? That means 1,000 students we won't be able to reach because of the need to pay those administrative costs. Why? Because we insisted on establishing a parallel structure. That is the real point of our representations today. However, we are not here to criticize the government's intentions, because we see them as very positive.

At the same time, this initiative will have to be adjusted to fit the reality in the various regions. And the reality in Quebec, unlike the rest of Canada, is that a loans and grants system is already in place. I don't think we are being difficult here. We are only trying to show you that there is room for agreement here. I think that agreement could involve giving the federal government the visibility it is seeking, by clearly stating that this is federal money, and re-investing Quebec's share in its own system of loans and grants and in our educational institutions. That is the kind of agreement we have suggested.

I would like to conclude by saying that the position we presented today was the subject of consultations with both member and non-member student associations. There are also some Anglophone students who, even though they may strongly identify with one party or another, do not see the point of this kind of duplication, when that money could in fact be used to introduce even more effective measures to alleviate the problem of student debt. Once again, if that duplication were avoided, young people in the rest of Canada as well would benefit by receiving more substantial assistance.

The Vice-Chair (Ms. Paddy Torsney): Ms. Redman has one last comment.

[English]

Mrs. Karen Redman: Thank you.

Very briefly, I do appreciate your point of view, but in one breath you're talking about student debt relief, while in the next breath you're talking about using those moneys in a different way. You're getting back to some of the fallout of the cutting back of the CHST. While that's another issue, which I would agree needs to be readdressed, it's a different issue from this one specifically that we are allocating the money for.

I thank you for your answer. That's all I have to add.

The Vice-Chair (Ms. Paddy Torsney): Thank you very much for your presentations here today.

[Translation]

Thank you all very much for your presentations and good luck with your studies.

Mr. Philippe Leclerc: Thank you very much.

[English]

The Vice-Chair (Ms. Paddy Torsney): We'll meet again on Thursday morning at 9 o'clock in Room 269 of West Block.

The meeting is adjourned.