Proceedings of the Standing Senate Committee on
Social Affairs,
Science and Technology
Subcommittee on Post-Secondary education
Issue 4 - Evidence
OTTAWA, Thursday, February 6, 1997
The Subcommittee on Post-Secondary education of the Standing Senate Committee on Social Affairs, Science and Technology, met this day at 8:40 a.m. to continue its inquiry into the state of Post-Secondary education in Canada.
Senator M. Lorne Bonnell (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we are here with officials from the Department of Human Resources Development.
Ms Martha Nixon, Senior Director General, Human Resources Investment Branch, Operations, Department of Human Resources Development: Mr. Chairman, we are pleased to be here today. You may recall that we were one of the first groups with whom you met back in October. At that time, we spent some time setting the context and talking about Post-Secondary education in terms of the federal and provincial roles. As I understand it, having heard from a number of people in between, you would like us to touch on some of the essential elements of the Canada Student Loans Program in order for your committee to understand what it is, how it is delivered and how the different pieces are put together.
We have put together for you a presentation paper. We will touch on the highlights of it.
You are probably well aware that the Canada Student Loans Program has been in operation since 1964. The total number of students we have helped since then is 2.4 million, with over $12 billion in subsidized loans.
Student assistance represents one of the reasonably well working federal partnerships. It is a federal program delivered by the provinces. It is running at the moment in nine provinces and in Yukon. As you know, Quebec and the Northwest Territories have chosen the opting-out route. They have satisfied us that they have similar programs in place, and we provide them money on a formula basis for those programs.
In the 1990s, we have been working on major reforms to the student loans program to bring it more into line with the feedback we have had from students and provinces, and also to deal with the changing situation facing students in these turbulent times.
Our current overall operating budget is $600 million per year.
On page 2 you will see who receives student loans. It is necessary to realize that this is a statutory, needs-based program. Any student who can indicate need in terms of any study, any line of discipline or any credit history, will be considered.
The number of students has risen fairly considerably since 1991-92, that is, by about 25 per cent, to a value of $800 million. We now have about 340,000 students enrolled in the student loans program. Since 1990, we have seen not just an increase in students who have taken out loans but also an increase in the amounts loaned. That has gone up about 60 per cent, from $800 million in 1990-91 to $1.3 billion currently.
You will see that about 50 per cent of loan recipients are in university programs. About 35 per cent are in community colleges. The remaining 15 per cent are at private training schools.
Two-thirds of the recipients are now under the age of 24, with the remaining one-third being 25 and over. That is something different from what we have seen over the past number of years. Increasingly, students are not always what we consider to be "young people".
Presently, 40 per cent of the student body are dependent upon assistance from their parents. Another 45 per cent are considered to be independent. When determining need, we distinguish between those two categories. We also have 15 per cent of students taking student loans who are married or sole supporters, and about 20,000 have dependent children.
The next page gives a breakdown of the percentage of the number of students on student loans in each province. You can see that Ontario has over 55 per cent of students.
Page 4 deals with the delivery process. It is important to understand that most of the front-end work relating to student loans is handled by the provinces. The students have one application form which is applicable to both the federal and the provincial program. We have federal criteria for eligibility. The provinces make the assessment and determine individual eligibility based on our criteria.
The provinces also assess the student's need. They issue loan certificates which the students can then take to the bank. Individual institutions are designated by the provinces as being eligible to provide student loans.
It is important to understand that the base of the CSLP is need assessment. We are trying to target aid to those in the most need.
It is intended that the student loans program should supplement the kind of assistance students can find from parents, awards and employment.
If students have an opportunity to work, we expect that to go toward rposting their loan and that is consistent with determining who is in the most need when considering a student's eligibility.
On page 5 we deal with how the student loans system works. The CSLP, or the federal program, will provide 60 per cent of a full-time student's need, up to a weekly loan limit of $165 per week. The provinces then decide how and to what extent they will meet the remainder of the assessed need. Sometimes that is 40 per cent, bringing it up to 100 per cent; sometimes it is a little less.
If a student's need is fairly high and he or she requires something in the area of $9,300 for a 34-week academic year, the student would receive $5,600 from the federal program and $3,700 from the province. It is broken down in that way. The student does not usually know who is giving what amount, but he or she will find that out at the end of the program.
When the student is approved for the loan from the province he takes the documentation to a lender, a financial institution, which will then issue the loan. During the period of study, the federal government program gives a full-interest subsidy to the lenders. The interest is paid by us, not the student.
A $5,600 student loan for a four-year program will cost the government approximately $4,000 over the course of studies, and that represents some considerable assistance being provided by the government to students.
When students conclude their studies, they can consolidate their loans. They then have six months to find a job before we ask them to begin repaying the loan or loans.
If they can only find a job with a very low income, or if they have trouble finding a job upon completion of their studies, we offer them up to 18 months of interest relief. However, they must apply for this. During that time, we pay the interest and they do not have to make payments to pay down the loan.
They are eligible for this 18 months of interest relief during the first five years after completing their studies. For example, if a student runs into problems in the first year he can apply for three months of interest relief. He might then find a job, but become unemployed once more. He could come back to us again anytime during that first five-year period for a total of up to 18 months of interest relief. This allows some flexibility.
Borrowers who have disabilities or who become disabled during the time of their studies can apply for assistance as a result of financial hardship. Their loans can be forgiven.
We also have a non-subsidized, part-time loans program under which students must pay the interest costs during their studies. We think this program will offer assistance to an increasing number of students.
Under the Special Opportunity Grants, we have some up-front grant money for three groups of students. Approximately 1,700 students are now receiving assistance under this program. About $3.5 million was spent in this way in 1995-96. These are students with disabilities, high-need, part-time students, and women in doctoral studies, in particular where it has been shown that there is a shortage of women in those academic fields.
It is important to understand that, currently, the federal student loan program is complicated by the fact that we have, in the last two years, introduced a new financing arrangement and that a large number of students in the program come under the old financing arrangements. Under those arrangements, we guaranteed the loans and it was up to the banks to try to collect the loans. If they could not collect them, the government paid them. That process gave little incentive to the banks to collect the loans. We have moved to a new regime whereby we are paying a premium to the banks, a risk factor or risk premium, and they are responsible for collecting the loans. We do not give them a guarantee.
Pages 6 and 7 describe the old financing arrangements, and I shall not spend much time on that. Those of you who are into heavy-duty case management around certain of your constituents' loan problems may be interested in reading this because it describes how we use private collection agents, legal agents, and income tax set-offs to collect those loans. We will be required to do that until all of the students who came under the old regime have moved through the system and we are left with only the group processed under the new system. We will describe that shortly.
Page 8 deals with the default situation, and you have probably heard from several people about this. It is important to understand that the majority of borrowers, approximately 75 to 80 per cent, repay their loans in full and on time. Of the remainder, when 10 to 15 per cent of the loans go into default, we are able to pick up a fair number of them once we start collection activity of one kind or another.
Our historical loss rate is approximately 10 per cent of the loans. That, of course, is too much. We would prefer to have no defaults. However, we must consider the unsecured nature of student loans; the fact that we do not ask for collateral or cosignatures, as the banks do when offering a student loan on their own; as well as the nature of the clientele, since they often have no history of managing loans or any credit history. In the past, we have given a 100 per cent guarantee to the banks, and there has been little incentive for lenders to be truly diligent. It is important to consider the loss rate in that context.
Two hundred million dollars in defaults is significant. We are attempting to determine how to deal with the issue of default and to understand better what causes it. We will talk more about several studies we have underway in that regard.
Page 9 deals with the question of designation. The provinces decide which institutions will be designated for the purposes of delivering student loans. Designation criteria vary from province to province; however, as you know, most of the institutions across the country are indeed designated.
The Canada Student Loan Program is fully portable. We have over 1,500 institutions in Canada and thousands around the world where students are studying with the benefit of a student loan.
In the past, we have noted, interestingly enough, that provinces have designated some institutions for student loan aid but not for provincial aid. That is based on the assessment of the programs being offered in that school.
There have been a number of controversial debates around whether a default rate would constitute a way of affecting designation. If a school has a high designation rate, should we turn it away from being able to deliver student loans?
At the moment, we are inclined to say that we need to understand much better why students default. We should have a discussion and debate with the institutions which have the most problems and work with them to determine why their default rate is as high as it is.
We have an ongoing study, and we are asking the evaluators currently working with us to evaluate the student loans program to focus on this issue. With the new financing arrangements in place -- and you have probably spoken with some of the bankers involved with our program -- we are quite hopeful the banks will be more insistent on finding better and more flexible ways to help students repay. We will be sharing with you the program evaluation results on this issue and other issues as we receive them. We are still targeting that for spring. We are not sure whether it will be late spring or early spring.
Mr. Scrimger will now focus on the new financing arrangements and some of the other issues.
Mr. Tom Scrimger, Acting Director General, Learning and Literacy, Department of Human Resources: On August 1, 1995, the new financing arrangements for the Canada Student Loans Program came into effect with contracts having been signed with nine participating private-sector lenders.
Under the contract, the lenders now assume a much greater responsibility for servicing and collecting the loans. Probably the main change is the fact that the 100-per-cent guarantee, which was the hallmark of the program until 1995, was replaced by a 5-per-cent risk premium for the lenders. In other words, with the payment of a 5-per-cent risk premium to the banks, when the loans go into repayment, there is no further guarantee provided to the banks by the government.
[Translation]
Senator Lavoie-Roux: Apparently, you never speak French. I see that you are typical public servants and that there is not a single word of French. Is this on page 10?
Mr. Scrimger: Yes, on page 10.
Senator Lavoie-Roux: Do you receive a bilingualism bonus?
Mr. Scrimger: Yes. We can speak in French if you wish.
[English]
Another element we think important is the service standards to which we have contractually bound the banks in relation to providing services to students, including disbursing loans within required periods of time, providing service in both official languages, having toll-free inquiry lines, and offering financial counselling.
It is important to note that, under the new rules, the banks do not determine eligibility and have no say in who will receive a loan. That process goes through the federal government and through a process administered for us by the provinces.
Under the old program, borrowers had to accept a fixed loan rate based on Canada bond yields. In the new program, they are offered the same option many of us have of either picking a floating rate based on the bank's prime rate plus two and a half, or a fixed rate based on the banks' prime rate plus five points for whatever term the student chooses.
All in all, under the new arrangements, the lenders have a greater incentive to work with borrowers to avoid defaults because the lenders must now face the loss associated with the default, not the government.
It is probably too early to assess, given that we are 18 to 20 months into the arrangements, whether the default and loan loss rates under the new arrangements are worse or better than the previous arrangements. Most students who have the new loans are still in school, and we will probably not have a flavour for loss rates for another 12 to 18 months as that first group of students completes their studies.
When the new arrangements were introduced, lenders focused most of their efforts on adapting their information systems and training their staff to handle the actual disbursement of the loans. We find now, in working with lenders, that they pay more attention to repayment and counselling issues.
We are closely monitoring the new arrangements. A third-party auditor is auditing the banks throughout this month and into April or May. The audit is focusing on two elements: whether the invoices the banks are sending to us are accurate, and whether the services which the banks are supposed to be providing to students are actually being provided to the levels in the contract.
Finally, we would point out that a recent C.D. Howe publication by Professors Finnie and Schwartz spoke very positively about the new financing arrangements and their potential.
Turning to page 13, an issue for anyone in the post-secondary system or in the student assistance business is the issue of debt loads or the emerging debt issue. Many factors have caused the steep increase in debt loads, including the rise in tuition fees and, certainly, over the past five or six years, much of the provincial student assistance has switched from grant products to loan products.
In 1990, the average provincial and federal debt load for a student was about $8,700 on graduation. We are now forecasting that, in about a year, that same debt load per student will be about $25,000.
There is no single definition of manageable debt. Our thinking has certainly evolved since 1993-94, leading us to consider that student debts must be better linked to their incomes. We are investigating with provinces, lenders and interest groups, our alternative approaches to debt management.
As you are probably aware, recently, a coalition of seven EDUCATION groups, led by the Association of Universities and Colleges of Canada, announced a broad debt management proposal for student loans.
I now move to page 15 which deals with loan limits. The costs of post-secondary EDUCATION have certainly increased rapidly. It is not uncommon for a student studying away from home to have expenses of between $10,000 and $13,000 per year.
We raised the CSLP limit in 1994 following a 10-year freeze to $165 per week from $105. As a result of the recent Premiers Conference, the provinces, led by Premier Tobin, are now calling for further increases in the loan limits.
While our analysis indicates that the loan limits appear to be sufficient for the majority of students, certain categories, such as students with dependants, may have to be examined further. We must examine any potential increase in loan limits against the ability of the students to handle the increased debt load that comes with it. We are in discussion with the provinces, interest groups and private lenders about the issue of loan limits.
I will now deal with the issue of bankruptcy. There has been a considerable media interest in the broader issue of bankruptcy itself and in bankruptcy as it affects student loans. It is not solely a federal issue. All provincial programs are facing increases, very sharp increases in some cases, in student loan bankruptcies.
We, ourselves, have seen, over the last six or seven years, the values of our claims for bankruptcy increase from about $20 million to $70 million per year. In crude terms, one in every nine personal bankruptcies in Canada probably involves a student loan.
Under the new financing arrangements, student loans are no longer guaranteed for bankruptcies once the students are in repayment. Obviously the banks will come back and look for additional compensation in future arrangements if bankruptcy rates remain high. It is in our interest to determine if we can do something to help control the level of bankruptcies.
I would point out that most students do repay their loans in full and on time. However, many students, perhaps through not being aware, do not take advantage of the 24-month protection provided through the interest relief program and our own grace period.
Amendments are being proposed to the Bankruptcy and Insolvency Act in Bill C-5, which is currently with the Senate, to prevent the discharge of a student loan bankruptcy for the first two years after completion of studies, to match the corresponding two-year period of protection that we provide.
On page 17, another issue in the public policy forum is the one of income contingent loan repayment, or ICR. Basically, the concept is that borrowers would repay their loans based on their post-study income versus a more traditional approach by lenders of a standard amortization.
In an ICR loan scheme, the repayments would be based on their income throughout a set repayment period. Many people use 25 years as an example. In some schemes, at the end of that 25-year period, the loans are forgiven, either by the government or through a payment to the lender.
A major consideration when talking about ICR is the concept of adverse selection and its impact on program costs. Basically, those who are able to pay back their loans would have the option of choosing a conventional program which they could repay more quickly and thereby minimizing their interest costs. Those people who are unable to do so would repay the loan over a longer period of time and have greater interest costs.
There are two base models are in use around the world. In the pure ICR, similar to Australia and New Zealand, generally speaking the loans are universally available. In other words, they are not based on need. There would normally be no interest subsidy during the study period, whereas we now provide an interest subsidy which we think averages a value of $4,000. To rposte administration and because lenders are adverse to long-term loan products for this kind of consumer, the loans are normally financed through the government and collected through the tax system.
There are variations in the model, but those are the common elements that we would find in most of the pure models. There is a second model in which ICR is another repayment option; that is the U.S. model. They offer an ICR repayment option in addition to other, more standard, bank repayment options or amortized approaches. In those cases, the front end of the program, the needs assessment, remains in place but, as borrowers enter repayment, they choose between taking a more traditional repayment stream or the ICR stream. In the American example, the loans are financed by the government. They are not collected by the tax system but through another agency.
Ontario, in recent months, has indicated its interest in pursuing an income contingent repayment scheme. We have been working with them to develop micro-simulation models to try to analyze and cost various options for income contingent loan repayment schemes based on Ontario's design parameters.
Ms Nixon: Some of you may have seen in The Ottawa Citizen this morning in which there was a press release out of Ontario last night which made a number of announcements in relation to student loans and student assistance. EDUCATION and Training Minister John Snobelen has called on Pierre Pettigrew, the federal Minister of Human Resources Development, to meet Ontario's recommendation to create a loan repayment practice allowing students to pay back loans based on their income after graduation. Snobelen noted that agreement must be reached quickly to meet a 1997 start-up date. Also announced was a scholarship program for merit students and an estimated $100 million has been invested in student assistance by matching private contributions.
We have tried to give you a fairly broad overview of our program.
[Translation]
We are now prepared to answer your questions or to discuss this matter at greater length, if you like.
[English]
Senator Cools: Thank you for your extremely thoughtful, even thorough, presentation.
You raise many issues, one of which sparked my interest, and that is the issue of default. You mentioned significant numbers of bankruptcies. The parent committee of this committee is currently considering another piece of legislation. That proposed legislation would introduce some previously unheard-of censures for debt.
Can you give me a profile of a defaulting student? As well, I would like a profile of a bankruptcy candidate. Since we were all students, we are sensitive to their needs. Who are they, and what is the average amount of money they owe? What are the minimums and the maximums? You talked about $200 million per annum. These people obviously need some help.
I would also like to know more about the penalties for defaulting, and could you give me a rough idea of the number of persons involved?
Ms Nixon: My colleagues would probably support me in saying that we probably cannot answer the first two questions. I do not believe that we have that information.
Mr. Gerry Godsoe, Group Manager, Canada Student Loans Program Policy, Department of Human Resources Development: A couple of studies are underway which will provide more information on the question. Over the past 30 years we have found that default is not strictly related to the amount borrowed. One can be in trouble with any level of debt if one has no income. People who tend to get in trouble are often non-completers. In other words, they have invested the money and they do not have the certificate at the end of the process to get the job to pay the loan.
Senator Cools: Do you know the average age of non-completers? Are they younger or older students?
Mr. Godsoe: I do not have an answer for that. There is a difference among the institutions that students attend. The default rates of university students tend to be much lower than those of private school students. The community colleges are somewhere in the middle.
The questions that remain often focus on why people default. There seems to be a range of opinion in the literature and in the focus groups that have now been formed as part of the evaluation. We do not have a definitive answer at this point.
Senator Cools: Do you have any information on gender or what socio-economic strata they come from?
Mr. Godsoe: You must remember that these people come from a financially poorer economic background because, in order to qualify for the loans, they must be found to be in need.
Slightly over 50 per cent of those in our program are women. That is reasonable given the make-up of the overall population. In terms of whether or not women have more trouble paying than men, the jury seems to be out at this time. Some reports indicate they may be because of lower income. On the other hand, they seem to be at least as diligent in trying to repay. We are getting a mixed message at this point.
In 1994-1995 the average claim was $6,000.
Mr. Scrimger: The vast majority of people receiving student loans are still under the age of 25. Probably 80 to 90 per cent of claims occur within three years of graduation. If they run into trouble, they usually do so early in the transition phase between school and a more permanent link to the work force.
Given that, we have never separated data based on age. I would say the average age is somewhere in the mid-20s.
Senator Cools: So it is not specific to older students or to younger students?
Mr. Scrimger: They are slightly older because they have completed their EDUCATION. It will not be the 18 and 19 year-old students entering the system.
As Dr. Godsoe pointed out, one of the problem areas relates to students who withdraw, so you will have a spread across all age groups. The average value per claim was $6,000 in 1994-1995. I believe it is closer to $7,000 today. It does not appear to be a large amount, but those loan limits reflect the smaller loan limits of five or six years ago, and the limit is increasing each year.
We are probably processing between 45,000 to 50,000 claims each year, of which between 7,000 and 9,000 are bankruptcies. We can confirm those numbers for you but I know that is the range.
Senator Cools: What percentage would 9,000 bankruptcy claims constitute?
Mr. Scrimger: With 50,000 claims, probably about 8,000 to 9,000 deal specifically with someone who is bankrupt.
Ms Nixon: We have been concerned about anecdotal information which you often receive from students that, in fact, there are people offering to assist students to go bankrupt in order to handle problems they may be having paying their loans. This need not be widespread, but it is troubling.
Senator Cools: Do you have any concept of the numbers involved?
Ms Nixon: We only know the number of people who have gone bankrupt. One of the reasons we are working with industry is to ensure that we deal with that in the bankruptcy bill before you. In a sense, nobody should have to go bankrupt during the period that we do not require them to repay, and we offer them assistance in interest relief. For the first two years, there should be no need for a student to go bankrupt from the point of view of having to repay student loans. Given that provision, that should help to stem some of that flow.
Mr. Scrimger: In most of these bankruptcies, the student loan is either the only debt or is certainly the majority of the debt that is being sought for discharge. You may have someone with a $10,000 student loan and $1,000 on a Visa card and they seek bankruptcy to discharge them from those debts. I am not saying there are not cases where people have more serious financial situations, where there are other debts involved, but it is rare, at that time in a person's life, to be dealing with people with mortgages and extensive car payments. In many cases, if it is not the only debt, it is the major part of the debt for which the person is seeking discharge.
Senator Cools: What are the penalties for or deterrents against defaulting?
Mr. Scrimger: The individual has every right to seek protection under the Bankruptcy Act. That is the purpose of the act. The impact for the Canada Students Loans Program is that, if they are discharged as a bankrupt, they are not eligible for assistance for a period of three years following the discharge.
Senator Cools: It is a fascinating issue. If these people seeking discharge and insolvency are younger people, on the thresholds of entering into careers, it seems remarkable and unusual that they should be seeking bankruptcy at the beginning of their careers. Something is not right here.
Perhaps we should hear from a witness who is familiar with the administration of the Bankruptcy and Insolvency Act.
The Chairman: Senator Cools, since we have little time left with these witnesses, perhaps you would raise that matter before the other committee.
Ms Nixon: You might also find it interesting to talk to one of the provincial superintendents of bankruptcy to get a provincial perspective. They often have a detailed perspective on this issue.
Senator Forest: Senator Cools has asked a number of the questions that concerned me. Anecdotally you mentioned that some institutions may be assisting students to declare bankruptcy when it may not be necessary.
Ms Nixon: I did not mean the EDUCATIONal institutions.
Senator Forest: No, I refer to the financial institutions. Do you have any idea of what percentage of defaulters or those going into bankruptcy might in fact be doing so deliberately? I know that is a tough question.
Mr. Godsoe: We really do not have an answer for that one. We do know, however, that about one-third of the number of people declaring bankruptcy in our program, do so within two years of leaving studies. There is a period of two years of protection and, obviously, the government's perspective is that the student should try to enter the labour force and try to meet his or her obligations under the program.
Senator Forest: How long has Alberta been using default rates as a criterion for designation of institutions?
Ms Nixon: We think it is around four or five years.
Senator Forest: Have you noticed an increase in bankruptcies in these recent tough economic times?
Ms Nixon: Yes.
[Translation]
Senator Lavoie-Roux: On page 1 of your brief, you state that Quebec and the Northwest Territories receive alternative payments towards the operation of their own programs. How much do they receive in the form of alternative payments?
[English]
Mr. Scrimger: The most recent payment, which was made just last week, on January 31, for the province of Quebec was $158 million; and for the Northwest Territories it was $1.8 million.
[Translation]
Senator Lavoie-Roux: Do you have a right to verify as to whether these $158 million are actually directed to student loan services?
Mr. Gadsoe: Quebec must offer a program similar to ours. Furthermore, we know that Quebec spends over $158 million each year for EDUCATION. That is the only answer that I can give you.
Senator Lavoie-Roux: I would imagine that the other provinces spend more of their budget.
Mr. Gadsoe: Yes, that is true for each province that participates in these programs.
Senator Lavoie-Roux: If Quebec were to spend only $158 million, hypothetically this would mean that there was not a great deal of money available for student loans and grants.
Mr. Gadsoe: I can tell you that Quebec has a very good program in place for students. Each year, the province awards $156 million in grants and $134 million in loans.
Senator Losier-Cool: Quebec's students are the least indebted of all students.
Mr. Gadsoe: Yes, in addition to grants, the province offers enriched programs.
Senator Lavoie-Roux: Now then, you state on page 13 that some students could owe up to $37,400. Do you have any suggestions for us? If we round out these figures, after four years of studies, a student could owe $40,000; that is enough to discourage anyone person from going to school. Do you have any suggestions to make as to how this debt load could be decreased? These are considerable sums of money for a young person who wants to marry, start a family and so forth. They remain in debt for quite some time.
We need to find solutions. Everyone says that students must be given the opportunity to study. I am not certain what the missing element is. Students are perhaps not responsible. I say that advisedly. Perhaps we are not doing enough to help those who come from poorer families. Does it not bother you that students may owe $40,000 by the time they graduate?
[English]
Mr. Scrimger: There are a number of issues which those of us in the student assistance business across the country must discuss. First, given the size of investment an individual may have to make in his own future through Post-Secondary education, $25,000 to $40,000, planning has to begin much sooner than it does now. Unfortunately for many students, the planning begins with their first application for a student loan, whereas students and their families probably should have been planning many years in advance. There is a need to encourage people to think about Post-Secondary education and plan for it as part of an investment in themselves, well ahead of time. It is the key issue facing student assistance programs in this country. Yes, many of these students are coming out with debt loads that were unheard of 15 or 20 years ago.
The question is: What is the right balance of assistance being provided by governments and personal responsibility to pay back an investment from which the student benefits for many years to come? We think part of the solution, which we have already put into place, is the new financing arrangements for lenders where we have tried to eliminate artificial barriers to flexibility between the bank and the individual. We have eliminated predetermined repayment periods. We have eliminated anything that prevents the bank and the student from being flexible. We already have two years of good protection for students as they make that difficult transition from school to work. We are in discussion with all the provinces, with student groups and other groups, including lenders, as to what other avenues should be examined in the area of providing more debt assistance and debt repayment assistance to students.
We do not have a silver bullet yet, but we are exploring a number of areas.
Senator Lavoie-Roux: You say that students should consider their EDUCATION to be an investment. However a 15- or 16-year-old kid would find it difficult to think of EDUCATION as an investment that will pay off in 15 years. It may not pay off, as you know, because some students come out of university and cannot find employment. Unless the younger generation is better at thinking of investments and money than my generation, it is not natural to be able to plan that far ahead.
I have no solution; that is why I am asking you for a solution. It should be considered because it could be a factor causing students to drop out. They may get a loan or a grant, but they know what it will cost them afterwards.
I am not laying blame on any government.
Ms Nixon: There is no question that this is the central issue preoccupying us as federal and provincial governments, the coalition of educators, and people involved with EDUCATION. The AUCC will be talking to you later this morning.
As you go across the country, will you find that this is the central issue. There is no one solution. A whole series of issues must be examined. We continue to have discussions with governments across the country, but we must find solutions together. Obviously Ontario believes that they found a route in income contingent repayment. I believe students need a number of options. No one way is the absolute right way for every student. We should consider introducing a series of measures that will start at the front end. We should contemplate what kinds of awareness training we can undertake. We should ensure that people have the means to save and invest money. We should look at up-front grants and where they should be targeted. We should consider what kinds of work and study options can be offered to students during their period of study.
We should then look at the back end. How can we make payment flexible and what kind of assistance can we offer? We need a whole series of options from different sources.
Senator Lavoie-Roux: On page 4 of your brief, you state:
Parents are expected to contribute to the costs of their child's EDUCATION until the student has been out of high school for four years --
You do not say it is a duty, but you come pretty close. You go on to state:
-- or in the labour force for two years, or becomes married or a single parent.
How long are we supposed to support our children?
[Translation]
Mr. Gadsoe: When we assess needs, we look at the obligation the parents have. It takes four years to complete a bachelor's program.
Senator Lavoie-Roux: Where do you get that idea? I can understand that parents are responsible up until the student reaches 18 years of age. What makes you think that after then, they are still obligated to meet their children's needs? I did it, but some parents are not able to.
Mr. Gadsoe: There are no laws in Canada to this effect. However, for the past 30 years, this is the principle on which federal and provincial programs have operated.
[English]
Ms Nixon: It is based on the principle that, if we have a needs-based program and a student comes to look for an EDUCATION which is considered to be a benefit for that student, and if the parent has the capability of assisting that student, then we would like to stress that the parent should make the contribution so that the government-subsidized money can go to the student who does not have a parent to assist them.
When you are working with rules, bureaucracy and regulations, you must fix a time period. There is no magic formula You do what seems logical. When a student has been away from home for a period of time, managing and living on his own, we consider him to be independent. The parent does not then enter into the equation when we are assisting need. It is an artificial division probably, but for the purposes of trying to make the assessment and being as fair as we can, that is what we do. We have based it on the principle that parents should, wherever possible, contribute.
[Translation]
Senator Lavoie-Roux: You use this criteria to determine if a person is entitled to a loan. How do you assess the loan application? What do you do in the case of young people who have broken off all ties with their parents, even if the father is the Prime Minister of the country. I am not insinuating anything whatsoever here.
M. Gadsoe: There are indeed exceptions and some flexibility when it comes to needs assessment, for example, when the family unit has broken down. As a general rule, parents are expected to subsidize their child's EDUCATION.
Senator Lavoie-Roux: It may not be that the family unit has broken down. It may be that the child no longer wants to have anything to do with his or her parents. Would you take a factor like this into account?
Mr. Gadsoe: Children always have choices to make.
Senator Lavoie-Roux: What about bureaucrats as well?
Mr. Nixon: Sometimes, we make a judgement call.
Senator Losier-Cool: I am pleased to see that you included in your document the presentation by the coalition of universities which draws a distinction between high needs first-year students and also students who are single parent. This has been the focus of some very lively discussions in committee for the past several weeks.
On page 9, it is noted that the provinces are responsible for designating institutions to which students may take their loans based on their assessment and on the programs available. Are you familiar with these programs? Do they result in a higher rate of employment? In this case, students will have a greater ability to repay because their chances of finding a job will be greater. How are institutions designated?
Mr. Gadsoe: It varies from one province to another. The provincial programs are based on different rules. A number of restrictions apply in the case of programs in a number of provinces, for example British Columbia, Alberta and Quebec. In general, the federal program is portable across Canada and in thousands of institutions around the world.
Senator Losier-Cool: The University of Moncton offers a course in French on common law. Would this program have a better chance at being designated if it were given in Ottawa?
Mr. Gadsoe: No, as a general rule, all public institutions in Canada are designated for the purposes of our program.
Senator Losier-Cool: In point 4, what is the meaning then of "based on their assessment of the programs offered?"
Mr. Gadsoe: The provinces may have different program designation criteria in place.
Ms. Nixon: For example, a province may decide that a hairstyling school is not designated. This is a matter for the province to decide.
Senator Losier-Cool: In consultation with the institution?
Ms. Nixon: Sometimes yes, sometimes no.
[English]
Senator DeWare: I have a short question about the banks.
When representatives from the banks appeared before us, they said they would like to decide who receives the loans. I realize this is not the case now. However, if the banks are taking the risk, how can you keep them from eventually taking over? That is a very serious concern.
Are they trying to have more say in who should receive a loan and how loans should be administered? Presently, Post-Secondary education is fundamentally open to all students and we do not want to change that. Do you see the banks working their way in here?
Mr. Scrimger: I would say no. We keep an open and constant dialogue with all the private sector lenders involved, and we have a good and open relationship. In dealing with them, they understand -- and, they told us this -- that the issue of eligibility and who gets the loans will rest with the government. There has never been a discussion around the premise that that will not be the case.
The financial institutions would certainly like to have an opportunity to reflect on giving a loan to someone who has already gone bankrupt or who has had a history of previous credit abuse. It is in that much more narrow discussion that they raise their concerns.
It has not been a major topic of discussion, but they understand and clearly follow the premise and the rules which state that, if that student walks into the institution with a valid certificate, they are to lend him money. There has never been any discussion concerning changing that rule.
Senator DeWare: The question was about the certificate. If they come to us and the province has approved their loan, do they then receive it?
Mr. Scrimger: Yes.
The Chairman: I have about 10 questions here, but there is no time left. I propose to give you a copy of my questions in writing. Perhaps you can give us your answers in writing so that we can have it for our records.
Ms Nixon: We would be happy to do that, Mr. Chairman.
The Chairman: Our next presenters are from the Canadian Association of University Teachers. Please come forward.
Recently, I was in Taiwan. Every member of the cabinet in Taiwan has a Ph.D. from Cornell, Cambridge, or somewhere else. They attribute the economic success of their country to their EDUCATIONal system.
[Translation]
Mr. William Bruneau, Ph.D., President, Canadian Association of University Teachers: With me is Mr. Donald Savage, Executive Director of the CAUT.
[English]
We will both be making the presentation and we will be glad to answer questions from the committee. I am pleased to be here on behalf of the association. Thank you for your invitation.
[Translation]
We feel that we are facing a crisis in the academic world. As teachers and researchers, we believe we are facing a cultural crisis. Today, traditional jobs are rapidly disappearing. Communication among voters, citizens and workers is changing radically from day to day. The trend today is to communicate by computer rather than in person or over the telephone. Radical changes are occurring in people's day-to-day lives in terms of employment and personal communication. Universities are in crisis. We are responsible for training people so that they can participate fully in this rapidly changing world.
In view of the profound changes that are taking place at lightning speed, what choices must we make? In the academic world, we will have to change. We are also facing an economic crisis where production methods and markets are changing. We are no longer dealing with a North American or Canadian market, but with a global one. Our's is a world of global markets from both an intellectual and economic standpoint.
This is the second crisis that we are facing. Can universities deal with two crises at the same time? We believe they can, but mechanisms have to change. The awareness of federal and provincial governments must be heightened. They have a role to play and a heavy responsibility to bear in this sector.
[English]
In a sense, you are asking us to discuss our capacity to face these two great changes and whether or not we have the capacity -- certainly we have the responsibility -- with the help of the federal and the provincial governments, to face these two crises. In our view, we do have the capacity, but we need the help of the community. The community expresses its will in this matter through the federal and provincial governments.
Our task today, as we understand it, is to talk about the federal and the provincial responsibility in cooperation with us, we who teach and do research in universities, and with the students who learn in the universities as we face these two changes.
The federal government has had a long and historically important role in ensuring the continuous industrial and economic renewal of the country. You are charged with this very large and broad task: the continuous renewal of Canada. We feel we are charged with it as well.
At the same time, you have a second task: the continuing cultural development of the country. On the one side, you must deal with economic matters and, on the other, cultural matters. The federal government has a long and traditionally powerful role in that domain. You have expressed it through the granting councils; the Canada Council, le Conseil de recherche en sciences humaines, and the scientific granting research councils, the Medical Research Council, the Council for Natural Sciences and Engineering Research, and so on.
In practice, the federal government has sought to grant funds and to support higher EDUCATION so that there is a reasonable equality of provision across the country -- from region to region and province to province -- and so that there is reasonable equality of access. We have just heard about student loans and grants which are a way of ensuring that students have equality of access across the country and also across social classes.
[Translation]
So that people from the lower classes, as we referred to them 100 years ago, that is people who are somewhat poorer than the average--
[English]
-- that these people also have the possibility to participate in higher EDUCATION on an equal basis. The student loan program has made that possible and it will continue to make possible as it, too, is transformed.
The system has been fairly successful, we think, in providing quality of access, but it now faces these massive changes and must itself change.
The aim of the system used to be the transformation of character. In the good old days, 100 years ago, when you went to university the idea was that your character would be changed in fundamental ways and you would become respectful of the rule of law, considerate of the rights of the state, and possibly liberally postated in a very general sense. Today, we have moved on and are concerned, we think, with the broader question of developing critical and well-furnished minds and the creation of new knowledge. That would have been thought a rather risky thing to do 100 years ago. We think the universities, and the students and professors in them, must play a direct role in the economic and cultural renewal of the country. We try to do this in an openly accountable way.
One hundred years ago, universities were fairly closed institutions, relatively private, and had very little public support. They were largely privately run and privately supported in a variety of ways, often by church-run bodies, and so on. That, of course, has completely changed. Universities have changed radically over the last 100 years. They have changed more radically still, and at a tremendous rate, since 1945.
It seems we will continue to change at an even more radical rate, if that is possible. The criticism that universities have been unable and unwilling to adapt to change strikes me as fairly ridiculous. When you consider what the university was in 1945 and what it is in 1997, that criticism which seems to be entirely without foundation.
That broadly outlines our position on the funding and governance of higher EDUCATION in Canada. We are faced with two profound transformations. We have already taken numerous steps to transform and face up to these two great changes in the Canadian culture and in the Canadian economy, but we still have a lot to do.
Our paper has two main themes. One is that in the next 10 to 15 years the federal government can be most effective in helping us to adapt to these great changes and to serve the country better by supporting our research capacity, the infrastructure of research -- laboratories and people -- knowledge and the ability to communicate it by various means, whether it be through the Internet or by improved libraries; what I would call, broadly, the infrastructure. This is, it seems to us, a key opportunity for the federal government.
The other opportunity is one that has already been mentioned this morning; namely, student assistance and student aid. Students are the primary concern, of course, of teaching bodies in the country. We are teachers and researchers, and those two things are mirror images, as it were. That is, I suppose, reason enough to add this concern about students and their access to higher EDUCATION.
We have tried to show that this is not just a heart warming, moral concern, but a hard-headed calculation. If we make it possible for students to participate fully and without a great deal of worry about indebtedness in higher EDUCATION, we are making a direct and immediately realized investment in culture, the economy and society. It is the kind of investment that we think will produce confidence in the role of the state -- something with which you must be concerned -- and confidence in the university itself -- something with which we as professors and teachers in the system are obviously ultimately concerned.
If students and their families believe they have an equal opportunity of participating in higher EDUCATION, they will have faith in the system and in the country.
There is a kind of morale as well as an economic message here. In saying that we support students and the possibility of equal access and participation in higher EDUCATION for students, we are saying to you that you have a chance to build public confidence in government, in the state, in the community and in the universities at the same time. There is a two-sided reason for public investment in students.
I have simply touched on these themes. In the course of 12 pages we were able to give many more reasons and a good many facts to support our views and to raise many questions. I am sure you have had a opportunity to read this although, I confess, it is a bit complicated. We have also attached a number of appendices which are even more complicated than our paper. I thought it would be more useful to present the main themes of the paper than read it, or even parts of it.
Earlier today someone mentioned a coalition which has recently announced an agreed set of proposals on student aid. The CAUT was one of the partners in that coalition and we were pleased to reach agreement on such a broad front on this crucial matter.
[Translation]
Senator Losier-Cool: I enjoyed your presentation a great deal. The Conference Board of Canada mentioned one of your criteria to us, that is your desire to form students with a critical and well-furnished mind. These are the students with the best chance of succeeding. This is also one requirement that employers are seeking. We will not discuss indebtedness or costs with you. We have already discussed this subject with financial institutions.
Can you tell me how universities will adapt to these major changes in 1999? I was involved for many years in the EDUCATION system. Change is a much slower process there than it is in the private sector. Can you give me some idea, so that I can compare the two? I seem to recall that Mr. White, the President of the University of Quebec at Hull, spoke on this subject recently. Can you give us an example of the types of services offered in universities in terms of the faculty and the equipment? Is the lecture method still being used?
Mr. Bruneau: I can give you two examples. Mr. Savage can give you additional ones. Today in 1997, we are seeing categories of students that were non-existent 25 years ago. For example, there were no native or aboriginal students 25 years ago. We are witnessing a major, fundamental renewal. A new segment of the population is participating in the postative process. We are seeing a fundamental renewal along with a profound change of attitude.
The second example has to do with programs. Information technology has evolved rapidly in the past 25 years. Programs that exist today in 1997 obviously were not around 25 years ago. Fairly substantial changes are occurring in order to keep pace with the demands of the world economy. These demands have led to adjustments and changes in student programs.
In fact, you are asking me another question. Are we in a position to exercise some leadership, that is to take action before we are asked to do so? Here again, I can give you an example. There is the case of multidisciplinary programs where research is conducted and questions are raised which require a person to have knowledge not only of history and sociology, but perhaps also of mathematics and biology. For example, understanding the human family or the evolution of species or other substantive issues requires knowledge not only of one field, but of many. This learning process and this multidisciplinary research is taking place in almost all of the country's universities. We are in the process of asking questions and doing research. We are the ones who are asking the questions. It is a matter of our exercising leadership. We ask questions and we try to form minds even before problems are put to us.
[English]
Mr. Donald Savage, Ph.D., Executive Director, Canadian Association of University Teachers: I will give one other example and then a cautionary note, perhaps.
In this last generation in Canadian universities there has been a greatly increased capacity for the study of foreign cultures, foreign languages, foreign political economics, and so on, all of which strikes me as absolutely essential knowledge if we are to compete internationally. That transformation, in large part, was internal. It was generated within the university and should be applauded. However, as the funds for research begin to dry up, it is precisely those programs that are most vulnerable. We are in danger of throwing away a generation's worth of work towards creating a research infrastructure and experts in this country.
[Translation]
Senator Losier-Cool: I have another technical question for you. Are francophone universities outside Quebec members of your Canadian Association? What about the University of Moncton?
Mr. Bruneau: Yes.
Mr. Savage: Yes.
Senator Losier-Cool: Thank you.
Senator Lavoie-Roux: Unfortunately, I have not read your brief as I only received a copy of it this morning. I have a question concerning research and development. This is an issue that concerns everyone we meet with. Those who make representations to us seem to be quite concerned or worried about the fact that funding appears to have dried up. Have you made any representations to the government regarding this matter? How have your demands been received?
[English]
Mr. Savage: For many years we made representations about this. The House of Commons Finance Committee has listened, in part, to some of the things we have said about, for instance, the importance of the funding of the three federal granting councils for research. We hope Mr. Martin will listen, this time around, to the representations made both by us and by them.
I should also draw your attention another coalition which has interested itself in research and which has produced the document on research infrastructure which is attached to our presentation.
We have made a series of propositions to the government as to how we could, perhaps, better target some of the research money to deal with emerging problems in research.
We talk about how important it is to ensure that research structures -- labs and so on -- are kept up-to-date. We suggest that funds be used for a specific program of transition when we have graduates, particularly in, say, science and engineering, who want to move into the private sector. Perhaps we could do a better job in that particular area.
We have endorsed the proposals of the Social Sciences and Humanities Research Council, which has pointed out that research is not simply a question of alliance with the private sector, but that the research capacity of the university should be available to all organizations in the community who have some need of research. The Dutch have pioneered this for many years and the Humanities and Social Sciences Federation is pressing the government to assist in doing a Canadian variant of that so that community groups -- for instance, non-profit groups and trade unions -- could have access to the research capacity of the university.
We have been pressing the government for many years. This year, we have provided, with our coalition partners, a detailed set of proposals as to what we think could be done better in this country in relation to supporting university research.
Mr. Bruneau: At the University of British Columbia, we have two examples of the crisis that has resulted from this enormous decrease in transfer funds which is passed on to us by the provincial government. One is the existence of a new category of employee: the teaching assistant for life, as we call them.They earn tiny salaries, and they are hired every September and fired every April. We must do this to fulfil the teaching and research tasks imposed on us by our large numbers of students, and by the large research enterprise we have taken on. We must continue this work but we no longer have the means to hire people for longer periods of time, in some cases for a career, in this important enterprise. Instead, a large number of people work for us for eight or nine months and are then let go. It is unfortunate that we are compelled to have this kind of employment relationship with them. It is not in the long-term interest of universities to have a floating pool of personnel. However, this is the result of the funding problems we have had to deal with in the last five years.
By way of another example, last week I visited a laboratory in our university where all the paint has fallen off the ceiling. Under the paint were little asbestos squares on the ceiling, and they are also beginning to fall down. The paint was all that was holding them up. The university is in a bit of a bind because our maintenance funds were used up by the end of January. I guess the rest of that ceiling will fall down.
These small examples illustrate a significant funding crisis in the infrastructure, which is the basic resource of people, knowledge and material that we need to do our jobs well.
We want to teach our students to be truly good, critical thinkers, and we want them to be researchers their whole lives long. People talk about life-long learning. I cannot resist adding a new idea -- that of life-long research. People must be able to do research in order to survive the 21st century. That will be a crucial requirement.
[Translation]
Senator Lavoie-Roux: You mentioned at the start of your presentation your concern about the changes that have occurred as a result of information technology, whether it be the Internet or other changes and also the problems with finding employment and so forth. Are any of the universities focussing on this problem? All of us are buying into the new technology as a marvellous thing. In many ways, it is, but no thought has been given to the implications. Are universities concerned about getting information out to people who are not plugged into the Internet? What impact does this have on employment? I would mention Jeremy Rifkin's book The End of Work. This is an issue of some concern. We can talk economics all we want, but everyone knows that this is a very important point. Are universities looking at this problem from a sociological standpoint? How do you plan to impart to the people who are no longer in universities all of this new data which will influence their lives more and more? Are universities focussing on this concern?
Mr. Bruneau: Quite simply, no they are not. In some ways, we would like to focus on this problem. For example, our Association is planning to hold a special assembly this coming fall for the specific purpose of discussing these issues. We would like to be able to answer these questions, but it is still too soon. Research into the sociological implications is just beginning. That is all I can tell you. It is not a very satisfactory answer.
Senator Lavoie-Roux: At least, you are beginning to address this issue and that is a start.
Mr. Bruneau: Yes, it is.
[English]
Mr. Savage: Many people in the universities are worried about this because it seems entirely possible that the creation of the new technology and the Internet will simply reinforce class lines rather than eliminate them. It will be the people with access to higher EDUCATION and access to the Internet who will have the privileges of the use of that technology. The remainder of the community may be frozen out. That is why the kind of thinking behind the science shops idea is so important. We must consider how the research capacity of the university can be translated into the community.
On the technical side, you have one example of this here in Ottawa. The computer science people at Carleton University were heavily involved in the creation of the Freenet, which is available to anyone who lives in Ottawa, provided they can get on. There should be a lot more of that.
Senator Lavoie-Roux: Right now we have the feeling that the only ones who are preoccupied are--
[Translation]
These are the people who market technology. I think that a link should be established, either with universities or with community colleges in the other provinces. I am concerned about this because the gap between the different classes in our society will continue to widen, not to mention that this will have an impact on job creation.
[English]
You have two universities in Vancouver, Simon Fraser and UBC.
Mr. Bruneau: Yes.
Senator Lavoie-Roux: There are at least four universities in Montreal. We take good care of our minorities, and they take good care of themselves. I congratulate them for that.
[Translation]
Given the scarcity of financial resources, what efforts are being made to bring university programs and priorities in line? This area will have to be examined more closely because costs are continuing to mount. We are told that there is less money available, but I am not certain that the money is always spent on the right thing. I am not talking only about universities, but in general terms. Some rationalization is in order. Are you involved in any rationalization initiatives and to what extent? Which cities have the greatest number of universities? Is there not only one university in Toronto?
Mr. Savage: There are three of them.
Senator Lavoie-Roux: What are the names of the other two?
Mr. Savage: York University and Ryerson.
[English]
Mr. Bruneau: In British Columbia there is, as some people would say, almost too much differentiation amongst institutions. In fact, that is how we have answered your question and tried to solve this problem.
The University of British Columbia is a research university or it likes to think of itself as one. It is a research university driven very much by grants from the granting councils and from industry. We have a very close relationship with other research institutions across Canada and around the world.
SFU is also a research university, but with more orientation towards undergraduate instruction, some people would say.
The University of Victoria is a liberal EDUCATION institution concerned with drawing people in from the interior of the province. It has made a specialty of undergraduate instruction, and people feel comfortable doing undergraduate degrees there. There is a distinction between what SFU does with its downtown campus and its orientation towards business EDUCATION, and UBC, which is everything to everybody and a large institution, and between UVic, which tries to draw people from the interior of the province. They are complementary institutions. One university does not try to do everything. It is impossible.
We have been forced down that path by financial necessity and also by history. UVic has quite a different history from us, and we accept those differences. However, there is some anxiety about this because liberal EDUCATION is universal. The study of language, culture, history and the basic sciences must be present in every institution. We cannot avoid having some duplication. In fact, we want to have some duplication. It is about families and scholars. I believe this situation also applies in other provinces.
Mr. Savage: In the last five years, there has been considerable development between universities and cooperative programs. For instance, if you look at central Ontario and universities such as Wilfrid Laurier, Guelph, and the University of Waterloo, you will see that they have set up cooperative library resources to create single warehousing. They complement each other's purchases and their students use each other's libraries.
They have done the same sort of thing with specialized kinds of courses which are expensive to offer. Why should they be offered in three institutions? We should ensure that students from the three institutions can go to any one of them, particularly for specialized undergraduate courses. In Nova Scotia, for example, the universities have set up a structure so that they work together with their libraries. That is also being done in central Ontario. In the Toronto and McMaster engineering schools, programs have been set up so that, again in specialized areas, students can tap into the expertise of either institution. Here in Ottawa, for all practical purposes, the graduate programs at Carleton and Ottawa are integrated in the sense that you can take a course at one or the other. It does not matter at which institution you are registered. The libraries for graduate students are open to everyone.
There is no doubt that pressure has been the mother of invention in this regard, but it suggests something quite important. That is to say, these kinds of structural reorganizations are done with a minimum of bureaucracy and they are done between institutions where there are real problems by real people who can actually solve them. We are fearful of the notion that we should create yet another large bureaucracy whose civil servants will direct all of this. This was our objection to the rationalization program of the Nova Scotia government of approximately one year ago. It seemed to us to be bureaucracy-driven, not knowledge-driven.
Senator Lavoie-Roux: Are you in agreement that, wherever rationalization can be made, it should be made now?
Mr. Savage: Yes.
Senator Lavoie-Roux: It should not be done at any cost, but the resources should be used more efficiently, should they not?
Mr. Savage: Yes.
Senator Forest: As someone who has lot of university experience, you need not make any case to convince me, particularly for research. Dr. Savage, in your new president, who was our vice-president of research, you have acquired a tremendous asset. It is our loss.
Research is a major concern of mine. I was still at the university when all these cuts were beginning to have their effect. We were worried then that we would lose a generation of scholars. I see it happening now in our own family of Ph.D.s having to go to the states because there no openings here in Canada. Even in the states, the contracts are only for one year. This is very detrimental to the institutions and to what universities are all about.
Do you think we have lost that generation of scholars? This is a serious question which has implications for the future. We have a generation of scholars who, instead of having been given an opportunity to teach and to continue with their research, are working on single-year contracts with different universities all across North America.
Mr. Bruneau: You have answered the question.
One could argue, as some people do, that in Europe, where there was over-production of graduates for as long as 100 years at a stretch -- and there is a lot of research about the role of these people in society -- it has not been a complete disaster. These people take on active roles in business and in community life and their ability and skill it is not completely lost to us. They were trained to do research in teaching. That is what they wanted to do and they are not doing it. In far too many cases, they are underemployed and frustrated.
Is it a generation entirely lost? To be strictly fair, they are not entirely lost. However, it is a misuse of their enormous talent. Some way must be found to draw them back into the research and teaching community.
Senator Forest: The cuts have precipitated a number of partnerships between business and the universities. Perhaps that is a good thing. In order that we can do their research, they finance it. However, I believe there is a danger in this, and I would like you to respond to that.
Mr. Bruneau: I will also ask Dr. Savage to reply to that one.
The University of B.C., has close relationships with the forest and the mining industries, for example. They are physically present and visible by the big buildings that have been subsidized to a fair extent by those industries. The question is whether they have control over hiring, over the programs of instruction, and over the kinds of research that are done. The CAUT is concerned that the kinds of research done are influenced by these industries possibly a little too much.
The private and the public sector must work comfortably together, but on the understanding that the liberal EDUCATION of students requires that we do research in all sorts of areas which may not be immediately likely to pay off. Fundamental research in science might not be driven by the immediate economic interest of a company which wants to solve a balance sheet problem next year or next month.
I have a feeling that you will agree with me on most of this, but it is perhaps worth trotting out all the reasons why it is a risky proposition.
Senator Losier-Cool: What is the position of your association on the question Senator Forest raised? Do you prefer more?
[Translation]
Do you want more funding from the public sector which could then have an influence over the programs offered. I did not understand your position.
[English]
Mr. Savage: Over the last few years, we have developed advice for universities on how to deal with this situation. We are not opposed to joint programs funded by the private sector, just as we are not opposed to the federal government funding programs. However, we believe it is important that there be an arm's length arrangement in several critical ways.
It is important that graduate students involved in these programs be able to write their theses and not have a company say that they cannot register a particular thesis because it touches on their corporate secrets. Most universities have solved that problem by implementing rules about it.
We are also quite concerned, as Professor Bruneau has said, about the importance of maintaining free and open research. The university is about open research, not closed research. If there are to be deals with the private sector, there should be strict rules about how long that research can remain private. We understand that people must apply for patents and that sort of thing -- and, it takes a bit of time -- but it does not take more than two years. After that, that research should be in the public domain.
As we operate, we put the research in the public domain so that anyone can criticize it. That is how you find out whether or not it is good. If it is secret and private, how can anyone in the university community know whether or not it is good? That is the basic problem. We think that universities must have that kind of rule in order to deal with that situation. There must be clear conflict of interest rules that have some teeth. We have suggested precisely what those should be. We have models for that sort of thing.
Our answer, then, is "yes." Of course, universities must be funded by a variety of sources, but with all those sources -- whether from the government, from the private sector or from anyone else -- there must be clear, well-understood rules which make it obvious that universities are different from their partners.
The Chairman: I have several questions, but we are out of time. I allowed the committee members to ask their questions first. I will send those questions to both of you so that we can receive your answers to them.
Senator DeWare: Whenever we discuss funding, universities, professors and young teachers trying to get into teaching positions, the word "tenure" comes up. A number of professors in our country do have tenure, as do some teachers at our local schools. If a faculty is filled with a tenured group, which is doing excellent work, is that one of the reasons we cannot bring in new faculty? Are you handcuffed in this way? Is tenure the problem?
Mr. Bruneau: I should make the distinction that tenure is the promise that universities make to us that they will not try to remove us from our jobs if we say something political or about our academic work which is mildly embarrassing to the university. We cannot be removed unless there is a good reason for it. The reason cannot be political. It must be to do with our performance as researchers or teachers. That is an important principle we would want to keep, regardless of what we decide about job security, which is what you are asking about.
With regard to job security, when you have long-term commitments to research and teaching, it just does not make sense to have annual hirings and firings. Everyone will agree that you need long-term commitments from the men and women who do the teaching and research in the university or those programs of research and teaching will not survive.
At the same time, the university has long since realized that a wide variety of people of different ages, men and women both, from a variety of groups in society, ought to be present in the university helping it to do its job. That renewal of the professoriate has been going on at a tremendous rate for the last 25 years. There is an extraordinary amount of renewal going on. We would like to see more.
The decline in transfer funds, about which you have heard three or four times this morning, has much to do with the fact that we are unable to make that renewal take place as quickly as we would like.
Mr. Savage: Canadian universities must be competitive in the North American society. Every major university in the United States has tenure. If we are to attract people to Canadian universities, we must have the equivalent. We certainly cannot pay the same salaries. If we were to tell world famous researchers that there was no tenure, they would, obviously, not be attracted to our universities. Presumably, many of our top researchers would come to the conclusion that they would get a better deal in the United States, not only on salaries but on tenure.
The Chairman: Thank you very much. We will be sending each of you some questions which we should like to have answered for our record.
We will now hear from Mr. Tom Norton, president of the Association of Canadian Community Colleges.
Mr. Tom Norton, President, Association of Canadian Community Colleges: Mr. Chairman, I should like to introduce Mr. Gerald Brown who is with me today. He is Director General of John Abbott College in Sainte-Anne-de-Bellevue in Quebec. Mr. Brown is also involved in our college presidents' network, that is, the grouping of 175 presidents of colleges, CEGEPs and institutes of technology.
We will try to give to you our view of the topics both with regard to the national association as well as with specific reference to institutions and what these things mean to them.
There are 175 colleges in Canada. Every province has them, all by different names. Very few are called "community colleges." Typically, the colleges are about 30 years old. Although they operate in 12 different jurisdictions, they have remarkable similarities.
We have approximately 400,000 full-time students and about 1.5 million part-time students. In effect, we are where working Canada goes to school.
When we talk about a learning society, it is crucial that we talk about the role universities play. We feel it is equally important that we understand that if working Canadians do not increase their skills continually, if technicians and technologists do not add continually to their understanding, there will be no economy. The value added through the intellectual component of work is so important now that it is working Canada that earns for all of us our living.
We have made our points as cogently as we may in the document. It is not our intention to read it. I should like to ask Mr. Brown, with your indulgence, to frame our general points.
Mr. Gerald Brown, Director General, John Abbott College: Mr. Chairman, the focus of our brief is our preoccupation with our students who are our raison d'être. Therefore, our brief deals with the needs of our students.
We recognize the delicacy of EDUCATION being in the provincial domain and the difficulties in trying to get some sort of pan-Canadian approach to Post-Secondary education. Having said that, we realize that it is a critical and effective way for the federal government to intervene, support and complement many of the efforts being undertaken in the various regions of our country.
We believe that the most appropriate role for the federal government to play is to facilitate a framework to support our students. Real life for our students is a continuum -- leading up to Post-Secondary education; in post-secondary EDUCATION; exiting Post-Secondary education; and then getting back into Post-Secondary education. We recognize that Post-Secondary education falls under the jurisdiction of the provincial government. However, the federal government can play a valuable role of facilitating access at the beginning and toward the end when students are exiting the system.
As students begin to prepare themselves to move to Post-Secondary education, it is important that they have an understanding of some of the opportunities that will present themselves. Although the systems across Canada vary and cover a whole variety of options and possibilities, increasingly, we are told by college presidents, career and academic advisors and by representatives of industry that there is a shortage of skilled labour. You have probably heard that over the last couple of months. We also hear that there is a clear need in the area of science and technology. We are able to respond to the humanities and some of the social science needs but, increasingly, science and technology keep surfacing. Therefore, we think there is a critical role here from the point of view of being able to help students who are thinking about what the future holds for them.
Our recommendations, therefore, focus on two particular areas. One is for the federal government to undertake a public awareness campaign, such as was done with smoking. We think there is a real role to play here in terms of making people aware of the fact that good opportunities exist at the post-secondary level, primarily in the areas of science and technology. This can be facilitated through scholarship programs which would assist students to enrol in studies in the areas of science, technology and engineering.
The major problem facing our students relates to what the future holds for them. The future has become very difficult to define. By virtue of an awareness program and a scholarship program, there are futures which lay beyond Post-Secondary education, those being primarily in the areas of science and technology.
Students, while in Post-Secondary education, are amassing a tremendous amount of student debt. I can speak to you not only as a college president but also from the personal experience of my own son who pursued the type of career he wished to enter into.
We are all from a generation which worked on a certain premise: that EDUCATION would not be an expensive proposition. The reality is that the rules have changed for Generation X. We are increasingly moving towards a U.S.-based model where the costs of tuition are increasing at a tremendous rate. Students in our institutions are graduating with a tremendous debt burden.
John Abbott College is located on the West Island of Montreal. Those of you familiar with the West Island of Montreal know that that is the upper socio-economic sector of Montreal. It is where most of the executives and senior management people live. My institution, therefore, is quite privileged in the sense of having that kind of community from which to base. Over the last three to four years we have seen a 100-per-cent increase in the number of students accessing student loans. This is in the Quebec system which is tuition-free. In the other provinces of Canada tuition is placing an increasing burden on our students as provincial governments back off on their funding formulas.
We have made several recommendations about the importance of moving to some sort of debt-relief plan which will enable us to help our students when they graduate -- whether it be something that is hooked to their income or some sort of work-related task that would give them credit toward their debt. Whatever model we consider, it is critical that we push ahead with that now.
Our students are leaving with significant debt and are looking for work. It is important that we facilitate that transition. Many students are being assisted in that transition. Today's Globe and Mail mentions several things that the federal government is doing to facilitate that transfer, and we commend that type of action.
However, the reality, from the point of view of employers, industry, and the unions is that students must go back into the system quickly. We must look at ways of facilitating that return. Continuing EDUCATION and life-long learning is a critical part of our life now. You have heard of the studies which show that the notion of a career lasting for 35 years no longer exists. For most of our students, careers last for three to four years. To be able to return to EDUCATION and to resource themselves is critical.
Unfortunately, our system, especially from the perspective of tax relieve that could come from that, is one that is primarily based on the old model: You go to school, you go to work, you pay taxes, and if you do take the odd course, you will get a tax credit. Tax credits are presently based on full-time student status. We must find some way in our tax system to compensate those who continue their EDUCATION.
Having participated in a number of committee meetings, we know the critical part of this process is the question and answer period. Clearly, the jurisdiction in this area belongs to the provincial governments, but we also see a critical role of leading into, out of, and back into our system which the federal government could play.
Mr. North: To avoid future problems with regard to the funding of students and our higher EDUCATION institutions, we must devise programs now which will encourage parents to start saving money, again along the American lines, virtually when children are born.
One notion we should like to present is the purchase of Canada Savings Bonds within the shelter of a much larger definition of an RESP. Those bonds could be purchased very much like mutual funds within an RRSP, with pre-tax dollars, and the interest earned would be sheltered. If that were done it would not only help parents save and encourage them to do that, but it would also help repatriate our debt, which is clearly a priority -- second, perhaps to debt rposttion, but nevertheless a priority.
The notion of helping the generation of parents with three- and four-year-olds to start saving now for that new environment and then creating an attractive vehicle for them to do that is a priority. If we do not treat it as such, we will not be talking about a 10- or 12- year window of unacceptable indebtedness but rather an extenuated multi-generational problem which could greatly diminish participation in higher EDUCATION.
I should also like to mention the crucial importance of the role the federal government plays in the international arena. Approximately 20 years ago, our colleges defined the word "community" as the immediate community around them. The community in which our graduates work now is obviously a global community. Now we find our young technicians in every country in the world repairing air conditioners and helping in the development of flight systems. We are becoming exporters of highly skilled people. We have been told by large employers in Canada that our graduates must understand that they could spend as much as half of their working lives working outside of Canada for Canadian employers. Unless our students have an opportunity while they are in college and in university or university-college to develop a sense of internationalism, to work with students from other cultures, to become comfortable in working with other cultures, a key vocational skill may well be denied them.
The federal government has played an outstanding role through CIDA and Foreign Affairs in creating opportunities for students to move to other countries, to work in other countries, and to work with Canadian industry in other countries. They have also played a role in making it possible for visa students to come to Canada, where, by being in our institutions, they change the way our institutions work. They create opportunities in classrooms and in labs to talk about those other countries and the application of business programs in other countries.
Both of these elements are very important. As the government reviews its priorities in international development assistance, we hope that it will factor into that the contribution that international development assistance makes to the learning of students in higher EDUCATION and their emergent internationalism. Without that, we are sorely short-changing our own students. Equally importantly, all of us as Canadians will pay a price for that in the future. We as a country depend more on export than any other OECD nation. Unless we encourage and expand those skills, our students will pay the price.
I thank you for your indulgence. We would welcome questions at this time.
Senator DeWare: These issues are important to me. I do not know whether you are aware of my background but, for five years, I was the minister responsible for community colleges in New Brunswick. I understand some of issues respecting these programs both as senator and as a parent because my son went through this type of program.
One instance which was brought to my attention as minister was that the average age of our aircraft mechanics in New Brunswick was 55. We could see a crisis developing. We set up a program and instituted the training and we were able to fill that gap.
When we were dealing with the Employment Insurance Bill, The Honourable Doug Young, the minister, appeared before our committee.
He told us about the moneys that were to be transferred to the provinces for training. Our concerns in that regard were twofold. First, we were concerned that you, as presidents responsible for community colleges, would be able to access those funds for training. Second we wanted to know if private institutions would have access to those funds. We were concerned there would be too many people trying to take advantage of that in the private sector, rather than the government being able to use it for community college programs.
Mr. Norton: The response to that would vary in different provinces. Typically speaking, 10 years ago, the federal government played an enormous and positive role in the retraining of the unemployed through the Ministry of Human Resources Development and its predecessor ministries. They made a significant financial contribution to colleges and institutes of technology across Canada.
As you are well aware, that has diminished now to the point where, on the one hand, the retraining of the unemployed is no longer seen as a primarily effective mechanism in labour market adjustment. On the other hand, the federal government is disengaging itself from the whole area of EDUCATION and from training specifically.
The total amount of money being spent to purchase training from the colleges has diminished. The private sector, quite reasonably in many cases, is an active bidder on that training. There are also private schools in Canada that are outstanding institutions. Having said that, let us also say that it has created an opportunity for activity by private training institutions which are, shall we say, less than exceptional.
Our concern is that, without a level playing field -- that is, without a standard that graduates must achieve -- students going in can be sadly disadvantaged. Our position is certainly not that there should be no private training schools or that private training institutions should not have access, but they must meet the same standards for their graduates. Graduates must meet the same standards regardless of the institution they attend
Senator DeWare: How do you set that standard? Who sets that standard?
Mr. Norton: Learning standards are truly the area of the province yet the federal government has a continuing interest in the labour market. There is an outstanding opportunity for the national government, in combination with the support of the Council of Ministers of EDUCATION, to define national exit standards in those vocational areas. There is no question that a partnership could exist there.
With that partnership, a whole host of problems we are now experiencing would be resolved. However, it may be fair to say that it would create other problems.
Then having moved from that in terms of accountability, there must also be participation by those people who employ graduates. They are the consumers in that instance. Industry and unions must be active participants.
Without those national standards, there will never be a way of assuring that the investment that individual Canadians and national and provincial governments are making in the skills upgrading of our citizens is an effective investment with outcomes that are serving real needs.
Mr. Brown: It is true that we were rather privileged in the sense of having direct access to all that funding. As college presidents, many of us are welcoming that challenge coming from the private sector. One of our strengths as colleges is our flexibility. Unlike many systems in Post-Secondary education we can adapt. We welcome the opportunity to show our strength. Competition is healthy. You must produce a good product and you must be able to sell it. We will succeed because we can provide industry and students with recognition for that kind of work and study.
Standards will come from industry. The industry will set those standards. Many of those standards are developed at the national level.
Senator DeWare: We will have a some competition which is good.
Mr. Brown: I agree.
Senator DeWare: What is the comparison between a community college debt load and a university debt load? How serious is the problem? Universities have statistics showing it will cost up to $35,000 for a four-year program. I suppose it depends on the course the student takes.
Mr. Norton: There is no reason to expect that college tuitions will be any less than university tuitions in the long run.
One difference is that the average age of college students tends to be a little older. More of our students are working part time. That is positive in one way. In another way, it means that the learning environment for those students is very complicated if they try to carry a full-time program.
More than half of our students are working 20 hours or more per week in vocational programs. That is a real challenge. Our information is that the debt load for our students on a year-for-year basis will be the same as it is for university students.
There is another important aspect to this. In some of our colleges, as many as 20 per cent of our students are university graduates. Universities, quite correctly, are not in the business of preparing people in all their programs for the labour market. They have other equally important objectives. In our unique Canadian model, increasing numbers of people are completing university and then coming to college for a year and carrying over the debt from one institution to the other. The debt loan pyramids. It is a real problem on that basis.
Senator DeWare: What is happening relative to distance EDUCATION?
Mr. Norton: That is so exciting; I wish you had not asked it.
Senator DeWare: I would think it would be.
Mr. Norton: Oddly enough, it has not manifested itself most quickly with students who live some distance from the learning institution. Often the student across the street from the institution is the one involved in that program.
Certainly for young people, the notion of being in an institution, as a social environment, as a transition from secondary school to work, will always remain important and crucial. It will not diminish greatly. For the working learner, distance EDUCATION represents a tremendous opportunity. It is finally moving from the talk stage into actual deliverables through the Internet and multi-media. This will be an explosive area in the next 10 years. I also think it will be a tremendous international marketing opportunity for Canadian institutions. We will be able to market to other countries the competence we will naturally develop in distance EDUCATION.
I would refer you to the work our universities are doing in the MBA programs. It is difficult to tune into a channel without seeing a grinning professor on the screen.
Mr. Brown: I chaired a council of 170 college presidents in Canada. We hold regular sessions to deal with issues that concern us. It was interesting to watch the evolution occurring among college presidents. Five years ago, the priority would have been strategic planning and then budget cutting. These are still the realities, but in our most recent session, the overwhelming preoccupation was how to deal with the new technologies and how they interface in the delivery of EDUCATION.
My initial perception of distance EDUCATION was that it would involve students who were physically removed from a learning institution. However, that is not necessarily the case. For example, on the West Island of Montreal, we have many pharmaceutical companies and our institution is running courses right in their plants, but the realty is that you could probably drive to each location within five minutes.
The Chairman: I am interested in and supportive of your recommendation concerning the portability of college credit transfers. Would you care to elaborate on that?
Mr. Norton: This is one we included, hoping that no one involved in national government would notice, but you have caught us.
Let me give you the classic opener. This is an issue among provincial institutions. It is an issue which must be dealt with in the Council of Ministers of EDUCATION.
Having said that, here is a tremendous opportunity for national leadership. There is a struggle within our provinces to simply get articulation, which means movement from secondary school through college, from college to university. However, it is coming along well. We are so much further ahead today than we were five years ago.
There are few or no protocols that address the situation pertinent to a working person who moves from New Brunswick to Ontario and wants to continue his or her learning program while working. No one with a purely provincial background has an incentive to consider that issue. That does not mean there is no interest in it, but it is not a primary provincial issue.
There is room for a federally supported program to consider what can be done about transferability of credit and portability? How can we ensure that Canadians are able to move their credentials and learning across Canada in a seamless way? It is easy to say, but in the academic community it is not easy to achieve. Early work will provide protocols among institutions if not among provinces.
That is a vital issue. We feel the mechanism is there to start working on it and that there is a role for the national government to provide leadership in support of the Council of Ministers of EDUCATION to tackle the issue.
The Chairman: Can you estimate how much funding would be required to develop your recommended pilot project?
Mr. Norton: To run a pilot project would cost less than $200,000. On that basis other institutions would pitch in.
I do not think the federal government can be expected to fund everything. If it is important to other people, other people should be invited to participate. I think $200,000 from the federal government would kick-start the project.
The Chairman: What are your major barriers to cooperation between universities and colleges in Canada?
Mr. Norton: We have seen the enemy and he is us. I wish I could find someone else to blame. We can blame our history. We can blame the fact that the universities have a very proud 900-year history of freedom and independence, of senate driven institutions. Our colleges are increasingly market-driven and often do not understand the complexities of universities.
Having said that, we have wonderful examples in Alberta, British Columbia and most certainly in Quebec, where institutions, colleges and universities have relative ease of movement of students between them. It would be inappropriate to point out examples of where that has not happened.
Mr. Brown: The critical issues between the colleges and universities are those that arise in any partnership. There is a recognition that we are all in a four-, five- or six-year continuum of Post-Secondary education and each has a role to play.
As Mr. Scrimger says, various provinces are evolving in that direction. Some colleges have mandates which are very much at the university level.
The CEGEP system in Quebec is in a sequential as opposed to a parallel system. It has taken a long time, but we have reached the stage where the points we require at the CEGEP level are exactly the points required at university.
The transferability issue we often talk about between provinces has, in fact, been an issue inside the province. It is being worked on. It is a recognition, as is anything in a partnership, of trust, respect and achieving a win-win situation.
The Chairman: Could you expand on what is happening internationally with community colleges?
Mr. Norton: Our colleges at moment are working in 72 countries. Our international involvement began about 15 years ago with small programs that CIDA actually funded. Those helped us link institutions in Canada with their partner institutions in other countries with the idea of helping those institutions develop to meet their own objectives.
Today, we have colleges which earn a substantial proportion of their operating revenue by contracting with the World Bank, the Asia Development Bank and contracting directly with countries not solely in the area of institutional development, but in order to help other countries develop national human resources development strategies. This is fancy language which means: How do you match your workforce with the employment opportunities being created by economic change?
The other part of that is the degree to which we want students from other countries inside our institutions. I mentioned that earlier and how important that is. I would refer to Holland College, for instance, in Prince Edward Island. Having Japanese students there in the summer is becoming an increasingly important part of their revenue base.
I would close by saying that the partnership between Canadian colleges and industry is becoming an important and unique exportable commodity. We can go with a Canadian company that wants to trade and sell goods to another country and offer to train people in that country to assemble, manufacture and repair that technology and thereby give Canadian companies an advantage in the market place.
For colleges like the British Columbia Institute of Technology, the Southern Alberta Institute of Technology, Édouard-Montpetit, and certainly Seneca College in Toronto, to name a few, this is an extremely important part of their community participation in economic success.
Senator DeWare: It also works internally, does it not? When a new company moves into a province and they required trained personnel do you come to the rescue?
Mr. Brown: Not only are we dealing with the human resource component in foreign countries, but we are becoming increasing involved in that in partnerships at home. Our institutions are working with the chamber of commerce to provide international missions to other provinces and countries. We are doing joint ventures now training people via the industry sector.
There are positive repercussions inside the institution. Not only is international development valuable from the point of view of transfer of human resource training, but student exchange plays an important role in our institutions. The more visible these students are within our institutions, the more visible they are as part of curriculum, the more people begin to recognize the global community we belong to. This also has a terrific impact on the internationalization of our curricula. Our humanity, science and English as a second language programs are all factoring into this international component.
Senator Carstairs: I should like some background material for myself which I think would be important material for the other senators to have. I am not a member of this particular committee but, hearing that you were to be called as witnesses, I dropped in.
My question has to do with the disparity in the number of community college placements from one province to another. When I was sitting in the Manitoba legislature Manitoba had the lowest number of placements of any province in Canada. Has that continued? Is the situating levelling out now? Is there a recognition of the importance of the role of the community colleges throughout all ten provinces and two territories or is it still very uneven?
Mr. Norton: It is certainly not perfectly even, senator. In some provinces, colleges began as extensions of government. Their job was to respond to the directions from a central provincial government. Generally our experience has been that the closer an institution is to its own community, the more it can respond to the economic and social necessities of that community; and the more that community starts to support, with its own votes and its own political interest, the growth of the institution. Manitoba was late in the day in coming into board governance, coming into a circumstance where the community felt it was their college, their institution, and expressed that to politicians. Institutions, such as Red River, South Winnipeg Tech, and certainly Assiniboine Community College, are now very much associated with the community, very dynamic and growing, and I am sure the pressure in Manitoba is now quite exceptional.
In British Columbia, the pressures around accessibility to higher EDUCATION are such that it is not just colleges that have grown but whole new kinds of institutions, such as university colleges.
Colleges are quite different in each province. There are massive differences between colleges in Quebec and Ontario, as an example.
Senator Carstairs: Thank you.
The Chairman: We are, unfortunately, running out of time. Professor Norton, if I sent you about 10 questions, would you answer them in detail to the best of your ability?
Mr. Norton: Sir, you can count on me.
The Chairman: Thank you.
We will now hear from representatives of the Association of Universities and Colleges of Canada.
Mr. Robert J. Giroux, President, Association of Universities and Colleges of Canada: I would like to summarize some key points in our written brief which we submitted to the committee several days ago. You should all have copies of the notes for my opening statement to which are appended the recommendations from our brief. We would ask you, if it is possible, to include our recommendations in the official record of the hearing today. We leave that in your hands, Mr. Chairman.
Following my opening statement, Dr. Davenport will also make a few brief remarks and then we would welcome your questions.
[Translation]
Clearly, Mr. Chairman, a decade after the Senate undertook its major review of federal policy on Post-Secondary education, universities are confronting a much different environment with new challenges and opportunities, which we summarize in our brief. Your inquiry is most timely and we very much appreciate your invitation to appear here today.
All partners in higher EDUCATION, including the federal and provincial governments, the institutions themselves, students and faculty, must work together to address the new challenges and opportunities to which I just referred. AUCC has identified three priority areas for action: university research, internationalization, and student assistance. I will say a few words about each of them in turn.
[English]
Our universities account for one quarter of Canada's research effort, significantly more than in any other country. Canada is recognized internationally as having a dynamic and productive university research community, which is the result of a funding system which stresses research excellence wherever it is found and of carefully balancing programs of the federal granting councils. Nevertheless, Canada's research effort pales when compared to most of our trading partners. Cuts announced in the last two federal budgets will rposte the real level of granting council support for university-based research by more than 25 per cent between 1994 and 1998. We certainly recognize the fiscal constraints on the federal government, but it is essential that Canada improve its overall science and technology performance in several respects to enable the country to thrive as a knowledge society to the same extent that it has succeeded as an industrial society.
In a globalized knowledge economy, Canada's research efforts must keep pace with that of its major OECD partners. Beginning to close the gap between Canada's R&D effort and the OECD average will require a long-term pattern of R&D investments. It will call for increased investments by all participants. AUCC, together with the Canadians Association of University Teachers and the Canadian Consortium for Research, recently developed "Putting Knowledge to Work," a concerted action plan under federal leadership over the next five years on three principal fronts: promoting research careers; arresting the erosion of Canada's research infrastructure; and enhancing partnerships to foster knowledge and technology flows.
The specific proposals in the action plan are outlined in our written submission. We believe "Putting Knowledge to Work" to be realistic and achievable, and respectfully urge your committee to lend its support to the proposed action plan.
[Translation]
Second, the federal government and universities share a belief in the importance of promoting internationalization, of providing our young people with international skills and of promoting Canada's trade.
In the area of trade, for example, Canadian universities were active participants in the recent Team Canada mission to South Korea, Thailand and the Philippines. We endeavoured to forge links with the private sector by emphasizing that university-private sector partnerships can help improve a company's exports and lead to new trade opportunities. Canadian universities are increasingly international in outlook, have a vast amount of technical expertise and have experience with an expansive network of overseas partners. These competitive advantages add value to Canada's trade promotion efforts. We also sought to promote Canadian universities to potential clients in these countries, both as high quality and competitively priced destinations for international students and as institutions with special expertise in training, technical assistance, and technology transfer.
[English]
Canadian universities' collaboration with partners in industrialized and developing countries is also a key vehicle for projecting Canadian values and culture abroad. International, cultural, scientific and EDUCATIONal relations are the foundation of the third pillar of Canada's foreign policy, a policy priority recommended by the Special Joint Parliamentary Committee Reviewing Canada's Foreign Policy and endorsed by the federal government in its response entitled "Canada and the World."
However, we feel that implementation of the third pillar has been disappointing. Budgets cuts have led to drastic diminution in academic relations programs and further cuts remain a real possibility. As a result, Canada loses the benefit of longer-term political and economic influence which accrues from international academic relations with the developed and the developing world.
There is a need for comprehensive strategy in this important area of foreign policy developed through collaboration among key federal and provincial departments and the higher EDUCATION sector to maximize the impact of our international academic relations activities. The AUCC and its members would welcome a more active partnership with the Canadian government in this area.
Finally, a comprehensive national student assistance program is a foundation stone for student mobility and equal opportunity without which many of our country's brightest minds would be unable to further their EDUCATION.
[Translation]
We are concerned about a number of recent developments which have created potential barriers to accessibility and mobility. They include the actions of several provinces to put limits on the portability of student financial assistance. They include, as well, rising student debt loads. Human Resources Development Canada has estimated that average student debt will rise to $25,000 by 1998 from approximately $17,000 in 1996 -- very high levels when compared internationally. While incurring some debt to gain a university EDUCATION is still a very good investment, very high debt levels and debt aversion can pose real barriers to accessibility for academically qualified but financially disadvantaged individuals.
[English]
The Canada Student Loans Program has been a Canadian success story, providing EDUCATIONal opportunities to hundreds of thousands of Canadians over three decades. Nevertheless, in recent years there has been periodic discussion of a possible federal withdrawal from student aid. This must not happen. We recommend that your committee urge the federal government to remain a full partner in student assistance through the Canada Student Loans Program, to address the growing problem of student debt, and to work with the provinces and other partners in the higher EDUCATION community in searching for solutions to this problem.
To these ends, the AUCC initiated discussions last fall with representatives of six other higher EDUCATION groups. Together, we developed a package entitled "Renewing Student Assistance in Canada: The Student Assistance Reform Initiative," which was made public in late January. It is a balanced set of proposals combining loans, grants, work study and tax measures to help students before, during and after their studies as required. Again, we would welcome your committee's support for these proposals which are described in more detail in documents that we have provided to each of you.
With that, Mr. Chairman, I will ask Dr. Davenport to add a few comments.
[Translation]
Mr. Paul Davenport, Ph.D., Vice-Chair, AUCC Board of Directors, President, University of Western Ontario: First of all, Mr. Chairman, I would like to thank you and your colleagues for striking this committee which comes at a critical juncture in the history of our Canadian universities. Mr. Giroux mentioned that I was the President of the University of Western Ontario; I am also an economist and this morning, I would like to discuss with you the impact our universities have on the economy.
[English]
We are making today, of course, an appeal to government for better support of our institutions. We know that our governments face a variety of challenges. Indeed, at federal and provincial levels, there tend to be two overriding objectives for government policy now. One is to get a handle on our deficits, and the other is to create economic growth and more jobs.
My specialty in economics is economic growth. I am convinced that the universities and EDUCATION generally lie at the heart of future job creation for our country. We are in the knowledge-based economy, an economy that Peter Drucker has described in his book Post Capitalist Economy, in which the key economic inputs are no longer land and natural resources, no longer just the general amount of labour in the labour force, and no longer financial capital, but rather knowledge and knowledge workers who can create knowledge, who can manage it, and who can apply it. It is striking, for example, that over the last six years in my province of Ontario, all of the net increases in employment have gone to post-secondary graduates. The other categories of the labour force have actually seen their overall employment go down, a striking example of the knowledge-based economy, even in the very difficult times of a severe recession. It is not only the employment of our graduates themselves that counts -- their own employment experience and the fact that they have an unemployment rate that is half the national average -- our graduates create jobs for others. Of course, our researchers create research which furthers the economy through technological change, which again and again has been shown to be the major driving force for economic growth.
When Mr. Giroux speaks about the three priorities for Canadian universities -- better support for research, better coordination of our international efforts, and improvement of our students loan packages -- we believe this is not only good for Canada's universities and our graduates, but for all of society. Indeed, these kinds of initiatives lie at the heart of job creation and economic growth, which is so important to our country.
Mr. Giroux's summary was excellent, such that I have very little to add, but I would like to focus for a moment on student aid.
The package that we have given you called "Renewing Student Assistance in Canada," on which we reached agreement with a number of organizations, including student and faculty organizations, sets out the essence of a comprehensive student aid package for Canadians. It has upfront grants to help students get into university; it has income-based remission to help them pay off their loans; it has tax measures to help them save for university and indeed to assist in paying off loans; and it has a work study component so that they prepare themselves for the job market while studying. I would urge the committee to study that document carefully because it does represent a consensus among students, among faculty, and among senior university administrators that I think is unique right now in Canada. We hope that document will serve as the basis for a renewed approach to student assistance that will make sure that no Canadian student is ever denied access to university simply because of financial need. We cannot afford that if we are to be a competitive country. We cannot afford it because it conflicts with our fundamental Canadian values. Let us make sure it never happens. Let us ensure that the only criterion for entry into university is academic performance and achievement.
Senator Carstairs: I have just received the document entitled "Reviewing Student Assistance in Canada," but I had read some it before because portions of it have been made public before.
I was particularly interested in the discussion about the Yale student and the Harvard student. My daughter went to Harvard. They talk about the lower student debt, but I do not think some of their arguments are valid.
First, two-thirds of all students at Harvard receive student assistance. Quite frankly, the one-third who are do not receive student assistance are rejected on the basis of the income tax forms that must be filed. My husband and were asked to provide copies of our income tax forms It was then determined that my daughter was were not entitled to receive student aid. However, they did something unique, something from which we can learn here in Canada. My daughter was designated as a scholarship student. During the whole four years she was at Harvard, she received nothing. It was entirely appropriate that those who needed the money were receiving it. She did not need it and was not getting it. Meanwhile, she did not lose the designation of being a scholarship student. In other words, she received recognition for her academic excellence. She now finds herself in exactly the same dilemma. She has a SSHERC. She is at the University of Toronto and she is doing a Ph.D., She receives a grant but feels guilty about it because she has no student debt. All of her fellow students who do not have SSHERCs are desperately in debt. She knows that if she wants to pursue an academic university career in the future, the SSHERC award will be an important part of her CV. How do we get around some of those dilemmas and problems?
Mr. Giroux: That is not a question I was expecting. We will have to reflect on that. With us today is Bob Best who is very familiar with student assistance. Dr. Davenport would also like to address this question.
Mr. Paul Davenport, Ph.D., Vice-Chair, A.U.C.C. Board of Directors, President, University of Western Ontario: Canadian universities distinguish between the undergraduate years and the graduate years. At the undergraduate years, most of our loan programs examine the family income. There is an evaluation of family need and an evaluation of the student's need. We target the majority of our funds -- both internal and external -- on the basis of student need.
The recognition of outstanding performance, which comes with the Dean's list and minor scholarships at the undergraduate level, does not drive much of the money we distribute. At the undergraduate level we direct our resources toward students in need. Recently, Mr. Snobelen, said that, in the future, we must do an even better job in targeting government funds toward truly needy students.
At the graduate level -- and I may be wrong in this, but I believe this is the philosophy -- we tend to take the position that the student is now on his or her own and is no longer being supported by parents. Therefore, we do associate outstanding performance with SSHERC grants, NSERC grants and other support because we assume the student is no longer dependent or no longer has access to the other family resources.
The need for base support at that level tends to come in other forms. I am thinking of the large number of teaching assistantships that we have at our universities which are designed to ensure that most students and, in some departments, all student have some minimum level of support.
You are correct. The very prestigious awards at the graduate level, such as the SSHERC, NSERC and MRC student awards, are associated with outstanding performance rather than with student need.
Senator DeWare: What is happening with your international student program? How many international students can we handle in Canada and what effect does that have on our own students getting places in university, and so on?
Mr. Giroux: First, there is definitely a desire on the part of all Canadian universities to increase their share of international students. Some may think that is purely for economic reasons because international students pay the full fees and do add in terms of the community, and so forth. It is also extremely important to internationalize the university and its curriculum. To us, the importance, in virtually all areas, of students coming from different cultural backgrounds and studying together is capital to Canada's economic growth.
We are a country that now exports approximately 40 per cent of its gross national product or gross domestic product. Therefore, we are an export-oriented economy. In order to succeed, you must be familiar with the different cultures in the world. You must know how people think and how they see issues, which is often very different from our own perspective. You must understand that, when dealing with Asia, you do not just go in and make a deal at the first meeting. You must establish relationships and friendships, and so forth. It is extremely important from both perspectives.
Although it has been said publicly, we have no indication that foreign students take the place of Canadian students. Our institutions are able to manage and accommodate foreign students. In some of our graduated faculties and departments, foreign students are essential for the maintenance of our programs. A number of our Canadian graduates may want to study in the United States, and foreign students pick up the slack. They contribute to the research program of our graduate departments. It is a win-win situation for Canada.
Senator DeWare: My other question concerns the importance on international trade of certain types of training. Is there a change in the thrust of the programs required because we are now trading globally?
Mr. Giroux: Dr. Davenport is better placed to answer that. Some advertisements by universities indicate that they want to bring international dimensions to their curriculum. The first thing that comes to mind is business schools because of the trade aspects. We have international MBAs or business programs of that type. This international dimension is on the increase in many other programs. The international dimension, although not a course by itself, does enter into this because of the interaction between the foreign students and our Canadian students.
Mr. Davenport: I should like to underline what Mr. Giroux said, namely, that our interest in international students is academic. It is not economic in the sense of higher fees.
Until just this year, Ontario's universities pooled all their foreign fees. No one had any economic interest in recruiting foreign students. We have all been doing if for years because we think these students add an important component to our undergraduate EDUCATION. They make the EDUCATION more diverse and more exciting for our Canadian students.
Fewer than 3 per cent of our undergraduate students at Western are international students. We think that is too small in light of the environment we would like for our Canadian students and we are working to increase it. It has nothing to do with the fees those students pay.
Your second question is a very good one, namely, how is our curriculum changing in light of this knowledge-based international economy that I talked about.
It is probably more easily recognized in areas like business, where the business curriculum in all our institutions is becoming more internationally focused. People realize that you will not be successful within Canada unless you have the ability to deal internationally. It also shows up in areas like the humanities, and there is an increased interest in foreign languages.
I met with a bank president the other day who asked if we could produce more graduates who could speak Spanish We have enormous possibilities in Latin America and we do not have enough university graduates who speak good Spanish. That can be generalized in courses on international history, culture, and so on.
We are reacting not only because we as a faculty believe in it, but because our students are demanding it. They realize that they need these skills to be successful in the future economy.
Senator DeWare: We have come a long way in 50 years.
I think your tax recommendations are sound ones. With regard to RESPs, some companies are selling non-transferable EDUCATION programs to parents for their children. They are not portable if the designated child does not use it. That must be rectified because another child in the family may required it. Would you comment on this situation?
Mr. Robert Best, Director, Government Relations and Public Affairs, Association of Universities and Colleges of Canada: We are certainly conscious of this. When we put together the package on student assistance, we talked about RESPs as a possible savings vehicle for people to save for themselves or their children. The problem with RESPs is that there has been a very low take-up rate. They are not very appealing. While we did not get to that level of detail in this package, we did make some recommendations about dposttibility of the contributions to RESPs which, we think, would make them considerably more appealing.
We have talked to federal officials about other ways of trying to make RESPs more appealing. We have asked the question: If the situation arises where the child for whom the saving has been collected chooses not to pursue Post-Secondary education, would it be possible to roll the money saved and the accumulated interest into, for example, an RRSP? In that way, there is an incentive for the parent to save without worrying about losing all the interest.
We highlighted one important way to make RESPs more attractive as an EDUCATION savings vehicle, but there are other approaches,
Senator DeWare: I move that the recommendations of this panel be appended to today's minutes.
The Chairman: Is that agreed?
Hon. Senators: Agreed.
Senator Carstairs: In your research on RESPs and other areas, have you explored the area of grandparents making contributions? In the United States, because they have an estate tax system, many grandparents are bypassing their children and leaving their money to their grandchildren because then the estate tax is only paid once. The children are using these moneys to fund their EDUCATION. I think many grandparents in Canada would be very willing to contribute to the EDUCATION of their grandchildren if they could get a tax dposttion for that contribution. Have you explored that area?
Mr. Giroux: I will ask Mr. Best to answer that, but you have my attention. As a grandparent I find that an interesting concept.
Mr. Best: We have not looked at that in detail. I stand to be corrected, but I think it is possible to purchase an RESP on behalf of a grandchild. It is a savings vehicle for EDUCATION. It is a matter of making it as appealing as possible for people to save.
We have not looked specifically at how to do that. I would think, though, that dposttibility of contributions to an RESP would make it a much more appealing vehicle for grandparents, parents, or individuals to save for their own EDUCATION.
Senator Carstairs: As you know, people can no longer contribute to an RRSP when they reach the age of 69, so it may be that grandparents would want to contribute to an RESP. That would obviously have to be addressed, as would the whole issue of whether grandparents' contributions could be an outright dposttion.
Mr. Best: We have made a recommendation about dposttibility of contributions.
Senator Carstairs: I am not talking about the contributions; I am talking about grandparents paying the tuition fees.
Mr. Best: Are you talking about applying the tax credit for tuition?
Senator Carstairs: Yes, exactly.
Mr. Best: Again, I would have to check, but I believe the tuition tax credit is transferable to a grandparent at the moment.
Senator Carstairs: I do not think grandparents are aware of that.
The Chairman: Have you conducted any research on the Canadian brain drain?
Mr. Giroux: We have been trying to quantify the brain drain, Mr. Chairman, and we have not been very successful. It is a difficult question to tackle. We do know that there have been some statements made publicly by a number of firms in the high-tech industry that they are having difficulty recruiting Canadian computer science and other graduates because of the attractiveness of the jobs, in terms of salaries and fiscal conditions, being offered in the United States.
We do not know whether the situation is as severe with respect to Ph.D. graduates. However, the Natural Sciences and Engineering Research Council did a study around 1990 in which they looked at where the scholars they had financed were located and what they had done. It showed that, about nine years after graduation, about one in five were outside of the country. Of those one in five, approximately 50 per cent said they would be coming back, but not for more money or better fiscal treatment. They would return to Canada if the institutions had available to them the kind of research infrastructure, equipment and facilities which would allow them to continue their research. They are very motivated about the quality of the research they wish to do.
That supports, of course, our contention that we must establish a proper environment in Canada in terms of the research infrastructure to attract and retain our best minds so that they can do the research in Canada for Canadians.
With respect to research careers, we wanted to provide incentives for bright young researchers to get started. That is also a major component of our proposal.
Mr. Davenport: It is difficult to do research on this issue, but every university president in the country, every dean, every vice-president of academics, knows of individual cases of truly outstanding scholars who have gone to the United States because they believe that is the only place they can have successful careers. They feel they will not have the support or the infrastructure here in Canada to get the job done.
This issue came up in the recent Smith report issued in Ontario. Dr. Smith met with university presidents. We cannot name names in a public hearing like this, but we know who they are. We want to be competitive with the very best state universities in the United States. The Smith report showed that we are currently being funded at about 75 per cent of what state universities get per student <#0107> not Harvard and Yale, but state universities -- and we are increasingly losing the ability to keep our best people.
When I was president of the University of Alberta, Dick Taylor, an Alberta boy, became the first Canadian to win the Nobel Prize in physics. He is a particle physicist. After graduating from the University of Alberta he went to Stanford. After he received the prize, he gave speeches for the next couple of years on the importance of funding research in Canada. He said, "If I had stayed in Canada, I would never have received the Nobel Prize. The only way for me to get this prize was to go somewhere where I could have adequate support."
Taylor is an exception. The Nobel Prize is awarded for an exceptional degree of accomplishment. For every Taylor there are 100 others who are worried that they will not be able to have the kinds of career they should have because of the inadequate support in Canada.
Senator DeWare: That is a shame, especially when we have such a wonderful country.
Mr. Davenport: We do have a wonderful country. That is what keeps our faculty here. Most of our faculty stays in Canada because they love the country, and it is a great place to live. We would like them to be able to have careers here which are second to none, and to have the support from the society around them to allow them to do outstanding research and to make the full contribution to society.
The Chairman: Can you quantify the loss of public dollars invested in these graduates who leave Canada?
Mr. Giroux: The short answer to that is no, Mr. Chairman. It is certainly a very interesting area of research.
Mr. Davenport: It is a large number. If you are thinking of a university graduate, in particular a Ph.D., then you have to cumulate all that society has invested through 15, 16, 18 years of EDUCATION. Just when that person is ready to start paying taxes and, in effect, reimbursing society for all that society has done for him or her, they leave. While I do not have a number for you, senator, it is a big number.
The Chairman: Have you estimated the total cost of your student assistance reform proposals?
Mr. Best: We did do some costing. It is at the end of the longer version of the document summarizing the package we have provided to you.
I should stress that it is preliminary costing, based mostly on publicly available data. Certainly, with regard to some of the tax measures, it is extremely tentative. If all the measures were implemented in full, over time, the total could run from $400 million to $600 million; about one-half of that is in deferred revenues because of tax measures. I stress that these are pretty rough estimates.
The Chairman: In your submission you note that your research and development proposals are realistic and achievable. Let us say that your recommendations on international student assistance are realistic and achievable. I do not think all three are realistic and achievable at one time. What changes should you be implementing right away and what changes could wait?
Mr. Giroux: Mr. Chairman, there is no doubt that the research proposals were very much influenced by what the government's intention was last September in terms of providing a second phase to the Canada Works Infrastructure Program. Therefore, a large amount of our research programs -- over $1 billion -- was predicated on the government going ahead and awarding about 20 per cent of a new Infrastructure Works Program to university research infrastructure.
Since then, events have overtaken us in the sense that the government has decided to add an extra year to the Canada Works Infrastructure Program, at a much more modest amount. There is no component, per se, of university research infrastructure in that program, although provinces, the federal government and municipalities are not excluded from agreeing on projects of that type.
From a fiscal perspective, the remainder of our program is, in our view, much more manageable because it is spread over five years and we are not talking very large numbers. We still, however, maintain that there should be a university research infrastructure component, but not within the context of the Canada Works Infrastructure Program.
With respect to the other components of the program, we realize that some of these will not be achievable all at one time. They have been thought through very thoroughly. We have reached a consensus, both internally in AUCC and externally with our partner organizations. We are still waiting to see just what will be in the upcoming budgets. We plan, of course, to sustain the drive. We intend to continue the push and to achieve our objectives over subsequent budgetary exercises. We are quite open to discussing with the government and with other groups what kinds of different approaches we could use, or amendments we could adopt, as long as the objectives which are inherent in those three thrusts are being met.
The Chairman: Thank you very much. After our trips to Vancouver, Regina and Halifax, we might have some more questions for you. If we send them to you, is it possible that, between you and your staff, you might get some answers to us? In that way, we can support some of your strong recommendations when we present our report.
Mr. Giroux: We will be pleased to do everything we can to answer your questions and to give you background data, Mr. Chairman.
Senator Carstairs: What is your view on income contingent loans?
Mr. Giroux: Our view is as stated in the document, senator. We need to adopt different approaches with respect to the repayment of debt and with respect to assisting students who are in need of some relief in terms of debt repayment. This may be done, however, without an income contingent loans repayment type of approach. We have left it much more flexible and open. There are different ways to approach this matter.
Mr. Davenport: Broadly speaking, we are supportive of income contingent loan repayment as one option. However, it is important to understand, and this comes out clearly in our brief, that this is only one option. There are other ways to link student debt management to income after graduation, which is the key issue.
We found that we are able to get a better consensus around another method, which is income-based remissions, which means that income is evaluated at some point after graduation. If you fall below a certain threshold, then you get some help in the remission part of the loan. In effect, that part of the loan is deferred. They are quite parallel and quite compatible.
Some of the studies done in the United States have been quite helpful in this regard. A recent study in Wisconsin showed that, for every dollar of subsidy the state paid to undergraduate EDUCATION, they got back $5 in taxes. That is the kind of leverage we are talking about.
When we say, "Let's give students a better break on their loans," it is not as if we are throwing money away. We are investing money not only in the individual's future but in the future of society.
Senator Carstairs: Could you send us a copy of that study?
Mr. Davenport: I will phone my office and have it sent here immediately.
The Chairman: Thank you very much for your excellent brief.
Senators, our next witnesses are from the Canadian Consortium for Research. Please proceed.
Mr. Paul Hough, Ph.D., Chair, Canadian Consortium for Research; Executive Director, Canadian Federation of Biological Societies: Mr. Chairman, with me today are Dr. John Service, the executive director of the Canadian Psychological Association and Dr. Roy Bonin, a past-president of the Canadian Society for the Study of Higher EDUCATION. Dr. Bonin is also a faculty member at Concordia University in Montreal.
The Canadian Consortium for Research used to be called the National Consortium of Scientific and EDUCATIONal societies. Many of us felt that was not exactly a name that tripped off the tongue; nor did it necessarily represent our main focus which is on research, especially in the university community but not entirely.
It really is a virtual organization in the sense that 21 different groups representing all manner of disciplines, not just the natural sciences, not just social sciences, but a real mix, come together on a regular basis. The people who are involved in organizing its activities are all basically volunteers from the constituent societies.
The consortium does represent over 50,000 researchers in university and government laboratories and in the private sector and is, therefore, the organization that represents the largest number of researchers in Canada.
We had prepared a short brief which was submitted a while ago to the committee. I do not intend to go through that brief in detail. I would prefer to raise a number of individual points and then get into a discussion. As I go through the points, I should like my colleagues with me to embellish my remarks as they see fit. I will leave as much time as possible for discussion.
As I said, the focus of the consortium is primarily on the health of research in this country and the state of that research. The current focus in the government and other organizations seems to be on cost rposttion.
In our view, this focus must change. Undoubtedly it will because these things do go through cycles. There is real fear in the community that, in the meantime, the research capacity in this country will take such a hit that it are will not regenerate to a level that it could and should in the future.
Rposting costs can be a positive inducement to new approaches and some of those were outlined by previous witnesses. It also induces alliances which again were alluded to this morning.
We are very concerned as a group that, without looking at the potential impacts of cuts, especially in the area of research, many measures will be implemented that will have a long-term impact.
We are asking the Senate committee, as a first order, to underscore the obligations of governments to address the question of impacts where cuts are proposed.
Similarly, it is often stated that expenditure rposttions must occur in all areas without consideration being given to national priorities.
Research is not an activity that you can turn on and off like a tap. It is not something that can be turned down simply because fiscal and other conditions seem to warrant it and expect it to be able to come back with the same vigour and impetus.
Canada has established a very good reputation in many areas for research excellence, despite the relatively low levels of support that have been provided to research; and that is manifested by the fact that many of graduate students and others are actively sought out by other countries for post-doctoral fellowships and other activities.
Again, because of the low level of support for research, we would urge the Senate committee to strongly recommend that there be a gradual increase in funding for research to levels consistent with other OECD countries. Currently, Canadian support for research is at about 1.4 or 1.5 per cent of GDP, whereas most OECD countries are at 2 per cent, plus or minus a little bit.
Another aspect which was partially alluded to this morning is that Canadian universities are an absolutely crucial component of the research enterprises in this country. Rightly or wrongly, a large percentage of the basic research that is conducted in Canada is conducted at universities. I say rightly or wrongly in the sense that other countries are doing it differently. There is no magic way of doing this sort of thing.
We must build on our strengths. If the universities are the places where the basic research is done, let us build on that and take advantage of it in all the ways that were discussed this morning.
The committee is urged to recognize this reality and to make recommendations that will strengthen the university community in that sense.
Research expanded a great deal in the 1960s when expectations and the requirements for Post-Secondary education were blossoming. Conditions today are at least as demanding from a globalization points of view. The Senate committee is, therefore, urged to recognize this and to unequivocally support operations and research functions at Canadian universities as a priority for the federal government.
Mr. Roy Bonin, Past-president, Canadian Society of the Study of Higher EDUCATION: Until recently, and I would say even now, depending on which institution we are speaking about, Canadian universities have enjoyed and continue to enjoy a competitive edge over other universities in the world by virtue of low tuition fees. Increasingly, as tuition fees rise, our competitive edge is being lost, not radically, slowly. Particularly, as Senator Carstairs mentioned earlier, even in prestigious American institutions where we are used to fees of $30,000 or $50,000, the reality is that virtually no one pays those fees.
With the increasing debt load of Canadian university students, successive students are simply saying, "If I am going pay that kind of money, then I should go where I can get more value for my dollar." We may find that Canadian universities will lose the competitive edge that we have taken for granted for so many years.
Mr. Hough: Another fundamental reality of research is that it is a national resource and it transcends borders. That is the primary reason we are saying that the federal government has an explicit responsibility, has actively supported research at the universities for many years, and that should be underscored and supported.
The main product of research is people who can think and have the expertise, be it in the university, private sector or wherever. The vast majority of funding for research goes into the preparation of people, from the granting councils, for instance.
Mr. Bonin: As the universities are going through economic downsizing, one of the first areas to be cut is these people who we consider to be our "product."
As research funding has become more contingent on outside contracts or whatever, there have been fewer opportunities to hire research assistants. In the first round of cuts, the first people to go were those on limited-term appointments and those hired on sessional appointments. Those who do not have tenure or guaranteed employment are the ones who are hit the hardest in the first round of downsizing. Unfortunately, we have very qualified people with no place to go. This, if anything, has perhaps contributed to the image that we have a brain drain. People do not necessarily choose to go to the United States. However, if you take a look at the employment opportunities in the Canadian Association of University Teachers bulletin or publications, you will find the ratio is five to one. People go where the opportunities are for employment.
Mr. Hough: Another important aspect of research is that the different sectors -- university, private, government, et cetera -- do play distinct but complementary roles. One reality is that the private sector, in large measure, has focused its research activities and studies very much on its core business concerns, which is appropriate, but in each case, they look for niche research capability and expertise, and they look for that wherever it is most highly recognized, not just in the local institution. They will go to where that expertise exists, regardless of where it is. Therefore, sustaining Canadian research capacity and having expertise that is not only high calibre but will attract that kind of interaction is most important.
Finally, an expression I like is, "research informs teaching and teaching informs research." The two are a mix, and that is true at the graduate level as well as at the undergraduate level. If I may provide a personal example, when I first went to university as an undergraduate, I had no intention of doing a Ph.D. Ph.D.s were done by really bright people. It was in my fourth year, while working on a project, that I realized I wanted to continue in research. It was only involved because the program demanded that I participate in that kind of a project. To have access to that kind of experience requires that all our institutions have research activities within them.
Mr. Bonin: Many people are not aware that most research groups in most universities are quite small. These are not research centres with 60 and 70 people. That is atypical. You will find that the people who do research also teach. It has become somewhat politically correct to assume a dichotomy between teaching and research. Currently it is politically more correct to put the accent on teaching. The reality is that there are only so many hours in a day and so many days in a week. Therefore, as the class size increases, as the number of teaching assistants decreases, and as the number of sections increases, there are fewer opportunities to do research. You have the same people doing both jobs.
I do not know where the image, the myth, of these professors who do not teach comes from, but I have certainly never met them and I have worked in four universities. Most of the teaching is done by people who also do research. If you increase the amount of teaching they have to do, simply because there is no one else to do it, then the amount of time they have available to do research is less.
Mr. Hough: A final point has to do with research expertise in this country being invited, involved, and active in international collaborations. You do not get involved in those sorts of things if you do not have something to bring to the table. In order to have something to bring to the table, you must be recognized as knowing something about the subject, and as having something to contribute. Our concern is that, if the research enterprise is allowed to deteriorate further, the ability to link up with international groups will markedly diminish.
There are many other topics we could touch on, such as the level of interactions between the universities and the private sector, the influence of the centres of excellence, and the numbers of chairs of departments. There are many exciting things going on in universities these days. The reality is that there are ever more demands being placed upon researchers. A current buzz words is the "commercialization" of research. This is entirely appropriate. If research outputs or results can be taken advantage of and taken further into a commercial area, then that is fine, but it is not necessarily the same people who can come up with the ideas, conduct the research and then take it into the marketplace.
With that point, I will call a halt to our sermon, if you wish, and invite your questions.
The Chairman: Thank you very much.
Senator DeWare: You recommend that the level of research be increased but you did not say by how much. Can you put any figures on that, even a percentage? You must have an idea of how much it has been decreased.
Mr. Hough: It depends on which sector you are looking at. For instance, the last two federal budgets have decreased the effective budgets of the granting councils by 25 per cent, from 1994-95 through to 1998-99. That is a huge drop. It is not as if all the people who are applying for grants receive them. In the last two competitions at the Medical Research Council, which is a fairly important council of this country, a grand total of 20 per cent of the new applications received grants. A huge list of proposals is kept by the Medical Research Council, all of which met every requirement to be funded, but they did not receive a dime because the council ran out of money.
If you wanted to redress that situation, you would be require roughly $150 million a year for the three councils.
Senator DeWare: Is that how much needs to be put back in?
Mr. Hough: Yes, just to get back to square one.
The total funding that is devoted to the research in Canada is approximately 1.45 to 1.5 per cent of GDP. The only country in the G-7, for instance, that is lower -- and it is not much lower -- is Italy. Every other country, including all the Scandinavian countries, have levels that are very much higher than ours. Most are around 3 per cent. We are saying that we should be gradually getting back as close to 2 per cent as we can.
Senator DeWare: You recommend that the Networks of Centres of Excellence program be renewed at the current level for the next four years. Is there a concern that it will not be renewed?
Mr. Hough: There is a concern that it will not be renewed at the current levels. There is less concern it will be cut entirely. The current level of funding is approximately $50 million to $60 million per year. If it came back at 60 per cent of that, for instance, obviously many of the existing centres, which by all accounts meet the expectations and criteria that were applied, would have to go, and then, of course, that diminishes your ability to rotate into other ones as well. There is no thought in the research community that, just because a centre of excellence exists now, it needs to exist forever. There will be an evolution of these things, and we believe that a sustained program should be in place.
Senator DeWare: You are saying that when cuts are made it will not necessarily mean that one centre will be closed. I can see where they are coming from but where you are coming from is totally different. You are saying that they should be kept open but, if one is redundant, it should be closed.
Mr. Hough: Absolutely.
Senator Carstairs: I was particularly interested in your comment that research is not like a tap, you cannot turn it off and on. I think there is a fundamental lack of understanding of that in Canada. Many Canadians think you can indeed turn it off like a tap because, obviously, the researchers will start to research again once the tap is turned back on. Meanwhile, what do they do? Where do they go?
When I went on to do a Master's degree in 1962, that was considered to be pretty nerdish. I can imagine the reaction when you decided to do your doctorate. I remember the reaction when Senator Michael Kirby announced to us all that he was doing a doctorate back in 1963. We thought that was extremely weird.
I do not think many kids going off to their first year at university are aiming for a Ph.D. Certainly some of them aspire to be doctors or lawyers, but few start first-year undergraduate work saying, "I am going all the way through to a doctoral program."
Are we losing people disproportionately? Is it easier, for example, to keep the social scientists, the political scientists and the economists in Canada than it is to keep the chemistry Ph.Ds. or the physics Ph.Ds.?
Mr. Hough: That is an intriguing question. I do not think we have an answer for you, senator. My sense is that that is not the case. I say that because of the global perspective of economics, language, history, anthropology and social problems. There may be a few more opportunities because of greater levels of money and funding for the science graduates to go elsewhere. I have never seen any numbers on that.
Mr. Bonin: You might find that you are on a level playing field relative to the cost of retaining, let us say, a graduate student as a research assistant, whether you are in one discipline or another, if you could write off the equipment in the hard sciences. However, to balance that, you would have to say that research moneys for contract research in particular are much more likely to show up in the engineering field and in the hard sciences than, for example, in the history or sociology fields. I would suspect one would offset the other. If you discount the equipment costs, the costs would be roughly the same. We do not pay a teaching assistant in philosophy less money than we do a teaching assistant in chemistry.
Senator Carstairs: The perception is that research in chemistry or physics is so much more expensive than research in history that we should be concentrating our moneys on the scientific side because the social researchers will take care of themselves. They only need a few books. I am being facetious.
What must we do to change that perception? What kind of hard data do we have to accumulate in order to make Canadians better understand the role of all research?
Mr. Hough: I think that is a valid challenge to all researchers, to make known what they are doing and why they are doing it in clearly understandable terms. I know that the Humanities and Social Science Federation of Canada has breakfast meetings on the hill, for instance, and they bring in researchers to discuss what they are doing on a fairly regular basis. I think it is monthly or quarterly. That is a small step, but it is a move in that direction. All the granting councils, including the Social Sciences and Humanities Research Council, provide numerous written examples in their publications and from their communications group as to what kind of research they are supporting and how it applies to real concerns that people are voicing.
That is a constant requirement. I would say it is also a legitimate challenge to put the question to the research community from this committee and from the political community in general. "What are you doing and why?" I have no doubt you will get some good answers.
I do not know of any research being done simply because someone woke up one morning and decided that is what he or she wanted to do. There are specific reasons and goals in every research project of which I am aware. They may not attain those goals, but they know what they are trying to get to.
Mr. John Service, Ph.D., Executive Member, Steering Committee, Canadian Consortium for Research: I am a psychologist and a social scientist, but there are psychologists who are neuroscientists. We span the whole spectrum.
There is a definite attitude in Canada and in the United States that the social sciences are not as important and that they do not get as much funding as other diciplines. I think that attitude has existed for quite some time. However, I am really encouraged to hear that it is changing.
The recent budget announced a health services research fund to look at the social sciences as opposed to purely medical and biological research. We have the Medical Research Council looking at a broader population and taking on a broader mandate. The recent health forum clearly took the view that we must look at population. Health determinants have failed. It must be a broader issue.
I passionately agree with you, senator, that there is an attitude to change; but, I think it is changing.
I notice that the recent commission struck by the government to look into the military has three historians on it. That surprised me, not from the point of view that they would not have something good to bring to the issue, but that they would appoint three historians. One begins to think about the reasons for that. I think attitudes are changing.
I believe that 60 per cent of the faculty members in universities are social scientists in the humanities and the vast majority of students are studying that area. Psychology courses are still very popular. Perhaps by influencing attitudes we can make some progress.
Mr. Hough: These students are also finding jobs. I do not think there is as much differentiation in the employment, for instance, of graduates as one might think. The humanities and social sciences do have applications. I graduated as an engineer, but most of the real work we are doing is interrelating with people. We are either selling an idea, trying to convince someone that it is the right way to go, trying to explain what it is we are talking about, and then getting them to help us achieve it. Most of the interaction, regardless of one's background, is interpersonal. The social sciences certainly provide a lot of that.
Mr. Bonin: A perfect example is the rebirth of philosophy with the new emphasis on ethics. There is a whole new market out there that had been languishing for years. It has taken off. Professors who are teaching and have expertise in those areas will now find themselves teaching in marketing, business and management, as well as in the traditional disciplines of philosophy.
The Chairman: A number of years ago the pharmaceutical companies appeared before this committee. They faithfully promised that, if the generic drug companies were stopped from producing drugs and getting the 20-year protection, they would make substantial contributions to research in Canada. How much money are the universities receiving from the pharmaceutical companies for research.
Mr. Hough: They have increased funding to what they would accept as research over and above what they had committed to when Bill C-22 and Bill C-91 came forward. They said that, by 1996, they would devote at least 10 per cent of sales to research. In fact, they contributed about 11 per cent in 1995. About $132 million in 1995 went into what was accepted as basic research. Almost 99 per cent of that went to universities.
To counter that, 69 per cent of the research funding that they accepted as qualifying, went into clinical trials. It came down to different groups, with the pharmaceutical companies and the researchers using the same word but in a different context. Research means different things to different people. In the pharmaceutical manufacturing case, everything that is related to either a discovery, testing, trials, et cetera, qualifies. That is what is allowed under the Revenue Canada Act. Researchers look upon research as providing new knowledge. Clinical trials are important but they do not necessarily tell us something new.
Senator DeWare: If they give 90 per cent to the universities for research, can they dictate how is will be spent?
Mr. Hough: Not really. They have set up different avenues for those companies who provide that money. One of those avenues is a medical research council, PMAC. That is strictly a peer-reviewed program. The companies have no say. They have certain representation on the allocations committee, but it is a peer review process and the companies cannot direct where the money goes.
Senator DeWare: I am glad to hear that.
Mr. Hough: Individual researchers who are working in areas that they feel are of prime interest and concern to a given company are obviously free and able to go to that company and say, "I am doing some work you people should be interested in. How about $10 million?" That happens. Usually, it is the researcher who has the idea. It would be tough to try to demonstrate that the companies are trying to direct work because the money is being spent on work that they hope will result in a product in the future. They do not say, "This will be a product in six months' time."
The Chairman: How far behind are our research laboratories?
Mr. Hough: Some of the research laboratories in this country, as far as expertise is concerned, are as good as those anywhere. It is a case-by-case situation. In numerous situations you have graduate students who are working with equipment that is older than they are.
Mr. Service: You have professors that are near retirement and if they do retire, no one will be able to keep their equipment running because they are the only ones with the expertise to do it.
Mr. Hough: Some labs have absolutely top-notch pieces of equipment. They may be located in laboratories that leak and you have to vacate the room when it rains, but the actual equipment is first class.
The Chairman: How are the new technologies affecting research, and how do you deal with new equipment which becomes outdated very quickly?
Mr. Hough: I assume by "new technologies" you are referring to communications, the Internet, and so on. When the Internet was discussed this morning it is interesting that the point was not made that the Internet actually came about through efforts of physicists at the Lucerne facility in France to communicate better among themselves. This has blossomed and has become a highway for interaction for everyone who has access to a terminal.
It has profoundly changed the ability and the facility for researchers to connect. The centres of excellence idea was initially met initially with a certain amount of scepticism. The most often asked question was: If people are physically disbursed, how can they work as a group? In fact, once they get to know each other -- and they do that at conferences, et cetera -- interacting through the new technologies is easy. It has had a profound and a positive influence on research. Ideas and data can be exchanged easily. When dealing with colleagues, you can get instantaneous feedback as to whether the idea is "all wet" or that it is interesting and it fits in your colleagues data. You get a better sense of how the data is set up so that, when someone else is involved in a similar program, it can be meshed together in a way that it can become complementary. I think it has a positive effect overall.
Mr. Service: It will also allow communities and individuals to access research results as never before. With the SchoolNet and enterprises such as that, as well the Humanities and Social Sciences Federation of Canada project in community science shops, for example the model from the Netherlands, this will be the greatest opportunity the world has ever seen of average community people and business people being able to access valuable information. I think it will be of great benefit to communities and businesses.
Mr. Bonin: You must also realize that with the budgetary restrictions for certain aspects of the research endeavour, we could not survive without this facility. Every professor cannot have a secretary. There would be 14 professors with one secretary. The day when you would write your notes out long hand and hand it to the secretary to type it and send it to the publisher no longer exists. You type it up yourself on your PC and then send it via electronic mail or FTP to the editor. The editor sends it to five or six people for review and then sends the comments back to you by e-mail. This could never be done by hand anymore in the way that we used to do it. The infrastructure simply no longer exists.
From that perspective, it is not a threat to us. Basically, it is the stated way of doing things.
Mr. Hough: Most of our organizations would be unable to function without it. I spend about two hours a day on e-mail with my own members.
Senator DeWare: Have you ever gone to the airport to buy a ticket when the terminals were down? They cannot function.
The Chairman: We probably have more questions, so perhaps we could be in touch with you later with questions to which you might respond.
Thank you very much for your excellent brief. We will be in touch with you.
From the Royal Society of Canada, we now have Mr. Howard Alper. Please proceed.
Dr. Howard Alper, Vice-President, Academy of Science, The Royal Society of Canada: The Royal Society of Canada appreciates this opportunity to present its views on some of the issues raised by the subcommittee. Our society, which comprises elected fellows who are selected by their peers for outstanding scholarly contribution to the humanities, social sciences and natural sciences, is dedicated to fostering the highest levels of learning and research in all areas of scholarship; making available to its members broad and varied knowledge to evaluate and to advise on respecting social, cultural, economic and scientific issues, such as AIDS or asbestos, for the benefit of Canada; and to promoting Canadian scholarship and accomplishments internationally, through active exchanges with other national academies.
My own experience is that of an postator. I am a chemistry professor at the University of Ottawa who has a research group of 19 graduate students and post-doctoral fellows. Our research is concerned with the development of processes of value to the pharmaceutical, petrochemical and commodity chemical industries.
Let me now address some of the principal issues noted in the mandate of the subcommittee.
The federal government has lost much of its influence over national issues such as Post-Secondary education. The rposttion in transfers to the provinces, together with a continued erosion of research support, has to a considerable degree marginalized the role of the national government in post-secondary EDUCATION policy.
It is of particular concern to many Canadians that the federal government maintains a strong presence in health but has left Post-Secondary education to become a patchwork of different policies and funding levels. Surely the pursuit of national standards, national accessibility and national excellence should exist within the federal government.
With regard to different policies, senators will be aware that the government of Quebec recently announced a new tuition fee regime where students from outside the province will pay substantially higher fees to attend a Quebec university than students resident in that province. Such a policy is contrary to the promotion of transferability amongst institutions and national access. While some attempts have been made by provincial governments to lower interprovincial trade barriers, this policy of the government of Quebec must be seen as a barrier to students and should be eradicated. Our concern is that provincial governments will continue to produce such policies without the countervailing presence of the federal government to ensure national policies.
Reform of student aid is critical, as we have heard from others this morning, and one of the best schemes would be a system to have repayment tied to one's future income. Such a system would be fair and more progressive than the current protocol that applies a flat levy to students regardless of income.
Our chartered banks have the capacity to fund an income contingent loan repayment plan system, and we would ask the federal government to begin serious negotiations with the chartered banks to help develop such a national student aid program. Ideally, the ICLRP should be implemented as a federal-provincial student assistance plan.
The Royal Society of Canada lauds the recent proposed reforms of student aid from a broad coalition of interested associations including, faculty, students and the AUCC.
It is important that the federal government amend tax laws to provide for greater philanthropy toward publicly funded institutions. We believe that many Canadians are willing to donate more to our post-secondary institutions but do not because of tax implications. The current tax regime requires an individual to pay capital gains tax on the appreciated value of any gift such as a stock or bond that is cashed in for a university EDUCATION. Moreover, the full value of the gift cannot be claimed as only the so-called "book" value is recognized, not the appreciated value. An example is in gifts of art to colleges and universities. Therefore, we recommend that the government remove the capital gains tax on charitable donations.
I refer to my next section as "demand and goals." The pressure of demand from students is in the general arts, social sciences and sciences. However, resources and public sentiment seem to want universities to move to professional and business programs to prepare students for the marketplace. Such pressure not only does not allow the universities to meet true demand, it also undermines the core mission to promote extensive inquiry into a wide array of subjects; the so-called matters of the mind which are pivotal to the evolution of social and cultural values of importance to the quality of life in Canada.
The goals of a university EDUCATION are to broaden one's knowledge -- that is, scholarly development -- nurture creativity, foster excellence, and develop protocols on the approach to and the solution of problems in diverse areas. The latter goal is a critical one because a significant proportion of university graduates with bachelor or doctoral degrees are, within five years, working for companies with responsibilities which are appreciably different from those for which they were formally trained.
A specific case is that of a Ph.D. chemist who, appointed to a research scientist post in a company is, five years later, a manager of a group of nine scientists and non-scientists. The methodological approach to the solutions of problems acquired during the university EDUCATION of an individual will be of value to both types of jobs. Flexibility and adaptability are important attributes for a successful career. Therefore, both core and professional programs are key to rewarding university EDUCATION.
With regard to what I refer to as university dynamics, it is recognized that universities, rather than attempting to excel in all subjects, focus on the reinforcement of their areas of excellence and the selective development of new programs for the 21st century. Universities must set priorities as to which programs to jettison, which to maintain as at present or on a more focused basis, and which to expand or to launch as a new initiative. Few universities in Canada have made meaningful priority decisions despite significant rposttions in funding allocations to many institutions. Organizations such as AUCC and others must exercise a leadership role in encouraging action in this regard.
International issues were referred to again and again this morning. There are two components to this issue. The first is the students' issue. Foreign students contribute to a significant extent to the vibrancy of post-secondary institutions in Canada. Their presence expands the cultural understanding of students, faculty and support staff, and thus has a favourable impact on tolerance and civility in society. For these and other reasons, financial aid and scholarship programs for such students are to be encouraged by both government and non-governmental organizations.
The second component relates to collaboration on a global basis. Research is a global enterprise and therefore university research must operate in an international context. International collaboration can add real value to projects being pursued in Canada. Unfortunately, an unintentional consequence of recent budget rposttions in government departments has led to a divestment of international programs in too many instances. The Royal Society of Canada recommends that this subject receive urgent attention by government.
Finally, research and teaching are the key contributors to scholarly development which is, as already noted, the raison d'être of a university. Indeed, the two are in a synergistic relationship with, for example, the results of recent landmark discoveries in whatever area being central to curriculum course development.
University research plays a vital role in assuring a vibrant economy and an excellent quality of life for the citizens of Canada. Discoveries including drugs made by chemists for the treatment of ailments associated with prostate or hormonal balance, a software program to enhance office efficiency, durable foams useful as resins for the rims of automobiles, membranes for industrial waste processing and disposal and new bench-marks for economic analysis, as well as original plays, novels and poetry, have a profound influence on the lives of the present and future generations of Canadians.
Pivotal to virtually all of this research is the preparation of students for the marketplace. Not only is the corporate sector a direct beneficiary of such training, but inventions made in a university can, and occasionally do, lead to the formation of spin-off companies, another source of wealth creation in the country.
A crisis has developed in the past three to five years in Canada as a result of the drastic rposttion in funding to the federal granting councils. As we heard, there has been the deterioration of research infrastructure at an alarming rate, which impacts on teaching as well, and difficulties in the recruitment of excellent junior faculty -- so-called "start-up" funds -- and retaining "rising stars" as well as leading scholars as a consequence of substantial budget rposttions.
To address these issues, the Royal Society of Canada recommends that new funds be allocated by the federal government.
First, we must establish a research infrastructure program to provide funding for the modernization of research laboratories, equipment purchase, operation and maintenance so that universities can carry out state-of-the-art research at a level competitive with at least some of the industrialized nations.
Second, a "Prime Minister's New Investigator Awards" grants program for new faculty appointees should be established to get them going when they are appointed.
Third, an "Enhanced Opportunities for Tomorrow" grants program should be established for rising stars, to encourage them and to retain them in this country.
The Chairman: Thank you very much for an excellent brief.
Does your society conduct any research on the Canadian brain drain?
Mr. Alper: Yes. There is no specific project aimed at that issue. There are projects which include, among the various issues, that one.
A significant number of individuals leave the country to go elsewhere. The United States may be the most common place they go to, but I want to emphasize that quite a few now go to Europe.
Five people left my own research group in the past four months, having completed their Ph.D. or post-doctoral studies. Two remained in Canada. Two went to the United States. One went to the U.K. That is, perhaps, not typical. However, I think it is representative of a general phenomenon whereby, of a group of 10 people, several will leave the country for one reason or another. Those reasons include better opportunities vis-à-vis research or whatever their field of endeavour may be; better infrastructure; and enticements of start-up funds. That does mean they are going to MIT or Harvard; it could be the University of Tennessee or the University of Utah. Those are some reasons why individuals leave the country.
The Chairman: Do many students from abroad come to Canada to get their Ph.D.s and then go back to their own countries?
Mr. Alper: Yes. I would say the vast majority do. It is not easy to convert from a student status to a permanent status within Canada, although it is not impossible.
The Chairman: Would you say that even if these foreign students come here, get their training and then go back to their home country that it is a great opportunity for Canada to have inroads into that country as a result of having contact with these students trained in Canada?
Mr. Alper: It is of tremendous benefit. A student coming here to do a degree adds enormous value to our enterprise in terms of postating our colleagues in and outside the university as to different cultural values and so on. The results obtained, hopefully, on problems of significance by those pursuing a degree in information technology at an undergraduate level or a graduate degree in medical research enhance the reputation of the Canadian people with whom they are collaborating and who are their research supervisors. That is an important point. When they go back to their country, they are, in a sense, our ambassadors. They present, hopefully, what is the best of this country. I am proud of this country and its fantastic quality of life, despite the limitations and constraints in which we operate fiscally.
By going back to their country -- and I have seen it personally -- they open up new opportunities for collaboration and research. They open up new opportunities for trade between Canada and whatever country these individuals come from.
Senator DeWare: Would you elaborate on the point in your brief concerning university dynamics? It has been said that universities must set their priorities as to which programs to jettison, maintain or change. You are the first witness to mention this point. We have tried to bring the discussion around to this point, but the witnesses have not wanted to talk about it. I think it is important. I would like you to elaborate on it.
Mr. Alper: It is a crucial issue for universities. It has been addressed by one or two in the country with a varying degree of success. It has been addressed in the United States at some universities in an excellent way and at others in not such an excellent way.
There are few universities that can afford or are capable of being excellent across the board. That applies to the best places in this country, such as Toronto or U.B.C.; and it applies to average or below average institutions. Institutions must make decisions as to which of their programs are really first rate. I am not defining this in terms of having networks of centres but in terms of having centres of excellence within the institution, in a department or in a sector. Those are the areas on which they focus, especially with reference to research. Teaching must provide teaching of the core programs, even in areas in which you do not excel in research.
Let me give you an example. Last year, the University of Rochester struck a committee to review the university's academic programs, rank them and make decisions. As a consequence of that assessment, three programs were closed at the graduate level. Seven were focused, for want of a better term, that is to say, to conduct research only in one area, for example, in history. Several were left as they were; and several were expanded radically by allocating a significant amount of resources to those programs.
Universities must do that, just as companies have already done it over the past five years. There has been an enormous amount of restructuring in the corporate sector. Government has had to go through the process. Granting councils, such as NSERC, reallocates some of its resources on the basis of excellence.
For the survival of universities as vibrant institutions, restructuring and making priority decisions are crucial.
The problem with significant cuts in different areas of the country is that, sometimes, it takes two to three years for the impact of those cuts to hit home. It is only then that some administrators are willing to start reacting. Those that start right away or even in advance will prepare their universities for a healthy future.
Senator Carstairs: I agree with you totally that differential fees in one province as compared with another is potentially dangerous. I point to what happened in Manitoba. We were the last province to introduce differential fees for foreign students because we recognized the value of foreign students studying at the University of Manitoba, in particular. After all the other nine provinces eventually did it, there was so much public pressure in Manitoba that we succumbed to the issue, too.
My fear is that that will happen. One province, Quebec, has done it. Will others do the same thing? It threatens the mobility of students across the nation.
We are beginning to a movement towards differential fees within the university structure itself. Queen's is now offering the $20,000 M.B.A. program. Western is talking about an $18,000 M.B.A. program. There is a slight differential fee for medical students. There is even, in some universities, a slight difference based on lab fees for the science students.
Where are the dangers of moving to this? I can see some benefits. If a person graduates with the M.B.A. from Western and the next year they earn an average income of $88,000, they can afford the $18,000 tuition. Do you foresee problems?
Mr. Alper: Personally, I am quite worried about how this could expand. It is not simply a matter of supply and demand or what you can afford to do. To be frank, a Ph.D. in chemistry can gain you just as much money as an M.B.A., perhaps not instantly, but within three to five years after being hired. The level of fees is lower on the science side than on the management side in western Ontario. Part of this is to add prestige to the program, as if you were buying a Hyundai car versus a BMW. That is part of the mentality behind this.
In trying to scavenge more money from different sources, that is, your clientele in part, as a consequence of budget rposttions, some universities have considered special programs like the Executive M.B.A. especially, but also the regular M.B.A. and medicine. One must be careful about not passing through the delicate balance of the value you are providing. It is not simply a matter of charging fees. In light of those fees, what value do you put on the EDUCATION that you provide? Is it worth $20,000? Is it worth $10,000? Those question should be addressed rather that how much you can afford to pay in light of what you will get back five years after graduation.
Senator Carstairs: It is clear that the Ph.D. chemist who chooses to work for a multinational chemical company might well be able to parlay that into a $100,000 income in several years. That would be unlikely, however, if that same Ph.D. student decided that he would take a job as an instructor at a university, even if that position has tenure track. That is unlikely to change very soon. How do you therefore assess a Ph.D.'s long-term goal?
Mr. Alper: Within an area or discipline, you have a wide range of opportunities vis-à-vis how much return you will get for the work that you do, whether you will become a high school teacher or a university professor or whether you will work for a multinational company. Even among multinational companies there are differences. For example, pharmaceuticals pay more than petrochemicals.
Those are the balances, and you must decide what is of highest priority to you as an individual in terms of what you want to do as a career.
Senator Carstairs: Various people face various dilemmas. Parents know when their child goes away to a university that they may never live in the same community together. The graduate student may choose a broader EDUCATIONal experience, and study in another country,
What is your experience as to the return rate of these people? If, for example, your Ph.D. chemistry student graduates and decides to do a post-doctorate degree in Geneva, will he return to to Canada?
Mr. Alper: Yes, some do. For example, of the people who left my own group a year and a half ago, there were four Ph.D.s. One went to Illinois on an NSERC post-doc, and she is now assistant professor at New Brunswick in chemistry. One went to California and is now an assistant professor in Montreal. These people have come back. The other two went into industry, one in Canada and the other in the United States. Of those four people, one is lost, not for good necessarily, but the other three are not, and certainly not the two who went abroad. These people are amongst the best, and they came back. That is important. Going out and seeing different ways of doing things, different philosophical approaches, be it research or management of a department in a university, is ultimately valuable to her or his career.
Senator Carstairs: For those who have a long-term academic goal, would the chance of them returning be better than for those whose long-term goal is in the industry sector?
Mr. Alper: No, I would say not. In the United States right now, there are a large number of positions in many areas. I am not talking about only science. It could be sociology, political science, or history.
It is a matter of making a decision about the job opportunities, the fringe benefits of joining the University of Illinois, not for your salary or pension, but for your start-up funds for research and other issues. What is the teaching load, et cetera?
I do not think there is a major difference between academic value and industrial figures vis-à-vis staying in Canada or going abroad.
The Chairman: Thank you, Mr. Alper, for your excellent brief. I suspect that we will develop more questions as we travel across the country and hear from other witnesses. We would appreciate having the opportunity to contact you by letter with some questions and obtain your views on them before we write our final report. Would that be possible?
Mr. Alper: It would be a pleasure.
The Chairman: Thank you very much for attending, and thank you for your brief.
The committee adjourned.