Proceedings of the Standing Senate Committee on
National Finance
Issue 13 - Evidence
OTTAWA, Wednesday, June 10, 1998
The Standing Senate Committee on National Finance to which was referred Bill C-36, to implement certain provisions of the budget tabled in Parliament on February 24, 1998, met this day at 12:00 p.m. to give consideration to the bill.
Senator Terry Stratton (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, I call the meeting to order. As we must be in the Senate at 1:30, we would like to commence now.
Gentlemen, welcome. We are glad to have you here to hear your views on this bill, particularly in regard to the Millennium Foundation. I would request that you introduce yourselves and proceed with your presentation. I understand that you will be about half an hour. We will then open the floor to questions. Please proceed.
[Translation]
Mr. Nikolas Ducharme, President, Fédération étudiante universitaire du Québec: My name is Nikolas Ducharme, and I am president of the Fédération étudiante universitaire du Québec, which includes 15 student associations representing 135,000 university students from all regions of Quebec, at the undergraduate, graduate and postgraduate level. I am a Canadian citizen and, what is most ironic, my member of Parliament is Pierre Pettigrew.
Mr. Mathieu Painchaud, Researcher, Fédération étudiante collégiale du Québec: My name is Mathieu Painchaud, and I am the spokesperson for the Fédération étudiante collégiale du Québec, which has a membership of 90,000 students in 23 college student associations throughout Quebec.
Mr. Ducharme: Today we will be focussing primarily on Part I of Bill C-36, which would create the Millennium Scholarship Foundation and we will also be speaking about amendments pertaining to student bankruptcies under the Bankruptcy Act.
We will be making reference to the constitutional state, to the representation of elected officials and to Quebec's desire to amend this bill. We will also be expressing our opinion on the Millennium Scholarship Foundation and the ramifications that this bill will have on Quebec's educational system.
Mr. Painchaud: I will now provide you with some background on the steps taken by the student federations. It all began with the September 1997 Throne Speech, when Jean Chrétien unveiled his project to set up a Millennium Scholarship Foundation to celebrate the new millennium.
In November, 14 national university organizations, including the FECQ and the FEUQ, were invited to appear before the Standing Committee on Human Resources Development and on the Status of Disabled Persons.
The report prepared by this committee contained 16 recommendations that would amend the Canadian student loans program. One recommendation in particular was addressed to the Government of Canada and it stated that the latter should provide funding for millennium bursaries that would include the federal and provincial grants and loans programs.
The student federations then turned to the media to convey their message and influence other groups and governments. We felt that given the significant amount of money that was being invested in this Foundation, merit and mobility should not be the only criteria used for awarding such bursaries when we know that the average student debt load in Quebec is $11,000. In our view, this initiative appeared too political.
When the budget was announced in February, we focussed on the duplication that would result in considerable costs to the system, when in fact we know that Quebec already has its own student financial assistance system. In addition, we said that these criteria were too discriminatory and did not reflect Quebec's educational goals.
We met with several groups to form the Coalition de l'éducation in order to bring our message to Ottawa. These groups included Quebec unions, the FECQ, the FEUQ, and the CREPUQ, which is the Conférence des recteurs et principaux des universités du Québec as well as the Fédération des cégeps. We wanted to tell the federal government that Quebecers agreed that education comes under provincial jurisdiction and should remain so.
And then negotiations between Quebec and Ottawa unfortunately broke down. Now we are turning to you.
Mr. Ducharme: The Canadian federation is a constitutional state that elects representatives that are to represent the will of the people. The Canadian federation is clear about its rules, namely its own Constitution. Education comes under provincial jurisdiction. Section 93 stipulates that each provincial legislature has the sole power to adopt legislation pertaining to education. Quebec has always been very possessive of this section and has always protected its educational system. Although the province has made mistakes, it can be said that since the 1960s, Quebec has done good things with its educational system, particularly through its accessibility policy.
Quebec lagged far behind in terms of graduates and, in 1964, when we were able to opt out, we set up a bursaries and loans system and kept our tuition fees low, with the result that we have more and more graduates in Quebec.
Our policy of accessibility and, in particular, our bursaries and loans system, have been in existence for 30 years.
Every year, students receive grants of $250 million. Tuition is $1,600 and, since our tuition is lower than elsewhere in Canada, students have a smaller amount of debt compared to other Canadian students.
This is what makes our accessibility policy distinct. We would ask that the senators ensure that the Canadian Constitution is respected in terms of education.
You are regional representatives, but you are also the Upper Chamber. This Foundation is unacceptable because it duplicates our financial assistance system and will create more problems than solutions.
As far as we're concerned, the problem in Quebec lies in the area of student debt. Even though our debt load is only $11,000, given the job market for young people, it is more difficult to get started in life when you owe $11,000. It's more difficult to start a family, purchase a house and goods. It's also more difficult to launch a business or even live comfortably.
The Foundation, as it is has been designed, has a mission that is not compatible with the Quebec financial assistance system. I repeat, in Quebec, we have loans and grants, unlike the rest of Canada, which has a loans system that includes certain grants.
These bursaries are paid out in $3000 amounts. In Quebec, this works out as follows: If you are a needy student or come from a needy family, you will have access to the financial assistance system. You will be given a maximum loan and if your financial condition warrants it, you will be given a bursary. These bursaries would be added to our financial assistance system and given the way that the legislation has been drafted, it is not clear that these bursaries will go solely to the neediest students. Instead, 25,000 bursaries will be scattered across Quebec, instead of reinjecting this money into our financial assistance system. The surplus could be reinvested into our post-secondary education system.
This bill, and this what we would like to get across to our Senate representatives, contains costly administrative duplication. All the money that will go into this Foundation will not make its way to the students. Neither the Lower Chamber nor the Upper Chamber will see the colour of this money because the Auditor General will not have access to this private Foundation. The money used for administration and the money that will be spent on duplication will not be included in student bursaries.
This is the beginning of the privatization of financial assistance and, in our opinion, this is horrifying. This is a private foundation and we see this clearly in Ontario. The Millennium Scholarship Foundation is being used to deregulate tuition and privatize the post-secondary education system.
In my opinion, what is worse is that, contrary to what Mr. Martin says or said in his speech when he tabled his budget, this Foundation will not reduce student debt and will not concretely improve access to post-secondary education. It is not earmarked for people who are in need.
We are scandalized by this Foundation, which will change and duplicate our financial assistance system. We are also scandalized by the fact that the Lower Chamber did not allow the members of Parliament to debate the issue. We have participated every step of the way. We have discussed the issue with many departments, public officials, elected officials and even with some of you, and at no time did anyone ever acknowledge that this policy of accessibility was part of the distinct nature of our unique society. Given the motion that took place in Parliament following the referendum and given the Calgary Declaration, there could have been some recognition that our financial assistance program is distinct and that this factor could have been dealt with as was done in 1964. There is a precedent concerning accessibility and financial assistance.
In 1964, Lester B. Pearson and Jean Lesage entered into an agreement on behalf of the two governments that gave us the right to opt out with compensation. This right enabled us to set up our own financial assistance system and, later on, we chose to add grants. Why is this impossible today? This is the question we have asked everyone. No one has been able to give us a clear answer, referring to the fact that the Foundation provided the necessary flexibility when we know full well that this is not true.
The first amendment that we would like to see in this bill is a stipulation that should a province have a financial assistance system, awarding grants and loans, the federal government must negotiate the right to opt out with compensation with the province concerned.
I would now like to talk about the will of the people. This is not simply the whim of one president of a Quebec university student federation. When the bill was introduced at the time of the budget, the 15 students associations that are members of our federation rejected the bill. All of the student newspapers were unanimous. This political exercise in visibility is duplicating our financial assistance program and will not be of any concrete assistance to the students, at least not to those who need it.
For the first time in Quebec's history, an educational coalition was created in order to denounce the bill. When I refer to this coalition, I am talking about rectors, CEGEP directors, CEGEP and university professors, lecturers, support staff represented by unions, and students who all denounced the bill.
The Quebec business sector has told the federal and Quebec government to come to an agreement on educational jurisdiction.
The National Assembly -- the Parti Québécois, the Liberal Party and the Action démocratique du Québec -- unanimously agreed on the following three things: Quebec should receive its fair share, Quebec should be able to choose who should be given the bursaries and all duplication should be avoided. In order for these three things to occur, 30 amendments have to be made. Consequently, it is easier to amend the bill in one place, the section referring to opting out.
We have asked for support in our request to the Senate. I do not know whether or not you have read the newspaper. Forty-three institutions or organizations have supported our initiative in the Senate. This was published in Le Devoir and in Le Soleil in Québec City. Approximately 350,000 people will read this article. I would like to read the names of all of our supporters to show you that there is consensus in Quebec. The Université du Québec, the Université du Québec à Chicoutimi, the Université du Québec à Rimouski, the Université du Québec en Abitibi-Témiscamingue, the Université du Québec à Hull, Télé-Université, the Fédération des cégeps, the Chair of Socioeconomic Studies at the UQAM, the Institut national de recherches scientifiques, the Fédération autonome du collégial, the Conseil provincial du soutien universitaire, the Fédération des travailleurs du Québec, the Confédération des syndicats nationaux, the Centrale de l'enseignement du Québec, the Comité des jeunes-CEQ, the Comité national des jeunes-CSN, the Fédération nationale des enseignantes et enseignants du Québec, the Fédération des associations étudiantes universitaires québécoises en éducation permanente, the Conseil pédagogique interdisciplinaire du Québec, the Union des artistes, the Fédération des professionnelles et professionnels universitaires, the Fédération des professionnelles et professionnels salariés et cadres du Québec, the Institut canadien d'éducation des adultes, the Société Saint-Jean Baptiste de Montréal, the Mouvement national des Québécoises et des Québécois, the Solidarité Populaire Québec, the Conseil permanent de la jeunesse du Québec, the Conseil national des jeunes du PQ, which is not included in the article but called us, the Conseil national des jeunes du Parti libéral du Québec also supports us, the Association de clubs d'entrepreneurs étudiants du Québec, the Regroupement Pont entre les générations, the Regroupement québécois des coopérateurs et coopératrices du travail, Jeunesse Ouvrière Chrétienne, the Réseau Carrefour Jeunesse-Emploi, the Mouvement d'éducation populaire et d'action communautaire du Québec, the Association québécoise de défense des droits des personnes retraitées et préretraitées, the Entreprise d'insertion Restaurant populaire, the Collectif des entreprises d'insertion du Québec, the Association des services de garde en milieu scolaire du Québec, the Fédération des coopératives and of course, the Government of Quebec, with whom we held a press conference. We are asking that the bill be amended to satisfy our educational requirements, namely, the right to opt out so that we can manage this money.
What really bothers me, as a young person, is the fact that we always play politics with social problems. The problem does not lie with the Foundation, nor with the federal government, nor the government of Quebec, the problem lies with student debt.
What is the best way to resolve this problem? The best way is to use our financial assistance system and reduce student debt in concrete terms. We are going to propose two possible solutions to the Quebec government once we have the right to opt out. We want to reduce the ceiling on loans in Quebec. The average debt load in Quebec could drop from $11,000 to $9,000 with this money or we could give out "graduation" bursaries associated with student debts. These are concrete solutions to a social problem. If my parents pay taxes, if I pay taxes even while I'm pursuing my studies, if everybody in Quebec pays taxes, then the money should be reinvested into programs that help people, programs that are as inexpensive and as effective as possible. This system has been in place for 30 years. It has proven itself. There is money if there is a surplus in the budget. Why not reinvest this money into a system that is already in place in order to reduce student debt? This is what is most important. Not handing out bursaries, not a political war, not visibility, not the celebration of the millennium. Student debt is what is important, accessibility to post-secondary education.
Mr. Painchaud: Notwithstanding the dynamics described by Nikolas, the federal and provincial quarrelling and the duplication that will result from the Foundation, there is another part of Bill C-36 that causes harm. This is the amendment to the Bankruptcy and Insolvency Act. Students will no longer be able to declare bankruptcy because of their student debt within two years of graduation. The time limit is now set at 10 years. This is a real problem because there are some students who are grappling with their heavy debt.
In Canada, amendments were made to the Canadian Student Loan Program. More specifically, Canadian students can take advantage of a 50-month reprieve over a 10-year period for reimbursing their debt and their debt load may be reduced by 50 per cent. These measures do not exist in Quebec. This is a problem that Quebec students will have to deal with because now they will no longer be able to declare bankruptcy until after a 10-year period. The situation is not the same in Quebec, and we must recognize that bankruptcy is an extreme measure that students do not take lightly. It is not with a happy heart that students declare bankruptcy.
Since 1966, when the financial aid program was set up, only 3 per cent of all Quebec students have filed for bankruptcy, and only 7.5 per cent have defaulted on their repayments. There is no abuse. However, students must be able to file for bankruptcy if necessary. We cannot force students to carry around a very cumbersome student loan. A student does not go into debt on the basis that he will make a great deal of money in the future. Everyone must be entitled to receive a loan, even a philosophy student, even if this field is not as lucrative as engineering. All students, like everyone else, are entitled to be released from a debt load that is too heavy.
Mr. Ducharme: I'd like to go back to Part I. We're hoping to obtain, and at any rate, we will continue to fight for, the right to opt out. The Fédération des étudiants universitaires du Québec, although it represents students from Quebec, also represents students who come from other regions of Canada in order to study in Quebec.
We support other Canadian students. We are able to see beyond our Federation. We are seeking two other amendments to the Foundation even though, with the opting out provision, we will have little to do with this Foundation.
I would like the senators to hear what we have to say because these two amendments are very important for the rest of Canada.
According to section 27, the Foundation will grant scholarships only to those students at the undergraduate level, namely, those pursuing a bachelor's degree. All of the rhetoric surrounding the Millennium Scholarship Foundation talks about getting on board the knowledge-based economy, about giving Canadians an equal playing field for pursuing education, about having scientists and people who are going to be able to participate in this economy.
In our opinion, it is not right that students at the graduate and post-graduate levels, namely, those seeking master's degrees and PhD's, do not have access to these scholarships. The detractors say: yes, but these students already have bursaries through other programs or through the granting councils. This is true, except that over the past few years, these scholarships have been cut back and the neediest students are no longer able to pursue their graduate and post-graduate studies because of their financial situation.
The Foundation will be able to be subsidized by private businesses, with more than 2.5 billion dollars coming from the government. We feel that it is unacceptable that students at the graduate and post-graduate level will not have access to these scholarships. It's not true that the Foundation will be able to provide them with scholarships afterwards because the bill states that this is not possible.
We are asking the senators, and this will be beneficial for all Canadians and Quebecers, that section 27.(c), include students who are pursuing studies that lead to a degree, certificate or diploma at the graduate and post-graduate levels, so that they too will be eligible for Millennium Scholarships.
The third aspect that we would like to see included in the bill is that, given that the main beneficiaries of these scholarships will be students, there be more than one student sitting on the Millennium Scholarship Foundation board of directors. For those of you who are familiar with the geopolitical situation of Canadian students, you know that there are national Canadian organizations that represent the students, namely, the Canadian Alliance of Students Association, the Canadian Federation of Students, the National Graduate Council as well as Quebec's university and college student federations.
We would like to see two students sitting on the board of directors to give greater student representation, given that students are the ones who will be benefitting primarily from the financial assistance system, there being a Canadian Student Loans Program in the various provinces or the Quebec bursaries and loans System. Section 8.(b) should therefore be amended to read: "two of them shall be students" instead of "one of them shall be a student."
In this manner, we will ensure that students are represented.
To conclude, Canadian history and the recent history of our financial assistance program, which has been in existence for 30 years, proves that it is possible to come to an agreement in Canada. There is already a precedent, the opting out provision, in 1964, which was negotiated in good faith between Mr. Pearson and Mr. Lesage.
We are simply asking that you do the same thing again, without any animosity or heated political debate. Think about the students, about student debt, about the way we could resolve the problem in an easier manner and let's think that this is a good solution.
You can be likened to our grandparents and we, the students, youth, we are a little bit like your grandchildren. We're asking for a little bit of intergenerational solidarity. We are often crushed by the babyboomers who don't listen to us, you as their parents and we as the children. Listen to us. Respect us as citizens, as representatives of the students. It's easy.
These four amendments are not complicated, you could even adopt them next week. It's very important to us. This is an intrinsic issue. The wishes of the students must be respected in any initiative involving students. We must abide by the consensus of approximately 23 per cent of the Canadian population. We must respect the will of the people. We must also respect the Canadian Constitution, which is clear. There is no ambiguity, this is perhaps the least ambiguous section of the Canadian Constitution.
We are asking the senators to amend the bill.
[English]
The Chairman: Thank you. I would ask, if you have written presentations, that you leave us a copy of each. You also mentioned a press article. If you could leave that, or a copy, with us as well, we would appreciate it. I think they would be important for the record.
We will now go to questions.
Senator Cools: I welcome these young people here before us today. I am a little bit older than you, but not quite old enough to be your grandmother, although I will be in a few years. There are people here who could be your grandparents.
It is nice to see young people before us. You said a few things on which I should like some expansion. You pointed out rather eloquently that students in Quebec have a lower debt load and face lower tuition fees than those in the rest of Canada. I assume that you have analysed this to be able to make that statement.
Could you share your analysis with us and compare the situation for Quebec students in respect of those two items with students in the rest of Canada, by province?
[Translation]
Mr. Ducharme: The average student debt in Quebec is $11,000, whereas that of Canadian students, namely those living in the rest of Canada, is $25,000. Tuition in Quebec is $1,600, whereas tuition in the other provinces varies. Let's use the example of the increases that are taking place in Ontario, where tuition may jump to $8,000. So you can see there is a big difference.
With the exception of the Yukon, no other Canadian province has a grants and loans program. It must be remembered that in the Yukon, there are only 1,500 university students, but no other province gives grants to the same extent as Quebec.
During the 10 years that the Foundation is to be in operation, there will be an investment of 2.5 billion dollars in Quebec. During the same period of time, Quebec will provide 2.5 billion dollars in grants to Quebec students.
As a result, student debt is much lower in Quebec than elsewhere in Canada. Education systems are provincial and they fluctuate; however, the Canadian average is about $25,000. There is a big gap, about a $14,000 difference, between the two.
[English]
Senator Cools: Out of curiosity, if Quebec students have the lowest tuition fees and the lowest debt load, which province has the highest? Do you know?
[Translation]
Mr. Ducharme: I believe that is Ontario and British Columbia.
[English]
Senator Cools: Ontario and B.C. do. I have a few other questions, but I am also mindful that we do not have a lot of time and that all the senators are eager to speak with these students. I will wait until the next round.
[Translation]
Senator Lavoie-Roux: You had an opportunity to meet Mr. Bérubé. I must tell you that this is a battle, I will not say a pitched battle, because that would create misunderstanding. I agree with you on the issue of the sharing of power, or on the issue of provincial and federal jurisdiction.
You are quite right to allude to the agreement reached in 1964 when Pearson and Lesage were in power. All of a sudden, it is as if this no longer existed and as though the federal government had full jurisdiction over education. We must convince our friends sitting opposite. It is not that they are less sensitive, but their hands appear to be more tied than ours.
As for the amendments, we have no problem with the idea of having two students rather than one sitting on the board of directors; as for the graduate and post-graduate students having access to the scholarships, we certainly agree as far as the master's degree is concerned but at the PhD level, it is perhaps easier for them to get grants from private enterprise, regardless of whether the degree is in engineering or pharmacology. As far as the principle is concerned, I agree with you.
You said that the scholarships would not help the most needy. This is not based on firm facts. Perhaps history will show that you are right. The members of the Foundation who will be selecting the recipients of the scholarships will have to establish criteria. I would imagine that these criteria would include the income level of individuals and there is no reason to think, right now, that those who are better off will be given more scholarships. I do not completely agree with you on that point.
As for the rest, we will try to convince the government. First of all, we have questions about how the Foundation will be run and we have other more technical questions about which my colleague, Senator Bolduc, is more knowledgeable than I am.
You can count on our assistance, our sympathy and our support so that this problem gets resolved. We are not interested in delaying a program that will lighten the student's debt load.
I was vice-chair of a Senate committee that studied post-secondary education. I do not know if you attended our meetings, because we heard from many Quebec representatives. It is obvious that Quebec's students are not as heavily into debt as the others, if we consider the resources that the various provincial governments make available to their students. I recall one province -- and please correct me if I am wrong, but I do not see any people who come from there -- Nova Scotia, where students were heavily in debt. Tuition in Quebec has remained low because students have never stopped fighting for this. Perhaps students have to be a little more realistic, but I do not want to get into another debate.
All I am asking right now is how we will manage to convince the government. If we could convince our friends opposite, I think that we could then propose amendments that are not revolutionary but that would allow us to change the proposed formula somewhat.
If, hypothetically, the formula was reversed and Quebec had more money at its disposal, because it would go directly to Quebec, what would these additional amounts be used for? You seem to be saying that they should be used solely for scholarships. As I said earlier, when we toured Canada, we received complaints everywhere about the quality of education because everyone has been subjected to budget cut-backs. How do you think Quebec could use these funds other than for scholarships?
Mr. Ducharme: I will answer three things clearly. I will also answer your question about tuition fees and student debt. I also have a fact sheet given to me by a coordinator of university research.
First of all, one of the Foundation's criteria will be student need. What we have asked for since the beginning are guarantees that could be given to the most disadvantaged students. No one was ever able to tell us that this would be guaranteed 100 per cent. That is one concern we have. We have no misgivings about the good faith of the people who will sit on the board of directors, however, we have no guarantees and as student representatives, it is difficult to live with that.
With regard to doctoral level students, you said so yourself, in certain fields, they receive significant bursaries, whereas in other fields of study, notably the humanities and other less trendy fields, there is no funding.
We believe that a university is not only about two or three programs but the entire curriculum. That is its function. It is the only institution that conducts research in a disinterested manner. Therefore, in our opinion, it is important that these people receive scholarships.
In what could this be reinvested? We said two things, and you said so yourself, even in 1996, it's because of student struggles in part and also because of a particular philosophy that education is accessible to many in Quebec. Our tuition fees are the lowest. The student movement always fought for them to stay low. I myself organized several protests in 1996. That's how we won.
What would be done with this money? First of all, we would like to improve our financial aid system to reduce student debt by 10 to 15 per cent in concrete terms. We could lower the ceiling for loans and compensate for it with bursaries. With fewer bankruptcies, less money paid out in interest, et cetera, our actuaries at the Federation have told us that surpluses of $25 to $30 million could become available. We would like to reinvest these amounts in our post-secondary system.
To our minds, this is beneficial. It improves the quality of our degrees because we can reinvest these resources in student supervision, equipment, books, but it also creates downward pressure on the tendency to increase tuition fees.
To answer Senator Cools' question: in Newfoundland, tuition fees are $3,185 and the average debt is $18,588; in Prince Edward Island, tuition fees are $3,056 and the average debt is $19,580; in Nova Scotia, tuition fees are $3,065 and the average debt is $24,818. In New Brunswick, tuition fees are $3,015 and the average debt is $20,628; in Quebec, tuition fees are $1,690 and the average debt is $11,227; in Ontario, tuition fees are $3,286 and the average debt is $17,081.
However, I would like to specify that the Premier of Ontario, Mr. Harris, increased tuition fees -- these figures are from last year. They are actually higher than this. For some programs, it can go up to 7, 8, 9 thousand dollars, because he deregulated and introduced formulas for tuition fees. He is thereby prevented a student like me, who comes from the lower middle class, from studying at the doctoral level. But this is not the place to debate that subject and it's not up to our Federation either.
The tuition fees in Manitoba are $2,896 and the average debt is $18,613; in Saskatchewan, tuition fees are $2,877 and the average debt is $23,700; in Alberta, tuition fees are $3,241 and the average debt is $17,778; tuition fees in British Columbia are $2,525 and the average debt is $17,388.
Senator Lavoie-Roux: Do you have any concerns about any other aspects of the bill that you have examined or have you confined yourselves to the issue of the Millennium Scholarship Foundation?
Mr. Painchaud: In our analysis of the bill, the amendment to the Bankruptcy and Insolvency Act is extremely discriminatory and even goes against the Canadian Charter of Rights and Freedoms and the Quebec Charter of Rights which states that no one can be discriminated against on the basis of their social status.
Social status means that a student must borrow money to be able to study. If he does not have adequate financial resources, it is discriminatory to prevent a student from filing for bankruptcy because he was a student and that he had to borrow to complete his studies.
Mr. Ducharme: There's one other thing that concerns us in this bill. In the mission statement, we would have preferred to see reference only to need. We are not against the 5 per cent for merit scholarships. This Foundation could award merit scholarships in Quebec. We calculated that $4 million would represent 1,333 scholarships of $3,000 each. This is legitimate, except that it represents 5 per cent of the money. As far as the rest is concerned, we would have liked to have the mission statement based exclusively on need. We also understand mobility, but we do not agree with that.
There is another thing in the legislation that worries us. We did not refer to it because it is not one of our main concerns. But it is the privatization of financial aid. The Foundation is not accountable to elected officials whereas it is our money. Not only is it not accountable, but it can receive money from external sources.
For example, Alcan could donate a million dollars to buy a million shares and with the dividends, it would give out scholarships. There is no guarantee within the current bill that states that it could not target that money, that is ask for scholarship recipients for that. There is no guarantee.
These are irritants, but we feel that with the right to opt out, we would not be irritated because the money would be in our own financial aid system and our system doesn't work that way.
Senator Rivest: I am in total agreement with the concerns that you have expressed and you have done so very well. This may be useful for our colleagues who are not necessarily familiar with all the realities of Quebec society and may not realize that these concerns are not simply a whim, or due to an ideology or mere stubbornness. Our colleagues from outside Quebec and on the government side must be made to understand that all of Quebec objects to this bill.
The presentation made by the students is extremely clear and relevant in this regard. People from the CEGEPS and colleges will be appearing later, and you will see, it's the same thing. The central issue, as you have understood full well, is the existence of a loans and bursaries system in Quebec. That does not prevent other provinces from doing the same thing if they want to. It is a proven reality that has a good track record, that works well, that is satisfactory, and our indignation results from the fact that unilaterally, the federal government has arrived with its "Canada coast to coast" approach without taking that reality into account. The students have expressed very clearly the reality of these two parallel systems that will overlap and that will not use the same criteria and approach. The students will be the ones to bear the brunt of it. We are simply trying to defend that reality. I have no questions because I would like to allow my colleagues to go into greater depth. It would be a good idea for our colleagues to give a copy of your presentation to Mr. Martin and Mr. Pettigrew, who will have to decide if this project should go ahead. The bill is certainly very premature and should be reconsidered, thus allowing the government of Quebec and others to provide their reaction. There may be other technical means of reconciling the Quebec and Canadian realities, but to force the passage of this bill at this point in time is not correct and does not serve the interests of the students.
[English]
Senator Cools: Mr. Chairman, I understand Senator Rivest's indignation, and I am sympathetic to it. However, we should use this opportunity to hear from these students to the best of our ability. Senator Rivest must be mindful that this committee, as of yet, has arrived at no conclusions.
Senator Lavoie-Roux: We have not heard any expressions from your side in the chamber.
The Chairman: Honourable colleagues, I will not allow for debate. We are limited as to time. Let us debate this separately and allow these gentlemen to make their presentation and answer questions.
[Translation]
Senator Joyal: I would first like to remind you, as you stated quite rightly, why tuition fees are lower in Quebec than elsewhere, even lower than anywhere in North America. If you look at the student debt situation in the United States, it's no better.
I was president of the Fédération des étudiants des collèges classiques in 1962, that is 36 years ago. We waged two battles during the creation of the Department of Education in Quebec which was headed by Mr. Gérin-Lajoie, in the days when Mr. Lesage was premier. In those days, there was no public college network in Quebec. All the colleges belonged to private educational institutions. Our first battle was the democratization of the educational system in Quebec, and the second was the issue of accessibility. We were effective in our struggle at that time since we had demanded that a student sit on the loans and scholarship fund selection and management committee. We got a scholarship before we got a loan. We believed that a student whose needs had been determined needed aid before becoming the client of a bank or another lending institution. That was our philosophy. I know that today, the situation is reversed. You are asked to be the client of a bank before benefiting from financial aid.
With regard to your priorities for the needs of Quebec's education system, in the event that these additional funds became available, do you think that money should be targeted to student debt? Would it be put to better use in other sectors, in improving teaching or technological tools that are needed today, in libraries, or else teacher training, equipment and teaching facilities? In your opinion, what is the number one problem of education in Quebec?
Mr. Ducharme: The main problem in Quebec is that universities and colleges are underfunded. In Quebec, we have universities and CEGEPS. We believe that if we had the right to opt out, the Millennium Scholarship Fund money that targets students should be reinvested in the financial aid system to reduce student debt in Quebec. It could be reduced from $11,000 to $9,500, which would mean that with payments over 10 years, you would save a lot of money and a lot of headaches. That would eliminate one year of repayment of student loans. The savings in interest the government must pay during the period of studies or during the period when we are entitled to deferred reimbursement would free up about $33 to $35 million for post-secondary education. If you can't pay your student loan, you must embark on a deferred reimbursement program during which time the government pays the interest on your debt. To lower the average student debt from $11,000 to $9,500, we need a surplus of $20 to $26 million.
We agree with the consensus of the education coalition and of Quebec as a whole. If there is money for our universities, there will be downward pressure on tuition fees and there will also be reinvestment in libraries, in equipment, in assisting and hiring teachers and if teachers are hired, this is even more helpful for the students of our federation and it also provides opportunities to those who are looking for employment.
To answer your question, we are dealing with student debt, funding, and the post-secondary network in Quebec. The federal government reduced its transfers, but the provinces also followed suit. They made massive cuts. In this way, 25 per cent of the budget of the university that I come from was cut over a period of four years. This has an impact even at the classroom level and on the quality of the teaching that is dispensed. There are more people in each class, fewer teachers per course and less supervision, diminished resources all around. Evaluation criteria are being downgraded because teachers have less time to correct our work because there are more students and fewer resources. Libraries are underfinanced. Books are the primary resource for studies in Quebec and in Canada. Computers increasingly provide access to databanks, but you have to buy them. When funds are not available, that's usually where the cuts are made.
I would like to emphasize to the Finance Committee members that the cost for administering the independent financial assistance unit in Quebec, and this is not an answer to a question, represents 1.25 per cent of the financial assistance plan whereas the cost of administering the Millennium Foundation is estimated at 5 per cent for the purposes of the bill. Everyone is saying that it will be 5 per cent. That is big money as folks say at home, and it will not be handed out as scholarships to students.
Senator Joyal: Have you reached a written agreement with the Quebec government stipulating that if the Quebec government receives the sums, it would guarantee to you that the ceiling on the loans would be altered proportionately?
Mr. Ducharme: There is no written agreement between the Quebec government and the Federation. Statements were made in the National Assembly and a statement was made by one Mr. Bouchard at the time when the education coalition had come out to meet Mr. Chrétien. The education coalition is asking for the same thing we are asking for. Thus, we do have guarantees.
Senator Joyal: You have no formal guarantee, and to come back to what you reminded us of and to what Senator Rivest was mentioning, if there were to be a net transfer to Quebec, either in the form of tax points or as a direct transfer, the total of these amounts would be reinvested, with priority being given to education and student debt.
Mr. Ducharme: It will also be reinvested in post-secondary education and a part of the amounts will be earmarked for financial aid for students.
Senator Rivest: It was a request made by Ms. Marois to Mr. Pettigrew during a phase of the negotiations.
Mr. Ducharme: We have heard this over and over again. You asked me if it was in writing; no, it was not in writing. We are not engaged in correspondence with the department.
Senator Joyal: I have seen too many commitments get re-evaluated under the public pressure that mounts as elections approach. I would like to be sure that when defending the students' interests, because I do think that you have been elected by the students, you must have formal guarantees that these sums will not be partly directed to students and partly to other sectors which are as deserving as education is.
The other question I would like to raise with you deals with students at the masters degree level. Do you have any statistics or data regarding the number of students at the masters level who are in debt as compared to the first college level or undergraduate university level? Have you any idea of the size of the problem caused by the fact that the masters students might not be covered by the Foundation?
Mr. Ducharme: In Quebec about 330 doctoral degrees are awarded each year. It is like a pyramid, as there are more of them at the masters level. So one part of the student debt is reduced. The average debt of these students is close to $22,000 and this also applies to those who are benefiting from the financial assistance plan for masters and doctor's degrees.
Senator Bolduc: Do you have a difference in the level of debt between masters and doctor's degrees?
Mr. Ducharme: Yes, about $17,000 and $22,000. The average debt could be as high as $40,000. If you finish your doctorate, you will be $40,000 in debt. Presently I owe $12,000. I am living with the pressure that is put on students in debt.
If these students have either a merit scholarship or a paying job, they cannot turn to the Quebec financial assistance plan because they are making too much money to be eligible for it. No one having such means receives any financial help. Those who do not have such means receive financial help and carry on their studies while going deeply into debt, and this is why we want to invest this money into student debt.
It is pretty well the same all over Canada, students are going into debt and those who are the most in need should be able to apply for a Millennium Scholarship to help them out. If you have a $5,000 merit scholarship and a Millennium Scholarship of $3,000, your standard of living goes up.
The Canadian system does not work in the same way for masters students and for doctoral students.
[English]
The Chairman: It is now 1:07. We must stop at 1:25 because I wish to review tomorrow's agenda.
Senator Bryden: I would just like to make a point. Yesterday, we listened to two hours of speeches from the other side. We have listened to some more today. My colleague is asking questions. I came here to hear the students, who are speaking now.
The Chairman: I am simply going by the list that existed yesterday. The extensiveness of the list was not there. That is why I allowed it. Today, we have an extensive list of questioners. I am asking, please, for understanding, since we have virtually 15 minutes. We have four or five senators left on the list. Please bear with me.
Secondly, the students would like to take photographs, as does Radio-Canada. Do any of you object to that?
If you have no objections, we will allow them to take photographs. Proceed, please.
[Translation]
Senator Joyal: I noticed in the newspaper you publish that the representatives of the University of Montreal, of Trois-Rivières, of Laval of Quebec and of Bishop's University seem to be rather supportive of the National Assembly's motion, as it was debated. Obviously, as it stands, it does not provide for withdrawal with financial compensation, but is rather an invitation to negotiate some kind of agreement with the representatives of the Millennium Foundation.
What would lead you to choose another formula than this one? It seemed, at least until mid-May, that negotiations were being carried on based on the motion that the Quebec Liberal Party had presented to the National Assembly, which seemed to me to provide a fairly reasonable ground for negotiations. Later on, it was amended and was finally set aside in favour of the withdrawal formula. What would lead you to go down this other avenue of agreement rather than the first one which seemed to have already been explored by the governments of both Quebec and of Canada?
Mr. Ducharme: As both negotiations were going on, there was no understanding at all between the negotiators. I spoke with the chief negotiators personally. One side wanted to negotiate implementation, whereas the other side was negotiating on principles.
Let us now consider the motion before the National Assembly whereby Quebec would receive its fair share, between 20 and 25 per cent, and whereby Quebec would be in charge of selecting the recipients. This means that if we select the recipients, it must be done following our criteria and not those of the Foundation.
Now if we want to practice a mode of distribution which would avoid any duplication and which would give the federal government the visibility it needs, the visibility of the cheque would be guaranteed, except for the fact that for the distribution method, the whole financial assistance network is already there in Quebec.
If we want to implement these three things, we should amend the Act in about 25 different places. We suggest that we amend it in one place and we will be able to respect these three principles. It will be much simpler, and the money will be efficiently managed. It will cost 1.25 per cent to manage the fund rather than 5 per cent. There will be more scholarships available. You can still go on awarding your 5 per cent in merit scholarships. In any case, we fought in order to ensure that below $5,000, this would not be deducted from financial assistance.
With regard to the National Assembly, everyone agrees, even we, but we are told that the best way to apply that would be through an opting-out provision. We would have to make around 20 or 25 amendments to the act, including the mission statement of the Foundation.
Beneficiaries of Millennium Foundation scholarships, must be chosen according to our criteria. These are not contrary to the Foundation's criteria, but they are incompatible with them. The National Assembly's motion, I recall, was seconded by the Parti Québécois, the Liberal Party and l'Action démocratique. We believe, and that is why we are submitting this solution, that the right to withdraw is much easier to apply. It guarantees that during ten years, we will not get involved in any political or administrative quarrelling.
The labour negotiations went on for 30 years. In 30 years, the foundation will no longer be inexistence. If we had the right to opt out as in 1964, the problem would be solved even before the creation of the foundation. The first scholarships should be handed out somewhere around September 1999.
Senator Bolduc: From what I have gathered, this point was debated and finally it was totally rejected because the government had already taken up its position. I am also in favour of a right to withdraw as I said yesterday. I invite you to read what I said yesterday.
You are saying that the bill would have to be amended in 25 places. If we amended section 29, rather than leaving administrative matters up to the Foundation's discretion, and if we could oblige the Foundation to reach an agreement, that is if we wrote that the Foundation "must," in other words, if the Foundation were satisfied, it could conclude an agreement with the Minister of Education as requested. We would the have a kind of administrative withdrawal and we would be sure that an agreement had been reached with the Quebec government.
Given this situation, by doing this, we could solve our problem. If the Foundation reaches an agreement, it will be because it will have agreed and the Minister of Education of Quebec will also have agreed that a reasonable agreement has been reached on general principles found in this Act, but also based on the established tradition for loans and scholarships in Quebec.
Maybe there is a way of amending only article 29 and not 25 different articles. This will not be contrary to the two criteria of financial need and of merit. If we could convince our colleagues of this, it would be a great step forward.
What I'm uncomfortable with is leaving considerable discretion over administrative matters and regulatory powers to an autonomous non-government organization. Thus we are giving them an opportunity to define a kind of public policy regarding the funding of advanced studies, in particular through assistance given to students.
We should, rather, oblige the Foundation to reach an agreement with the Quebec government. If we want to know what the priorities of the Quebec government are, we will perhaps be told that it consists in funding university studies, but that other priorities may also exist. Would it not be a positive response and would it not be viewed favourably by our colleagues?
Mr. Ducharme: It is a viable option, but it is not the one we choose. We are requesting the right to opt out. In our view, this is the best way of avoiding any problems. You are suggesting that we should force the Foundation to negotiate. I was told that this was impossible because the word "must" cannot be written into an Act. Our position as well as the position of our student associations is to seek the right to opt out with compensation. Anything other than that seems unacceptable to us.
Senator Bolduc: I also agree that this is an ideal solution, but we should be realistic. I do not mean to say that we should not proceed in that manner, but I do emphasize that it would be easier to get. You may be banging your heads against the wall by asking for the right to opt out. I agree with the right to opt out because it has existed as a tradition in Quebec for 35 years. We must be realistic. I think that we have come to the ultimate point in our negotiations. We must keep the pressure on the negotiations and get concrete results for you.
This is what I have in mind when I propose this amendment, this different perspective. This is not simply an administrative manoeuvre to be applied with total disregard for the principles.
[English]
Senator Forest: I should like to commend the students for their presentation, which they made with eloquence and passion. When our post-secondary education committee met with students from Quebec, we found that the Province of Quebec had put a priority on education and that there was much to commend the system.
I spent most of my life in academia at the universities. With respect, you made a point about post-graduate students being eligible. The first priority is to help students get into the system. Of course, the funds are always limited.
Would you not agree that the first priority should be to help needy students get into the system first? Perhaps, when students get on to their masters and doctorates, they might then have other means of support. That is the priority of the Millennium Foundation.
[Translation]
Mr. Ducharme: Your premises regarding the Foundation are right. Access to education does not only involve the undergraduate or bachelor's level. For a needy student wanting to carry on with his studies, as I was explaining, there is a pyramid effect. There are fewer and fewer students, the cost goes on decreasing and there are fewer and fewer persons eligible. The Foundation should not forego the leeway it has to assist students in post-graduate and doctoral studies.
Over the years, this Foundation will be replenished with private investments, so it will be growing but presently it is not allowing itself to give more. It might not give any during the first years, but why should any legislation stop it from awarding scholarships to students at the graduate and post-graduate level? This is inconceivable to us. The administrators will base their decisions on the regulations, but this will not stop the Foundation from awarding scholarships to graduate and post-graduate students.
Furthermore, 5 per cent will be awarded on merit. This might mean 5 or 7 per cent awarded to graduate or post-graduate students. This is not our Federation's position on this, but just an example.
[English]
Senator Forest: Senator Bolduc referred to clause 29 of the bill in his questions. He suggested that it should be mandatory, rather than discretionary, for the federation to enter into agreements with the provinces. I gather from that that you do not have any comfort level in the fact that the foundation can do this. You feel that it must be mandatory to enter into negotiations. I agree that they should.
[Translation]
Mr. Ducharme: Right now we have no guarantee. What will we do if no agreement is reached? The best way to guarantee an agreement is to oblige -- as Senator Bolduc has already stated -- the parties to negotiate or accept our motion for a right to withdraw. This is the best guarantee of all. We would then be sure that the money would go to our financial assistance plan.
What will we do if there is no agreement between Quebec and the Foundation, if we have to set up a parallel system for distributing all forms, processing them and sending the cheques out to the students? It will be costly, useless, inefficient, it would duplicate everything. Unfortunately Quebec students do not have full participation in federal programs. Take the case of students abroad. Sometimes, we have participation rates of between 11 and 12 per cent because it is not in our institutions. The best guarantee for that money to come back to the students is that it be in our financial assistance plan. Our financial assistance plan has an office in every university.
[English]
The Chairman: I am sorry to interrupt you, sir, but I should like to give Senator Moore a chance to ask his questions.
Senator Moore: Mr. Chairman, I am from Nova Scotia. I was interested in the figures you mentioned with respect to the average tuition fees, in terms of Nova Scotia vis-à-vis Quebec.
If I am a student from Nova Scotia and I attend McGill, Laval, or another institution, would I pay 60 to 90 per cent less on average? What would I pay?
[Translation]
Mr. Ducharme: I do not have the exact amount, but there are so-called "differential fees" for non-residents. It is also done in British Columbia. Presently, provinces do not have the same tuition fees. It costs about $12,000 per university student. When a student from another province comes in, the Quebec government pays, and we do not agree with that. We think that this is negative, but there are different tuition fees for non-resident Canadian students. This is the way it is done in Quebec, in British Columbia and presently, we know that the British Columbia government wants an equalization of tuition fees across Canada because of this. We also disagree with this.
In the present situation, it costs about $3,000 for a New Brunswick student to come and study in Quebec.
[English]
Senator Moore: What would the amount be? Does the differential fee bring the total to one-half of the 60-90, is it double, or what is it?
[Translation]
Mr. Ducharme: It's about $2,700 overall.
[English]
Senator Prud'homme: But not more.
Senator Moore: It is $2,700 in total.
[Translation]
Mr. Ducharme: This means that it is cheaper to come to study at McGill than in nearly three quarters of the other provinces.
[English]
Senator Moore: I see that. What percentage of university students in Quebec would be paying this higher fee? Is the determining factor here your place of permanent residence?
[Translation]
Mr. Ducharme: Non-resident, it is like when you vote, it means your place of residence.
[English]
Senator Moore: What percentage of the students would be paying that higher amount?
[Translation]
Mr. Ducharme: Less than 10 per cent; at McGill University, it is 30 per cent, but this is because most non-resident Canadian students are residing there. At Bishop's University, it is a bit over 20 per cent, at Concordia University it is 7 per cent; on the average it is below 10 per cent.
[English]
The Chairman: Thank you very much, gentlemen.
If there is time, would committee members like to have a second round with the students tomorrow morning?
Senator Bryden: I believe that the students have put forward their case very well. While it is interesting to me to learn more about the system in Quebec, I wonder if the students believe that they still have something to add to their case. In my view, it was done very well.
The Chairman: We are still awaiting word on other groups or individuals who would like to appear.
We will be hearing tomorrow from the Canadian Bar Association. It might be interesting if some of you could attend, to hear their views.
Thank you very much.
[Translation]
Senator Prud'homme: I met with the students because I am interested in the issue. They understand I am not a member of the committee, and that, out of courtesy, committee members speak before I do.
You say that you will have representatives and observers here, so you will be continuing to lobby us. I am here to obtain information. It is therefore not important whether I ask questions or not.
The committee adjourned.