HUMA Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 14, 1999

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[English]

The Chair (Mr. Peter Adams (Peterborough, Lib.)): Colleagues, we'll now begin the meeting.

I think you all have the agenda. Our principal item today, pursuant to Standing Order 108(2), is a study on matters relating to the mandate, management, and operation of the department or departments of government, which are assigned to them from time to time by the House.

Today we're dealing specifically with the Canada Millennium Scholarship Foundation.

You will notice that under other business there are two items, one dealing with the Centennial Flame Research Award. You can read that. That's an item that annually comes before this committee. I don't think it should take us very long. The second item is the report of our Sub-Committee on Children and Youth at Risk, and we'll deal with that if we have time.

On your behalf I would like to apologize to our witnesses. I hope you understand that most, if not all, members were tied up in the House of Commons. Otherwise, we would have been here earlier. We're sorry you've had to wait.

Our witnesses are Norman Riddell, Jean Lapierre, and Alex Usher of the Canada Millennium Scholarship Foundation. Gentlemen, we're in your hands. I would assume you have a short presentation, and that would be followed by questions from the members. Welcome.

[Translation]

Mr. Norman Riddell (Executive Director and CEO, Canada Millennium Scholarship Foundation): Thank you, Mr. Chairman.

Ladies and gentlemen, members of the Committee, I would first like to thank the Chair of the Committee, Mr. Peter Adams, for giving us this opportunity to provide an update on the Foundation's activities. As you know, following our press conference last week, Foundation directors approved the first series of scholarships. So, this would seem to be an appropriate time to present an update with respect to the Foundation's activities.

[English]

It has been just over 18 months since Parliament passed legislation creating the Canada Millennium Scholarship Foundation. The Government of Canada created a foundation as a response to a very real problem that had been building for several years. In 1998 the Government of Canada estimated that the average student who graduated from a four-year program and had borrowed to finance his education had taken on approximately $25,000 of debt. As the Minister of Finance said in his mid-year fiscal update in 1997, it is simply not fair to Canada's youth to ask them to begin their careers with this kind of burden on their shoulders.

As you know, the foundation was endowed with $2.5 billion by the Government of Canada. It was given two tasks: first, to invest its funds profitably and safely; and, second, to give away over a period of 10 years the entire sum of $2.5 billion plus interest to the students in the form of scholarships.

[Translation]

The Foundation has only one vocation, which is to help students. That is why the vast majority of students and their parents understand the Foundation's goals and are confident that it can achieve those goals. We find it very encouraging to see how favourably Canadians have reacted to the Foundation's creation and their positive perception of our organisation. That can only serve our current and future efforts to ensure that Canada's youth are able to access what they need to pursue their education.

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Our legislation sets out the broad criteria for granting scholarships. Up to 5 per cent of the amount set aside for these scholarships may be awarded on the basis of merit alone. Those are our awards of excellence, that the Foundation will be discussing in January.

The Foundation's general awards program is funded from the rest of the budget allocation, which amounts to $285 million this year. That amount must be awarded to students on the basis of financial needs and merit, financial needs being an essential condition to be met as part of the needs assessment.

[English]

Concerning the delivery of the foundation's general awards, I would like to point out that when the foundation was initially set up, it was envisioned that it would begin delivering these scholarships in the fall of 2000. I'm very happy to tell you today that we have exceeded that goal by eight months. The first 70,000 general awards scholarships, worth almost $215 million, have already been approved by the foundation's board of directors. The first cheques will be delivered to students in just over three weeks, nearly coinciding with the millennium. The letters notifying the students of this fact are in the post as of this morning.

This success would not have been possible without the cooperation of our provincial and territorial partners. Over the course of the spring and summer of 1999, the Canada Millennium Scholarship Foundation concluded agreements with nine provinces and three territories for the delivery of the scholarships. The provinces, each of which receives a share of our awards based on its share of the population of Canada, help us via these agreements to identify those students most in need so that they may receive scholarships.

The agreements also detail the format of the awards in each province. The format varies slightly from one jurisdiction to another. The foundation designed its program to be adaptable to the different provincial programs in order that it might meet the requirement of its law that it deliver its program in a manner that complements existing provincial assistance programs to students wherever possible. The result is a national program with regional variations in its application.

A major benefit of these agreements has been to keep the foundation's administrative costs very low. Since the provinces provide us with the data we require to determine who is needy, we are not required to do our own needs assessments. This saves us tens of millions of dollars a year. Of course, any money we save in administration can be given in the form of scholarships. When the Government of Canada originally set us up, it was expected that our costs would be between 10% and 15% of our program costs. I'm very happy to inform the committee that we're keeping our administrative costs under 4%.

[Translation]

As you know, there is one province with which we have not yet succeeded in signing an agreement. I refer to the province of Québec. Over the past six months, we have tried to come to an understanding with Quebec, while at the same time ensure that our program complies both with the imperatives of the legislative framework and the Government of Quebec's objectives. Specifically, we have tried and, I believe, succeeded in ensuring that our offer met the terms of the unanimous resolution passed by the National Assembly in May of 1998, consistent with delivering the Foundation's scholarships. The talks are continuing with the Government of Quebec, and we are hopeful that an agreement will be reached with the Government of Quebec in the near future.

[English]

Eighteen months ago the Government of Canada entrusted the foundation with the job of helping young Canadians invest in the knowledge and skills they need to help themselves and the country to succeed in the next century. To date we have achieved some success. We have put out our awards faster than anyone expected and for less money than anyone expected. We have done so because of innovative financing arrangements and partnership agreements. As a result, 70,000 young Canadian students will soon be better off than they were a year ago, and over the next 10 years over a million students will benefit from this program.

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Exactly as the Government of Canada intended, these scholarships mark Canada's celebration of the millennium and represent an excellent way of investing in our youth.

[Translation]

Thank you, Mr. Chairman.

[English]

The Chair: Thank you very much, Norm.

[Translation]

Would your colleagues like to add anything? Not for now?

[English]

I have Maurice Vellacott, Bryon Wilfert, and Paul Crête on my list.

Mr. Maurice Vellacott (Wanuskewin, Ref.): This is addressed to whichever one of you wants to respond. As a father with college-aged students and as a member of Parliament who has constituent work that involves students, I'm wondering—and I'm hoping it's not a naive question—whether this millennium foundation is in effect the Canada student loans program by a different name. In the province of Saskatchewan it's run by the Department of Post-Secondary Education, which does the assessment, and they get a portion of the grants. Now it's millennium scholarships. So fill me in. Is this a shell game going on here? What's the deal?

Mr. Norman Riddell: It's not a shell game. There's a major change. What we provide are grants, not loans. When we set up our program, we had a choice. We were instructed by our legislation to provide scholarships to people who are in need. In order to do that, you have to know who's needy. In order to know who's needy, you have to have a process for doing that. We looked at doing that ourselves. The cost of that would have been several tens of millions of dollars each year.

We noted that the provinces already did that work. They assessed the need of young Canadians who were studying. So we made the decision that we would accept the provincial needs assessments as our own. That meant the criteria for determining need were slightly different from one province to another. They weren't exactly the same from one province to another. But we thought that was a small cost to pay to save the tens of millions of dollars I mentioned, because of course anything we save we can give away in scholarships.

So the province assesses the need, as it does for the CSLP or the provincial student loan program. It forwards us the names of the neediest students who meet our criterion of merit. Our merit criterion is quite simple: you must have succeeded 60% of a year of post-secondary education. The reason for that requirement is that our research is showing us that a rather high percentage of young Canadians who begin post-secondary education drop out. Since we don't have enough money for everyone—$2.5 billion is a lot, but it allows us to do only about $300 million of scholarships a year—we're concentrating our aid on the people with the highest need, roughly one-fifth to one-sixth of the 500,000 to 600,000 young people who receive financial assistance from the public program in the provinces and territories.

Mr. Maurice Vellacott: So for the province of Saskatchewan, using rough numbers, let's say 1,000 came forward on a needs assessment basis. There would not be millennium scholarships for all of those. You may have exact numbers for Saskatchewan. What you're saying is that we could take a percentage of that.

Mr. Norman Riddell: If we can take the province of Saskatchewan as an example, the province of Saskatchewan has an allocation of $9.975 million. There will be 3,870 scholarships given out in the province of Saskatchewan. The Government of Saskatchewan forwards us the names of the 3,870 neediest students who meet our criteria. We then award scholarships to those people.

The arrangement we have with Saskatchewan is that the Saskatchewan government will continue to provide the financial assistance it has always provided to students in the form of loans and bursaries. At a certain point, probably in the month of March, the province will then receive a cheque from the foundation, and it will pay down the loans that have been issued to the students at their financial institutions. So the result is that the student is better off by the amount of our scholarship.

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Mr. Maurice Vellacott: With the Canada student loans program in the past, then, there was not forgiveness under that. That's what you're saying is the big difference now.

Saskatchewan is one of the provinces that has a grant scenario, too, as you know. I guess I'm trying to figure out how a person would benefit in the province of Saskatchewan. They might end up getting it in grant instead of millennium funds.

Mr. Norman Riddell: Can we take a specific example? I'll use round figures.

Suppose Saskatchewan had assessed your need at $10,000. That meant they decided you lacked $10,000, because your program was going to cost $10,000 more than what you had as money available to you. It would give you a substantial portion of that $10,000 in the form of loan and bursary. In Saskatchewan, the cheques are issued basically monthly. Those cheques will go out as before. Those cheques represent a combination of grant and loan money. Of course, there's a loan building up at the bank. The student's debt builds up at the bank. The student isn't required to pay that debt until they finish university. While they're studying, the Government of Saskatchewan pays the interest on the money. What happens with the arrival of the millennium scholarships is that during the course of the year of study, the amount of the foundation scholarship to that individual is sent to the bank, reducing the loan the student has already taken out at the bank as part of his student loan.

Mr. Maurice Vellacott: So they find that out after the initial assessment. It's six months in, at the end of the year, or that kind of thing.

Mr. Norman Riddell: In terms of the way the student finds out, first of all some of the students who will receive the scholarships will not know they've applied for them. You apply automatically. By virtue of applying for financial assistance in your province, you automatically apply for our scholarship. They will receive a letter. I mentioned that the letters are in the post this morning, and I hope they'll get them before Christmas. The letter will tell the student they have received a millennium scholarship in the amount of $2,000, $3,000, $4,000.

In the case of Saskatchewan students, the letter will go on to say that a cheque will be sent to your financial institution in the month of March to pay down your student loan that you have been living on since September. The student will therefore be better off by the $2,000, $3,000, or $4,000.

Mr. Maurice Vellacott: Thank you.

The Chair: Colleagues, I'd like to move on. We're hardly in normal circumstances, so I think we're going to really have to keep it moving today. I have a long list. I have Bryon Wilfert, Paul Crête, Dale, Libby, Carolyn Bennett, and then Rey Pagtakhan.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Mr. Chairman.

Gentlemen, I understand the arrangements are different in each of the provinces. One example would be British Columbia, where there is a particularly good arrangement between the British Columbia government and ourselves in terms of the program. I wondered if you could elaborate on that specifically.

Also there's a second question, Mr. Chairman. In terms of the awareness for students in the country to understand how they could apply, could you maybe just let us know what the procedure is? You talked about a needs assessment basis. Suppose someone were to come to our offices to ask about it. Could you elaborate on that for us?

Mr. Norman Riddell: It's true that the arrangements differ slightly from one province to another. There are basically two operations here that are important to keep in mind. The first is the use of the foundation's money. The use of the foundation's money is fairly consistent across the program. In all cases, it's a grant, although the grant can vary between $2,000 and $5,000, depending on the province. The grant is given in some provinces or territories, partially or totally, in addition to all existing assistance. It's on top of everything. In other provinces, the money of the foundation is provided instead of a loan that you would have received from the province, or it is used to pay down a loan that the province has already given you. In all cases, the foundation's money is used to improve the financial situation of the student. That's operation one.

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The second operation is what happens to the money the provinces save as a result of the foundation coming into the picture. I mentioned earlier that while the student is studying, the provinces pay the interest on the money. When the student ceases to study, the loan is consolidated at the bank and the province pays a risk premium to the bank in order that the bank assumes the risk of collecting the money. If we pay down those loans, that's money on which the government doesn't have to pay interest. That's money on which no risk premium will ever be issued, so the province saves money. The money that's saved is provincial government money, it is not the foundation's money. It's money that the province would otherwise have spent, but that money belongs to the province. However, the foundation was interested in getting the maximum benefit for students from its program, and I'm happy to say that all the governments with which we have signed agreements have agreed to reinvest the money they save for the benefit of the program.

If I could come to British Columbia, I'm particularly happy about the agreement there. I think the government is happy about it. Basically, we invested $36 million in the province of British Columbia. As a result of that, there's a $36-million replacement of student loans, basically. The Government of British Columbia saves money. The Government of British Columbia uses all its savings, plus roughly an additional $5 million of its own money, to create a scholarship program in years one, two, three, and four in British Columbia. That's what has happened in what I take it is your part of Canada.

The Chair: So every student in B.C. gets one of these awards?

Mr. Norman Riddell: They don't necessarily get our award. If they don't get our award, they get an award that the B.C. government can pay for as a result of the savings we've generated in the province.

Mr. Alex Usher (Senior Policy Adviser, Canada Millennium Scholarship Foundation): Technically, if you are in your first four years of post-secondary education and your need is in excess of $105 a week, the entire provincial portion, or 40% of your award, will come as a grant. The neediest 10,000 or 11,000 of that group will get millennium awards and the balance will get an award from the province.

Mr. Norman Riddell: With respect to your second question about how you apply—

The Chair: Norm, we should probably just speed it up a bit. We're all very interested, but I have a list here of about ten members.

Mr. Norman Riddell: Okay, I'll do this quickly.

Application is automatic. By virtue of applying for financial assistance in the province, you do that. We did that because we didn't have time to let everybody know we exist and then get them all to apply to us. We are running a campaign to let people know they have applied. The fact that 100,000 people will get scholarships I think will be good publicity, and there will be continuing interest in the program.

The Chair: Paul Crête, Dale Johnston, and then Libby Davies.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, B.Q.): My interest is the current status of your negotiations with the Quebec government. The Government of Quebec has signed agreements with respect to lowering student debt loads with both the university and college student federations in Quebec. The latter sent you letters saying they were very happy with a scheme whereby the loan amount would go down by 25 per cent. It seems to me that all the conditions have now been met and that we should be able to finalize this process.

Is the Foundation now introducing new conditions that would explain the fact that no agreement has yet been reached with the Government of Quebec? How much distance is there between the positions of the two parties and what is still outstanding? Have new conditions been stipulated? What aspects are still outstanding?

Mr. Norman Riddell: Thank you. The Foundation's position has not changed. We want an agreement that is clear and provides a benefit to those receiving millennium scholarships. You referred to a letter that Mr. Legault sent to Ms. Stewart and to a document signed by Mr. Legault that was circulated to students in Quebec.

Mr. Paul Crête: Yes, to the letter Mr. Legault sent to Ms. Stewart, as well as the letters signed by the students themselves.

Mr. Norman Riddell: Yes. We are aware of that document. We have some questions regarding its interpretation. As you know, unfortunately, the Government of Quebec has not agreed to communicate directly with the Foundation. That is the reason why it takes a little longer to obtain the needed clarifications.

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All I can tell you this morning is that negotiations are continuing in spite of that problem, and that I am optimistic we will soon be able to come to an agreement with the Government of Quebec.

Mr. Paul Crête: I was asking you to explain in what way your position and the Quebec government's position differ, so that we can have an understanding of what is lacking. I certainly understand your problem, but I am sure the Government of Quebec has no need to negotiate the issues directly with the Foundation. At the same time, this is not a matter I am anxious to revisit.

I would simply want to know what obstacles still remain now that the student federations have stated in writing that the proposed solution is satisfactory. They were asked for their feedback on that a few months ago, and they responded. As for Mr. Legault, he sent on the documents to the minister, who then passed them on to you. Are there still issues to be resolved or are new conditions going to be added in these negotiations?

Mr. Norman Riddell: The negotiations with Quebec have been ongoing for several months, and we have agreed on many items. First of all, you again refer to the fact that the Government of Quebec is refusing to deal directly with the Foundation. Although that does complicate things somewhat, the Foundation has accepted that position and has since found a way of communicating indirectly with the Quebec government.

The National Assembly requested a share for Quebec, which will be based on demographic parameters. Within its annual allocation, the Foundation sets aside an amount for recipients identified by the Government of Quebec, based on the population split between Quebec and the rest of Canada. So, we agree on that.

Quebec has also asked, via a resolution passed by the National Assembly, that potential scholarship recipients be selected by Quebec. The Foundation has agreed that Quebec should receive students' applications for financial assistance, carry out the needs assessment and identify those that are eligible for a millennium scholarship. So, we agree on all of that.

Mr. Paul Crête: Yes, and that will considerably lower your administrative costs.

Mr. Norman Riddell: Indeed, and the Foundation is agreeing to pay the Government of Quebec for those that contribute to our program, just as it is paying the other provinces.

Finally, the National Assembly's resolution asked that Quebec avoid duplication when awarding these scholarships. The Foundation has agreed that Quebec can award these scholarships. So, we also agree on that point.

Mr. Paul Crête: Yes. What I'm interested in are the things still separating the parties.

Mr. Norman Riddell: What we have been attempting to ascertain, since about the month of June, is just how the Foundation's funds will be used. The Foundation was established for the sole purpose of helping students, and we want to ensure that when our money is passed on to the province, the end result will be an improvement in the financial status of those students who receive scholarships.

In his letter of last week, Mr. Legault spoke of lowering students' debt levels by reducing the loan cap. I see that as a promising suggestion. That's why the Foundation undertook to examine that proposal. However, we need some additional details, which we are now attempting to obtain. They are forthcoming but the process is slower than it would normally be.

However, I can say this morning that I am optimistic about the possibility of reaching an agreement with the Government of Quebec, just as we reached an agreement with twelve other governments in Canada.

Mr. Paul Crête: With respect to the additional details you require, are you seeking this information from the Government of Quebec or from the university community?

Mr. Norman Riddell: That information should normally be provided by the Government of Quebec. I spoke to the President of the FEUQ, Mr. Daniel Baril, who told me the government had that information and that he himself had seen it. We are simply asking to check the figures to ensure that everything is as it should be.

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Mr. Paul Crête: Is that the last remaining obstacle? Will others crop up once that issue has been resolved? What will happen to students who are enrolled in a vocational training program, are in their first year of CEGEP or are studying at the graduate level?

Mr. Norman Riddell: You probably know even better than I, given that the legislation creating the Foundation was passed by Parliament, that the Foundation's funds cannot be awarded directly to graduate or secondary level students.

As I mentioned earlier, there are two operations: first of all, the use of the Foundation's money; secondly, the use of any money the province is able to save as a result of Foundation funds being made available to it. The Foundation's money must be used to provide scholarships to those students the Foundation is authorized to assist, and any savings Quebec realizes as a result of our program being in place will be used to award scholarships to secondary and graduate level students.

The Chair: Paul, one last brief question.

Mr. Paul Crête: Fine.

Would you agree that the issues as regards secondary level, vocational program and first year CEGEP students is basically the result of a difference in the structure of the province's educational programs and the fact that Quebec has a completely distinctive system for which no provision was made in the legislation?

Mr. Norman Riddell: As you know, the Foundation has been working for some ten months now with twelve and even thirteen different governments. I have noted as many variations in terms of programs as there are provinces. We try to adapt our program to the requirements and specific circumstances of the province or territory involved. We have succeeded in doing so in our dealings with twelve governments in Canada. And we hope to achieve the same result with the thirteenth government very soon.

[English]

The Chair: Dale Johnston, Libby Davies, Carolyn Bennett, Rey Pagtakhan, and then Andy Scott.

Mr. Dale Johnston (Wetaskiwin, Ref.): Thank you very much for your presentation.

I think I heard answers to several of my questions when you spoke to my colleague, but one of the things that wasn't quite clear was the 60% that you referred to. Is that 60% the academic standing of the student, or is it 60% completion of their studies?

Mr. Norman Riddell: The 60% refers to completion of courses. Suppose you carry five courses in a normal year at university. If you've passed three courses at any time in the past, you are now eligible for the program. The reason for this requirement is that until a student has demonstrated that he or she can do post-secondary work, there's a very high risk that he or she is going to drop out. As I explained, we don't have enough money for everyone, so we wanted to concentrate our money on the students who have shown us by a simple passing of these courses that they're able to do work at that level.

Mr. Dale Johnston: In effect, that's an academic standard. Is that the only academic standard you place on this?

Mr. Norman Riddell: There's another. You have to be admitted to an institution, but you wouldn't be studying otherwise.

Ms. Carolyn Bennett (St. Paul's, Lib.): And that's an academic institution.

Mr. Dale Johnston: I guess that pretty much goes without saying. We could debate whether that was a good benchmark or whether it wasn't, but that's how it is.

You also mentioned that administration costs amounted to about 4%. From my calculations there isn't 4% of the population in Saskatchewan. Therefore, more money is used up by administration than is paid out to all of the students in Saskatchewan. It's about $8.6 million in administration. Is that right?

Mr. Norman Riddell: Actually, I said my administrative costs were under 4%. My budget is roughly the size of the Saskatchewan allocation. That includes paying for the money to be managed, because you'll appreciate that the management and investment of $2.5 billion requires a certain amount of work. That includes payments we make to the provinces for the work they have accepted to do for us, because it seems reasonable that since they're saving us money we should pay them something for the work. There are substantial payments there that aren't reflected in the staff we have in Montreal. We have a staff in Montreal of basically 13, 14 people to run a program of $300 million a year.

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Mr. Dale Johnston: Do you have any contract help? You mentioned the administration of these funds. Do you contract anybody to administer the funds?

Mr. Norman Riddell: Yes, we do. For example, we don't manage our own money directly. We ran a competition from a number of investment management firms to identify three firms who manage our investment portfolio. So yes, we have three firms that do that. Our informatic work is done by a company, and we use a legal firm in Montreal to provide legal work for us. Those services are, in a sense, contracted out. We acquire them outside because we don't think it's efficient or cost-effective to carry that kind of cost inside.

Mr. Dale Johnston: I have just one further question. I wasn't clear at what stage these payments are made to the students. Could you just clarify that for me, please.

Mr. Norman Riddell: It depends a little on the jurisdiction, but generally speaking students will receive a notification that they're getting a scholarship in December. Then, in January, if they are receiving money directly from the foundation or directly from the province, they will receive their cheques. If their loan is being paid down, because they have already received the money, the payment to the financial institution may be delayed as much as to the month of March. But it doesn't make any difference to the student. He is not paying the money back and he's not paying interest on it, but his financial situation will be improved probably by the end of the month of March.

Mr. Dale Johnston: But they have to have completed their studies? They don't get this in their first or second year, surely, do they? They must have to have completed their studies by the time...do you know what I mean?

Mr. Norman Riddell: It's 60% of a year, once.

Mr. Dale Johnston: They could apply in the first year?

Mr. Norman Riddell: Yes. If you've done three university courses—say you did three summer schools and you passed all the courses, you are now eligible for the program from the beginning of the year. All we wanted was some proof that you could do post-secondary education.

The Chair: Thank you very much.

So it's Libby Davies, then Carolyn Bennett, Ray Pagtakhan, Andy Scott.

Ms. Libby Davies (Vancouver East, NDP): Thank you, Chairperson. First of all, I'd like to thank you for coming today. It's actually very helpful to get basic information about the millennium fund, because I haven't been aware of just exactly how it operates. It's just good to find out some of the nuts and bolts of it.

I want to address my question to the bigger picture about post-secondary education and where the millennium fund fits. Just talking about B.C., I don't know if you're aware of a report that came out just about a week or so ago. It shows the federal program spending devoted to post-secondary education has actually declined by 50% over the last 20 years. Just to put this in the context of where we are and what I think is really a crisis in post-secondary education, that's what we're looking at, a 50% reduction in federal program spending.

The impact on students is obvious, but just to put some numbers to it, in the past nine years average tuition fees have increased by $1,850, which is 119%. I think most of the people around this table who went to school never faced anything in terms of that kind of debt load and the anxiety of what that produces for students.

Now the millennium fund, as we know, is $2.5 billion, but from what I understand there have been general estimates that something like 750,000 students in any given year are in financial need in this country. So the fact that we have 70,000 who are getting some form of assistance through the millennium fund is sure better than nothing, but we're coming in at about 8%, certainly below 10%.

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I have a couple of questions. Do you really feel you are meeting the goal of improving accessibility? Accessibility has a huge amount to do with financial accessibility, particularly for first-year students. I know you're saying you want some demonstration that a student is committed and actually passing their courses. But it's often the first year that's a very critical one.

On the requirement of the three approved courses, I think most students wouldn't have done the summer school thing, so you're really saying they're ineligible in their first year, by having to have those first three courses.

Second is the situation of reinvestment, or not, by provinces. Obviously, in B.C. we've had a very good situation, where our province has been putting money back into post-secondary education. What about Ontario? I read one story in the Toronto Star where they were saying that with the $800 million in cuts they were bringing in, part of it was reneging on their promise to reinvest in education as a result of getting money from the millennium fund. I would like you to speak to that.

Thirdly, could you tell us how much the chair makes and what the directors of the millennium fund make?

Mr. Norman Riddell: That's quite a number of questions. Let me try.

First of all, on what we are doing, it's true our figures show there are roughly 390,000 students who get funds from CSLP. Another 110,000 in Quebec get student loans. So a total of 500,000 people need money, according to the mechanisms that are in place to measure need.

I mentioned we'll help about 100,000 of them. We have a little more than 70,000 letters out now. If we can sign our agreement with Quebec, as we hope to, we will add another 24,000 or 25,000 people to the list, making it 95,000 people. So we're able to provide substantial assistance to roughly one-fifth of the needy population.

You asked me if that's the whole solution. Of course it's not; it's a contribution. If we had been given more money, we would help more people. But we have what we have. We have to manage it prudently so it will last over the ten years. I think eventually you're going to see us helping more than 100,000 people a year, but with the money I currently have, I can't see being able to go to a much higher percentage of the 500,000 needy people.

On accessibility, because we didn't have enough money for everyone, we decided to concentrate the money on the neediest because those populations are the most at risk. You have single mothers and people with dependents. You have children from families where the parents didn't get a university education and where the parents are maybe unemployed. Certainly the parents are not able to contribute to the education of the child. This is the population at risk.

We want to send them a message that “If you'll take the effort to give your time and borrow some money to go in, over a four-year period we'll be able to make sure you get out with roughly $15,000 less debt than you would otherwise”. They won't get out without debt, but they will get out with a lot less debt.

Ms. Libby Davies: You said $15,000?

Mr. Norman Riddell: We have the ability to give people up to $15,000 over four years. So if the average debt in your province is $25,000, the potential is there for the neediest students to take that debt down to $10,000. It would be nice if it were less, I suppose, but it makes it a lot more manageable when you finally go out into the workforce.

The message we're sending to people is it's not going to be as bad as they think. They're not going to be in debt for the rest of their lives because they got the post-secondary education they really needed. They're going to have a debt, but we think they will be able to manage it.

You asked about reinvestment.

Ms. Libby Davies: Ontario.

Mr. Norman Riddell: We have an excellent agreement with the British Columbia government, of which we're very proud. The Ontario government made a similar commitment. Like you, we saw stories in the Toronto Star. We contacted the Government of Ontario about that and received assurance that the Government of Ontario intends to fully respect the promise it made to the foundation. Minister Johnson signed a letter to the foundation. Until proof to the contrary, I believe the Government of Ontario intends to fulfil its commitment to reinvest its savings for the benefit of the students.

Ms. Libby Davies: Okay. What is your answer to my last question?

Mr. Norman Riddell: Your last question was on the honoraria for my chairman and my board members. Yes, the directors of the foundation receive an honorarium in line with what is given to people who participate in the management of other organizations. Some of them accept it and some do not.

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Ms. Libby Davies: Can you tell us how much that is? I don't want to know who accepts it or not, but what is the honorarium paid to directors? Is it the same for the chair, or is it more?

Mr. Norman Riddell: The chair gets the same as everyone else; I didn't say the chair accepted it. It's $5,000.

The Chair: Okay. We will move on to Carolyn Bennett, Ray Pagtakhan, and Andy Scott.

Ms. Carolyn Bennett: I am just interested in the means test. With the escalating costs of going to university, I think a lot of people worry about the means test keeping up with how much it really costs to go to university, and particularly to go away from home to university. Is it the same means test that's being used presently for the Canada student loans program?

Mr. Norman Riddell: Yes, basically the means test the province applies for its own awards is the means test the foundation is using. I'm sure if you asked any student they'd tell you the system wasn't perfect. But students can lobby their governments to get these needs assessments improved.

Ms. Carolyn Bennett: If you have five kids from one family in university—

Mr. Norman Riddell: If you have five kids in university, I don't think the parental contribution would be particularly high, so those students would qualify and have need recognized more easily.

The point here is, do you think a foundation could create a system in eight months that would work better than the admittedly imperfect systems the provinces have been running for 25 to 30 years? We don't think so.

Secondly, we don't think it is a good use of money to spend $30 million a year doing that when we can get access to this information by paying the provinces roughly $2.5 million a year, thereby saving ourselves a lot of money, which we prefer to give away to students rather than spend on administration.

Ms. Carolyn Bennett: Will you be participating in the review that's going on, in terms of needs assessment?

Mr. Norman Riddell: In the agreements we have with the provinces, we accept their needs assessments. But we have ongoing discussions with the provinces and the students about how this program works, and we're all interested in improving it as it goes on.

Ms. Carolyn Bennett: Okay. I guess there was a certain feeling when it was launched, obviously, that need was more important than merit. But also there might be some other benefit that would come from encouraging students to explore Canada and take their university training in other provinces or in another language. Is there any incentive for that in your program?

Mr. Norman Riddell: One thing that was very important, partly because you put it in the law, is there can be no restriction on the mobility of the foundation's money. If you win the money out of the New Brunswick allotment, you can use it in Quebec or British Columbia, and vice versa. That is fundamental, and every province has agreed to it.

But we've done better than that. Partly because of the arrival of our money, provincial money is becoming increasingly portable as well.

Ms. Carolyn Bennett: Thank you.

The Chair: It's Rey Pagtakhan—and colleagues if we could keep it fairly short—and then Andy Scott.

Mr. Rey D. Pagtakhan (Winnipeg North—St. Paul, Lib.): Question one, when you reviewed the first-year eligibility, why did the foundation not consider the standing on high school graduation as a basis for the likelihood of handling the university load?

Mr. Norman Riddell: The standing in high school is not something on which we can easily have data. It is not something the provinces would have had. We would have had to go to another database, if you're talking about different types of standing.

The fact that a student has been admitted to university obviously indicates they've completed enough secondary school to get into a post-secondary institution. But the research shows that people who get into post-secondary institutions, which means they've passed their high school at least to a certain extent, are dropping out in their first year at a rate of 20% to 30%.

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As I mentioned, we don't have enough money for everyone. Research has shown that if the student can get two or three courses under his belt, the chances of their dropping out are reduced drastically, and they go on to finish. That's why we have this rule.

Mr. Rey Pagtakhan: Of the proportion that drop out, how many of them are poor and how many are not?

Mr. Norman Riddell: I'm sorry, I can't give you accurate information on that subject.

Mr. Rey Pagtakhan: Is it possible, then, if the number of dropouts is higher among the poor, that the very system is unfair to the poor and thus not addressing the very basic question for which a scholarship has been created? Is it a logical inference to make at this point?

Mr. Norman Riddell: It's a possible inference. I'm not sure it's a proved case. Remember, all our scholarships are going to the most needy. We are not providing scholarships, in large part, to the middle class.

Mr. Rey Pagtakhan: I realize that.

Mr. Norman Riddell: Why do people not succeed at university? There are many reasons. We wanted to ensure, given that we had limited resources, that we were putting our money on the people who have shown they do, as research has shown, carry on.

Mr. Rey Pagtakhan: On the second point, are there any distinctions made between university and community colleges?

Mr. Norman Riddell: There is no distinction.

Mr. Rey Pagtakhan: None whatsoever.

Mr. Norman Riddell: None. We believe the student makes the primary investment. He gives up his time, he gives up working, he gives up a paycheque, invests a lot of his own money, probably some of his parents' money, and borrows some. We're providing only some assistance. Therefore, it is entirely right that the student decides what institution he goes to and what program he studies.

Of course, the corollary to this is that the student accepts responsibility for the choice he or she makes.

Mr. Rey Pagtakhan: The last question is with regard to students. Are these limited to Canadian citizens and landed immigrants, or are foreign students eligible?

Mr. Norman Riddell: It is limited by law, the law you passed, to Canadian citizens and landed immigrants.

Mr. Rey Pagtakhan: Thank you, Mr. Chair.

The Chair: Andy Scott.

Hon. Andy Scott (Fredericton, Lib.): Thank you, and thank you very much, too, for not telling me to do it quickly.

Voices: Oh, oh!

The Chair: I knew I forgot to say something.

Mr. Andy Scott: First of all, I have to say I admire the delicate way you expressed the students' sense of the adequacy of the student loans program, that they would tell you it “isn't perfect”. I'm trying to imagine the placards outside my office. I don't remember any that said the system isn't perfect.

Voices: Oh, oh!

A voice: Please, sir, may we have some more?

Mr. Andy Scott: I know the students are going to get more money if we pay down the debt, but there will also be money in the hands of the provinces as a result of that, because they're guaranteeing these loans. They're paying default interest, I'm sure, and so on. What assurances do you have that this money will stay in the system? I understand it's not dollar for dollar, but there would be some savings, as a result of this, to the provinces. That's my first question.

The second question is with regard to whether an application is refused by a province on a basis other than need. For instance, if you have an outstanding loan against the system that you have not paid, you may be ineligible for more money. You still have need, but you're not going to get through the system in terms of the province. Given that we're relying on the province's assessment, what happens then?

Finally, what progress are we having in terms of attracting private sector interest? I know that's one of the long-term objectives of this exercise.

Mr. Norman Riddell: We have written commitments from all the provinces and territories with whom we signed agreements to the effect that the money they save will be reinvested for the benefit of students. That is a written commitment normally signed by the Minister of Education. We will be monitoring that, and the provinces are aware that we will be doing research on this. We will probably do it with the help of student organizations in the country.

It is true that the provinces do refuse applications for student financial assistance to people who have defaulted on their loans or made fraudulent applications in the past. Because we work in an integrated way with the provinces, our program is not available to these people either.

With respect to the private sector, you, Parliament, provided in the law that we could accept contributions from private citizens or corporations. You have given us charitable status, so we're able to issue income tax receipts to people who make contributions.

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We have concentrated our energies, as you might expect, on getting out the first awards for January 2000 in order to meet everybody's objective of trying to celebrate the millennium by making a major investment in young people.

I've been very surprised. Although we haven't solicited money, people have come to us to talk about it, and it's interesting who comes. It isn't necessarily the great big corporations. Individual Canadians are interested in doing something, and not something big, but they don't know how to do it themselves. They can come to a foundation and say they're interested in giving, say, three $5,000 scholarships a year for the next ten years, and ask for help.

So I believe we're going to play an important role in empowering fairly ordinary Canadians to get into the business of investing in the future of our youth.

Mr. Andy Scott: Thank you, Mr. Chairman.

The Chair: Colleagues, I have one request for a second round. I have no objection to that, but I know we started late. I also know that things are awkward in other committees and in the House of Commons.

Maurice.

Mr. Maurice Vellacott: You made a comment about some paying down their loan but some getting it directly in January. Did I understand you to say that? That is, if they get a cheque and want to go out and buy a hotrod or whatever, that would be possible.

Mr. Norman Riddell: In certain provinces—Alberta, to name one—the student will receive money that the Alberta government will pay them from money that comes from the foundation instead of a loan they would have otherwise received.

Suppose you're John, going to the University of Alberta, and you're a resident of Alberta. You received an amount of money in September that was a loan from your bank. You were going to normally receive a second payment on your loan in January. You will not receive a second payment from your loan in January; you will get a cheque for an amount of foundation money, which will be a grant.

Now, the university will be there to take part of it away from you in tuition fairly quickly, I suppose, but....

Mr. Maurice Vellacott: Theoretically, you could default on the loan, too, I suppose. If they chose to play it that way, I guess they could take that money and run.

Mr. Norman Riddell: There is always that risk. Obviously, if they default on the loan they won't be back for a second round.

Mr. Maurice Vellacott: Right.

Mr. Norman Riddell: Again, once people have demonstrated that they're able to carry post-secondary education, they normally stick fairly seriously to the programs.

Mr. Maurice Vellacott: Would there be any reason why, instead of a loan from the bank...? I guess we're trying to do it so that they get money, at that point. Can't it go to the bank or to the institution?

Mr. Norman Riddell: It could have gone to the bank, but frankly, if you get a $3,000 cheque from the bank because they've now loaned you the money, you can waste that money just as easily as you can waste the foundation's money.

Mr. Maurice Vellacott: That's true.

Mr. Norman Riddell: I don't think we can control everything a student does with his money.

The Chair: Maurice, thank you very much.

Again, I want to apologize to our witnesses for the late start. I hope you do understand; it was out of our control.

Jean Lapierre, Norman Riddell, and Alex Usher from the Canada Millennium Scholarship Foundation, we appreciate your presentation, gentlemen, and the frankness of your answers. I for one am glad you're ahead of schedule. I was particularly glad to hear that you've been able to use, as it were, more of the money for the scholarships than was originally anticipated. I'm also pleased that you are thinking ahead as to what the future of the foundation might be.

As chair, perhaps I could ask you to supply us with copies of your annual report in numbers sufficient for all members. I would be certainly very glad to circulate them to my colleagues, who are, as you can see, very interested.

Mr. Norman Riddell: We have some copies of the annual report and the pamphlet. We'll be happy to hand them out to the extent that we have copies. I believe each MP received a copy, but for those who have not yet received one, we'll be glad to provide one.

The Chair: Given our system here, I think it would be useful if you could send us a bunch and then I could circulate them. Thank you very much.

Colleagues, let's move on to other business. The first item, as you can see, is a motion regarding the Centennial Flame Research Award. It's a routine motion, I understand.

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Ms. Libby Davies: I so move.

The Chair: Those in favour? Those against? I see none.

(Motion agreed to—[See Minutes of Proceedings])

The Chair: We now have to move in camera, colleagues. We're going to consider a draft report.

[Proceedings continue in camera]