FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 5, 1998

• 0905

[English]

The Acting Chairman (Mr. Paul Szabo (Mississauga South, Lib.)): Order. This is the finance committee, Tuesday, May 5. We are resuming consideration of Bill C-36, an Act to implement certain provisions of the budget tabled in Parliament on February 24, 1998.

This morning we have as our first witness Jacquelyn Thayer Scott, president and vice-chancellor of University College of Cape Breton.

Good morning. Our practice is to ask the witnesses to make opening remarks of no more than 10 minutes, and then the members would like to ask questions of you. If you're ready, please begin.

Dr. Jacquelyn Thayer Scott (President and Vice-Chancellor, University College of Cape Breton): Thank you, Mr. Chairman and members of the committee.

As the chairman said, I'm president and vice-chancellor of University College of Cape Breton. I'm also chair of the Canadian Alliance of Education/Training Organizations. Thank you very much for the invitation to speak to the committee today.

I am here to support Bill C-36 and to congratulate the Government of Canada on bringing forward this initiative. Many learned and concerned individuals and groups will be presenting extensive arguments to you for the passage or the amendment of this legislation. I will confine my brief remarks to two principal questions: Why is this legislation important? Why is it important that it be initiated by the federal government?

In my view, Mr. Chairman, this legislation is vital for Canada's future. As a nation we have a very small proportion of young people. Those of you who have studied demographic statistics gathered by StatsCan or who have had the opportunity to hear or read demographer Dr. David Foote, or others like him, will know that the age distribution of Canada's population looks rather like a Christmas tree, a hemlock tree to be precise. That is, the bulk of our population is in their middle years, with the tree top narrowing as it reflects 60- to 65-year-olds, but with a growing hemlock-like bulge above the 65-year-old demarcator. Below the age of 28 this population tree rests on a very narrow trunk of young people, upon whom we will depend in the coming century to keep Canada a vibrant nation of traders with a high standard of living.

The shape of our demographic tree is rather unusual even among the western nations and when compared with that of our major trading partners. All of them have a much larger cohort of young people to carry their national economy and legacy forward.

In other words, Mr. Chairman, as the knowledge-based era steadily unfolds, we simply cannot afford to waste the potential of a single young Canadian. It is instructive as well to look at the profile of that very small cohort of Canadian youth, because a disproportionate number of them, compared with a previous generation, are growing up in socially and economically disadvantaged environments.

For example, Statistics Canada in its 1996 census reports that the total aboriginal population is 2.8% of the total Canadian population and 3.8% if one includes all those Canadians who claimed aboriginal ancestry and identity. But at least 10% of Canadians 15 years old or less are aboriginal.

The Centre for International Statistics on Economic and Social Welfare for Families and Children at the Canadian Council on Social Development reports that in 1996 nearly 1.4 million Canadian children under the age of 16, some 21.8% of all Canadian children, are growing up in households with incomes below the national poverty line. Normally one would expect the incidence of children living in poverty to go up in times of recession and down in good times. However, the incidence of Canadian children living in poverty has not come down, even with the GDP growth we experienced in 1994, 1995, and 1996. The proportion of children living in poverty in Canada actually increased in 1995 and in 1996. In other words, Mr. Chairman, we are in a situation in which a great proportion of our small-aged cohorts is increasingly less able to participate at all levels of education.

What we have learned from brain and other research in the past decade is that particular attention to learning needs must be paid in the early years of childhood development and again in the decade between 15 and 25 if we are to optimize that human potential of each citizen. This initiative, Bill C-36, provides important financial support to learning at one of those key developmental periods.

As well, Mr. Chairman, you will be aware from other presenters and from reports in the media of the increasing problem of student debt, arising from both (a) the withdrawal of the provinces from bursary assistance to post-secondary students, replacing these with increased access to loans; and (b) the general decline of funding to the universities and colleges.

In case other presenters have not brought it to your attention, I have appended to my notes a few graphs arising from an extensive study of student aid and accessibility this year by the Maritime Provinces Higher Education Commission, with the assistance of the Angus Reid Group.

• 0910

In appendix A, table 1, you can see the dramatic change between 1993-94 and 1996-97 and the number of maritime undergraduate students graduating with high loads of debt.

Table 2 on the same page graphs the sharp increase in the average size of maritime student loans, coinciding with the elimination of bursaries in two of the three maritime provinces between the 1993-94 and 1994-95 academic years.

Tables 3 and 4 on the following page illustrate the estimated and projected student debt loads in each of the three provinces for graduates in each year between 1986 and 2005.

The maritime data on student debt is especially telling because this is not a wealthy part of Canada. Whether they will leave the maritimes or stay, young people and more mature students alike, the extensive interviews of parents and students in this study showed, are keenly aware that further education is their personal and collective key to an economically sustainable future. This study also clearly showed that the financial issues of costs and debt load are more likely to affect the decision to pursue or not pursue post-secondary education of students from lower income households.

Further, the clear implication of this finding is that there will be greater pressure for students to find good jobs in order to pay back the loans, or many will need to default on their loans, which has particularly troubling social implications for students from lower income backgrounds as it might well work to limit their social mobility.

If the case for improved student assistance is as clear and urgent as I've argued it is, I know some others are less persuaded that it should be addressed through the mechanism outlined in this legislation as a federal initiative.

Mr. Chairman and members of the committee, I believe there are three sound reasons why the federal government is the best and perhaps the only agent that can successfully address the issues I've outlined above.

First, in the knowledge-based economy we all generally acknowledge to be emerging as the dominant paradigm, education and training are directly related to the acquisition of skills and competencies for economic development and sustainability. In recent years we've become increasingly successful as a nation of traders, especially of services and information technology software, and our future rests in continuing that trend.

Economic development and international trade are very much a part of the federal jurisdiction. For the federal government to intervene and assist in building the skills competencies infrastructure of that economy and trading base simply represents a necessary form of vertical integration, to borrow a phrase from the private sector, to assure the achievement of one of its principal jurisdictional mandates.

Second, demographic studies will confirm that young people are not evenly distributed among Canada's provincial jurisdictions, nor are children in poverty and youth of aboriginal origin or identity evenly distributed. By way of illustration I draw your attention again to Canada's Atlantic provinces, a region with significant economic challenges but one where the financial capacities of these provinces mean low per-student grants from governments to universities and high tuition costs.

At my own institution more than 80% of students must receive student aid to participate in post-secondary education, and in our primary catchment area more than half of the households have incomes below the national poverty line.

Third and last, Mr. Chairman and members of the committee, Canada's universities do not have the capacity to resolve the issue of student aid themselves. Unlike our neighbour to the south, the structure of our economy has been dominated by branch plants of multinational corporations, which donate proportionately much less to Canada's universities and other charities than they do to U.S. entities, and by large numbers of ultrasmall enterprises.

As well, the federal tax structure in this country has never favoured or stimulated large-scale private philanthropy by the wealthy as in the U.S.

Let me draw your attention to appendix B to illustrate my point. This table is reproduced from the Winter 1998 issue of University Manager, a publication of the Canadian Association of University Business Officers, and compares university endowments in the U.S. and Canada.

A number of universities reported by the two national associations of business officers is in precise relation to the population estimates of Canada and the U.S. When scaled to the number of institutions, you can see that the aggregate wealth of U.S. colleges and universities is almost five times that of the aggregated Canadian colleges and universities. The data show that the public universities in the U.S. are twice as wealthy proportionately as their Canadian counterparts and, by the way, their tuitions for in-state students are very comparable to those of Canadian tuitions in unadjusted dollar terms.

You'll see in the notes to that table that three Canadian universities participated in the U.S. survey as they are also members of that association. In terms of size of assets they ranked as follows to their U.S. counterparts: the University of Toronto, 76th; McGill University, 77th; and the University of British Columbia, 89th.

• 0915

Although ranking low by U.S. standards, those three Canadian universities, when joined by the University of Alberta, nonetheless control 51% of the total endowment assets of Canadian universities. Add to their number the next six large Canadian universities and, together, these 10 institutions control 73% of total endowment assets. Geographically, 36% of total Canadian university endowment assets are held by Ontario institutions and 17% by British Columbia institutions.

These data, Mr. Chairman and members of the committee, clearly show both the relatively weak position of Canadian university endowments to fund student aid and, once again, illustrate the very significant disparity in geographical distribution of these private assets for student aid.

Again, Mr. Chairman, I commend the Government of Canada on its Canada Millennium Scholarship Foundation initiative. The technical problems in the legislation are very few, in my view. I believe the changing financial circumstances of Canadian universities may raise future issues relating to the definition of “public” in subclause 2(1) regarding eligible institutions, but I appreciate the current problems in redefining that term adequately.

It will be important to have good criteria for recognizing the eligibility of many of Canada's outstanding private training colleges as well. I also would note that the exclusion of subparagraph 9(6)(c)(iv) and paragraph 12(7)(b) of individuals as members of the board or members of the foundation who are employees or agents of Her Majesty in right of Canada or a province may unwittingly exclude any employee of a community college or a Quebec university from such status, because on the whole they are employees of their respective provinces. If it is not the government's intention to exclude these individuals from the appointment pool, some revision of language may be in order.

These are minor quibbles, Mr. Chairman, compared to the importance of this initiative. I am a pragmatist, like many of you. I think of life as a river. When the current of issues and needs comes to a rock, the water runs over it. If the rock is big enough, the water must flow around it. In addressing urgent and critical social and economic issues, we have lots of big rocks in the river that is Canada. The issue this legislation addresses, in part, for Canada's young people is so important that we need the water to flow unimpeded, even if it must flow around jurisdictional boulders.

Thank you, again, for this opportunity and for your kind attention.

The Chairman: Thank you very much.

We'll now move to the question and answer session.

Mr. Ritz.

Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): Thank you, Mr. Chairman.

Thank you, Mrs. Scott, for your presentation. It's very thought provoking.

I have a couple of things written down here, but in the last point you talked about disparity in geographical distribution to the three...you talked about McGill, U of T, and UBC. I'm wondering how you think the millennium fund will be any different. We're talking about the major population bases and the students in those population bases. How will the millennium fund be handled any differently from that? Will there not be disparities in it as well?

Dr. Jacquelyn Thayer Scott: I think it's less likely, because, if I understand the legislation correctly, the emphasis is on it being means based and those in need are not necessarily geographically distributed in the same way. So I think there is the potential for some equalization.

Mr. Gerry Ritz: We're talking of both need and merit.

Dr. Jacquelyn Thayer Scott: That's correct.

Mr. Gerry Ritz: Some other people have had problems with the definition of merit. You know, there are certainly differences in classes and differences in students. How do you come to terms with merit? Maybe my best effort is a C, which makes me meritorious in my mind, but yours is an A and of course.... How do you work out those disparities?

Dr. Jacquelyn Thayer Scott: Those are certainly difficult, but one thing that has been developed is some expertise in Canada's colleges and universities with regard to the assessment of merit. As you know, often grading averages may differ among programs and so on.

Mr. Gerry Ritz: That's right.

Dr. Jacquelyn Thayer Scott: There are ways of dealing with this if the colleges and universities and their student aid offices and registrars are consulted in this process.

Mr. Gerry Ritz: Are you saying those people should be consulted, that they should become part of the technical—

Dr. Jacquelyn Thayer Scott: I would think they would be a very valuable advisory resource to the foundation.

Mr. Gerry Ritz: Thank you.

The Chairman: Perhaps I could add to your questions. This issue of merit has come up over and over again. I think an undergraduate student needs a C+ to proceed to an honours, and to get into a graduate school he would need to get a B. Is that right?

Dr. Jacquelyn Thayer Scott: On the whole. Generally speaking.

The Chairman: So if you're still in the course, you're meritorious basically. That's the issue of merit. If you qualify for the program...if you're going to get a D+, there's no reason for you to get a bursary, because you can't continue.

• 0920

Mr. Gerry Ritz: But then you go back to the needs basis. Maybe if I maintain a D+, it will at least see me into further education. Maybe my need is there. Does one override the other?

In the presentation last night they talked about a 50-50 split.

The Chairman: But you won't be in a program for very long with a D+. That's the point I'm making.

Mr. Gerry Ritz: That's true.

The Chairman: If you don't get a C or a C+ for your BA, and for Honours a C+, or whatever, and to get into graduate school a B.... If you're not there with the grades, you're not going to make it anyway, so it doesn't matter whether you need it or not.

Mr. Gerry Ritz: It's a fine point.

Dr. Jacquelyn Thayer Scott: The emphasis on the needs base I think does need to be primary, because there is a pattern among a lot of students of changing marks as they go through the program; that is, their first-year marks may be very different from the marks they are achieving by years three and four.

Mr. Gerry Ritz: So you don't want to turf them out in the first year or two.

Dr. Jacquelyn Thayer Scott: That's right.

The Chairman: Mr. Crête.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): I am interested in your tables in Appendix A, tables 2 and 3 about the increases in premiums. In table 1, you give figures for all of Canada and for the Maritimes whereas the other tables deal only with the Maritimes.

Did you know that a similar table for Quebec shows a very different situation? Given that we have had a grant and loan program for 25 or 30 years, the average indebtedness in Quebec is about $11,000, whereas in your table 1, among others, you show debts of $30,000 for 1996-97, and those debts are constantly increasing.

Do you agree that the fact is—and this seems to me to contradict somewhat the beginning of your brief—that it is not necessarily a question of knowing which government sets things up, but rather a question of political will since in Quebec we have developed a system that allows students to have a much lower level of indebtedness than is the case in the rest of Canada? Is it therefore not preferable to allow provinces that wish to do so to have a separate program, or, at the very least, to allow Quebec to maintain the one it already has, letting Canada develop one that resembles it more and more, with the objectives it wants to reach, especially that of lower indebtedness?

[English]

Dr. Jacquelyn Thayer Scott: I think the Quebec government has a commendable record in that regard. The fact of the matter is that in the years when student aid programs were more fully funded and included greater emphasis on accessibility—before the cutbacks in bursaries and so on—there was still considerable variation among the provinces. As well, there were often difficulties related to students who, for various reasons, needed to study outside their home province because certain programs were not available within the province.

The premise of my argument is that as a nation we have certain challenges before us with respect to the small number of young people that we have and the challenges of the transition that we are all making to a knowledge-based economy.

It is extremely difficult to have a situation where individual Canadians, simply by accident of birth or residence, have widely differing advantages with respect to post-secondary education. I think that's an important social principle, and it's an important principle that needs to be recognized in terms of the economic development mandated for federal jurisdiction.

[Translation]

Mr. Paul Crête: We spoke earlier about merit. The Chairman spoke of a definition of merit that, in the end, is the equivalent of someone completing his or her studies successfully, without necessarily having specific performance criteria. That may be an avenue to explore for those who would do so in the Canadian system.

• 0925

Would it not be more interesting to develop a model that would allow debt remission for students who complete their studies within a prescribed time frame? For example, a three-year BA takes six academic sessions. Thus, someone who did not need additional years to get his diploma, who had no failures, could get a 15 per cent debt reduction. That would encourage students to perform well, to meet normal program requirements. A plan such as the millennium scholarships, until proved otherwise, will benefit students who do best. They will get the grants. We will therefore exclude people who do well, those who have to work during their studies and who have to find a balance between succeeding in their studies and getting an adequate income. That does not necessarily allow them to get straight As, but they are good students. Isn't the way of the future about reimbursing student debts rather than about millennium scholarships, which would be available to far fewer people?

[English]

Dr. Jacquelyn Thayer Scott: I think there are a variety of ways in which this problem can be addressed. This is not necessarily the only mechanism.

But I return to two points, perhaps. One would be the issues that would result from variation if this were handled by the provinces. Second, I was pleased to see that the legislation does allow for assistance to part-time students, because part-time students can, in addition to their work, graduate with very little debt with this kind of assistance.

But that can be a problem, because again, the provinces vary in their treatment of part-time students. Again, I commend the Quebec government on its excellent plan, but its plan does not give bursary assistance to part-time students.

So you can see that variations across the country are quite wide; we will need a variety of mechanisms. But it's very important that we have a mechanism like this as the principal and equitable base for Canadian young people.

The Chairman: Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): I appreciate your being here with us today, Dr. Thayer Scott.

The principles of universality and equality of opportunity are basic tenets in the education system. Yet even within the province of Nova Scotia, if you look at primary and secondary education, the variance in offerings from one area to another because of the importance of the local tax base is significant. I went to an elementary school, for instance, where, if 23 students came out of grade 6, only eight ever graduated from high school. There was that degree of drop-out rate in that period, because it was a poor rural area.

Based on the importance of and the relative return on investment in primary versus secondary and secondary versus post-secondary.... Even now, based on the Mustard study, people are saying how important investment is for high-risk situations for children between the ages of one and three. I'd be interested in learning what your opinion is on investments in other levels of education, also based on the tenet of equality of opportunity.

You've mentioned—and I was interested to read about it—the focus on the transition between a resource-based and manufacturing-based economy to a knowledge-based economy. Certainly in Cape Breton, as well as across Canada—but particularly in Atlantic Canada and most particularly, I would say, in Cape Breton—that is a very important consideration. I know there's some interesting work being done in tying UCCB to economic development as a magnet for knowledge-based industry in Cape Breton, combining quality of life and a low cost of living with technology, especially with the death of distance as a determinant in the cost of telecommunications. I'd be interested to hear your views on that, because I think that's absolutely essential.

• 0930

It's interesting; we've heard a number of people tell us why the federal government does not have an appropriate role in this type of area, and you've made one of the most convincing cases for why it does. It's not a political question but an equality of opportunity question. I think that's very important for us to consider as Canadians.

As well, in terms of labour mobility, one of the areas left out of the millennium scholarship is that of career colleges. I know in Nova Scotia, and indeed across Canada, career colleges are playing an increasing role, especially in terms of lifelong learning, and yet they are not included in the millennium scholarship. There's no representation provided currently in this legislation for board representation or scholarship eligibility for even accredited colleges. I'd be interested to hear your perspective on that.

Those are a couple of points. I think it's very important, if we're going to be talking about equality of opportunity, that we not just focus on post-secondary. I think we should also take a hard look at some of the other areas and even consider ideas like, for instance, a Head Start program, which ultimately would provide more access to places like UCCB for young people coming up through the system now.

Dr. Jacquelyn Thayer Scott: Among the three points you touched on, you made the mistake of touching on two of my passions. I'll have to watch my timing here in terms of how I respond to you.

I'll touch briefly on the issue of private colleges. I believe it will be very important for the foundation to establish early on some good criteria for the inclusion of some of the outstanding private training colleges.

By way of example, the Radio College of Canada, as it used to be called—and I don't remember it's new name; it was recently announced in the Globe and Mail—graduates close to 70% to 80% of all the electrical technologists in Canada. They have an extremely good record. So you would want to see criteria that would include their students within the realm of possibility of receiving scholarships from the foundation.

I think the National Association of Career Colleges would be a very valuable resource to the foundation board, as they undertake this, to develop criteria. They have an accrediting system, a very rigorous one, that their members may undergo. They have a lot of experience that would be quite valuable to the board in doing that.

With regard to the issue of early childhood education, there has been a great deal of research, particularly brain and neurological research, over the last 10 to 15 years that has rather dramatically changed how we look at the whole issue of how people learn.

In fact, part of the reason it's a passion of mine is that I chair another group, which is not referred to here, that is interested in getting that research into the hands of educators and trainers to discuss the implications in terms of curriculum and pedagogy.

From that research it's quite clear that the key developmental points at the younger stages of life are in the pre-school years into early primary, and then again in the decade between 15 and 25. So if one were to look at that research, which is really formed by looking at how the brain actually works as opposed to imputing from observed behaviour, the conclusion would be that we ought to be addressing significant resources at both the early childhood level and at what one might view as the late secondary or early undergraduate level, those being the two portions of maturation where learning has particular impact.

With regard to the other issue, I know it doesn't relate directly to the legislation before us, but I would be happy to talk with you and any other members of the committee at great length about what we're doing at the University College of Cape Breton with respect to economic development.

I will leave you with a couple of very quick anecdotes. We have been successful enough at what we are doing in that area that we now receive a lot of visiting delegations from developing countries and from other jurisdictions to see how we have approached the different model of post-secondary interaction with community and with economic development. We're the only Canadian college or university that is a full member of a regional economic development authority. We're engaged in a wide variety of stimuli.

Very briefly, in terms of the information technology industry, for example, you will be well aware of our problems in attracting other companies to come to Cape Breton. About five or six years ago we decided we had to grow our own. The University College was very much involved in that through networking, organizing, volunteering, mentoring programs, and training technical assistants.

• 0935

Of the 53 companies that have been established in the last five years within the Sydney area, two were listed in January in the Financial Post's 25 IT companies to watch in Canada. It's a very thriving little industry. It's not big business; it's people who want to live in Cape Breton. We'd like to do a lot more of that and will certainly be working with all levels of government to make sure we can.

Mr. Scott Brison: I've spoken with John Macdonald from BCE—he's excited as heck about it—and Colin Latham of MT&T. I'm the MP for the valley and I think there's a huge opportunity for Cape Breton and for Nova Scotia with what you're doing. I think it's terrific.

Dr. Jacquelyn Thayer Scott: Thank you. We'd be very glad to have you come and visit.

Mr. Scott Brison: I want to. After the House is finished this spring, I'll be there this summer.

Dr. Jacquelyn Thayer Scott: Good.

The Chairman: Thank you, Mr. Brison.

We'll go to Mr. Valeri and then Ms. Redman.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Mr. Chairman. A number of the areas have been covered so I'll be brief. I know my colleague has a number of questions as well.

With respect to the definition of public, you also made the comment that you believe there will be changing financial circumstances for Canadian universities. The legislation will allow for a review, so the legislation is put together to respond to some of that changing environment. I was wondering whether you might be able to expand a bit on what you mean by that.

Dr. Jacquelyn Thayer Scott: I would be glad to. As I say, I appreciate the problem, but we probably don't yet have the right language to deal with the issue. At the developmental stage I asked the question, “What is a public university or college?” The quick response was what you might expect: that they receive a majority of their funding from a level of government. Right away that lets several of us out in Nova Scotia. The education minister in Nova Scotia gets quite annoyed when I remind him he's a minority shareholder in the University College of Cape Breton, but he's paying less than 40% of the bill. That's not true in a lot of other provinces, but as those kinds of relationships among funding change, I would worry about a narrow definition of the term “public”.

There are differences across the country in how universities in particular are chartered. We have an independent legislative act and are chartered as a corporation. That's a fairly typical model, but it's not the only model across the country.

One may need to develop some other sub-definitions of public and the institution must meet one of them. Otherwise, I would be a little leery about the presumption that government is the majority funder of all of our institutions and therefore they're public by that definition.

Mr. Tony Valeri: Are you concerned about the definition as it's presently written in this legislation?

Dr. Jacquelyn Thayer Scott: I'm concerned about what its interpretation might be in law if students of an institution were denied because the board deemed the university not to be public.

Mr. Tony Valeri: I know Mr. Brison was making reference to career colleges, but was your answer that the criteria to be applied are essentially already in place with career colleges, or are there some other types of criteria we would need to come up with in order to bring them into the fold?

Often you hear that career colleges experience a very high default rate and the quality of education is sometimes not up to standard. At the same time, we had representatives from the association who gave examples of very good education and very good work they're doing in getting people out and working and being productive citizens of the community. What types of criteria would we have to come up with? Could you shed some light on that?

Dr. Jacquelyn Thayer Scott: I think one of the principles in public policy that I'm always attracted to is simplicity. Probably the simplest view would be to say one should be an accredited member of the National Association of Career Colleges. It does have non-accredited members, but it would stimulate those members who are not accredited to go through that process.

• 0940

There is a very clear distinction in the track record between accredited institutions of that body and others who are either unaccredited members or not members at all of that association, in the same manner as AUCC and ACCC have very keenly interested and concerned members who want to offer a quality product. It's in their interest for their industry to be viewed as a quality industry.

I think the simplest way is the best, much as we often define, in government programs, eligibility of the university to participate in certain kinds of programs by virtue of its membership in AUCC, because they know those institutions have gone through a certain process to be full members of AUCC and ACCC. The best analogue we currently have in the private sector is the National Association of Career Colleges.

Mr. Tony Valeri: Thank you, Mr. Chair.

The Chairman: Thank you, Mr. Valeri.

Ms. Redman.

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

I would like to thank you, Dr. Scott, for your presentation. I think it has been fascinating.

I want to zero in for a minute on the reference you made at the bottom of page 6, talking about the branch operations of multinational corporations and saying they donate proportionately less to Canada's universities and charities.

Is that just a natural outflow of the fact that the corporation headquarters may be south of the border? Have you looked at it proportionate to the number of jobs and the kind of bottom line contribution a Canadian operation makes—if it's proportionate? If you've looked at that and it's not equitable, have you any suggestions on what we could do to change that or encourage and stimulate that kind of reinvestment in the community?

Dr. Jacquelyn Thayer Scott: That's an excellent point, and I'm sorry I don't have some of the data at hand with me today so I can give you some specific examples. The Canadian Centre for Philanthropy has done some work in this area, as have some other academic researchers. It is clear that even on a per employee basis, or anything of that nature, the giving is not the same.

Let me give you one very simple example. Emory University in Atlanta, Georgia, believe it or not, has the second largest endowment, right behind Harvard, in the U.S. Why? Because Coca-Cola is headquartered in Atlanta and every year it gives shares to Emory University. Those shares have grown and it has $12 billion in the bank. You could run a whole big Canadian university on the interest of that $12 billion. I wonder how it spends it.

The point I was really making about Emory is they're clearly not selling that much Coca-Cola in Atlanta, and while they have a lot of employees in Atlanta, they don't have that many employees. So the giving is quite disproportionate. It very much relates to the headquarters issue. Where there are corporate headquarters, there is a heavier percentage of charitable giving, and we simply don't have corporate headquarters in the same kind of way.

If you look, for example, at Atlantic Canada, the only major corporations that have corporate headquarters in Atlantic Canada, outside of public sector sorts of groupings, are AT&T, which has located its headquarters in Dartmouth, and Jacques Whitford and Associates Limited, which is a national firm with its headquarters in Halifax. End of discussion; everything else is a branch operation.

That's a considerable problem in this country in terms of corporate fundraising and the capacity of universities in particular to do that kind of fundraising.

Mrs. Karen Redman: It's good news to me, as a member of the government, that you feel the federal government is appropriately the funder of this kind of student relief from debt. I would acknowledge that comes through consultation with students and the fact they were looking at their debt loads and becoming very alarmed about them.

Some of your comments would lead me to believe you're not looking at kind of cookie cutter, “we'll give x to province Y things”. You're looking more at the relief of student need and having it go to students and institutions directly, and not always trying to even up the orange juice, as my mother used to call it, making sure everybody gets the same amount.

Can you comment on the structure that's being proposed in the legislation as being an arm's length, sort of non-governmental body? Do you see that as the most appropriate way to accomplish the kinds of things you're acknowledging need to happen?

• 0945

Dr. Jacquelyn Thayer Scott: I think it probably is. As you know, bilateral negotiations between the federal government and individual provinces are often quite problematic for a variety of historical and other reasons.

The advantage of the arm's length entity is that—I'm going to use one of those big academic phrases now—it kind of creates a triangulated partnership. One of the challenges that has faced us all over the past decade, and will do so into the future, is finding those kinds of partnerships that are multilaterally based, so that we can come to some kind of consensus and move forward on action, where bilateral action doesn't work.

It is probably the best-guess mechanism that could have been developed under these circumstances. Only time will tell. It's somewhat akin to the CFI legislation with regard to that, but I think it's a step in the right direction in terms of interjecting a third party into the discussions.

Ms. Karen Redman: Thank you.

The Chairman: Thank you, Ms. Redman.

Ms. Torsney.

Ms. Paddy Torsney (Burlington, Lib.): I too want to thank you for coming and giving some great factual background for a lot of your comments and positions. Having had a chance to drive through the campus early one Sunday morning, I know you come from a beautiful part of the world and a great school.

I'm wondering if perhaps in the pre-budget round you have some ideas as to how we can either change some of the tax issues or foster that spirit, that culture of giving, that may be more accelerated in the United States than it is in Canada. We'd certainly be interested in seeing how we could help universities and colleges across the country in the next budget.

Dr. Jacquelyn Thayer Scott: I'd be very pleased to do that in any way, particularly with the Canadian Centre for Philanthropy, which has done some thinking in this regard, because it really has to do with how we treat wealth and the giving of wealth in this country.

The Chairman: Thank you, Ms. Torsney.

Do you have a question, Mr. Szabo? Go ahead.

Mr. Paul Szabo: Thank you for your intervention. I hope you'll be back during the pre-budget...particularly on early childhood development—the Carnegie work, Fraser Mustard, the Canadian Institute of Child Health. The importance of secure, consistent attachment with an engaged, committed adult, the impact on neural connections and synapses, etc., during those first three years are so important and as well are an investment. I think it's time for more education. We may be able to use the savings, in the longer term, to subsidize education.

I want to quickly ask you a macro thing. It would be easy to start playing numbers, but I did a weighted average on table 1 of the debt load between 1993-94 and 1996-97, and roughly, the average debt load for the student population increased from $12,000 to $18,000. It's a 50% increase in the amount of debt. There was also a very substantial increase in the number of students with over $25,000 worth of debt. It went up from 71 students to 1,750 students, a very substantial increase.

Since tuition represents 25% to 30% of the cost of the education, it seems to me something is unexplained. I don't know if you can help us or help me to zero in on what it is. If tuition is only about one-quarter of the impact—even if you assume a generous increase over the three-year period in terms of the amount of tuition costs—what has happened in terms of the cost of living or the other costs, other than direct education costs, that has gobbled up all of this increase? Almost three-quarters of it has to do with non or indirect cost of education. I'm struggling to find out whether it was housing, travel, or some other element, because three-quarters of the increase in student debt is due to non or indirect costs. Do you have some thoughts on that?

Dr. Jacquelyn Thayer Scott: Yes. I wish I had with me the data broken down by Nova Scotia and the other provinces in table 1, because tuition does not represent 25% of the cost to students in Nova Scotia.

• 0950

Our tuition this year was $3,700, and ours is the second lowest in Nova Scotia. It's a school of 3,600 students, plus 20,000 others who take part-time courses and upgrading courses. Our total base government support is $10.6 million, so if you take $3,700 plus student fees, plus textbooks.... And the cost of textbooks has grown considerably. Again, that cost is outside the control of the universities, and, in many cases, outside the control of Canadian publishers, because so many textbooks still have to come from the U.S.

As well, the cost of technology associated with learning has grown considerably. It's become almost immoral, I think, for a university or a college to graduate students without them having some computing skills. I know what our investment is every year in that kind of technology, and for other schools that are proportionately wealthier I know it's a lot more.

Increasingly there have had to be other fees attached. We've avoided doing that at UCCB. Others have not been able to. Students are paying a considerable extra fee for laboratory use, for computer lab use, for all of those sorts of things, so that the growth has been not only in tuition, it's been in other fees that are not really voluntary fees. Depending upon the program they're in, there are mandatory fees for participation in that program.

So I think the national data is not representative. Indeed, it's distorted by the Quebec figures for the debt levels and so on and by the fact that those tuition costs are so much lower than in other places. As I said to a group of government bureaucrats about three or four years ago, “Think about student aid, and if you want to see your nightmare, your nightmare is Nova Scotia.”

The Chairman: Thank you, Dr. Thayer Scott, for your presentation.

I just want to reiterate the point that was made by Ms. Torsney and Mr. Szabo in reference to pre-budget consultation. This year we'd like to receive the briefs well in advance. Therefore you'll be getting a letter very shortly for your contribution to the pre-budget consultation process. We'll probably be expecting the briefs to come in to the committee sometime in the summer so that we get a chance to review. So when we finally do meet you in the fall we'll be able to talk about your brief at greater length and ask deeper questions.

Dr. Jacquelyn Thayer Scott: Thank you very much for the opportunity.

The Chairman: We'll suspend for two minutes.

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• 0957

[Translation]

The Vice-Chair (Mrs. Paddy Torsney): Mr. Clément Lemelin from the Université du Québec à Montréal, welcome to our committee. You have 10 minutes to make your presentation and there will then be a question period.

Mr. Clément Lemelin (Professor, Economic Sciences Department, Université du Québec à Montréal): Madam Chair, it is an honour to be here to comment on part 1 of Bill C-36 regarding the Canada Millennium Scholarship Foundation, though, since education is under provincial jurisdiction, I would have found it more normal to testify in Quebec rather than in Ottawa.

It was not possible to translate the brief that has just been given to you so I will present it briefly in English.

[English]

Education is expensive. A recent assessment of costs, the results of which are reproduced in table 1, shows that the average cost of university education in Quebec amounts to around $28,000 a year. One of the merits of part 1 of Bill C-36 is to implicitly assume that the costs of education are not limited to direct costs or student fees.

Many a priori reasons can be found in favour of public intervention in education. They essentially lead to two objectives: accessibility and democratization, that is, to increase the number of students and to ensure that limited access to financial resources is not a factor in the decision to carry on studies.

But public intervention can equally be a source of inefficiencies and inequities. As shown in table 2, the redistributive effects of public financing of post-secondary education were regressive in Quebec in the 1980s, at least at the university level. It is as if the role played by the government was that of the Sheriff of Nottingham, not that of Robin Hood.

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Public financing of education assumes many forms, some of which are shown in table 3. Given the aforementioned objectives of accessibility and democratization, variable assistance to students, according to their own financial resources, seems appropriate, since it is directed towards those who are more sensitive to price. Then much less is lost in economic grants.

The educational measures contained in the last budget are very numerous. It is as if the federal government had decided to use all the means at its disposal but one—transfers to the provinces that lead to subsidies to colleges and universities. In the past few years, these transfers have suffered from the fight against the deficit.

In favour of increasing expenditures, one can point to the social rates of return for higher education. But the returns are probably even higher at lower levels of education, and other needs also exist. Why invest in higher education rather than at lower levels? Why education rather than, for example, child care or health care or even ice hockey clubs? Why spend more rather than lowering taxes or public debt? These are very difficult questions indeed. They should nonetheless be kept in mind when deciding to establish a foundation.

If financial needs are the priority criterion in their allocation, the millennium scholarships could make the redistributive effects of public financing of higher education more progressive or less regressive. To the extent that financial assistance to students varies inversely with financial resources, the transformation of subsidies to institutions into financial assistance is consistent with the objectives of accessibility and democratization. So three cheers for the foundation, but....

One of the motives behind the set of measures contained in Bill C-36 is the quest for visibility. Seen from a different angle, it raises the possibility of duplication.

Clause 28 is ambiguous. Given the differences in Quebec's and Canada's systems of financial assistance to students, it seems to me very difficult to define ways and means of allocating millennium scholarships that respect the following conditions: all students in Quebec and Canada are put on an equal footing; the foundation complements existing provincial student financial assistance; and the foundation avoids duplication.

It is obvious that adjustments would have to be made in the Quebec system of financial assistance, but then, is it the purpose of the foundation to take some of the room occupied already by the Quebec government? How are the millennium scholarships and Quebec student assistance to be reconciled? The answer is not obvious to me.

Nowhere in part 1 of Bill C-36 can one find a precise definition of financial need or an indication of the weight this criterion is to be given in the allocation of scholarships.

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I firmly believe the definition of financial need and its role in the allocation of scholarships should be those that can be found in the Quebec system of financial assistance. Financial need is equivalent to scarcity and arises from financial resources being lower than is needed to cover studies.

Questions should be raised about the relevancy of letting the foundation define financial need. After all, this is a $3 billion question. If the definition used by the Quebec government is kept by the foundation, one must admit that duplication is a big possibility. If a different definition is given, or if need is only one among many other criteria and is not given priority, one is confronted with other problems.

Among the alternative criteria one can find merit, which is not defined either. Academic merit is highly inefficient as a criterion with respect to the objectives of accessibility and democratization. Its main effect is to generate economic rents, and one is not very far from throwing money at students.

Another alternative criterion is the so-called needs of the Canadian economy. Once again, this is a very hazy concept. I would not like to learn that the business of identifying them is left to the members of the foundation. This criterion could very well lead to an inefficient allocation of resources, characterized by economic rents and various sources of rigidities.

In summary, I find part I of Bill C-36 to be in many respects imprecise. Moreover, it doesn't take into account what is already being done in some provinces. It will also turn upside down some of the priorities that these provinces have defined. Examples are given in the paper.

This is very unfortunate, since clause 43 reminds us that the foundation could last for a period of only ten years. One can hardly see in this bill an example of cooperative federalism.

Thank you.

The Chairman: Thank you very much, Dr. Lemelin.

We'll begin with Mr. Ritz.

Mr. Gerry Ritz: Thank you, Mr. Chairman.

Thank you, sir, for your presentation. You made one comment in there that piqued my interest. You talked about everybody starting from “equal footing”. I wonder how we arrive at that point if that's the basis from which these scholarships should come. How do we get to that equal footing situation? Look at the disparities across the country now.

[Translation]

Mr. Clément Lemelin: In fact, the problem with this levelling is simply that there is already a grant and loan program system in Quebec and that those grants are fairly generous. Essentially, they take student needs into account, needs that are defined on the basis of resources and required expenditures.

This section of the Bill indicates that the Canada Millennium Scholarship Foundation must complement the assistance already given by the governments. In that case, what can we do in Quebec? Specifically, how do we take into account students' financial needs when those needs are already taken into account by the student aid system in Quebec? What then is the role of the Foundation?

Please recall that what is said is that the system must complement the existing student aid system. In that case, the Quebec government can make adjustments. If it does, what does that mean? It will take into account the fact that the federal government gives scholarships to students and then it will reduce student grants. Then it is not a complementary system. It's simply a system that replaces the existing Quebec student aid system.

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To me, this seems to be the most important problem. Secondly, it implies that the financial need criterion might not be the essential one. The Canadian scholarship allocation system might be based on other criteria, in which case we may refer to a relatively independent plan. To repeat a little what I said earlier, the problem then becomes: according to what other criteria will the student aid system be defined? I'm asking myself a lot of questions. More importantly, I would recommend that this committee try to specify the criteria. It would be awkward to have a Foundation become the arbiter between financial needs, merit and also, possibly, the needs of the economy.

[English]

The Chairman: Mr. Crête.

[Translation]

Mr. Paul Crête: Thank you for your presentation, Mr. Lemelin. I think you have clearly demonstrated the impact of this Bill on the Quebec system.

If the Bill is not amended based on your analysis and if the Quebec system continues in parallel what will things be like in 10 years? The Foundation will last 10 years. You certainly can't see the future, but based on your analysis, if steps are not taken to bring it into line with the Quebec system, what will the reality look like in 10 years? Do you think the millennium scholarships will have altered the nature of the Quebec plan or do you think the two plans will coexist and that we will see some kind of confrontation where students will judge which is the better plan? What do you see as the result of this law if your arguments about merits or other similar elements are not taken into account?

Mr. Clément Lemelin: Mr. Chairman, The limited life-span of these scholarships does indeed create many problems. It is partly the problem of linking the Quebec system and these millennium scholarships. One of the possibilities—I don't remember if it was the Quebec Minister or the Minister for Human Resources Development Canada who alluded to it—is simply that the Quebec government identify some grant recipients and send its list to the federal government, which would then issue the scholarships. Incidentally, such a system would be similar to certain procedures used in the U.S. where at some time the person responsible for financial assistance must deal with a variety of possible sources.

However, insofar as this solution is adopted, it creates another small problem, that of the temporary nature of this intervention. First, I am not convinced that system will last only ten years. Once the government intervenes in a sector, it is later induced to inject additional funds, if only because there are a lot of people applying pressure. This pressure leads us to another small problem.

Insofar as the Quebec system adjusts itself to the Canadian one, there will be enormous pressure on Quebec to get the funds released. There has been talk of $75 to $100 million per year. You will no doubt have other witnesses here who will say: "Yes, it is important to invest in higher education". One of the possibilities is that the funds released will later be used to finance universities.

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The problem with all this is that these are temporary measures. What happens when the Foundation disappears? Once again, we risk seeing a situation where the provinces—in this case Quebec—are left holding the bag and the Bill. This injection of additional funds, one of the possibilities suggested in the brief, will lead to more funds for universities if there is Co-operation. I think that's where the money will go. In the end, money sticks where it hits.

[English]

The Chairman: Mr. Valeri.

Mr. Tony Valeri: Thank you, Mr. Chairman.

Thank you very much for the presentation.

I guess I'll start off by saying that certainly there is agreement that funding the access to education is a joint responsibility of the federal and provincial governments. You did make reference to the fact that there needs to be a degree of cooperation between the federal government and the provinces with respect to the millennium fund. I'm sure you're aware that there are negotiations going on presently to try to come to an agreement so that the objective of eliminating duplication would be met.

I think it was the Minister of Education in Quebec who did also say that if in fact the millennium scholarship fund does go forward, and additional moneys are provided to students in Quebec, this may in fact free up money for the province to reinvest into other aspects of the educational system that are completely provincial jurisdiction. We applaud that, but certainly that's a choice the Quebec government would make in terms of the reinvestment in education.

In your last comment you talked about the province perhaps then being held ransom because this is only a temporary program, and those expenditures may be made and then the money is not there. The Quebec government, and any other province, in fact, would be left with trying to fund something they had agreed to fund and now the money is not there.

At the same time, in terms of models, you need to hold as many things constant as possible, but we're in a changing environment.

I do appreciate the fact that you come from an economics background.

As revenues permit, who's to say that there won't be further reinvestment in other things that would benefit provinces, that there won't be tax reductions down the road, that there won't be more done for education, that there won't be more done for health care? It's a changing environment.

So I'm not sure your argument that if the government put this program out and then retrenched it would leave the provinces at risk is as defensible as perhaps you would like.

Perhaps I can get a comment from you on that.

[Translation]

Mr. Clément Lemelin: You say things may change, but I think that you are simply referring to a concern I expressed at the very beginning. The federal government decides to inject monies. What is announced, at least in some newspapers, is that it is a Foundation that will allow the allocation of scholarships for 10 years. You are saying that things will change and that it may last for more than 10 years.

All well and good, but I don't know if you see that, according to this interpretation, there is a risk that this intervention in the field of education by the federal government will last quite a long time.

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It is no longer a matter of saying that we now have a certain amount of money and that we will therefore allocate it to education. If it lasts more that 10 years, great! But then there will be a more fundamental problem, which is that the federal government has decided to occupy an area that, according to some interpretations of the Constitution, belongs to the provinces.

In fact, I touch on this in the brief. I have a lot of difficulty in understanding what is meant by a joint responsibility of the federal and provincial governments when we are talking about an intervention in education. In fact, as an economist, I would be inclined to say that governments should intervene in the educational system by taking on a share of education expenses.

There are various ways of doing this. One can give grants to educational institutions. One can also finance students or even their parents. Those are different possibilities. It is said that the federal government can give money to students and to their parents but that grants to teaching institutions come under the provinces. In the end, all modes of intervention in the education system are interconnected.

If at any given time you decide to give more aid to students, there could likely be an increase in tuition fees. The teaching institutions would then need fewer grants. I have a great deal of difficulty in accepting this idea of joint responsibility. We must certainly recognize the interdependence of these forms of aid.

I also stated in the brief that I especially did not want to get into constitutional battles. You know that in Quebec a law of decreasing marginal utility applies to these constitutional battles. People are just about fed up.

I would also like us to talk about other parts of the brief. It seems to me that this idea of helping students is a good thing even if only because it allows a modular approach that brings us closer to achieving the goals of democratization and accessibility.

[English]

The Chairman: Mrs. Redman.

Mrs. Karen Redman: Thank you, Mr. Chairman. My question is really quite simple: is student debt a problem in the province of Quebec?

[Translation]

Mr. Clément Lemelin: I would be inclined to say yes. There is certainly a problem, but I don't think it is as serious as in the rest of Canada. I hope the answer is clear for now since you said it was a simple question. However, I would like to add certain points.

The data indicates that at the end of their BA, Quebec students have less debt than students in other Canadian provinces. I believe this is because the grants and loans system has a large grant component.

That being said, one small thing must be added. Some studies done on student loan reimbursement problems indicate that the indebtedness or reimbursement problem stems from two things. The first factor is of course the level of debt, the level of indebtedness. But the second factor, which may be as important in explaining why students have difficulty reimbursing their loans, is simply problems getting into the job market.

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Many American documents mention this, but there are also many Canadian studies that show that getting into the job market, the difficulty of finding a well-paying job may explain both the reimbursement problem and the indebtedness level.

This leads me to add another point. You asked us if there was a problem with the reimbursement of student debts in Quebec and if the problem was as serious as in Canada. I would be inclined to say first off that since the level of indebtedness in Quebec is lower than in Canada, the problem is not as great. However, the economic condition of the students, when they reach the job market, may be more difficult than in certain other parts of Canada, and that may explain why the difficulties are greater in Quebec than in the rest of Canada.

[English]

Mrs. Karen Redman: Having asked a simple question and gotten a simple and complex answer, I'm going to ask another question.

We've heard consistently, both from inside and outside Quebec, that there are aspects of the Quebec system that are working very well. Indeed, the average debt load is probably somewhat less than that in other provinces of Canada.

Having said that, it would then seem logical to me that the kind of financial assistance being offered by the millennium scholarship actually would be of a greater benefit to those students bearing the smaller debt load in Quebec than it would be in another province where the average debt load may be somewhat higher.

Your comment about access and integration into the job market I think is a point well taken. It probably would be more relevant if the millennium scholarship fund were the only thing this government were doing, not merely the centrepiece of a budget that has many other options and ways to address both student debt and youth unemployment.

There's another piece I'm not satisfied with. When people talk about duplication within the province of Quebec, this specifically includes people who can avail themselves of this, such as part-time students, and I'm not convinced that it's a total duplication of what exists in Quebec currently.

Prof. Clément Lemelin: Would you repeat the last part of your question about part-time students?

Mrs. Karen Redman: Part-time students will be able to get millennium moneys, whereas my understanding is that this doesn't exist within the funding structure in the province of Quebec.

[Translation]

Mr. Clément Lemelin: If I have understood correctly what you are saying about Canadian scholarships, there is a financial aid system of a certain quality for students and you add that Canadian scholarships could now be related to other aspects of the student financing problem. That is what you suggest. But there is a problem. What are the other criteria that will be used to allocate millennium scholarships if the criteria for Canadian scholarships are not the same as those of the Quebec financial aid system? That may mean that the allocation of those scholarships will be based on scholastic merit. Numerous studies show that as a rule students who have a very satisfactory scholastic performance are not those who wonder whether they should continue their studies or not.

If that is the criterion, I believe that the millennium scholarships will only be useful in generating economic income. Remember the objectives of accessibility and democratization. I do not think that giving scholarships to the best students will have any effect whatsoever as n incentive.

There is now a second possibility. It is quite possible that the millennium scholarships will operate differently from the Quebec system. Their allocation may be based more on the needs of the Canadian economy. That's an expression that shows up a few times in the Bill.

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But then I have one or two questions. We should first ask ourselves why we should encourage people to go into the sciences, because presumably we are talking about science, engineering and informatics. Why would we need to encourage people to go that way?

I am with students every day and I know very few people, aside from students, who are as concerned as they are about their professional future. If we want to move in that direction, I would ask the committee to at least assess the impact of certain government interventions.

I believe that, at the end of the 80s and the beginning of the 90s the federal government gave scholarships to students who went into the sciences. I would like us to at least assess the impact of this measure.

Here is another point. You mentioned that there is a host of other measures in the Bill. I agree, but it allows me to make another comment. I had refrained from commenting on the other parts of the Bill because I thought that I was to discuss only part 1. Now if you are talking about other measures, I would like to make some additional comments. I always come back to the results published in table 2.

One of the other possible government interventions in education funding is tax expenditures. The problem is that tax expenditures are often very regressive measures. They may even be more regressive than those aimed at granting general subsidies to universities. So we should perhaps be prudent in this area. I am talking about redistributive or regressive effects, especially those of all the programs that encourage parents to invest in a registered study savings plan. That may be very risky for the students or in underprivileged environments. Therefore there may not be much incentive in that area.

That being said, we can move on to the third point.

Mrs. Karen Redman: Why?

Mr. Clément Lemelin: Why are redistributive effects unfortunate or why are parents from underprivileged environments less likely to benefit from a registered study savings plan? Well, I think one of the reasons that they may not do so to the same extent is simply that... Think about what is happening today. It's not 95 or 99 per cent of the people who will undertake post- secondary studies. There are between 20 and 25 per cent who go on to university. There are many reasons why people do not continue their studies. It may stem from the fact that they do not have the necessary financial resources, but it can also be related to a host of other factors that have to do with scholastic performance. Those factors have been at play for a long time.

At present in Quebec, perhaps there are perhaps 65 to 80 per cent of students finish high school. Do you think that overnight their parents will be interested in investing money? The risk would be far too great. That's the problem in a nutshell. The probability of children from well-off environments continuing their studies up to university is much higher. As a result, since the risk is much lower, those people would be more inclined to benefit from these tax measures. I think that is one of the factors. There are many others that could be an influence.

Your last question was about part-time students. I discuss that in the brief. It's fine to talk about Co-operation or of different ways of intervening in the education system... In fact, the issue of part-time students has been discussed often in Quebec. We have often asked ourselves: should we extend the financial aid system to part-time students?

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The starting point to answering that question was as follows. The resources allocated to student financial aid are limited. We have to as efficient as possible. The student financial aid system acts as an incentive. In all probability, if we give assistance to students, we aim at increasing the number of students, not only at improving their lot, but also at encouraging them to continue their studies.

The following question was asked in Quebec: is it worthwhile to create other incentives for students to study part-time? If you glance at the data, you will see that Quebec is the Canadian champion of part-time studies. Is it necessary to develop other incentives to increase that system. Since the funds are limited, if we give money to part-time students, we are taking it away from full-time students or from other beneficiaries.

[English]

Mrs. Karen Redman: In a final comment, I would go full circle and come back to my first very simple question, and that is to acknowledge that student debt is an issue across Canada, including in the province of Quebec, and the millennium scholarship, as well as many other initiatives in this budget and this bill, will help to relieve that.

Thank you.

[Translation]

Mr. Clément Lemelin: I would simply like to add one small comment. I would believe in this proposal if I were told what criteria the scholarships will be used to calculate the amount of a scholarship. It is not obvious that it will basically be the one now used in Quebec. That's where the problem lies. I am afraid that a good part of the scholarships will serve only to create economic income, which means the essential and only criterion will not be financial need as it is defined in Quebec, where the resources of students and their parents are almost exclusively taken into account.

[English]

The Chairman: Thank you, Professor Lemelin.

I have one final question. From your comments, you're arguing points of delivery and duplication, and what have you, but you're not arguing whether....

Let's get right to the bottom of it. When a cheque comes in from the federal government to a student in Quebec, do you think he or she will cash it?

[Translation]

Mr. Clément Lemelin: Once again, my problem isn't knowing whether it will be a maple leaf or a fleur-de-lis attached to the aid. My problem is knowing whether the Canadian system will add to what already exists in Quebec. That's the problem. Insofar as the criteria are the same as those used in Quebec, I think that a system...

[English]

The Chairman: I can tell you what it adds. It adds $3,000 per student, and it helps each student who receives that.

Now this is the problem. There's an old saying, when you hunt for moose, don't chase rabbit tracks. I think that's sometimes what we do. We tend to think that everything has to be perfect all along the way in order to act.

The bottom line is this. When we've had pre-budget consultations across the country, we've heard from students, from Quebec, outside of Quebec, and I'm sure if we heard from people outside of Canada, we'd get the same thing. People need help in this country. Students need help in Quebec and outside of Quebec, and what we have done as the government is provide billions of dollars to help all these students. Generally speaking, I often wonder why people are attacking structure and not the end result.

Monsieur Crête, you've had more questions than I've ever had.

[Translation]

Mr. Clément Lemelin: Could I add to that? You say that the millennium scholarships would give $3,000 more to a student. I'm not sure about that.

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If the scholarships are given to students with financial needs... At this time the Quebec system says: here are your needs. Those needs are tuition, living expenses, etc. We subtract sources of income from those needs. I do not see why the Quebec assistance system would not take into account the millennium scholarship that a student would receive from the federal government. If the student has financial needs and receives a $3,000 scholarship, well, sorry... If we keep the current Quebec student aid system, the student will receive $3,000 less in grants from the Quebec government, and God knows that at this time there are many more students receiving grants in Quebec than the number announced as recipients under the Canadian assistance plan. When they receive a grant, they have already received $3,500 or $4,000 in loans. On average, they receive $3,000 or $4,000 in grants. They already have needs of $8,000 to $10,000. If they have a supplementary source of income at a given time, I don't see why the Quebec government should continue to give them the same level of assistance.

I'm sorry, I have the impression of being in the House of Commons. Calm yourself, Mr. Lemelin.

You say that students from all parts of Canada have come to tell you that they need more money. Of course. I am unionized, I am a university professor, I have an education, I have experience, and I have needs. The same is true of students. They also have needs. If they benefit from student assistance, if they receive scholarships, they already have a $3,000 to $4,000 loan each year. Quebec students say they have needs. That's obvious. Alberta students say they have needs. That's obvious. However, in Quebec we like to point out to students that they may have needs but that as a general rule they benefit more from the Quebec system than from the Canadian system.

[English]

The Chairman: Professor Lemelin, thank you very much. I think you've made your point, and we certainly appreciate your contribution to the study of Bill C-36.

We're going to suspend for approximately two to three minutes, and we will be back with the Canadian Environment Industry Association.

• 1042

• 1046

The Chairman: I'd like to call the meeting back to order and welcome representatives from the Canadian Environment Industry Association: Ms. Rebecca Last, Ronald Vincent Portelli, and Christopher Henderson.

I've had the opportunity to read your brief. I'm trying to connect it with Bill C-36, and I'm having a hard time doing that. But I do want to raise a point that you do spend a lot of time on the Mintz report.

For members of our committee who are not aware of that, that's a report on corporate taxation.

What I would like to do—unless you're going to focus on Bill C-36 here, and I don't think you are, based on your brief—is ask for unanimous consent from the members of the committee that the submission of the Canadian Environment Industry Association be tabled as evidence for the committee's possible future study of the Mintz report on business taxation. So we would just transfer this to our study of the Mintz report, which will take place prior to the break. Is that okay?

Some hon. members: Agreed.

The Chairman: You still get to speak.

Mr. Portelli.

Mr. Ronald V. Portelli (President, Canadian Environment Industry Association): Thank you.

Good morning, Mr. Chairman and committee members.

[Translation]

Good day, ladies and gentlemen.

[English]

As you know, I'm Ron Portelli, the president of the Canadian Environment Industry Association. With me is Christopher Henderson, who is the chief executive officer of The Delphi Group and vice-chair of the board of CEIA, as well as chair of our policy committee.

We do appreciate very much the opportunity to speak to this committee on behalf of our industry. It is our first time before your committee, and we would like to give you a brief introduction to the industry and address why Canada's environmental business sector is a key player in our nation's future, before focusing on some of the principal items of our remarks with respect to business taxation.

CEIA is the national voice of the environment industry. We represent one of the fastest growing sectors of our economy. CEIA, along with our nine provincial chapters, represents the interests of some 1,500 companies that develop and supply environmental products, technology and services—a fairly significant representation.

Our vision is to make Canadian industries world leaders in the use and provision of environmental products, technologies and services, and review the Canadian environment industry as a new economic force in this country. The industry includes over 4,000 companies largely comprised of small and medium-sized enterprises, and these companies are located in every region of the country.

According to StatsCan, the industry had annual sales of $16.7 billion in 1995, representing 2.2% of our gross domestic product. These are conservative figures, as they do not include elements of the more broadly defined industry, such as Canadian technologies or green products. Other estimates using a broader definition of the industry put sales levels up to $27 billion.

It's interesting to note that the environment industry, for example, is larger than the aerospace industry, which according to the Aerospace Industries Association of Canada had 1995 sales of $10.8 billion.

Our sector employs 123,000 people—again, according to Stats Canada, more people than are employed in the oil and gas, chemicals, logging and forestry, pulp and paper or textile sectors. Many people do not recognize the significance of the size of our industry.

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Canada's environment industry is a knowledge- and technology-based industry, with exports exceeding $1 billion annually. There is tremendous potential for creation of jobs and growth in our industry through the export of environmental products, technology, and services. The global environmental market growth is expected to continue at something like 7% to 10%, with double-digit growth rates in some of the key developing sectors or markets such as Latin America.

It is our view that the environment industry is a strategically important sector to Canada's economy and society, and it would be a key player in our nation's future as it provides Canada with three important dividends: one, human health, through the prevention and control of pollution; two, ecosystem health, through the prevention and control of pollution and remediation of contaminated sites; and three, economic health, through the enhancement of competitiveness of other industrial sectors and the creation of jobs and growth within our environment industry.

The Speech from the Throne spoke of Canada's commitment to environmental protection both at home and globally, and the Prime Minister's speeches, most notably the Maple Leaf Dinner speech, position Canada as being prepared to take environmental leadership steps and having leading environmental technologies to help solve global environmental problems.

The most challenging and complex environmental problem that Canada and the world has ever faced is that of climate change, which the balance of scientific opinion suggests is attributable to human activity. There has been much said about the potential costs to Canada of achieving the greenhouse gas reduction target specified in the Kyoto Protocol.

While the transition to a less carbon-intensive economy implies economic loss in some industrial sectors, it will open up enormous new economic opportunities, and social costs will be offset to the extent to which Canada's climate change industries, that is, those suppliers of technologies and services to mitigate greenhouse gases, are able to address market needs.

CEIA recommends an increased focus on maximizing economic and social benefits from implementation of the Kyoto Protocol, which will require that Canada's climate change industries be competitively positioned for maximum participation in the growth of domestic and international markets.

Other countries, in particular the U.S. and the European Union, have organized conscientiously and deliberately in ways that Canada is just starting to do. The budget has allocated $150 million for the plan that Canada is to develop, and we argue that focusing in this area is critical to the country.

The environment industry will be key to enabling other industry sectors to meet their environmental challenges while maintaining or enhancing competitiveness, and since the environment sector cuts across traditional industry sectors, it is and will become increasingly important to Canada's trade and competitiveness.

At this point, I'd like to ask Christopher Henderson to provide you our commentary on corporate taxation.

Mr. Christopher Henderson (First Vice-Chair, Canadian Environment Industry Association): Mr. Chair, you pointed out at the outset that we aren't speaking to Bill C-36, but I think we'll say this. What we are presenting before your committee to consider is the business competitiveness aspects of our industry and the way we can contribute to the tax revenue you need to pay for things, like Bill C-36, and how we preserve the future for those kids we want to educate.

In that respect, we think the Mintz report is highly timely and highly relevant. We commend the government and the Minister of Finance for commissioning it.

We have a couple of things to say about it that we think are good and a couple of things that are maybe a little bit of omission, which we think you should look at in the future.

With respect to general corporate income tax, the Mintz report proposed a general reduction of federal and provincial income tax. It sounds like parenthood, but we also think it's a good idea, particularly in the case of small business.

As Mr. Portelli pointed out, our industry sector, like many technology sectors, is small business based, and we believe this proposed reduction in corporate income tax, particularly for small business, would improve the competitiveness of our companies.

However, we do feel that one aspect of corporate income tax should be considered further. In light of our competitors, where there are preferential income tax rates, where there is accumulation of capital for exports, we feel this is a critical issue in our competitiveness or lack of it in international markets.

It used to be that price and performance was all that counted to a buyer abroad, in the U.S., Latin America, Asia, Europe, wherever. However, increasingly these buyers want us to come to the table with equity financing to share in the risk of a venture, for water and waste-water projects, for air emission monitoring, whatever it might be.

To that extent, we feel we need to look at how our tax system encourages the accumulation of equity expressly for the purpose of penetrating export markets.

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On the question of capital cost allowance, the Mintz report has largely said that capital cost allowance incentives should be minimized. We think otherwise. When we look at the issue of the Kyoto climate change convention, which has been signed by our country, we feel that one of the most important things we can do to help meet the Kyoto targets of reducing greenhouse gas emissions will be to give business some cushion—not a complete cushion; this is not a free ride—to make the transition over the next 12 to 15 years to a sustainable energy capital stock. Accelerated capital cost allowance for specific provisions, specific kinds of capital stock, are a way to do this. It's a targeted financing incentive that the finance ministry in the past has not generally jumped at. We don't think it's a good idea in this case.

I've spoken about small business taxation. We talked about the tax incentive for R and D. As Mr. Portelli has mentioned, this is a technology-intensive sector and getting more so. The scientific research and tax credit mixed...in fact, we feel again that we need more targeted tax incentives for specific technology families that do specific things, like improve our environment or help us deal with greenhouse gas reductions. This is something in the Mintz report that's not fully looked at but we think you should put on your agenda.

Finally, the Mintz report went into a very innovative discussion on the issue of environmental taxes. We point out this is a controversial area. There's a great deal of sensitivity about this. There are differences among our members about the issue. We do feel, though, that we have something to contribute in this process, and we'd be pleased to sit at any table that looks at the issue of environmental taxes.

In sum, Mr. Chairman, we feel that Bill C-36, however you may judge it, needs to be paid for. We think our industry and our taxes that we offer can pay for it. We think there are things that might need to be done by the Government of Canada to make us more competitive in export markets, through technology. We think there are other tax measures that need to help us deal with major environmental threats, like climate change, and look to certain areas like environmental taxation.

Thanks a lot. I move to your questions.

The Chairman: Thank you very much, Mr. Henderson.

Mr. Ritz.

Mr. Gerry Ritz: Thank you, Mr. Chairman. Thank you for your presentations, gentlemen.

We've seen a lot of different media coverage on climate change. Is it fact or fiction? Is Canada a major player? We've seen evidence showing Canada only contributes 2% to the problem. Do we need these tax incentives that you talk about here to control our so-called problem at home, or do we need them to get out there in the world and market the technology that Canada has at our disposal? I'll throw that out to you.

Mr. Ronald Portelli: I'll start off and then I'll ask Chris to add to it.

It's a complicated area. It is one of the most challenging things that has ever hit our country and the world. The balance of scientific opinion does indicate that it is connected to human activity.

Canada's contribution, in the total scheme of things, is relatively small. The issue we're putting forward and positioning is that, frankly, other countries—the U.S., the European Union—are moving aggressively to position their industries to be competitive and garner returns in jobs and growth for their countries through attempting achievement of these targets. If Canada does not do what it can to competitively position its industry, which is one of the world leaders, we will fall behind.

I think that is the critical point we're trying to make here.

Mr. Christopher Henderson: Two additional points.

It's really a trading issue, and that's the economic risk factor here. If our major trading partner decides to ratify—though I suggest you may not find that they ratify. The U.S. has never ratified any international environmental convention, though it has implemented every one. The administration has done it anyway. There will be punitive measures that will arise if we do not do the same thing. As Ron mentioned, if we don't keep pace, we lose the technology opportunity.

In reality, what you're dealing with here is an issue of business transformation to a different energy future over the next 10, 20 or 30 years. Our company advises major companies in the oil patch, in the petrochemical industry, in the manufacturing and resource sectors. Frankly, those people see it fundamentally as a business risk. Shell International endorsed the Kyoto agreement last week. Why? Not because of political issues but because of business risk. They feel they need to move to a situation where they diversify their energy sources.

Taking the emotionalism out of it—this is not an emotional issue, though there clearly may be, as Ron suggested, a climate change risk to our environment—from our standpoint there is a trading risk, there is an economic risk, but there is also an economic opportunity. We feel that if we delay looking at those incentives that position us in that trading world, we would lose competitive positioning. This is the issue to consider in your committee.

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Mr. Gerry Ritz: This is fairly timely. Are we talking time-sensitive here? Do we have time for a phase-in/phase-out period on what we see as traditional and what we're going to have to move to in the next number of years to get our stance on Kyoto? How do we do that transition without causing that economic downturn that a lot of people talk about, or the hurt and so on? We need to gain as much as we lose just to tread water.

Mr. Christopher Henderson: Those are two questions. I don't think there is a priority one urgency in terms of acting, but I think it is a priority one urgency in terms of starting to do the hard thinking and the real exploration about it.

We probably have a window of opportunity of a couple of years to introduce these mechanisms before our trading partners scoop us. Making those transitions will take quite a few years, but I think you need to have a fiscal and policy framework in place to move within the next two years; otherwise our trading partners will be ahead of us. As Ron suggested, in some cases they're already quite a bit ahead of us.

Mr. Gerry Ritz: Thank you.

The Chairman: Are there any questions?

[Translation]

Mr. Paul Crête: Yes, Mr. Chairman. Could you inform us about the amendments that you would propose to Bill C-36?

[English]

Mr. Ronald Portelli: Originally, I was under the understanding that the $150 million that was allocated in the budget would need to have specific legislation and that it should probably be dealt with in this context, but we understand it's being dealt with in other legislative arenas, existing ones through the GPC and PERD legislation. In that case, we are only suggesting and strongly recommending that the allocation with respect to the $150 million, where this committee has an influence, be made immediately and to avoid any specific hurdles that make it impossible for the various organizations to access those funds. I don't see that as necessarily tied directly to Bill C-36 but is an aside from that.

The Chairman: Mr. Henderson, do you have anything to add? Are there any questions on this side?

Ms. Torsney.

Ms. Paddy Torsney: Burlington is certainly representative of an area that has a large number of environmental technology businesses. I'm pleased to know you're here.

You mentioned that the government has some objections to tax incentives and that you still thought they were important tools. I wonder if you would sort of outline what the objections are generally and why they're important.

Mr. Christopher Henderson: I would be pleased to. We're delighted that Burlington has an active industry, as it does, in our sector.

The point we're making here, both with respect to the accelerated capital cost allowances and research and development, is that in order to make them effective and not unduly reduce tax revenue of the Government of Canada, they need to be targeted. Targeting means that you have to do what some financial orthodoxy says is picking winners, and then sales saying these sectors, these technologies, these kinds of capital stock.

In all frankness, that is where the finance department has not been over the last decade or so. The movement has been to general measures like the scientific research and tax credit. That's why we have all the problems, we submit.

If we're going to deal with specific issues, we argue, therefore, that targeting in the areas we've suggested makes sense. My point was that this runs, in a sense, against the current thinking within the finance department to use broad tax measures. We think that in these areas you throw the baby out with the bath water, but you also reduce tax revenue for the Government of Canada unnecessarily. We suggest that if you give tax incentives as a reduction of tax revenue, let's be fair. We don't necessarily like that as businesses. However, we are arguing that it makes sense in competitive terms, but it needs to be targeted.

That was the context of my comment.

Ms. Paddy Torsney: And the specific areas you would like us to target are the winners, which are...?

Mr. Christopher Henderson: Well, we're suggesting a couple of areas. On the issue of research and development, I think we are saying the world is changing. In terms of our sector, the upfront management of toxic and hazardous waste, the upfront management of greenhouse gas emissions, those are the kinds of technology areas we think there's legitimacy to have tax incentives for on the R and D side.

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With respect to the accelerated capital cost allowances, we note certain capital stock consumes a lot of fossil fuels. If we want to reduce greenhouse gases and meet our Kyoto target, it would be prudent to try to move capital stock into more efficient capital stock, so you want to target the capital stock that consumes a lot of carbon fuels.

Let me use an example. The Nanticoke plant near your riding consumes coal to generate electricity. It's going to be opened because of the nuclear shutdowns in Ontario. If you could burn gas instead of that coal it would be a lot cleaner, but Ontario Hydro has an asset value on those three hydro-thermal coal plants burning in Nanticoke.

If they want to make a transition, can you cushion the transition without unduly affecting the balance sheets? That gives us a crown corporation, but this primarily affects private companies. We're not suggesting to do it wholly but at the margins, to give some incentive for change in a more accelerated way, to meet our Kyoto targets. If you do that, we're arguing we have, in part, the technologies that can supply those solutions.

Ms. Paddy Torsney: Let me suggest to you that when it comes time to work on this issue more specifically, the rail sector has made a pretty impressive presentation to all of us on changing the capital cost allowance. It's mounting quite a campaign, and it would be nice to see you support that, if you do.

Certainly also in our area we are plagued by far too many trucks on the road. It would be nice to see more of the traffic in the corridor being supported on the railways rather than on our highways.

Mr. Christopher Henderson: On that issue, one of the areas you might put an R and D incentive on—that's why we think there's discussion needed here—is in the automotive sector where we are rich, strong and competitive. There is a global market for technologies in catalysis, combustion, and alternative fuels that can help us reduce at least the air pollution impact, if not the urban impact, of those trucks. That's an example of R and D incentive targeting.

The Chairman: Thank you, Ms. Torsney.

Mr. Portelli, Ms. Last, Mr. Henderson, thank you very much for your presentation.

We did find a connection to Bill C-36, but it's also nice to get a break from all the Bill-C-36-oriented presentations.

As I said earlier, this will be part of the testimony for the Mintz report, so thanks again.

We'll suspend for five minutes and we'll be back with Centrale de l'enseignement du Québec.

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The Chairman: Welcome.

You have approximately ten minutes to make your presentation, and then we will start asking questions.

[Translation]

Mrs. Lorraine Pagé (President, Centrale de l'enseignement du Québec): Thank you. Mr. Chairman, ladies and gentlemen, The CEQ's statement today will deal mainly with the Canada Millennium Scholarship Foundation. We will also make two brief comments about the Bankruptcy and Insolvency Act and the Child Tax Benefit.

I will start with the Canada Millennium Scholarship Foundation. The CEQ does not feel isolated this morning in its position. There has been a very broad consensus; the population of Quebec, the editorial writers, as well as all those organizations involved in the field of education are against the Canada Millennium Scholarship Foundation project.

The CEQ concurs with this opposition for eight basic reasons. The first is that this Foundation project is a federal encroachment in education, which comes under provincial jurisdiction. In fact, for us, financial aid is an integral part of education policies. As I was saying, a broad coalition of students, leaders of colleges and universities and all unions are opposed to the Foundation project for this reason.

Even the most federalist Quebec editorial writers have denounced this gross interference by the federal government in the field of education. Obviously the right to equality is a responsibility that both the federal and provincial governments must assume, but they must do so in their own areas of jurisdiction. That means that the federal government must concern itself with equal opportunity in work, for example, in terms of equal access, unionization and salary equity. But when it comes to education, it is up to the provincial governments, under whose jurisdiction education falls, to deal with the issue of equality and implement the appropriate programs. But the objective of the Canada Millennium Scholarship Foundation is to intervene in the area of equal opportunity in education.

Here is the second reason for our opposition. In our opinion the Foundation is not the right way to improve equal opportunity for Quebec students. Basically, it is not through scholarships based on merit that one improves equal opportunity, but through a needs-based assistance plan based on need such as the one that exists in Quebec. On the other hand, scholarship systems, despite their essential contribution to limiting student indebtedness, cannot manage to eliminate all the inequalities of access to higher education. There are cultural barriers to higher education; that is why early intervention is required, and that is what Quebec is trying to do with its family policy and full-time kindergarten for five-year olds.

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It must be said that the federal government would make a greater contribution to the objective of equal opportunity in education if it helped Quebec with its family policy, by returning, for example, the savings it will make in the area of personal income tax related to the recent Quebec policy of day care for $5. Remember that it is the only province that offers such a service for five dollars.

Third, the pursuit of equal opportunity is neither a private nor a temporary mandate. However, when we look at the Foundation project, we see that the federal government makes this fundamental mandate a private responsibility. We cannot accept that the heads of major corporations, whose main aim is to increase their company profits, administer public funds allocated for equal opportunity, especially since after 10 years the government would withdraw from the Foundation and leave it in the hands of the private sector. It is as though after 10 years equal opportunity will have been achieved and public administrations could set the issue aside. In fact, let us be clear: the CEQ would denounce such a temporary project given to the private sector even if it were proposed by the Quebec government.

Fourth, the Foundation duplicates a system that has proven itself. Quebec currently distributes $525 million in loans to 100,000 individuals. It receives $90 million from the federal government as compensation. Each year Quebec offers $256 million to more than 75,000 grant recipients. Nowhere else in Canada are so many grants given out. The Quebec financial assistance program is different from and more complete that that of the other provinces. A uniform federal program does not take this Quebec specificity into account.

When Minister Pettigrew promises that he will not duplicate the plan because his government will allocate the scholarships on the basis of merit and not on the basis of financial need, he makes assertions that do not correspond to what is in the Bill since it includes the criteria of both need and merit.

Finally, even if the Foundation kept only the merit criterion, it would still be duplicating the Quebec system since $10 million per year are given to Quebec students as merit scholarships.

Fifth, in terms of student indebtedness, Quebec has been relatively successful where the federal government has failed miserably. Student indebtedness is more than double in the rest of Canada, where the federal government is responsible for financial aid for the provinces, and that, as you can see, is a very bad scorecard.

The Student Financial Assistance Act allows all provinces to withdraw and receive financial compensation. The Quebec financial assistance plan is therefor not a privilege but a right it has chosen to exercise.

Sixth, the Quebec plan is more generous than the federal project for the year 2000. The average millennium scholarship will be $3,000 whereas the average Quebec grant amount was already $3,900 in 1995. Quebec grants can even reach $16,000 per year for students with children.

The eligibility period is limited to 32 months in the federal project. In Quebec, this period covers the entire time of post- secondary studies, from college to doctoral level.

The number of millennium scholarships cannot exceed 25,000— there will be 100,000 throughout Canada—and Quebec already has 75,000 grant recipients

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When government representatives tell us that the federal government refuses to give Quebec its fair share because the Quebec government refuses to use all the funds for student aid, they are hiding the truth. The truth is that Quebec already offers student far more than what the federal government is promising for the beginning of the next millennium.

Seventh, the federal intrusion will create distortions in the Quebec plan. The millennium scholarships will be added to those already offered. Grant recipients who get $10,000 or even $16,000 will receive an additional $3,000. Then, either Quebec will have the onus of changing the rules of its plan to cut financial aid or more money than is necessary will be granted. This is not an example of flexibility of the part of the Canadian federal regime, nor federal-provincial co-operation.

Finally, Quebec youth is not for sale. The Prime Minister said in the House that he wanted to give young people a cheque with the maple leaf so that they know where the money comes from. It's not complicated: the money comes from our pockets through our taxes, it is not a gift from either the federal or provincial governments. That kind of politics and the Prime Minister's statement come from a time that we had hoped was long passed in politics and in a democracy. Young people have seen this attitude as a gesture of contempt.

The federal government is mainly responsible for the decrease in the quality of university training, the deterioration of student living standards and the deterioration of staff working conditions in universities through cuts in transfers for higher education.

This decrease in payments has increased pressure on tuition fees all across Canada. If young people are in debt today, it's because tuition fees have increased. It is a truism that we should remember. So it seems to us that that the Canada Millennium Scholarship Foundation is a strategy designed to make us forget the devastating federal policies on the financing of higher education through the reduction of transfer payments, and also a strategy that allows the federal government to intrude in the field of education by ignoring its obligation under the Student Loans and Scholarships Act to agree to a province's request to withdraw from the program and administer it on its own.

Two brief comments as I close. First I will speak about the extension to 10 years of the deadline for students discharging their debt. This measure seems to us unjustifiable and inequitable. It is discriminatory in that it submits them to separate judicial standards when they abuse no more than other groups—and often less than other groups—provisions the Student Loans and Scholarships Act. It is also unjustified because we have just set the deadline at two years and it is much too early to assess the effect of this measure. It is also inequitable because the deferred payment program in Quebec is only five years, whereas the project would extend it to 10 years in the rest of Canada.

As for the Child Tax Benefit, we ask that the amounts be given back to Quebec to allow it to ensure adequate financing of its social assistance program, since it is currently struggling with significant cuts because of the reduction in transfer payments.

Thank you for your attention. We will be happy to answer questions.

[English]

The Chairman: Thank you very much, Madame Pagé.

If I may, to begin, I just want to ask a question. Unless I'm misunderstanding this, your final comment here in your press release says that Mr. Chrétien is giving cheques to people of voting age—right?—to basically have an impact on the next referendum, and you say that this is the old sort of politics. Is that correct? Is that what you're saying?

[Translation]

Mrs. Lorraine Pagé: those are not my words; I repeated what Mr. Chrétien said in the House of Commons. Unless it's his double that spoke that day, I have to believe that that is what Mr. Chrétien answered in the House of Commons. His statement was reported in news bulletins and broadcast live on cable.

Mrs. Christiane Gagnon (Québec, BQ): I believe our Chairman was asking you about your interpretation in terms of a referendum vote.

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Mrs. Lorraine Pagé: Yes, Mr. Chrétien said he wanted to ensure that young people who will be eligible to vote in the next referendum know where the money is coming from when we refer to student financial aid. That's what he said.

[English]

The Chairman: That's what he said?

Ms. Lorraine Pagé: Yes.

The Chairman: I just find it.... This is your comment. It doesn't say Mr. Chrétien said this. This is what you're saying. Right? If it's in quotations.... It says here that—

[Translation]

Mrs. Lorraine Pagé: Mr. Chrétien made that statement. I am commenting on it and I find it unacceptable and a reflection of an outmoded concept of politics and democracy.

[English]

The Chairman: So it's your comment.

[Translation]

Mrs. Lorraine Pagé: My comment may be shocking, but so was his statement.

[English]

The Chairman: Okay. Just to make sure that this is what you're saying he's saying.... You're attributing this to him, and I can't think why Mr. Chrétien would say that the reason we have a millennium fund is that we want to buy young Quebeckers' votes, because I don't think that's an issue.

First of all, I have far too much respect for the young—and the old—who live in Quebec to think they can be bought. To hear that somebody thinks that somehow the federal government would engage in anything like that is certainly something that I as a Canadian find pretty degrading.

Quite frankly, as chairman of the finance committee I find it's sort of a low type of debate when it comes to politics and you start talking about people being bought. I don't want to get into that, but I do want to tell you what my sentiments are. I'm not very impressed with this type of presentation when it speaks to people's integrity.

Mr. Ritz, do you have a question?

[Translation]

Mrs. Lorraine Pagé: Mr. Chairman, when one does not want one's comments to give rise to debate, one does not make them. Mr. Chrétien made statements that were open to interpretation. Either he intended us to see through them, which would be objectionable, or he made a statement that was awkward at the very least and he should have apologized. Be that as it may, a statement made by the Prime Minister in the House of Commons merits a debate by the population of Quebec and of Canada. That is the rule in a democracy.

[English]

The Chairman: Absolutely. I don't have a problem with that. In the same way that you're expressing your point of view, I'm expressing mine, because we both have the same rights.

Mr. Ritz.

Mr. Gerry Ritz: I just have one short question. You spoke about the provinces opting out of program and so on. I'm wondering how you come up with a formula so that you arrive at a dollar figure that's equitable for all sides. How do you arrive at that?

[Translation]

Mrs. Lorraine Pagé: You know that the Canadian student financial assistance legislation that is now in force allows a province that wants to administer its own plan to withdraw, manage the program itself and receive compensation. By setting up the Canada Millennium Scholarship Foundation, the government is in fact setting up a separate plan where the right to withdraw and the automatic compensation to the provinces at their request do not exist.

First, we do not want a millennium scholarship project, but if the government maintains the millennium scholarship approach, we believe this project should be managed according to the same rules that apply to the grants and loans system and student financial aid, and that upon their request provinces should be able to withdraw and receive full compensation. Hence, they should receive the amounts due to them according to the established rules so that they can administer the plan according to their own priorities.

Of course, since we are talking about student financial aid and higher education, these funds should go to student financial aid and to higher education. When Quebec receives these monies, it can allot them to financing its grants and loans plan, which we have shown to be more generous, or at least better suited to the needs of Quebec society and of the students themselves. That would allow it to get some manoeuvring room for adequately financing the rest of the education system from its own budgets, whether it be school, pre-school, primary school, high school, adult education, professional or technical training, or even parameters involving higher education, i.e. university.

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[English]

Mr. Gerry Ritz: Thank you.

The Chairman: Madame Gagnon.

[Translation]

Mrs. Christiane Gagnon: Good day, Mrs. Pagé. You reiterated many points that were raised during the testimony we have heard and that people are concerned about regarding the millennium scholarships. It is clear that, especially in Quebec, people don't want the millennium scholarships imposed in this manner because they would unbalance the entire Quebec grant and loan system.

We have also heard supporting testimony from witnesses from various Canadian associations. Some Canadian witnesses see through the federal game. I was very pleased yesterday to hear a University of Ottawa professor tell us that this was a federal intrusion in a provincial jurisdiction, bad federalism, a centralist federalism, and that that is not the way to respect the wishes of Quebec, among others. It is important to think about this testimony because usually we are always told that it is a handful of malcontent sovereignists who say such things. In this case, it was a professor from the University of Ottawa who came to tell us that this way of treating Quebec didn't make sense. As you said, the Quebec system of grants and loans has proven its worth. Furthermore, many people have come forward to tell us that they were concerned about the way these scholarships would be managed. Since public funds will be managed by a private Foundation, people are worried about the criteria that will be used. If the Bill were adopted in its current form, it seems we would not even have the possibility of allowing Quebec to administer these millennium scholarships. I would like you to expand on that.

Here in this committee, when we say we don't want these scholarships and that Quebec students are only indebted to the tune of $11,000, we are told that we are unaware of the reality of student indebtedness. That's because Quebec has largely done its share to contribute to the grants and loans system to ensure such a situation. I would like you to explain this point of view again because it is important for people to know that our system is different and that it must continue to be respected.

Mrs. Lorraine Pagé: I will answer Mrs. Gagnon's questions in very general terms and I would ask Mr. Beauregard, since he is the resource person at the Centrale de l'enseignement du Québec in charge of the student financial aid issue, to give you further details.

If Quebec students are less indebted than elsewhere, it's not because of the Holy Spirit, but because measures have been taken to achieve this end. There are two types of measures.

First, Quebec has the lowest university tuition fees in Canada. It's a truism: the higher the tuition fees, the more students become indebted. When we can maintain tuition fees at a lower level, we manage to reduce the pressure on our young people and thus keep their indebtedness at a lower level.

The second measure is to have a generous grant and loan plan. And the Quebec plan is the most generous in Canada. So when we say that Quebec has proven itself in this area, it's not because we are flattering ourselves unduly. We have the facts to back us up.

In fact, in the context of the summit meetings on education that were held in Quebec and that lasted two years and brought together more than 100,000 participants in a public and social debate on education, we set up a committee to review Quebec's grant and loan system. We concluded that the system could be improved in some ways but certainly not as proposed by the creation of a Canada Millennium Scholarship Foundation.

I would like to underline that I came to Ottawa a few months ago to ask the federal government to agree with the social consensus in Quebec on the question of language school boards. Similarly, I ask the Standing Committee on Finance to take into account the obvious consensus in Quebec regarding the issue of millennium scholarships and to support the recommendation asking that this plan contain rights of withdrawal and compensation for the provinces that request them.

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I yield the floor to Mr. Beauregard for the conclusion.

Mr. François Beauregard (Advisor, Centrale de l'enseignement du Québec): It is true that Bill C-36 does not allow the Foundation to assign, in whole or in part, its obligations in the granting of scholarships, which means, to all extents and purposes, that it cannot transfer those funds to the provinces.

You have to understand that we are not against the fact that the federal government offers scholarships in Canada and manages them if the Canadian provinces do not want to manage their own programs. In fact, it could have made its Canada Student Loans Act a grants and loans act like Quebec's if it so wished. This would have changed the federal law on student loans to one on grants and loans and the clauses of withdrawal with full compensation would have been maintained. The other provinces would have been entitled to the same compensations foreseen under the Canada Millennium Scholarship Foundation. When people say that this will cause administrative complications, we have to recognize that we already have students with dependent children who receive up to $16,000 in grants, in addition to loans. And the federal government will give an additional $3,000 to 25,000 scholarship recipients.

No student in Canada gets $19,000 in grants from his government, but I am not talking about scholarships from private Foundations. Quebec will therefore have to tell that student that it is cutting the help it is giving him because the federal government is sending him a cheque for $3,000. That's nonsensical. That's not respecting provincial jurisdiction in their specific areas of competence.

Mrs. Christiane Gagnon: I only have one more small question about duplication. We know there is another aspect that is related to the numerous cuts in Canadian social transfer payments and in Quebec we are very sensitive to that. We know this will create duplications and overlapping. Have you calculated how many fewer scholarships we will have? The committee has been told that 5 per cent of the total would be set aside for administration. Given that we already have a structure in place, if we took into account Quebec's share of that 5 per cent, how many scholarships would we lose? I have made my own personal calculations, but I would like to know if you have an idea of the number of scholarships we would lose. If we want to help more students and be more efficient about student indebtedness, I don't think that giving fewer scholarships is very efficient. I see it rather as a lack of efficiency and I would like your opinion on this matter.

Mr. François Beauregard: I haven't really done the calculation but we know the Foundation will generate about $300 million in investments and interest. The numbers may vary from one year to the next. We can therefore calculate 5 per cent of that $300 million, but I think that instead we should take the 25 per cent of that $300 million that represents Quebec's share and calculate 5 per cent of the 25 per cent of the $300 million, in other words 5 per cent of one fourth of the $300 million. We would then have a good idea of the amount that will be wasted on administration when we already have the staff in place in all our colleges and universities to administer our student grants and loans plan.

The Chairman: Mr. Crête.

Mr. Paul Crête: You say in your brief:

By creating the Foundation, the Chrétien government transforms this mandate into a private sector responsibility.

Further on you say:

The CEQ would not want such a project even if it was proposed by the government of Quebec.

Could you elaborate on the fact that this project, in whatever system, federal or otherwise, is unacceptable because it leads to the privatization of financial aid to students?

Mrs. Lorraine Pagé: It is a basic objection on the part of the CEQ. Members of the Committee who would like to see our opposition as just another federal-provincial quarrel would have a very reductionist view of our opposition to the Canada Millennium Scholarship Foundation.

The very idea that a societal objective, the right to equality, would no longer be the responsibility of our mandated representatives, the provincial and federal governments, but that of corporate executives, is, we feel, a basic issue. When public funds are at issue, we believe that elected representatives must be responsible. They are the ones who are accountable to the public, the ones who present the results to the electorate and they have to abide by the public's decision on the policies they defend.

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If we give that mandate to the private sector, how will the average layperson be able to tell the CEO of Chrysler Canada, Ford Canada or GM Canada that they don't agree with their way of managing public funds or that they disagree with the means used to defend and promote equal opportunity in education or the right to accessibility? It's an extremely important issue for us. If the Quebec government had presented a millennium project managed by Lavalin, Hydro-Quebec or God knows who, we would have opposed it in the same manner. For us, it is a public responsibility that must belong to public organizations, and there must be room for representatives of the population and the education community at the side of elected officials if such a project is to see the light of day.

For us, it is a central and fundamental issue that has nothing to do with areas of jurisdiction but that is at the heart of a vision of public matters and the social responsibility of governments in these very broad matters of equality.

The Chairman: Thank you, Mrs. Pagé.

[English]

Mr. Riis.

Mr. Nelson Riis (Kamloops, NDP): Thank you very much, Mr. Chairman. I have just one question.

Your figure of $11,000 for the average debt load was interesting, when compared to the rest of Canada, and says a lot about the initiatives that the Province of Quebec has taken over the last number of years to support education. You indicated in your presentation, and also in your following comments, that one of the reasons it's only $11,000 is that there are no tuition fees in certain institutes in Quebec and that has been helpful.

If we believe that education is crucial for economic development and if we believe that a few decades ago we felt that 12 years of education was necessary for a person to be a contributing citizen, I think we could say that today, decades later, we would probably agree that 14 years or 16 years was absolutely necessary in terms of training and education in order for a person to be a contributing citizen in the knowledge-based economy, particularly in the 21st century.

In light of these comments, would you agree that it would be worthwhile for provincial governments, preferably with assistance from the federal government, to eliminate tuition fees totally, to eradicate this whole hurdle—albeit maybe modest for some people but significant for others—to simply do away with tuition fees, as many countries have done for many years?

[Translation]

Mrs. Lorraine Pagé: Yes, the CEQ has for many years defended the idea of free university studies, which exists in some industrialized countries like France. The CEQ also believes that a real fight against the student indebtedness must necessarily involve an offensive on the financing of higher education in order to reduce tuition fees first and to aim at achieving the goal of free education in the medium term.

For us, it is an important, central issue and we even find that the debate in Canada, but also in some provinces, including ours, now revolves around such things as the management of student indebtedness instead of asking the basic question, which is what we need to do so that our young people are less indebted or can better manage their debt in order to be debt-free when thy reach the labour market.

We are part of a generation that arrived on the labour market practically debt-free because we had very low tuition fees. Anyway, that was the case for me, and for most people of my generation with the Quiet Revolution and increased access to university.

We are giving our young people, the generations that will follow us, a legacy that is often hard to bear because they arrive on the labour market with a debt that is, in Quebec, still very high. In Quebec, that debt is about $11,000 and that is a significant amount for a young person starting to work. You can then imagine what it's like in other provinces where student indebtedness can reach $20,000 or $25,000. I believe that we really need to change direction there and that restoring the level of transfer payments in education will allow the provinces—Quebec as well as all the others—to act more efficiently in this regard.

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[English]

The Chairman: Thank you, Mr. Riis.

Ms. Torsney.

Ms. Paddy Torsney: Thank you.

[Translation]

Mr. Beauregard, do you believe Quebec students have an indebtedness problem?

Mr. François Beauregard: Yes, of course there is an indebtedness problem. Some categories of students are more indebted than others and there are certainly improvements to be made in the Quebec plan. However, the level of indebtedness of Quebec students is not comparable to that of students in other provinces because Quebec put a grant program in place in the early 60s. But it is correct to say that some students have special difficulties; heads of single-parent families, for example, have heavy burdens to bear and must stretch out their studies over longer periods. Those people could benefit from improvements to the financial assistance plan.

Mrs. Paddy Torsney: Then, Mrs. Pagé, why do you say that a $3,000 scholarship to a Quebec student is more than is necessary? You did say that, didn't you?

Mrs. Lorraine Pagé: Yes. Because it is a program that is managed unilaterally all across Canada without our having any real say in the allocation of the money. I would remind you that the millennium scholarships will not be given only on the basis of need, but also on the basis of merit. What guarantees does the Canada Millennium Scholarship Foundation give us, since it is a program that addresses all provinces in the same way and is managed by corporate executives? What guarantees do we have that the proposed measures will be adapted to the real-life situation of Quebec students?

We say that the provinces should have the right to withdraw with compensation and to establish the best plan to meet their own needs with those monies in order to take into account the specific needs of certain clients. That will allow for the necessary adjustments and improvements that need to be made to the Quebec plan for those clienteles for whom improvement is needed. Mr. Beauregard gave one example, that of single-parent families who need certain improvements.

Mr. François Beauregard: I would like to add something if I may.

Since Bill C-36 allows for two criteria, need and merit, it is certain that in Quebec they will be given to those who are already grant recipients because they are the ones with the greatest financial difficulties. In fact, in Quebec, to have access to a grant, you must first have had access to the loan. You have access to a grant only if your financial situation warrants it.

I would like to give you a concrete example. A student receives a $3,000 loan from the government and a $16,000 grant because of his situation. The Foundation will give an additional $3,000 to the student that is already getting a $16,000 Quebec grant. Moreover, not all grant recipients will get money from the Foundation because only 25,000 of the 75,000 grant recipients will get some. That will create distortions in the plan and the Quebec government will be forced to change its regulations to reduce the level of help it is already giving its students. I don't know if my explanation is clear. Is it?

We have nothing against the fact that students are receiving $3,000 scholarships, but those who will be getting them will not be those who are only getting loans. It will be those who are already receiving grants. That's why we say that there is duplication. In Quebec, the situation is completely different from that in the other Canadian provinces where students only have access to loans.

[English]

Ms. Paddy Torsney: Let me clarify something. You're an organization that represents teachers. Who else? You're mostly focused on the high school and grade school system. Is that correct?

[Translation]

Mrs. Lorraine Pagé: The CEQ represents all primary and high school teachers in Quebec. It also represents college teachers and university lecturers.

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As well, it represents the professional staff in primary schools and high schools and most colleges, as well as some professionals in universities, the professional staff including student financial aid counsellors. Therefore CEQ members are the counsellors on financial aid in colleges and universities. That is why we have always followed this issue closely. The committees that have been set up in Quebec on the issue of financial aid under the grants and loans plan have always given an important role to the professionals in this field since they are the people who are in daily contact with the students and who understand both the mechanics of the system and its effect on the students.

Therefore it is because of these representational aspects that we have developed a special interest in the whole question of student aid. In addition, of course, since we are the union that represents the largest portion of education personnel in Quebec, we have always followed all issues related to education closely.

[English]

Ms. Paddy Torsney: Thank you.

Before my next question, I just wanted to check the translation. At the beginning, I think the witness said that they were professional people in the universities, not professors in the universities. I think the translation came out that they were professors as well. Can we just clarify that point please?

[Translation]

Are the professionals of whom you speak university professors or simply people who work in a university?

Mrs. Lorraine Pagé: We have both. We also have university lecturers. The university professors are not affiliated to the central unions. They are grouped within one federation. The president of that federation came before the finance Committee last week. But we have lecturers at the CEQ, and we also have professional staff.

Mrs. Paddy Torsney: Thank you. I think there was a translation problem.

[English]

So I guess I'm a bit at a loss. I kind of hear you saying that perhaps Quebec students would object to seeing their debt relieved by thousands of dollars. You're arguing in fact for an increase in transfers directly to the province instead of giving money to university and college students directly.

I'm sort of thinking that, in a cynical way, maybe the issue is that you want to get more money for all the rest of the system that your members benefit from, whereas our goal is helping individual students who have in fact told us that there is a serious problem, both inside and outside Quebec, which means all across the country. Would I be cynical in thinking that maybe you're trying to get more money for your own organization?

[Translation]

Mrs. Lorraine Pagé: No. I don't think you are right, for the following reason. I indicated quite clearly at the beginning of my presentation that we were asking for Quebec's right of withdrawal with full compensation, but when we speak of Quebec, we are talking about all the provinces because it is an area of provincial jurisdiction. The current legislation on student loans allows a province to withdraw from the program with compensation. We want the issue of scholarships to be handled in the same way so that the provinces are able to withdraw with compensation. I said that those monies would be allocated to financial aid for students and to higher education. I did not say that they were for primary school or high school or for colleges; I talked about higher education and financial aid for students.

Quebec spends $520 million through its financial assistance plan and now receives $90 million from the federal government. It is obvious that if it receives more from the federal government, it will have more manoeuvring room to adequately finance other things. The teachers' job has deteriorated greatly, as have the services in universities, given the federal cuts in transfer payments. That would therefore increase the provinces' manoeuvring room, and primarily Quebec's, since we are coming here as its representatives; they would then be in a position to improve the general financing of higher education.

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The monies would go to financial aid. As I said in my presentation, that's how we see things. However, Quebec would act in accordance with the priorities established by the educational community.

[English]

Ms. Paddy Torsney: Well, let me clarify one thing for you. In fact, this is not a government program; it's an arm's-length foundation. That's where the corporation support is. There's the ability for corporations and others to give money to the foundation to expand the amount of money available.

I'd suggest to you that the method being used is in fact very similar to the research granting councils. Of course, university professors, students pursuing doctorates, and what have you in Quebec are also quite familiar with this. This is in fact very similar.

Furthermore, in terms of the priorities of Quebec, the government has to make some decisions. As for what it chooses to spend and throw money at, we don't control that completely.

I don't know about this suggestion that a province that gets more transferred to it than is collected from that province in tax dollars is somehow being overly hard done by in the university sector when they've made specific decisions not to increase funding to universities for a number of years in favour of spending money arguably in other areas that I might not agree with.

We don't have any control, so we're listening to students. This is where I think you misunderstood the motive behind this fund. Just this little bit of money is intended to answer the call that students gave to us in the pre-budget consultation period. Students all across the country said that we should give them the money to help their situation and help give them this brighter future. I think you want this as well—at least I hope you want it for them.

They asked us to deliver money in such a manner. It's not about some corporation controlling this money. It's a foundation. It's administered under agreements. In fact, the criteria will be very similar to the Canada student loans fund, Quebec student loans, and the other ones in the provinces. This is in answer to students. In that very direct way, we can respond to their issues.

Should there be work done in other areas? Perhaps, but again, when we transfer the CHSC to the Province of Quebec, they make decisions within that disbursement. Some of them I'd agree with, some of them I wouldn't. So here we are answering the students directly. That's the motive behind this fund.

By the way, it's not the only thing that's there for students and provinces in the budget; it's just one part.

[Translation]

Mrs. Lorraine Pagé: Students in Quebec are part of the coalition that includes the CEQ, the Fédération des professeurs d'université, the Fédération des cégeps, the Conference of Rectors and Principals of Quebec Universities and the Quebec Federation of Catholic School Commissions. All these people, including the students of Quebec, come together in disagreeing with the Canada Millennium Scholarship Foundation project. You have the right to continue to say that it is a good project, but everyone in Quebec is telling you that it is not.

Secondly, if it is really a question of equal opportunity in education, this is a responsibility of the state. We are against the private financing of public responsibilities. In fact, during the first years of this Foundation the federal government would be a stakeholder.

So you can see that the more we talk, the more problems come to the surface. Federal money will be managed by the private sector. We are against that. At the end of 10 years, the federal government will withdraw and there will only be private funds managed by the private sector. We are against that in terms of equal opportunity because that must be the responsibility of the state.

The millennium scholarship project, in our opinion, is not a good project. Whether it is initiated by the federal government or by the provincial government, our objections are the same on the substantive issue.

[English]

Ms. Paddy Torsney: So you disagree then with the granting councils as well, with their system? As for the Medical Research Council of Canada, the Natural Sciences and Engineering Research Council of Canada, the Social Sciences and Humanities Research Council of Canada, you disagree with those funds as well?

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[Translation]

Mrs. Lorraine Pagé: I think we should not mix apples and oranges. You spoke about supporting research and development. We have never rejected the concept that university research could rely on support from a number of sources. But when we talk about accessibility to education, we believe that state intervention should be favoured, financed by public funds, because the right to equality, to equal opportunity in education or in other fields must be recognized as one of the primary responsibilities of states.

This approach that we want to adopt here is not limited to the federal government. Other governments also choose that way. It is a choice with which we disagree. We express it. We believe it is a way of privatizing social obligations, public interest obligations and we object to that.

[English]

Ms. Paddy Torsney: Can I also just put on the record that Professor Lemelin actually agreed with the fund? So I guess there's not complete unanimity in Quebec.

The Chairman: Thank you. I just have a final note here. In the finance committee, you often hear of various views and perspectives on issues. As we deal with policy issues, one of the things that we really do at the end of the day, when all is said and done and all the views have been expressed—I'll add that I think you've expressed your point of view in a very articulate manner, and you certainly have your perspective—there's a final question that I often ask myself as the litmus test of any public policy: does this, at the end of the day, improve the quality of life for people?

In this instance, does it improve the quality of life and opportunity for young people? I'm not convinced that it doesn't, because I think it does. I think that at any point in time at which you make that type of investment of over $2 billion for bursaries and grants, you must admit that you are giving opportunity to 100,000 young people.

This is where I have difficulty understanding why you are so against it. I understand the duplication aspects and the politics of the issue, but just for a second, do you think it passes the litmus test as I described it? Does it improve the quality of life for those 100,000 young people who are going to benefit from this program? Does that enter into your thinking at all?

[Translation]

Mrs. Lorraine Pagé: What we have said in our brief and repeated today is that we would like the monies that are to be made available to students to improve their lot—that's what you are telling us—should be subject to the existing regulations regarding loans, so that the provinces can withdraw from the program with compensation and administer them.

Money will therefore be coming in. That money will be allocated to students since we are talking about the financial assistance plan. The Quebec financial aid plan not only provides loans; it also provides grants.

Students in Quebec are much more closely associated with the structure of the financial aid system, with its evolution, its management and the changes made than they would be with the board of directors of the Foundation. In Quebec, students participate in working committees on financial aid. They can influence the way things evolve much more directly than they will be able to in the Canada Millennium Scholarship Foundation, a Canada-wide plan in which, in 10 years, the public administration will no longer have any say, since the Foundation will be in the sole control of corporate executives.

We believe that the money is welcome, that it will certainly be useful, that it will necessarily be put to good use, but it must be done according to the rules that regulate the respective jurisdictions of the federal and provincial governments in the field of education.

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We therefore believe that the Quebec financial aid plan can be further improved, allowing students to improve their lot. We will also give them the assurance that they will be more closely involved with the plan's configuration, its evolution and its management.

[English]

The Chairman: Thank you very much.

[Translation]

Mrs. Christiane Gagnon: May I make a brief comment?

[English]

The Chairman: Yes, go ahead.

[Translation]

Mrs. Christiane Gagnon: Thank you. I have heard many witnesses from the field of education, including those yesterday from the Ontario Community College Student Parliamentary Association, who have come to tell us that they were concerned about the transparency of the scholarship management. They also told us they were apprehensive about the merit criteria.

So all I have not just heard nice words. There are people in English Canada, elsewhere than in Quebec, who are worried about the management of the $2.5 Billion.

I will give you a bit of history. This is not the first time the federal government shows its bad habit of wanting to intervene in areas of provincial jurisdiction. In 1953, it tried to do so under Prime Minister Louis Saint-Laurent. Quebec fought to refuse it and to ensure that it was decentralized by giving the money to the provinces. The same thing happened under Lester B. Pearson. So this is the third time that there is a vigorous attempt to invade provincial jurisdiction.

I have to say, since I follow the committee proceedings assiduously with Mr. Crête, that I have noticed that there are varying opinions; opinions have been expressed saying that this Canada Millennium Scholarship Foundation is not as good an idea as it is made out to be.

[English]

The Chairman: Thank you.

Thanks to everyone. You've certainly generated debate, which is always a healthy part of the democratic process.

We're going to suspend for five minutes.

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

[Translation]

We will now hear from Mr. Bernard Normand and Mr. Robert Martin of the Institut canadien d'éducation des adultes. They will share a 10 minute presentation period

Mr. Bernard Normand (Director General, Institut canadien d'éducation des adultes): We would first like to thank you, members of the parliamentary committee, for allowing us to present our observations, comments and proposals regarding Bill C-36.

Let me start off by saying that we will limit our comments to part 1 of the project, which deals with the Canada Millennium Scholarship Foundation and that the main thrust of our presentation will be an examination of the three conditions regarding the tight to education in the current context.

For us these conditions for real access to post-secondary education are the implementation of the principle of equality of access, the respect of the diversity of people's needs, and as a corollary, the recognized abilities of public authorities to respond to those needs.

Those are three components of the right to education that we believe to be part and parcel of the Canadian and Quebec democratic traditions and that have been at the heart of the Institut canadien d'éducation des adultes' mission and activities for five decades, since 1946. Please note the word "Canadian" in our name, which highlights the fact that then as now, in the field of adult education we promote the interests of the Quebec population as well as that of the French-speaking population in other provinces.

The Institut canadien d'éducation des adultes is a non-profit organization that includes a force of more than 80 organizations from educational institutions, the network of professional training belonging to unions and community organizations as well as individuals involved in continuing education.

Let me add that we are also active as an advisory organization to such international organizations as UNESCO and the International Council for Adult Education. In fact, it is because of this related expertise that we put out, with the Canadian Association for Adult Education the Aperçu des tendances en éducation et en formation des adultes au Canada that was a reference document for the fifth UNESCO conference on adult education in Hamburg last July.

After this introduction, let us get to the heart of the matter. First, we believe that we have to start with the realities that underlie this Bill, i.e. people. A brief examination of the situation forces us to acknowledge the major and increasing difficulties facing people who, during the last few years, have wanted to or were in the process of getting a post-secondary education.

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These stem from, among others, structural obstacles in terms of access to higher education at the college and university levels, a deterioration in living conditions for students and adults pursuing a higher education.

In terms of accessibility, let us say that we agree with Mr. Paul Martin's recent statement that low-income families are under- represented in our higher learning institutions. We will come back to that.

We see a lot of facts that confirm the increases in the cost of studies and the deterioration of living conditions of people registered for full or part-time post-secondary studies.

Let us point out a few facts to illustrate this. Average tuition fees for full-time students at the first level in Canadian universities have increased significantly in the last year alone, from 1996 to 1997, in all provinces except Quebec: for example, 18 per cent in Newfoundland, 10 per cent in Ontario and 8 per cent in Alberta and in New-Brunswick.

In 1996-97, the average debt for a student who completed the first level in university was $11,227 in Quebec and between $17,181 and $24,818 in the other Canadian provinces.

In Quebec, where the situation has deteriorated less, in relative terms, the average university student's debt has nevertheless increased by 31 per cent between 1991 and 1996; this, combined with employment difficulties, has forced 10 times more students, in other word between 2,000 and 20,000, to participate in a deferred reimbursement plan for their loans. These facts show how far Canadian society has slipped in terms of democratization and a real right to education.

There are causes to this situation. One of the main ones has been the drastic reduction by the federal government in transfer payments to the provinces for post-secondary education, health and social security, which culminated with the transfer of the Canada Assistance Plan, which had existed since 1966, on April 1, 1996, to Canadian social transfer payments.

This reduction in transfer payments has resulted in a major decrease in income for the provinces, of about $7 billion, based on the 1994-95 transfers, which were of about $19.3 billion, to $12.5 billion.

We must end this brief contextual reference with a double conclusion. First, the budget and tax decisions of the federal government have, over the last few years, directly contributed to the deterioration of student living conditions and of public education networks under provincial jurisdiction.

On the other hand, these same federal authorities seem to be calling, in the context of Bill C-36, for a change in direction, and I quote section 5 of Bill C-36:

... to improve access to post-secondary education so that Canadians can acquire the knowledge and skills needed to participate in a changing economy and society. The objects and purposes of the Foundation are to grant scholarships to students who are in financial need and who demonstrate merit.

Given such a dramatic turnaround, you will understand that like many citizens and representatives of community organizations we are perplexed and want to go beyond the laudable statements of principle and the announcements of generous outlays by Canada's Minister of Finance. That is what we will do by looking more closely at certain sections of Bill C-36.

In paragraph (1) of section 5, we find, linked to the Foundation's mission, the two major criteria for access to its resources:

... The objects and purposes of the Foundation are to grant scholarships to students who are in financial need and who demonstrate merit

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On this matter, in the wake of the most appropriate comments made by the Fédération étudiante universitaire du Québec, we believe that a student financial aid system must, above all else, guarantee the right of access to education, an internationally recognized social and economic right that Canada agreed to in 1976. I am referring here to the International Covenant on Economic, Social and Cultural Rights. It seems dangerous to us to mix, or even worse to put on the same footing as section 5 and other clauses of the project seem to do, this primary goal of access to education, the basis of a true democratization of education, and another goal of rewarding exceptional academic performance, even though that is a valid function that should be recognized. However, in the context of a free and democratic society based on equal opportunity, it seems essential to us to give a clear and preponderant priority to the financial needs of individuals.

This Bill worries us in this regard, especially since section 27(2) stipulates that the Foundation could grant up to 5% of the annual amount in grants to people “who demonstrate exceptional merit even if those persons are not in financial need”. In addition, many other major components of the Bill open the door in terms of eligibility, are relatively vague and are left to the Foundation's sole discretion.

We now get to the heart of the problem caused by the nature and structure of this private Foundation. In fact, many of the sections in this Bill show clearly that this Foundation could be managing $2.5 Billion of our tax dollars without being really accountable while have in a lot of manoeuvring room that leaves a lot of openings for arbitrary decisions given the weak parameters of the type “The Foundation shall grant scholarships in a fair and equitable manner across Canada”.

In our opinion, there are three political and legal questions to be asked in the current Canadian constitutional context. Does the private rather than public nature of this Foundation not risk to get us further from the real implementation of the objective, despite the announcement by the Minister of Finance, of equal opportunity? That is the first question.

Here is the second one. Would our democratically elected representatives not have very little power over the private management of such a corporation at the very center of our higher education system.

Thirdly, would the entry of this new Foundation in the private sector not de facto exclude recourse under the Canadian Charter of Rights since it applies to relationships between individuals and the federal and provincial governments?

Since we must unfortunately answer “yes” to all three of these political and legal questions that are of the highest importance, we are convinced that the adoption of Bill C-36 would be a significant step backwards for Canadian society in terms of the means of exercising the right to education and the democratic control by our elected representatives in Parliament of a significant part of our taxes. For us, this would be a major step back at a time when Canada, like other countries, is questioning itself more and more about democratic states retaking powers too often left to market forces alone. After the famous no taxation without representation formula that was adopted by the founders of Canadian and Quebec democracy in the XIXth century, should we not now cry out taxation demands representation?

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Let us now turn briefly to a question that was raised by many other speakers from Quebec, the context of relationships between the federal and provincial governments. Let us be frank from the start: we have studied the federal government's arguments, such a as promoting equal opportunity as the main reason for legislative intervention, the flexibility allowed under sections 28 and 29 in terms of possible agreements between the Foundation and the provinces, or event the theory of joint federal-provincial jurisdiction in education. We find none of these arguments convincing. We believe that under the terms of section 93 of the Constitution act of 1867 and of agreements such as that reached between Quebec and Ottawa in 1964 in this matter, education has been and remains the exclusive—some would say preponderant— jurisdiction of the provinces in Canada, and that federal interventions in this area require one or more explicit agreements with the provincial powers.

Starting from this fact, the numerous achievements of the educational system and the expressed wishes of the Prime Minister of Canada and the Premier of Quebec last March 30th to reach an agreement, we all strongly hope that this agreement will respect recognized jurisdictions with the main objective of improving the living conditions of peoples doing full- or part-time post- secondary studies.

In closing, here are our two recommendations.

The Institut canadien d'éducation des adultes recommends to the Standing Committee on Finance that it propose amendments to Bill C-36 so that the Canada Millennium Scholarship Foundation be a public organization subject to democratic control by elected officials of the federal Parliament and have as its mission to help students on the basis of their financial needs.

The Institut canadien d'éducation des adultes recommends to t the Standing Committee on Finance that it propose amendments to Bill C-36 to allow the provinces that manage or would like to manage a student financial aid program to withdraw with full compensation.

Thank you.

The Vice-Chair (Mrs. Paddy Torsney): Thank you very much, Mr. Normand.

Mrs. Gagnon.

Mrs. Christiane Gagnon: Your recommendations are similar to those of the CEQ and those of the students' federation, the colleges and universities, and many other spokespersons in Quebec. I hope our committee will follow up on the recommendation made by many Quebec and Canadian groups that are asking for the respect of the provinces' areas of jurisdiction. No later than yesterday we were being told that it was bad federalism, and that we were not taking into account the very essence of federalism, which must adapt to the realities in the provinces. We are fully opposed to the way decisions are being centralized by the Canadian government.

Many speakers have expressed some of the concerns you have raised, especially in terms of equal opportunity and the management of the Foundation by god knows who, by 15 people of whom six would be named by the government. I'm not sure what question to ask you since we have already talked about the reality in Quebec and in the other provinces of Canada.

By giving the provinces that want it the right to withdraw, we would really be taking into account the realities where they live. For Quebec, it would be a way of being fairer in the field of education. We are often given the image of Quebec students who only have $11,000 of indebtedness, and we say the $3,000 would have more impact on them than on students in British Columbia who have a $25,000 debt load. That's more or less the reasoning. I would like you to give us some points to argue, given this reasoning when we are in a question period with witnesses.

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What would be the impact in Quebec of giving a $3,000 grant to a student who has an $11,000 debt? Do you believe that saying no to the millennium scholarships in the manner Quebec proposes is saying no the reducing student indebtedness?

The Vice-Chair (Mrs. Paddy Torsney): Mr. Normand.

Mr. Bernard Normand: I would answer that question by saying that it is obvious that we would like a maximum of resources to devolve to students. If, as we wish, there is an agreement between the Quebec government and the provincial governments to allow students to improve their living conditions, which are becoming more and more deplorable, we are in favour.

Obviously we have not said that we are in favour of the entire project that has been proposed. We say that major amendments must be made to respect democratic traditions to respect Canadian constitutional law, to respect what seems to us common sense, in other words act by respecting existing jurisdictions and allow section 15 of the 1982 charter, which deals with the issue of equal opportunity, to come forth in a spirit of broadening democracy.

I therefore believe that Bill C-36, in its first part, goes against an element of Canadian democratic tradition.

Mrs. Christiane Gagnon: I would like to ask another question. Yesterday, a witness from the University of Ottawa came and spoke to us in the same vein you have about the recommendation on the right to withdraw. He told us that since the government wants to set up a Foundation made up of members named by the government, he was wondering about the partisan nature of such a Bill. He was saying that public funds should be managed by people who are elected. There is no transparency in these scholarships. We want to know how this money is spent. We have suffered enough with the cuts in Canadian social transfer payments across Canada and in Quebec and we are especially sensitive about the impact of Canadian social transfers on education, health and income security. We must therefore show we are serious and responsible in the management of these $2.5 Billion. Could you listen please? I am asking questions, Madam Chair.

The Vice-Chair (Mrs. Paddy Torsney): I would like to speak.

Mrs. Christiane Gagnon: Yes, but you are the Chairman.

The Vice-Chair (Mrs. Paddy Torsney): Yes, but I would like to clarify something else now.

Mr. Normand.

Mr. Bernard Normand: Please allow me to stress the major point of the brief we have tabled. It is not the question of federal or provincial jurisdiction because we agree with the Quebec coalition on that. What we wanted to highlight is your responsibilities as elected officials of the Canadian population in terms of our taxes. For us, that is the major issue. There is a risk of very serious consequences if we transfer public taxes to the private sector.

One of the youngest MPs in the House has raised questions— whether we agree with him or not—about the political responsibilities of elected officials in a democratic society, and I believe those are questions that are being asked now. Do you, as elected representatives, want to transfer your responsibilities to a private Foundation? We have difficulties in understanding that and I think the project was insufficiently prepared.

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I hope that elected representatives at the federal level will reconsider and make the necessary amendments as a result of the testimony you have heard here. I am sure and confident that you will make the necessary amendments to this Bill.

The Vice-Chair (Mrs. Paddy Torsney): Thank you very much, Mr. Normand. Mrs. Redman.

[English]

Mrs. Karen Redman: Thank you, Madam Chair.

In my riding I have two universities and a community college, and they're very happy with this budget and very excited about the millennium scholarship fund. On the point you raise about government being accountable for public money, one of the other things that came up in my conversations with people from these post-secondary institutions was that they were thrilled to see a reinvestment in research and development.

I'm aware there are post-secondary institutions in Quebec that use funding from those funding councils. One of the things that came out when we were talking to the professors at the local universities was that very high on their list of whether or not they would stay in Canada was the milieu in which they worked and whether or not they had research funding. That sometimes outweighed the size of the salary, if we were competing with the United States. So in a very real way it creates access for those post-graduate students to stay in Canada.

I see this as a very similar exercise, where we are increasing access and creating an atmosphere that will allow Canadian students to go to Canadian universities. If we follow your logic that this is public money and therefore politicians must be directly accountable for it, how do you explain the fact that I haven't heard anybody say anything but good things about the research granting councils? That's dramatically different from what you're proposing we do here.

[Translation]

Mr. Bernard Normand: I am not a specialist on everything in research policy and on the whole question of research funds. However, I can indicate first that that there is nevertheless, in my opinion, an important distinction between the need to improve living conditions for students and something that to me seems much more complex, which is the revenue sources that are likely to help Foundations at the university level, to help the system at the post-doctoral level for teaching and for professors. Personally, I believe that at that level we can clearly see certain combinatory elements of the private and public sectors, as is the case now. There are many universities today that get support from certain private groups in well-defined areas.

I believe we have to show a certain amount of flexibility in this matter. We cannot apply what I said about supporting the living conditions of students to the entire educational system at all levels. That would be too simple. I make the following distinction: the post-secondary education system must first take into account the needs of students and allow access to the millennium scholarships beyond social classes and financial situations. The Bill we are discussing aims at that and I believe we should focus on that.

The question you raise is highly relevant and could lead to other elements but, in my opinion, it is secondary. Personally, I believe that there may be combinations of public and private Foundations at that level. But the position of the ICEA is related to the purpose of the Bill, which is to improve equal opportunity for Canadian students at the post-secondary level.

[English]

Mrs. Karen Redman: It sounds to me like you're agreeing with me that there is a mechanism and a federal role to be played.

I was directing my question to your comments about the accountability of the elected officials and that politicians should be accountable for public money. You're agreeing that the research granting councils work and there is a role for them to play, despite the fact they look quite different from just direct funding through the federal and provincial governments in partnership.

[Translation]

Mr. Bernard Normand: I believe it is a reality we have to take into account. Our goal is not to dream up models of what could be, but rather to start from the reality in North American universities, in Canada especially, and in Quebec.

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Having studied in two Canadian universities, I know very well that in the last few years there has been a certain linking of parts of the private sector in some areas and public sources. Obviously there could be an entire debate on this issue but that is not the subject of this meeting, but I think that certain private companies have an interest in putting money into research. I think there university environments need ways to allow these questions to be dealt with fairly. Here we are in an area that is not as significant as that the right to education of individuals.

Personally, I come from a working environment from which no one went to university except me. I was the first in 1965. It is thanks to the improvement of the financial aid system in our country, in our province, that I was able to go to university. The financial aid system is the basis of everything, and it is what must allow all Canadians, in my opinion, to have equal opportunity according to our Constitution, according to section 15 of the Constitution Act, that outlines, in paragraphs 1 and 2, the question of giving people equal access. Education is one of the most important elements and I believe elected officials will be going adrift if they have no hold on it.

[English]

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

Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you, Madam Chair. Good morning.

I've been sort of quiet in these hearings on Bill C-36. I've been taking it in for a long time, but this morning I managed to stay awake. Sometimes we get the same question repeated. This morning, not for the first time, you took more time in your presentation on the jurisdiction of education rather than the presentation of the need for adult education. That's what I heard.

I represent the riding of Niagara Falls, where there is a university and Niagara College. This college, as a matter of fact, is just being built with some $25 million from the province. I understand we're fundraising some $6 million from the private sector.

If these cooperations were not there with the fundraisers within the private sector, I don't know if we could really do today all of the things we want to do in education.

We're also starting another program in my university, Brock University, in post-graduate work. The private sector is making contributions, and I'm one of those making a contribution. I think some time this week I'll announce that I'll donate $10,000 to that university. Mind you, some people might say there's a reason for it. Yes, there's a reason for it. I think when some of us have a vision that we want to do something, there's a reason.

Let me tell you, sir, if I had been hurting from the people who run those universities....

May I also inform you that the day our budget was announced, both the president of the university and the president of the college were here in Ottawa expecting some good things because they care about education, not the jurisdiction of government. If I had come up to this issue of who has jurisdiction, I surely would not have made the decision to donate even 10¢, because what I care about is the education of people and the betterment of young people today.

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Having said that, I think, Madam Gagnon, we are wide awake in what we're saying. I have been on the finance committee for five years now, and in the last few years I've heard that students want an education. They don't care where it comes from. But I've heard there is more interest in education and more funding for education from one side of the country to another.

We also heard, depending on which part of the country you were in, not to increase the transfer of payments to the provinces but just put it directly into education. The provinces haven't always put those moneys where they've been earmarked.

Yes, we're awake. Yes, we understand where the jurisdiction comes from. Yes, we want to do the best thing we can for the students.

I surely did not come to Parliament in 1993 or 1997 to be told whose jurisdiction it was. I came here to help those who could maybe not help themselves, specifically those like me. I never went to university, sir. That's all.

[Translation]

The Vice-Chair (Mrs. Paddy Torsney): Do you wish to make a comment or not, Mr. Martin?

Mr. Robert Martin (Institut canadien d'éducation des adultes): Please allow me to say one thing. I think that what Mr. Pillitteri just said makes a lot of sense. We have to recognize that there are differences in Canada.

We have to remember that Quebec has had a plan that includes grants as well as loans for the last 30 years. The current plan in Canada only has loans. Therefore there has been work done, made in Quebec. We gave ourselves a financial assistance policy long ago.

We also have to remember that students participate in the management, in the sense that there is co-operation, and has been for a long time, between the Quebec government and the national student associations so that the financial assistance plan evolves over time.

What we have always understood and expected is that the federal government would respect existing agreements. Moreover, we always expected this plan to last, through transfer payments and thanks to Quebec's freedom to set up such a plan.

If Canada and the other provinces now want to change the financial assistance plan, I think that's a good idea. I think that is very positive for all Canadian students. But you have to recognize, after all, that in this country agreements have already been reached and that they must be adhered to. It is in that sense that the work done by the Quebec government must be taken into account, work that has always responded to the needs expressed by the students, and that in fact the Quebec students' federation currently agrees with its government.

We have to be able to make distinctions and take into account experiments that have been tried in Quebec in matters of financial aid. That takes nothing away from what you said. You are right.

We can also recall that each year, when the universities undertake a public funding drive, companies are called upon to contribute. They contribute to the financing of Quebec universities as a whole, without having any right to interfere. So we aren't saying that corporations have no role to play. That was made clear many years ago in Quebec and I believe it must remain so.

The Vice-Chair (Mrs. Paddy Torsney): I would like some clarification on two points. On page two, you have data on tuition fees. Between 1990 and this year, the cost for one year at university in Quebec increased by 300 per cent. Is that right?

Mr. Robert Martin: You said 300 per cent?

The Vice-Chair (Mrs. Paddy Torsney): Yes, because it was $570 and it's now $1,600.

Mr. Robert Martin: Yes, that's correct.

The Vice-Chair (Mrs. Paddy Torsney): So that makes it 300 per cent.

Mr. Bernard Normand: You are quite correct, Madam Chair. There were, up to 1988 and 1989, before the change, tuition fees that were far lower that those in North America and in Canada as such.

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However, if we want to use more reasonable numbers in this matter, we have to say that at that time an important adjustment was made that tripled the amount. Since the beginning of the 90s, since the adjustment, the increase has been comparable to what it has been elsewhere.

That was the turning point. A very important change was made, but after all, you know very well that, on average, tuition fees in Quebec are still lower than those in the rest of the Canadian provinces. For us, that may be the most pertinent fact.

The Vice-Chair (Mrs. Paddy Torsney): On the first page, you say that you are a Canadian group because you work with adult Quebeckers and with the French-speaking population in other provinces. What percentage of this presentation is from people from Quebec and what percentage from people of other provinces?

Mr. Bernard Normand: I will be very honest with you. Our board is made up only of people from Quebec. We are a small institute that includes only about ten staff people and we cannot do what a large organization can do. However, at this time we are doing training work with a group of people, some of which come from New Brunswick and others from Ontario, on literacy and the recognition of acquired knowledge of French-speaking people who ask for our services. It's relatively limited, given our resources.

However, we have always served what used to be called French Canada. The ICEA was created by people. One of its founders was Mr. Claude Ryan, who was Minister of Education. Therefore, the institute has always served, as much as its means would allow it, French-speaking people in other provinces. However, our board does not have members from other provinces and the people from other provinces make up about 10 per cent of our clients. That is very limited, but we have underlined it to show that we are trying to integrate Quebec and Canada in our work.

The Vice-Chair (Mrs. Paddy Torsney): I asked you that question because Mr. Pillitteri and I have a good part of our constituency that speaks French. In our province especially, but in other Canadian provinces as well, people who want to study are saying that the millennium scholarships are a good thing. You represent people from other provinces but you are against the program. It's an interesting point for me.

Thank you both very much for your presentation. I also thank all my colleagues.

[English]

We're adjourned until 3.30 p.m.