Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 4 - Evidence - April 29, 2010
OTTAWA, Thursday, April 29, 2010
The Standing Senate Committee on Social Affairs, Science and Technology, met this day at 10:29 a.m. to study the accessibility of post-secondary education in Canada.
Senator Art Eggleton (Chair) in the chair.
[English]
The Chair: Colleagues, the first item is the budget.
Let me draw your attention to two documents, starting with the simple one. It is a single page entitled, Special Study on Post-secondary Education.
There are suggestions that we will need editing services, and these services are a standard kind of thing. Do you want any further explanation of that item, or do you want to say anything about it?
Jessica Richardson, Clerk of the Committee: I worked with the appropriate person at the Library of Parliament to come up with the rates. I looked at all the substantive reports the committee prepared over the last five years, and I spoke about having Mr. Thompson come up with the average length the report is likely to be, translated that into words, figured out roughly how many hours will be needed and added a few extra hours, of course, because you never know. The rate is $65 an hour, and then I added taxes on top of that.
Senator Ogilvie: I so move.
The Chair: Are there any further questions or discussions? Are we agreed?
Hon. Senators: Agreed.
The Chair: Carried.
The other budget document is for the cities studies, and in play, again, is an item for editing and revision services.
What is that item specifically for?
Havi Echenberg, Analyst, Library of Parliament: It is for the next cities report.
The Chair: These items are relevant to the fiscal year that goes to the end of March, so somewhere down the line we will return to the next segment of the cities study. That item is another one of those expenses, $11,800.
The next item is $9,500. Last December, when we filed the report on Poverty, Housing and Homelessness, we filed it in a traditional form, and we received special permission to try something different. You all received a copy of the executive summary and the foreword that Senator Segal and I signed, and in the middle was a compact disc with the full report. It is a much better read and it has taken off like wildfire. We are out of copies. We need a reprint. This amount is for the reprint.
Then we have the Federation of Canadian Municipalities conference coming up, and we are providing for the possibility of two senators going. We are not sure who wants to go. I usually go every year, but it is in Toronto, so it will not cost me anything, unless it is conference fees. They frequently invite me as a speaker to talk about what we have been studying on cities. There is room for another senator, if anybody wants to go, and for one staff. I believe Ms. Echenberg will go to that conference.
Is anybody interested in the possibility of going to the Federation of Canadian Municipalities conference? It is a big conference of mayors and counsellors across the country, and usually the Prime Minister and the leaders of the parties go and make speeches.
I used to be an executive member of the association, so I have a long history with them. If anybody is interested, let Ms. Richardson know. We have provided for another senator, and the transportation is for any senator who might come from out of town.
That takes us to other expenditures, which is $500 for miscellaneous, whatever that is.
Ms. Richardson: That item is in case there is anything we could not foresee. It is a modest amount.
The Chair: The total is $31,000, and $11,800 is for editing and revision, so that amount has to be about the lowest budget of any committee.
We have no specific travel plans and are still working on our agenda. Our agenda between now and the end of the session in June is based on meetings that will take place here, no travelling: finishing up the post-secondary education study; reviewing Bill C-268; the user fees in health care; and we might have the autism day.
Senator Martin: I move the adoption.
The Chair: Agreed?
Hon. Senators: Agreed.
The Chair: Carried.
[Translation]
Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
Today we continue with our topic of post-secondary education accessibility in Canada.
We have witnesses from Human Resources and Skills Development Canada. Heading up the team is Kathryn McDade, Assistant Deputy Minister, Learning Branch; Marc LeBrun, Director General, Canada Education Savings Program; Martin Green, Director General, Workplace Partnerships Directorate; Catherine Adam, Director General, Aboriginal Affairs; and Glennie Graham, Senior Director, Canada Student Loans Program.
Welcome to all of you. Ms. McDade will give the opening remarks, and then we will have an opportunity to ask questions.
Kathryn McDade, Assistant Deputy Minister, Learning Branch, Human Resources and Skills Development Canada: Thank you chair, and good morning, senators. It is a pleasure to be here with you today to discuss access to post- secondary education and the support that the Government of Canada provides in this area.
I know that during the course of your study to date on the issue, you have heard how important post-secondary education is to both individual success in the labour market, and, more broadly, to our national capacity to compete in the knowledge-based economy.
Recent research suggests that roughly two thirds of all job openings now require some type of post-secondary credential, and, as you know, higher educational attainment has also been linked to a wide array of social benefits; everything from lower crime rates to better health outcomes.
The federal government plays a crucial role in promoting and supporting higher education through a variety of instruments, including direct transfers to provinces, tax-based supports and support for research. We will not focus on any of these pieces, but we will talk today about one dimension of the federal efforts, which is programs designed to ensure that post-secondary education and apprenticeship training are accessible and affordable for Canadians. I will provide a brief overview of the several HRSDC programs that support that objective: loans and grants for current students; incentives to save for post-secondary education; incentives for apprenticeship training; and targeted supports for Aboriginal learners.
I will start with a few remarks on the Canada Student Loans Program. It was first established as a statutory program in 1964. Over the past four and a half decades, it has disbursed close to $30 billion in loans and grants to 4 million students. This year alone, the program will provide approximately $2.5 billion in loans and grants to support approximately 385,000 students, or 40 per cent of all full-time post-secondary students across Canada.
[Translation]
The funding model used for the CSLP has evolved over time. Under the current regime, which has been in place since August 2000, the Government of Canada directly finances student loans while a service provider handles administration of the loan and loan repayment.
These loans are delivered in concert with provincial student financial assistance programs — with the federal government providing 60 per cent of a student's assessed financial need and the provincial governments covering the other 40 per cent. For a typical 8 month school year, this translates into a maximum of $7,140 in Canada Student Loans.
All provinces and territories participate in the Canada Student Loans Program except Quebec, the Northwest Territories and Nunavut, which receive alternative payments from the federal government to operate their own student financial assistance programs.
[English]
The program has undergone significant improvements over the past few years. Budget 2008, for example, announced a variety of new initiatives that were implemented in the 2009-10 school year. These initiatives included a new Canada Student Grants Program targeted at under-represented groups, such as students from lower- and middle- income families, students with dependents and students with a permanent disability.
To give you an example under the Canada Student Grants Program, a student can qualify for more than one grant. For example, a student with a permanent disability from a low-income family with one child, one dependent, qualifies for three different types of grants totalling $5,600 for the typical eight-month school year. The same student can receive a further grant of up to $8,000 for disability-related equipment and services, and that student may be eligible for up to $7,140 in Canada student loans.
Other improvements from Budget 2008 included a new repayment assistance plan designed to make it easier for student borrowers to manage their debt. One of my colleagues, Glennie Graham, was here two weeks ago and discussed these recent program changes.
The efforts through the Canada Student Loans Program to promote accessible and affordable post-secondary education are complemented by another HRSDC initiative, the Canada Education Savings Program. This program was created in 1998, and was developed to encourage families to save for their children's post-secondary education by investing in Registered Education Savings Plans. It provides a universal grant, called the Canada Education Savings Grant for all RESP subscribers. Savings in RESPs attract a 20 per cent matching grant, to a maximum of $500 per year.
Cumulatively, as of December 31, 2009, over three and a half million children had received over $5 billion in grant payments to assist them with their post-secondary education costs. This funding is supplemented by two grants targeted specifically to lower income families, the additional Canada savings education grant and the Canada Learning Bond. It is important to note that low-income families can receive a CLB without contributing any of their own funds to an RESP.
The CESP delivers these educational savings through an innovative public-private partnership between the Government of Canada and over 75 financial institutions. Financial institutions open RESPs and apply for the CESG grant on behalf of their clients and are responsible for receiving and distributing grant payments. The financial institutions do not receive compensation from the Government of Canada for their delivery of savings incentives.
As with the CSLP, recent budgets have announced improvements to the program. Budget 2007 expanded the program by increasing the lifetime limit on RESP contributions from $42,000 to $50,000.
Budget 2008 built on that improvement by extending the time that RESPs can remain open from 25 years to 35 years.
In 2009, for a single year, over 250,000 students withdrew about $1.8 billion from their RESPs to support their education. As the program matures, more payments will be made, thereby benefiting an increasing number of Canadians by helping them to attain a post-secondary education.
Before moving on to a different topic, I note that in addition to providing direct financial support through the CSLP and savings incentives through the CESP, the Government of Canada offers the Canada Summer Jobs program. The program provides students opportunities to gain work experience and earn money to defray the costs of their education. In 2009-10, 37,500 students obtained summer jobs through the program.
[Translation]
I would like to turn to HRSDC programs that support apprenticeships. Apprenticeship is a key component of Canada's learning system and several federal measures provide financial support to Canadian apprentices.
For example, HRSDC provides regular income support benefits through the Employment Insurance (El) system to eligible apprentices during their periods of in-school technical training.
In addition, through EI ``Part II'' programming, approximately 60,000 apprentices are supported each year for additional classroom-related expenses.
Through the Apprenticeship Incentive Grant (AIG), the government provides a cash grant of $1,000 per year to apprentices in the first two years of an apprenticeship program in one of the designated Red Seal trades.
Since the AIG was implemented in January 2007, over 145,000 grants have been issued. In Budget 2009, the government launched the Apprenticeship Completion Grant (ACG), which provides apprentices who complete their Red Seal Certification with a $2,000 completion grant. Over 19,000 ACGs were issued in 2009-10.
[English]
I understand that the committee has expressed considerable interest in the skills development of Aboriginal people in Canada. I know you have heard from colleagues at the Department of Indian and Northern Affairs on this topic. The government invests significant resources to deliver a range of education upgrading and up-skilling services that support the development of foundational skills for employment and access to post-secondary education for Aboriginal Canadians. A recent five-year investment of close to $2 billion in Aboriginal skills and employment training will help Aboriginal people prepare for meaningful employment and assist Aboriginal youth to make successful transitions from school to work or prepare for opportunities requiring some post-secondary or apprenticeship training.
Through collaborative partnerships, HRSDC also delivers the Aboriginal Skills and Employment Partnership program. This project-based program supports multi-year training strategies to ensure that Aboriginal people acquire the skills, including apprenticeship training, required to secure long-term employment. Since 2007, the government has provided an additional $205 million to this program.
Canada's Economic Action Plan provides additional temporary support for skills development activities through the two-year $75 million Aboriginal Skills and Training Strategic Investment Fund, and some of these projects support construction activities leading to Aboriginal people entering into the trades, some of whom will become indentured apprentices.
Thank you for your patience with the opening remarks. I have with me the managers responsible for all the programs referenced in my remarks. We will be happy to answer your questions.
The Chair: Thank you very much.
There are a number of areas I want to explore with you, but I want to focus on tax credits. This tax credit system is the biggest single expenditure of the federal government. The responsibility might not be directly with your department, but the government provides over $2 billion annually in tax credits, and we heard people suggest that the credits are not effective. They are an ineffective way of encouraging enrolment, particularly amongst lower income people. In fact, lower income people receive much less advantage from this these credits than higher income people.
Many lower income people have an opportunity, perhaps, to carry the credit forward, but that does not do much good in terms of paying for their education now if they are struggling to find the money to do that.
Some people have even said this policy regressive. They have suggested that the money in foregone taxes can be better spent, perhaps, in grants or in expanding the student loan program.
Has the federal government evaluated the effectiveness of these measures? What do you say to the people who have been rather negative about the tax credit system?
Ms. McDade: To my knowledge, we have not. I cannot speak for the government writ large. I am certain that Finance Canada has prepared analysis of the progressiveness or the effectiveness of the various tax measures that support post-secondary education, but we have not looked at that issue specifically, so I cannot comment on their behalf.
Your comment with respect to the alternative policy of channelling money out of some of these tax credit vehicles into loans and grants is not an area where we have been asked to provide analysis. I am sorry not to be able to answer in any greater depth, but I have not seen any of that area.
The Chair: I am sorry, too, because I think it has to be looked at in a comprehensive way.
You mentioned summer employment. People that have come to us in the process of these hearings said last year was a particularly bad year — we all know that — because of the economic downturn. They say if they try to make up for lack of summer employment with part-time jobs during the year that there is a clawback provision if they earn more than $50 a week, so that provision becomes a disincentive. Why do you have this $50 limit and why do you not have more flexibility to deal with changes in the economy such as the downturn we had last summer?
Glennie Graham, Senior Director, Canada Student Loans Program, Human Resources and Skills Development Canada: The Canada Student Loans Program is based on needs assessment. We look at resources and costs. We have a provision for a $50-a-week maximum in terms of earnings, and it does reduce the need because resources go up.
We are aware that the earnings maximum is an issue, and we have had conversations with some of the stakeholders about it.
We have a process in place through the provinces where an individual can appeal and ask for a reassessment of need. Essentially, the program is set up to be based on needs assessment, so if they have more income, they have less need for loans and grants. That is the simple answer.
The Chair: It does not sound too simple. We also heard from people saying that there is a lot of complexity in the system in applying for those student loans, so you are making the process more complex.
You have, as I understand it — as we have been told — an expectation that people will earn money during the summer for part of their education. You agree that last summer was not a normal summer, and many were not able to do that. Yet, you are putting them through more hoops on appeals in a system they say is already a complex system.
Ms. Graham: The system is complex and is set up to look at their costs, needs and resources. We have an appeal system in place. We recognize that the recession means they are not necessarily able to earn the income that we expect them to contribute as part of our needs assessment. There is an ability for them to appeal that expectation and have a reassessment.
The Chair: What are you doing to make the system simpler?
Ms. Graham: We have a number of things in place. We are looking at our forms and the information that we put out there. We have commissioned somebody to look at the simplicity of the language of our application forms and such. We do want to make the process easier. We are a legislated program, and we have a legal contract with students, so some things, by necessity, have to be complex.
We provide a fair amount of outreach. We work with the student financial officers at universities to try to ensure that information is relayed to students on how to access post-secondary education and to fill in the forms.
We also have an outreach program with students, where we go to universities and colleges, and we have kiosks and talk to people about the student loan process and how it works.
One thing announced recently in Budget 2008 is a service delivery vision initiative, where we want to improve the ability of students to manage their loans online and use more technology that they are comfortable using: looking at reducing the amount of paper they have to fill in, going to one application for all years of study, electronic confirmation of enrolment and so forth. We are looking at ways to simplify the system because we recognize that it is complex.
The Chair: You say you go to colleges. What about high school? People who are dissuaded and think it is too complex and will not meet their needs may not go to the college. What are you doing at the high school level?
Ms. Graham: High schools are provincial jurisdiction. We are limited in our access. However, we are working with the Province of British Columbia at the moment on an experiment where we go into high schools to provide hands-on assistance with students to show them how to look for post-secondary education courses and how to access student financial assistance. We will help them through that process. That will begin this fall. If it is successful, we think that program is an opportunity to approach other provinces about providing the same assistance.
We are targeting schools that are in lower socioeconomic areas, so we want to reach those students who do not necessarily know how to access post-secondary education, or may overestimate the costs and underestimate the benefits. It is an area that we are interested in working in, and we are making progress with provinces on moving into that area.
As well, we talk to YMCAs and YWCAs in terms of getting the word out to their constituencies about the benefits of post-secondary education and what is available to help them.
Senator Eaton: In your presentation, you talked about a billion dollars of investment in Aboriginal skills and other monetary aid.
Does that money go directly to the students, or is that given as a complete number to the Assembly of First Nations or to bands?
Catherine Adam, Director General, Aboriginal Affairs, Human Resources and Skills Development Canada: The references to the Aboriginal Skills and Employment Training Strategy, which was introduced in April of this year, is a successor to the Aboriginal Human Resources Development Strategy.
In this program, the money goes directly to Aboriginal organizations, and the organizations identify the client needs. They design the program and they help deliver the programs.
Rather than going to a national Aboriginal organization necessarily, it goes to service providers, Aboriginal organizations at a community level that are able to assist Aboriginal people in accessing post-secondary education support, skills and training.
Senator Eaton: Do these associations have a proven ability to deliver the programs?
Ms. Adam: Absolutely, and the Aboriginal Human Resources Development Strategy, AHRDS, ran for 10 years, so we have seen remarkable success in many of the indicators on the success of the strategy, and with Aboriginal Skills and Employment Training Strategy, ASETS, which is looking at building on the success of the Aboriginal Human Resources Development Strategy.
The new strategy will focus now on being demand driven, so we will ask the Aboriginal organizations to identify labour market information — what are the industries in their region that are looking for employees — to help make sure that we have a match between the labour market demands and the Aboriginal population in a given region. The strategy will build on partnerships, so Aboriginal organizations will strengthen partnerships with provincial and territorial governments, with industry, with educational institutes and other Aboriginal organizations.
Senator Eaton: If I was a young status Indian native, and I wanted to take forestry, where would I go to access the money?
Ms. Adam: Different avenues are open to a young Aboriginal person interested in taking skills or education training in the forestry industry.
One avenue is through what has been known as the Aboriginal Human Resource Development Strategy, now the Aboriginal Skills and Employment Training Strategy, and this money is accessed through the Aboriginal organizations by going to the local office and meeting with an employment counsellor.
They would look at speaking with the individual, taking a history, education, what their area of interest is for employment, what kind of training they need to obtain employment in that field. They look at what programs are available for the skills development, and then there are financial supports to gain those skills and training.
Senator Eaton: It is not only a matter of finishing high school, having the marks, filling out a university application form and then being supported?
Ms. Adam: I do not mean to give the impression that they have to access one of the Aboriginal service delivery sites. That program is one program that is available to Aboriginal people. Other programs that we have representatives here to talk about today support access into college or university. This program is one that is also open to Aboriginal people who have not necessarily completed secondary education and are looking to gain the skills and training that are required at post-secondary education or through another training program. These Aboriginal organizations are able to assist the individual in gaining either the post-secondary education supports or in taking General Educational Development, GED, to acquire the credits that may be required to enter the field they are interested in.
Senator Eaton: We are entering a period where the baby-boomer crush is over in terms of schools. We will have extraordinary labour shortages in the next five to ten years. Have we begun the discussion of trying to recruit younger immigrants,. or do we give any kind of financial help to non-Canadian students in schools here whom we want to encourage to stay here?
Ms. Graham: To be eligible for a Canada student loan they have to be a resident of Canada.
Senator Eaton: They do not have to be a citizen; they can a resident?
Ms. Graham: Yes, a permanent resident: Immigrants are eligible to access Canada student loans and grants if their program of study is 36 weeks. We have heard that some programs for skills upgrading are shorter than 36 weeks, in which case they would not be eligible. However, in general they have full access to the Canada Student Loans and Grants Program.
Senator Eaton: Non-full-time residents do not have access?
Ms. Graham: That is right.
Senator Eaton: We have no special programs geared to attract younger people to Canada? I am not saying that we should; I am only posing the question. We will have huge labour shortages, and our immigrants now are middle-aged. What will we do to attract younger people?
Ms. McDade: If colleagues from Citizenship and Immigration Canada were here, they would tell you, in terms of immigrant selection, about changes the government has made to speed up the processing to make it easier for students who have come to Canada to study, to remain in Canada if they meet certain eligibility criteria.
Your specific question is around financial incentives and financial support. The short answer is no, from a Government of Canada standpoint. I am not familiar with the full range of provincial support. In particular professions, through the Provincial Nominee Program, for instance, there may be financial incentives. I am not aware of any.
Martin Green, Director General, Workplace Partnerships Directorate, Human Resources and Skills Development Canada: I do not think that there are incentives through the Provincial Nominee Program. I do know, although I do not have the numbers here, that the number of foreign students in Canada is increasing. It is a seriously big business for Canadian universities.
We work with Citizenship and Immigration Canada on the many aspects of foreign credential recognition. Through the ``Going to Canada'' portal, if young people want to come here who already have some educational background, we have sophisticated tools that will tell them what they will need to do when they arrive in Canada in terms of up-skilling or re-skilling to join the labour market in a certain area. There has been a lot of success there. I am not responsible for that area, but there are big efforts there and positive things taking place.
Senator Callbeck: Welcome, and thank you for all the information.
A number of witnesses have told us that the level of financing that they can access under the Canada Student Loans Program is not sufficient. You say this program is based on needs assessment and cost. How often is that level of financing adjusted or considered?
Ms. Graham: In 2005, we raised the loan limit from $165 per week to $210 per week. Some students are already at the loan limit. As a result of the introduction of grants this past fall, they can access more in loans if their assessed need is higher. There is a little more for them, but it is true that our loan limit is $210 a week, and about 40 per cent of students are accessing the loan limit now.
From time to time, we look at raising the loan limit, but at this time there is no plan to raise it beyond the $210.
Senator Callbeck: You say ``from time to time.'' In other words, you do not do it every three or five years but whenever you get around to it?
Ms. Graham: I would not say it is when we get around to it. We look at tuition costs and at the program from a policy perspective and recommend an increase. As I said, we looked at it last in 2005. We know that a high percentage of students are at the maximum limit, so it is currently on our minds in terms of what the implications of raising loan limits will be.
Senator Callbeck: There is no set time? In other words, you do not look at this issue every three or five years?
Ms. McDade: Ms. Graham is saying that an increase in the loan limit is a policy decision of the government, and there is no legislated requirement for a review within a certain time frame, which I think is what you are wondering. Those loan limits can be changed as frequently or as rarely as the government feels is appropriate.
Senator Callbeck: You said there is an appeal mechanism. Do many students appeal?
Ms. Graham: Appeals are made through the provincial government, so I do not have those numbers. I can see if we can forward the numbers to you.
If at any time during the year a student's income or their parents' income changes, there is an appeal mechanism. We can give you a sense of that number, if that is of interest.
Senator Callbeck: That will be helpful to the committee.
With regard to part-time students, it says here that only .005 receive any financing under the Canada Student Loans Program. Why is that?
Ms. Graham: I am not sure what you are referring to. In the past year we raised the limit. It is true that few people access part-time loans and grants. In August of last year, we increased the amount of loan available to students in part- time studies from $4,000 to $10,000. We will be interested to see whether that change increases access to part-time student financial assistance.
Senator Callbeck: Do you think that statistic is so low because the amount was low, or are there other reasons?
Ms. Graham: Our view is that if someone is going to university part time, often they have a full-time job and have no need to access student financial assistance, or when we look at their income compared to their need, we see that they do not qualify for assistance because their income is high enough to support the expenses that they incur going to university part-time. That is the simple answer.
Obviously, because of the current economic circumstances, we are interested in whether the increase in part-time loans that we put forward will assist people.
Senator Callbeck: Are there statistics on the number of part-time students who have applied?
Ms. Graham: Yes.
Senator Callbeck: And for those who have been turned down?
Ms. McDade: We may not have the precise number with us. We know that there are roughly 396,000 part-time students in any given month. We can provide the statistics on the number of applications for part-time loans. The proportion rejected is probably modest. I think what you really want to know is, of the students in part-time studies, what proportion try to access this program and use it for their studies. We can provide that information.
Senator Callbeck: That would be great.
One witness talked about the Registered Education Savings Plans and the Canada Education Savings Grants, saying that these programs benefit the families that need it the least. What are your comments on that view?
Marc LeBrun, Director General, Canada Education Savings Program, Human Resources and Skills Development Canada: The program was introduced in 1998. It underwent an evaluation, and in 2002 the evaluation showed that specific factors were indicative of people participating or not participating in the program. One factor was general awareness and another was income level. The likelihood that those in low-income families were aware of, or participating in, this program was low, so in 2004 changes were introduced that were targeted specifically to low- and middle-income families.
In 2005, we introduced the Canada Learning Bond and an additional grant which gives low- and middle-income families additional incentives to save. The matching rate was raised for those families to create additional incentive. We are currently evaluating those changes and expect to know by the end of this year whether they have been effective in incenting low-income families to save for post-secondary education.
Senator Callbeck: You said you introduced changes in 2004 and you mentioned the bond in 2005. What were the other changes?
Mr. LeBrun: The basic match rate is 20 per cent for saving for your children's education. The government gives low- income families 40 per cent on the first $500 as an additional grant. There is no specific program name for it; it is a higher incentive based on income.
Senator Callbeck: You are evaluating those changes now?
Mr. LeBrun: That is correct.
Senator Cordy: I want to talk about the unmet needs. In 2008, the actuarial report showed that a number of students require far more money than they are receiving from their student loan, ranging from a low of $1,191 in Ontario to a high of $5,219 in Nova Scotia. I am from Nova Scotia, so when I see numbers like that I become alarmed. When I asked a similar question last week, the response was that it could be because of higher tuition costs in Nova Scotia.
Do you look at regional differences when determining what amounts students are eligible to borrow?
Ms. Graham: The provinces provide the up-front needs assessment, and they consider income, family size, where students live and the costs there. Each province assesses needs in its own way. Provinces look at parental income for dependent students, and they look at whether the family has more than one child in post-secondary education. It varies across the country in terms of what the contribution of the parents can be and what the assessed need is.
To answer your question directly, yes, regional differences are taken into account in the needs assessment.
Senator Cordy: Why is there such a difference in a needs assessment between Ontario and Nova Scotia? I would think that if a needs assessment were done those numbers would be close. There is a big difference between $1,000 and 5,000.
Ms. Graham: The cost of tuition is a factor, as is the cost of living.
Senator Cordy: I understand the factors, but if a needs assessment is done, why is there a difference in the amount of the unmet need? I would guess that with a needs assessment, the unmet need may vary by a couple of hundred dollars between provinces rather than by $4,000, as is the difference between Ontario and Nova Scotia. The needs assessment does not seem to meet the needs of the various provinces.
Ms. Graham: What study are you referring to?
Senator Cordy: The 2008 actuarial report.
Ms. Graham: I will get back to you on that answer. The question is a fairly complicated one.
Senator Cordy: That is fine. The difference seems big if you have a needs assessment. The range seems to be broad.
Moving on to summer employment, some students in Nova Scotia have unmet needs of $5,200, and last year the summer unemployment rate was the highest ever recorded. That unemployment rate left the students in a dilemma for this past year. Hopefully the employment rate will increase this summer.
I want to go back to the chair's question about the $50 maximum for part-time work. Of course, if students do not have a job in the summer they will try to find a job during the year. The $50 maximum earning is five hours of work at $10 an hour. Many students living in the Halifax area and going to university are working at jobs in retail, because that area is flexible for them. However, not many retail outlets will hire a student who can work only five hours a week.
When was the last time the $50 was adjusted?
Ms. Graham: I do not think it has been looked at in the years that I have been working in this area.
Senator Cordy: Which began when?
Ms. Graham: In 2000.
Senator Cordy: So that was at least 10 years ago.
Ms. Graham: Yes.
Ms. McDade: To clarify, the $50 is the limit before the student is expected to contribute funds, so it is not taken into account in terms of their income contribution. There is no bar on —
Senator Cordy: I understand that. They can earn $250 a week, but everything above $50 will be clawed back from a student loan, will it not?
Ms. McDade: It will be considered part of their contribution to their own education, as opposed to funds provided by the federal and provincial governments.
Senator Cordy: If we look back at the $5,200 of unmet needs in Nova Scotia, $50 a week will not cover those needs. Fifty dollars is not much.
I want to go back to the complexity of the forms. We hear people say that people from the government are not much help. We heard about the complexity of the forms last week. We heard that they are at the level of expertise of Grade 11 or 12. The target for student loans tends to be students whose parents are not necessarily university educated. The target group is first-generation post-secondary students; low-income students; and Aboriginals, who have low rates of graduation from high school and much lower rates of graduation from post-secondary institutions.
When we look at the complexity of the forms and at the students applying for student loans, the situation does not seem to be a good fit. Are you looking at making the forms easier to fill out? I know you said earlier that if students do not receive enough funding they can reapply or appeal, but that process only adds to the complexity. I am concerned when I see complex forms for people in the target groups, who are the ones looking for student loans.
Ms. Graham: It is a concern of ours. As I mentioned earlier, we are looking at applying plain language principles to our documents. The documents that students have to sign are contractual and there are obligations and legislation around the things we must put in the documents. In terms of explaining to students what the applications are and why certain information is required, we are running a pilot project on having entrance and exit interviews with students. We take them through their obligations under the application and the student loan program and assist them to better understand what they are entering into. They are entering a complex financial arrangement and it is the first time that many of them will do so. We want them to know that the commitment is a serious and long-term one.
We want to help them to understand what the forms are and why they need to sign them. At the other end, when they graduate and their loans are consolidated, we will have another interview with them to tell them how to manage their loans and what to do if they get into trouble in terms of being able to repay.
We are putting that pilot project in place in B.C. Our objective and hope is to implement that process across the country and make it a mandatory part of applying for student loans.
Senator Cordy: Do you hold individual meetings?
Ms. Graham: Yes.
Mr. LeBrun: Some of the questions you are asking are tied to financial capability or financial literacy, that is, whether students signing for a student loan understand what they are getting into. Ms. Graham spoke of the entrance- exit tool, which is one thing we will pilot. Other initiatives are in place in the government that look at financial capability. In December of last year, Statistics Canada released survey results on the financial capability baseline of Canadians. We are drawing on that data now to see whether specific factors lead to general understanding of financial concepts and what the baseline is for students and families based on income levels, et cetera. That capability baseline is one area of interest for us.
The Financial Consumer Agency of Canada is partnering with provincial security agencies and provincial departments of education in formulating web tools for students to build financial capability into the curricula at the high school level. They deal with concepts like student loans, insurance, budgeting, et cetera. A number of initiatives relate to some of the questions that you are asking.
Senator Cordy: This process must start in high school; it cannot start in the first year of post-secondary education.
Senator Martin: Thank you very much for being here today. Senator Cordy asked a question that was on my mind about how students are able to access the available programs. We have been talking about identifying the barriers to accessing post-secondary education and eliminating, or at least reducing, them. However, the question here today is, what are the barriers to students to accessing funds?
You have outlined a number of programs that are available, but the question is whether students are able to identify what programs they are eligible for, because there are different eligibility criteria and there is a range of programs. I know how complex that process can be, especially if English or French is not their first language or if they live in a remote rural community where there is also a virtual divide.
I hope that situation is better than it was 30 years ago when I was in school, but the forms are still complex. We can have the best programs, but if people cannot access them, that is the greatest barrier.
I am glad to hear about the program that you are launching in high school. We have all heard of Computers for Dummies and French for Dummies. There are all sorts of kits with easy-to-read instructions, and perhaps something like those kits can be implemented. I know that schools have a shortage of counsellors and they cannot meet with the hundreds of students they are responsible for, so it is up to the students to navigate the system. That is a huge barrier. If they are rejected, they need to know what the appeal process is. Studying English as a Second Language and working part time due to other financial commitments are also barriers.
Are we improving on lowering those barriers to allow better access for students?
Mr. LeBrun: On the education savings side, to increase families' awareness of savings programs we have undertaken a number of promotional and outreach activities in July for the last few years in partnership with the Canada Revenue Agency. Every July over 3 million families receive updates on their Canada Child Tax Benefit statements, and in the last few years we have included an insert about savings for post-secondary education.
Senator Martin: Recently, a community group translated into Korean the government material for Korean veterans whose first language is not English. It is good that the information is disseminated in partnership with other departments. However, I imagine that families who may not be able to read English fluently would put that information into the garbage bin.
Mr. LeBrun: We have a basic insert with the Canada Child Tax Benefit that outlines the programs that are available to give families an incentive to start thinking about planning for their kids' education. We have a quarterly mail-out for low-income families. They apply for other government benefits and we gather that information and send them specific information about other programs available. We have brochures available through Service Canada Centres and online. Many of the key brochures talk about savings for education in 8 to 10 languages. The brochures are available online. We base ourselves on census data to identify the most common languages that Canadians speak. Those pamphlets are available to families.
In an effort to reach some of the low income, Aboriginal and recent immigrant groups, there is an additional grants and contributions program. We work with community organizations, and currently have 16 agreements across the country that talk about the importance of planning for post-secondary education. These organizations hold workshops on how to fill out an RESP application, how to obtain a social insurance number, how to apply for a birth certificate, and so on. There are a number of measures to make these programs known to Canadians.
Ms. Graham: We provide a number of services. We have an online presence called canlearn.ca. On that website, we have tools that help students determine what level of support they might be able to receive. We also have information about the labour market in terms of the kinds of jobs and where courses are available for them. There are interactive tools on that site and a lot of students use it.
Students can also ask questions from the CanLearn website. We respond directly to the students with information on what is available. We have a 1-800 number where people can call to ask for information about what we can provide. We try to provide as much one-on-one help as possible in that respect. In person, we have a lot of outreach activities on university campuses. We have a third-party service provider who has a presence on campus through their kiosks. The service provider is there to answer questions and to take students through what might be available.
In terms of our grants, a person only has to apply for a Canada student loan and they are automatically assessed as to whether they are eligible for any one of our suite of grants. That assessment is provided through the provinces. In terms of our stakeholders, we are actively engaged in discussing with stakeholders how to deliver the message to students about what is available. We have worked closely over the past year with the Canadian Alliance of Student Associations, CASA, with the student federation, and with the association of student financial officers who are on campus and there to talk to students. We work closely with them to try to use them to deliver the message as well.
We have a couple of other special things. We work with the rural exhibits program at Agriculture Canada to outreach to students in rural areas as well, and with both the YMCA and the YWCA. That is the area of things we do.
Senator Seidman: I want to talk more about the Canada Registered Education Savings Program. We know that it has become more popular and more important over the last number of years. I think we ought to congratulate the minister and the government on their ongoing analysis and on the improvements they are making to this program.
Important features are the 20-per-cent matching grant per year and the Canada Learning Bond for low income families, who do not have to contribute any of their own funds. In Budget 2007, you expanded the program by increasing the lifetime limit; in 2008, you extended the time RESPs can remain open.
Can you tell me more about how you plan more information and communication on that program? Along the same lines of educating Canadians and families about saving for their education and about the possibilities of government programs to encourage them and to help them, how would you promote this program?
Do you have any other such innovative programs in the works?
Mr. LeBrun: What are we doing in terms of the possibility for Canadians? We have an ongoing analysis, where we look at take-up rates; that is, the overall impact for Canadians. For example, the Canada Learning Bond was introduced recently for children born after a certain period. They have to be born after 2003. We will not know if that program is effective for another 15 years.
On the Canada Learning Bond side, because low income families are a target audience, we are looking at ways to increase their participation rate. We have mail-outs and we go directly to families. This year, we are testing different ways of reaching these families, for example, with a voucher. What is the most effective way to reach these families? Is it by means of a self-addressed envelope with the child's name on it and something like, We understand that Sarah was born recently; congratulations; you may be eligible for this program.
This year, we are looking at a voucher. We will give families an actual piece of paper with Sarah's name on it. It does not have a value but it has the child's name on it. The message is, bring this voucher into a financial institution and they can receive $500. We will test those families that receive a voucher with those that receive only a letter or those that do not receive anything to determine the most effective means of reaching those families.
We also look at program design features. We understand that the program is complex; it is a complex financial savings vehicle. There are barriers. Many families do not feel comfortable going into a bank. We work with a broad array of financial institutions — credit unions, the caisse desjardins, banks, and scholarship trusts — in any way we can to facilitate access to those savings. We look at analysis to see how to improve current work programs. We look at international examples as well. A child trust fund was introduced in the U.K. a number of years ago. We question what we can learn from international examples as well.
All of these things are part of our work.
[Translation]
Senator Champagne: Ms. McDade, at the beginning of your presentation, you said that, as part of the Canada Student Loans Program, Quebec used their right to opt out and receive the payments directly instead, and that it created its own loan program.
My first question is the following: is there some coordination between the federal and provincial levels to ensure that everything is in order for Quebec students?
My second question has to do with the fact that, even if the loan program is administered by Quebec for Quebec students, Quebec parents are still entitled to the federal government's Registered Education Savings Plan. Could you tell me what exactly is available to Quebec parents and students compared to what is available in the other Canadian provinces and territories?
[English]
Ms. Graham: With respect to Quebec, they receive an alternative payment from the Government of Canada for the programs that they provide to their students. Our legislation stipulates that they must provide programs that have substantially the same effect as the Canada Student Loans Program.
Historically, since 1964 they have received an alternative payment each year for their loans and for some of the grants. In February, we indicated publicly that we would compensate Quebec in an incremental amount of $115 million for the new grant program we introduced in September of last year.
The short answer is that we ensure that our contribution to Quebec students is made directly through the Province of Quebec.
[Translation]
Senator Champagne: So parents can still take advantage of the Registered Education Savings Plan?
Mr. LeBrun: As you have pointed out in your question, the grant is available to all Canadians. But a new incentive was introduced in Quebec a few years ago, a new tax credit — Quebec Education Savings Incentive (QESI). Revenue Québec administers the program. It offers Quebec parents an additional incentive of 50 per cent of the total amount the federal government would have provided. If a family had contributed $2,000 this year, the feds would have given them 20 per cent or the equivalent of $400. Families are also eligible for a provincial tax credit of $200. It is a new program that started in 2007.
It is Revenu Québec, not the federal level, that is responsible for the administration. But the two programs are linked. Quebec parents are entitled to those two programs.
Senator Champagne: Even if it is administered differently — in any case, Quebec is always different from everyone else — the assistance is similar. I wanted to make sure that Quebec parents and students have the same benefits. Thank you very much.
[English]
Senator Keon: Canada is one of the most highly educated countries in the world. Yet, these problems seem to unfold as we hold these hearings. Can you, collectively or individually, give me a snapshot of where we stand vis-à-vis Scandinavia and America — they are the two extremes — in assistance for post-secondary education?
Ms. McDade: I doubt that we can provide that information here. We are familiar with our general ranking, as you are, in terms of the other countries of the Organisation for Economic Co-operation and Development. The most recent data on post-secondary education attainment were released by the OECD. However, in terms of specific comparisons on student financial assistance, which I think is your question, we will get back to you.
Ms. Graham: A lot of countries in Europe provide free post-secondary education. Recently, the U.S. decided to go to a direct lending approach, which is similar to what Canada has in place right now. We can give you a better sense of how we compare or what other countries are doing with respect to student financial assistance. We will be happy to give you a more comprehensive answer in a written submission.
The Chair: Please see that anything that you provide to us subsequently as a written submission is sent to the clerk.
Senator Keon: That is fine.
The Chair: That completes round one. Let me go to round two and start with a question.
I asked you a question earlier that we will ask the finance officials to answer with respect to the tax credit system. Senator Seidman also raised questions relating to the Registered Education Savings Plan, RESP; the Canada Education Savings Grant, CESG; and the Canada Learning Bond, CLB, which is to help low income people.
The Canada Learning Bond goes back to someone born in 2003 and later. I understand that we are talking about kids who are seven years old now. However, there is a need now for low-income people to access the funds they need for post-secondary education. We have heard that, with programs like the tax credit, the higher income people can take advantage of them and not so much the low-income people.
Have you completed an evaluation on the effectiveness of this program for low-income people? Are you doing anything now that will help low-income people to take advantage of these programs?
Mr. LeBrun: I can start with your question about what we are doing now to offer help to low income families.
The learning bond is given only to kids born after 2003. For the existing program, the flat rate 20 per cent, has been available since 1988. As you point out, this program offers an initial $500, plus $100 every year. That program can add up to $2,000. It is for kids going through the system now.
With the introduction of the recent changes in the 2008 Canada Student Grant Program, which is targeted to low- income families, programs will target students as they are going through the system and attending post-secondary education 15 years from now. Other measures are in place right now, for example, the Canada Grants for Students from Low-income Families.
In terms of evaluation of these programs, for example, the Canada Learning Bond, we undertook an evaluation of these programs in 2009. We should see the results of that evaluation later this year.
The Chair: We are concerned about access to post-secondary education. The people that take advantage of these programs are, by and large, the people that can afford post-secondary education and the ones that are higher in the statistics in terms of being in post-secondary education.
With the monies that we have, we need to target bringing more people into the system; that target involves low- income people as well.
Mr. LeBrun: In terms of distribution or participation in the program, you have heard from prior witnesses that much of the money going out in education savings programs is going to higher income families. In terms of their proportion of the Canadian population — and, I can use a number but I want to confirm this number in writing — let us say that families earning over $125,000 in terms of family income represent maybe 13 per cent of the Canadian population. However, they are participating in the program at closer to 40 per cent. Participation is tied to savings. One can draw the conclusion that if they are higher income they have greater capability to save. That is correct. Surprisingly, however, there are still good numbers in terms of participation of low-and middle-income families.
We are looking at the distribution now. Low income families do save for their kids' education. About 40 per cent of all kids have an RESP and are receiving a grant. I do not have the exact numbers for the low-income families, but there is still good participation.
Families are saving for their kids' education. When you ask families, what are you doing to save, regardless of income levels, families want their kids to have post-secondary education. That desire is universal. It is in their ability to save. We look at the matching rate but there is also the learning bond that is not tied to actual saving. The government supports those families in building up their assets.
Through a written submission, I can give you a greater description of that support.
Ms. McDade: I asked Mr. LeBrun to give you a couple of examples of the income eligibility for the low- and middle- income Canada student grant. We do not have numbers of Canadian families, but this information will give you a sense of the thresholds at which families or students are receiving that maximum support.
Ms. Graham: We introduced the low-income and middle-income grants last year, so I do not have the take-up data yet. These grants were introduced to address that issue, namely, that we want to attract and support low-income families in accessing post-secondary education. The grants are available for each year of undergraduate studies, so for four years. Grants are based on family size and on where they live.
In Ontario, the income threshold to receive the low-income grant, which is $250 a month or approximately $2,000 a year, is $22,241; for two persons, it is $27,615. For the middle-income grant, for a two-person family size it is $56,131. That grant provides about $800 a year in support for middle-income families.
Ms. McDade: That assistance is non-repayable, so it is grants and not loans. As Ms. Graham said, we are in the first academic year of the program, so she does not have take-up data. Judging by the funds, the take-up is exceeding what has been forecast for low- and middle-income.
Senator Callbeck: You gave us the figures for Ontario but can you submit to the committee the figures for the provinces?
Ms. Graham: Yes; we have them for all provinces.
Senator Callbeck: In the Canada Registered Education Savings Program, you talked about having agreements with 16 community organizations. Can you talk about those agreements?
Mr. LeBrun: In terms of promotion and outreach, we have agreements with 16 organizations. I am looking for the actual names of the organizations.
Senator Callbeck: Give me one example of what the agreement involves.
Mr. LeBrun: The aim of that contribution program is to build understanding and participation in education savings. We might work with Momentum, for example. That organization will have a workshop and they will send out the invitation across the community. They will invite Service Canada to have a mobile social insurance number kiosk there. They will invite someone from a local financial institution, for example RBC or CIBC; and they will walk through the process with that family. They will say, Here is how you can open up a Registered Education Savings Plan; you will need a birth certificate and a social insurance number; we will walk you through the application for an RESP.
It is a hands-on workshop.
Other organizations have translated their materials into multiple languages. They work with local immigrant community services and invite members of that community in. They break down some of the barriers of working with big financial institutions. We are working at the ground level with these institutions.
Senator Callbeck: If a community organization of Prince Edward Island wants to become involved, the federal government will give them funding and assistance?
Mr. LeBrun: There are 16 agreements in place. We are now completing a review. We went out with a call for proposals in January of this year. We are trying to extend that program across Canada in specific targeted groups such as recent immigrants. We are looking at rural participation rates. It was a pan-Canadian request, so I do not know if anyone from Prince Edward Island applied, but they would have been eligible to apply for that program.
Senator Callbeck: With respect to students with learning disabilities, they need an up-to-date assessment that must be no more than three years old. If the student starts a four-year program, they need an assessment at the beginning. Let us say they have an assessment for the first year. Must they provide another assessment for the fourth year? Is it every three years?
Ms. Graham: I am not sure about that, senator. That requirement could be something to do with the universities. I am not familiar with that requirement in terms of the Canada Student Loans Program. We can find out for you, though.
Senator Callbeck: We have been told that the Canada Student Grants Program will pay up to 75 per cent of the costs for an assessment to a maximum of $1,200. However, these assessments can cost in excess of $3,000.
Ms. Graham: I do not think we pay for assessments.
Senator Callbeck: It says a student grant for learning disabilities.
The Chair: I understood that it is a requirement for the program. The student must provide the assessment, but it costs them more money than you are allowing for. That is the problem.
Ms. McDade: Given that it is not an insured service?
The Chair: Yes, for people with learning disabilities, not physical disabilities.
Ms. Graham: We pay up to $1,200 if it is not covered under their private insurance.
Senator Callbeck: That issue has not been looked at in terms of increasing the amount you pay?
Ms. Graham: No, we have not looked at increasing that amount.
Senator Callbeck: You will send us the information about whether they need to provide this assessment every three years?
Ms. Graham: Yes.
The Chair: Before I go to Senator Cordy, colleagues, I have a couple of housekeeping matters to discuss as soon as we finish with with our guests.
Senator Cordy: I want to talk about making Canadians aware. You talked earlier about some of the innovative things taking place in the high schools and about the pilot project that you have in British Columbia, which is a good thing. You talked about the learning bond, and sending a voucher letter to see what the uptake is. That is a good idea. With changing technologies, we are never sure if things are working or not. That is a positive thing.
In Nova Scotia, a wonderful literacy program was started by Dr. Richard Goldbloom at the Izaak Walton Killam Hospital. When children are born, they receive a package of books to take home, so the program starts right away. Have you looked at giving out information about the learning bond in maternity hospitals as soon as children are born?
Along the same line, the government brought forward a repayment assistance option in 2008 or 2009, which I thought was a positive thing, particularly in light of the economy. Graduates may not have the ability to pay back but this option is available to them. However, we heard last week that people are not aware of that program so the uptake is low, which can be seen as a positive thing, if people do not need it. It is not necessarily a program that we want a high uptake on but we heard last week that people are not aware of it.
Going back to the part-time students, we know that because they are only part-time and may be employed that they may not need loans. However, again we heard that people are not necessarily aware that part-time students qualify for loans and some of them who could apply for a loan are eligible to receive a grant, which is something they might not be aware of.
What other types of innovative things are you doing in terms of giving information to Canadians, specifically on the repayment assistance option, part-time students and learning bonds? I know you mentioned a couple of things, but are you providing that information in maternity hospitals?
Mr. LeBrun: We look at international examples. One program we look at carefully is the Child Trust Fund in the U.K. The U.K. has looked at an automatic enrolment feature. If, after one year, the parent has not opened their plan, the U.K has set up contracts with a number of firms that automatically open the plans for those families. We have been looking at the program for a number of years and waiting for results to come out, hoping that they will indicate that participation rates go up.
What we are seeing in the early literature is saying that although families are opening up the plans, the program is not leading to additional savings. It is almost like a passive approach. Families sit back and wait for the plan to be opened but then they do not contribute. We look at that program because we have been looking at automatic enrolment features; looking at tying it into maternity wards, if you will. I think we have a 96 per cent or 97 per cent penetration rate with the Canada Child Tax Benefit form. The form is right there at the hospital. Can we add a check box, if you will?
Senator Cordy: The form is at the hospital?
Mr. LeBrun: It is. The actual learning bond is not part of that form. The form is for the Canada Child Tax Benefit. We have looked at partnering with the Canada Revenue Agency to add a box on that form that says, ``I would like information on the Canada Learning Bond.''
Senator Cordy: That would be an easy addition.
Mr. LeBrun: They are easy things we can do, at least a soft pull of information. We do not open the plan for them, but at least they know about it.
In the interim, not being able to work with CRA to finalize that addition, we are working with our own Service Canada centres. When a person comes in to request parental benefits, we can tell them about the Canada Learning Bond, RESPs and the Canada Education Savings Program. Some things like that occur today at the Service Canada level.
Ms. Graham: In terms of making sure that students know they may be eligible for grants for part-time studies, was your question, how we do that?
Senator Cordy: Yes.
Ms. Graham: Anybody applying for a part-time loan will be assessed automatically to determine whether they are eligible also for a part-time grant.
In terms of the Repayment Assistance Plan, a robust part of the CanLearn website provides information on that plan. We have a tool where people can see whether they are eligible for assistance under that program. That interactive tool calculates what their affordable payment might be.
In terms of our service provider, we have a third-party service provider that gives repayment seminars throughout the year at universities in conjunction with the student financial aid officers on campus. There is a fair amount of outreach in terms of trying to ensure that people understand that they can avail themselves of these programs if they are facing financial issues.
The Chair: Thank you very much to all of you for coming — good teamwork. Thank you for answering all our questions. Please send any further information to the clerk of the committee.
I will now adjourn this portion of the meeting but will ask my colleagues to stay for a couple of housekeeping matters.
(The committee continued in camera.)