Tuesday 5 May 1992

Student assistance

Ontario Federation of Students

Laurie Kingston, chairperson

Rob Centa, member

Council of Ontario Universities

Dr Peter George, president

Patricia Adams, director of communications and public affairs

Edward DesRosiers, director of research

University of Toronto

Robert S. Prichard, president

Dr Daniel Lang, assistant vice-president, planning and registrar

Ontario Confederation of University Faculty Associations

Dr William Graham, president

Marion M. Perrin, executive director

Comité consultatif des affaires francophones / Advisory Committee of Francophone Affairs

Michel Giguére, senior research officer


*Chair / Président: Beer, Charles (York North/-Nord L)

*Vice-Chair / Vice-Président: Daigeler, Hans (Nepean L)

Drainville, Dennis (Victoria-Haliburton ND)

*Fawcett, Joan M. (Northumberland L)

*Martin, Tony (Sault Ste Marie ND)

*Mathyssen, Irene (Middlesex ND)

O'Neill, Yvonne (Ottawa-Rideau L)

Owens, Stephen (Scarborough Centre ND)

*White, Drummond (Durham Centre ND)

*Wilson, Gary (Kingston and The Islands/Kingston et Les Îles ND)

*Wilson, Jim (Simcoe West/-Ouest PC)

Witmer, Elizabeth (Waterloo North/-Nord PC)

Substitutions / Membres remplaçants:

*Brown, Michael A. (Algoma-Manitoulin L) for Mrs O'Neill

*Cunningham, Dianne (London North/-Nord PC) for Mrs Witmer

*Lessard, Wayne (Windsor-Walkerville ND) for Mr Owens

Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgienne ND) for Mr Drainville

*In attendance / présents

Clerk / Greffière: Mellor, Lynn

Staff: Personnel: Drummond, Alison, research officer, Legislative Research Service

The committee met at 1539 in room 151.


Resuming consideration of the designated matter pursuant to standing order 123, relating to student assistance.


The Chair (Mr Charles Beer): I call the meeting of the standing committee on social development to order. We are in the second day of looking at OSAP. Our first witnesses today are representatives from the Ontario Federation of Students. I welcome you to the hearing. I have three names in front of me and I see two persons, so maybe you could introduce yourselves. As you know, we have half an hour for a presentation and questions. We'll take the half-hour from when you begin. Welcome.

Ms Laurie Kingston: My name is Laurie Kingston and I'm the chairperson of the Ontario Federation of Students.

Mr Rob Centa: My name is Rob Centa and I'm a member of the Ontario Federation of Students from York University.

Ms Kingston: To begin with I just want to say a word about who we are. The Ontario Federation of Students is a democratically run organization that represents post-secondary students from colleges and universities across the province of Ontario. We have over 200,000 members at this time.

It is important to place the issue before you today in context. To consider the option of converting the current delivery mechanism for student aid from a mix of grants and loans to an all-loan system, a developed understanding of the current weaknesses of the system is required.

A system of student aid designed to promote accessibility to post-secondary students must contain several fundamental components. It must realistically assess the costs that are faced. It must deliver the assistance required based on the individual financial need of the students. It must be sensitive to the needs of today's diverse student body. It must have expected contribution tables and repayment schedules which make allowance for the differential earning profile of students from historically marginalized groups. Just by way of example, women on average earn only about two thirds of what men do in equivalent jobs. Such things, say during the summer, for expected contribution are not taken into account when women as well as men are looking for jobs. It must remove the prospect of a massive debt load which will deter many potential students from pursuing post-secondary education. We argue that at this time OSAP does not meet any of the above criteria.

In any study on the feasibility of shifting the current grant and loan mix to a primarily loan-based system, the issue of student debt load must be considered. In 1990-91 students on OSAP took on about $3,500 of debt per academic year. That's an average. Some incurred a much greater debt load than that. After four years a student will be entering the job market $14,000 in debt. Again, there are many students who owe more than that by the time they leave school, when they graduate, go to part-time or cease being in post-secondary education on a full-time basis. In addition, one must consider the further debt load often incurred by graduate students.

In addition, debt loads become more onerous for members of traditionally underrepresented groups who often earn less upon graduation than the national average. Many students find themselves using up to 16% of their income before taxes to repay student loans. Commercial banks consider 8% to 10% of annual income to be used for such purposes as a heavy debt load.

One detail which is often overlooked is the fact that loan repayment commences six months after a student is no longer considered to be a full-time student. This means that when students, and frequently this is for financial reasons, cease to be full-time students payments begin and interest accumulates. What they are then faced with is a vicious and escalating circle of bills and interest payments. Even if the students drop down to part-time for financial reasons, they find that they must work part-time, go to school part-time and still make the maximum payments on their student loans.

It's important to recognize that the chartered banks make a significant profit on student loans, a profit which would surely increase if any shift towards an all-loan system is made. Currently the government does most of the paperwork and absorbs all the risk while the banks collect a very handsome sum of interest from both the government and the students. A student leaving university with a debt of $14,000 -- the breakdown of that would be approximately $10,000 for Canada student loans and $4,000 for Ontario student loans -- can expect to pay at least $9,600 in interest to the banks while repaying her loan. The government will have paid about $4,900 in interest to the banks while the student was still in school. The extension of $14,000 of student loans to the student therefore has generated $14,500 in interest to the banks without any risk on the part of the latter.

Students graduating with massive debt loads face immediate limitations on their future options. Graduates wishing to establish small businesses, invest in existing operations or continue with their studies are immediately constrained by debt loads which often exceed manageability.

It is evident that the current situation is not working. The thousands of students living below the poverty line while on OSAP, and the creation of the Ontario Student Assistance Program Review Board to examine the program, stand as proof that the status quo is not acceptable.

One of the options often touted as a panacea is an income-contingent repayment plan, known as ICRP. The federation takes issue with a number of aspects of the proposal: the massive startup costs associated with the plan, which could threaten program feasibility; The implication for graduates with atypical employment experience, and the psychological barriers to participation created by the prospect of entering into lifelong debt are all negative aspects of any ICRP scheme. We do not feel students should bear the burden of debt for their education for the rest of their lives. Our preferred system involves a truly progressive system of personal income tax and a fair and progressive system of corporate taxation.

We believe that a society which aspires to overcome social and economic inequality must provide educational opportunities which break social barriers and bypass economic disadvantages. Education is a right, an essential service. It must be available to all persons regardless of ability to pay. A vital and well-funded system of student assistance is essential in achieving these ends.

Before going on to questions, I'd just like to explain a bit of what the appendices we have included with our document are.

The first is a series of recommendations that we made subsequent to the first chapter of the Ontario student assistance review. They are what we deem to be short-term improvements that need to be made to the system at this time.

Appendix B is a research paper we put out in June 1990. You'll note that it includes a list of allowable costs, what OSAP included as allowable costs the year this was put together and what we consider to be allowable costs.

The first part of appendix C is a fact sheet that we've put together on income-contingent loan repayment schemes. There's one on student assistance, one on graduate student assistance and one on tuition fees. These were part of an information package we put together during a series of information sessions we held with MPPs from across the province. We had our members come in from colleges and universities across the province to participate in this series.

The Chair: Thank you very much, for both the presentation and the attachments. Also, thank you for the lobby earlier this year. I think probably all of us here had students in to see us. What we're going to do, then, is just divide up the remaining period of time. Each caucus will have an opportunity to ask questions. That will work out to approximately seven minutes for each caucus. We'll begin with the Liberal caucus.

Mrs Joan M. Fawcett (Northumberland): I have just one question. I get a lot of calls from students and parents of students who perhaps have been turned down. They can all cite cases where there are abuses by students who have received loans, or even grants sometimes, and according to the stories, shouldn't be receiving them. They really should not be eligible; the parents are quite able to contribute. Could you just give me your opinion on that? From your vantage point what have you seen?

Ms Kingston: That's a question I hear quite frequently. Everybody likes to talk about the example of the next-door neighbour who supposedly is on student assistance and has just bought herself a car. I believe that in any program that's necessary, any program of social assistance, there is opportunity for fraud. I believe quite strongly, though, that the cases of fraud are not the majority. They make good stories. I believe those cases are the minority. Because there are cases of occasional fraud does not mean that our health care system should be abolished, that welfare should be abolished, that unemployment insurance should not exist. I believe that to claim the student assistance program should be cut back or that criteria become more stringent is not -- I don't think that would stop fraud. People can still lie on their forms.


Mrs Fawcett: That's right.

Ms Kingston: There are still, I believe, many students who need student assistance who aren't getting student assistance, and many students who are accessing the system who aren't getting enough to live on.

Mrs Fawcett: I certainly agree with you. Thank you.

Mr Hans Daigeler (Nepean): Thank you for appearing before the committee. As it turns out, I think the subject is even more timely than when Mrs Fawcett originally introduced it as a motion, which was of course before Christmas. It appears that OSAP is being chosen by the government as one area to cut back rather than to perhaps improve and expand, which, as I am sure you are aware, is somewhat contrary to their own previously stated goals.

You, I think, have been involved in the review that has taken place up to now. Do you continue to be represented there? The deputy minister yesterday was, I think, quite strong in saying that, yes, consultations are continuing, the question of income contingency has come up and we've consulted on that. Would you agree with the deputy minister? Are you satisfied with the consultation as it has happened so far and, in particular, the consultation with regard to the income contingency plans?

Ms Kingston: I do continue to participate in the OSAP review process. During the first segment there were three reference groups, and Rob was on the one about financial eligibility. We had representatives on all the reference groups, I sat on the general advisory committee and continue to participate in the OSAP review.

We were very disappointed to see that the recommendations that we felt were necessary to make at this time -- it must be noted that the base amount of money allocated for student assistance has not been increased since 1983. I don't believe the recommendations we made were outlandish, and they were even subsequent to the OSAP review and the very cooperative process in which we participated. It was decided that at this time these would not be implemented.

As far as income contingency is concerned, it was noted that we would discuss it during the second phase. It is my understanding that Professor David Stager put together a model which, for the purposes of the ministry, was to be value-free, and was doing it in conjunction with the Council of Ontario Universities. They could use it in whatever way they chose and the ministry was to use it as a model to determine the feasibility of the applications of this model. We were told, at the level of the OSAP review, that this particular model was to be rejected because the front-end costs were too great and that this was not something that would be applied at this time.

Beyond that, we're still several models -- the meeting that was to have been held on April 27 was not held and I imagine that we are to continue considering different models until we see what comes out of that; until we begin to see actual changes in the program. I can't comment on the value of this consultative process because we haven't seen anything implemented from it as yet.

Do you want to add something to that?

Mr Centa: I think the consultation has been somewhat open, but again we need to see what the results of the consultation really are: whether it is just a process where we can put our positions on the table and then the government chooses to ignore them, or whether the input we are giving is being seriously considered and given value in the policy formulation.

It was somewhat surprising to hear yesterday that the deputy minister was planning on meeting with representatives of the Council of Ontario Universities and other groups to further discuss an income-contingent repayment plan proposal. We had not yet been informed of that meeting. I guess we are expected to hear about that in the next couple of days.

Mr Daigeler: That's why sometimes these committee hearings are quite useful. We find out about things that -- in your presentation --

The Chair: I'm sorry, Mr Daigeler, it's time.

Mr Jim Wilson (Simcoe West): Thank you very much for your presentation. I should tell you that after four years in the University of Toronto, I guess I was an average student, because I graduated with exactly $14,000 worth of OSAP loans. I'm still paying those loans today, and I've been fortunate since graduation to have good jobs. So I have complete sympathy with what you've stated here, although to play devil's advocate for a minute, I notice one line comes right out of the NDP's Agenda for People, where it says, "We should have a truly progressive system of taxation and a minimum level of corporate taxation," as one of the solutions.

To be fair to the government, I think its own Fair Tax Commission came back and said that even if we tax the hell out of corporations with a minimum tax, we're not going to get any more than about $200 million worth of tax. So that isn't going to be the panacea, and we're already the highest-taxed jurisdiction in North America. In fact people are leaving and there aren't jobs.


Mr Jim Wilson: It is true. We won't debate it, but it's well used by a number of people who know what they're talking about.

I would say, what other suggestions do you have? I agree with you, it's a shame the government's cutting back, but before they get their chance to ask you this question, I'll ask you the question.

Mr Centa: There are a number of answers to that. The first thing is that the Fair Tax Commission -- my understanding is the government is going to re-examine the establishment of a minimum corporate tax in the fall to look at the feasibility of implementing it.

One of the things we strongly believe in is that any student systems must be nationally oriented, and what we've seen is that it's very difficult for one province to implement a fair system of taxation when one might argue the direct opposite is happening at the federal level. We've seen a shifting tax burden in Canada from where out of 100% of taxation, 50% came from corporations, 50% came from individuals. We now have more of a situation where 80% is coming from the individual and 20% from the corporation. While I might agree with you that individuals have certainly seen their tax burden increase, I'm not convinced it would be fair to the say the same for corporations.

Certainly I think one of the proposals we have in terms of generating excess revenue would be to close some of the tax loopholes that currently exist. I think it's fair to look at tax loopholes as a government spending program when they're offering subsidies for entertainment expense, that sort of stuff. It really is a spending program in the same way that spending on social assistance is a spending program, and I think there needs to be, again, a rigorous evaluation of the merits of each of those spending programs in sort of an overall analysis of where we choose to collect revenue from.

I'm not convinced that we are in the highest-taxed region in North America.

Mr Jim Wilson: Wait till you get your first paycheque.

Ms Kingston: We've both had our first and second and it's --

Mr Centa: I think that's one of the ways we propose to generate revenue.

Mr Jim Wilson: Your answers aren't surprising. We'll beg to disagree on the facts. None the less I think I'll point out and ask your comments on student job prospects, not only this summer but throughout the school year, because in spite of the OSAP loans, for a great length of time in university, and also being governor of the university, I think I had four jobs. I can't see students now being able to actually do that. Do you have any recent statistics on how bad the job market is out there?

Mr Centa: Last year the unemployment rate for returning students nationally was 14.5%, and Ontario came in right about the national average. Of course within Ontario it's incredibly important to remember the regional diversity within summer employment opportunities. What we're seeing in Toronto is a very bad summer this summer. We can't even really compare to some of the northern communities. Some of the students who are leaving community colleges in the north and finding the unemployment rate in their own town is over 20% or 30%, and that is for the general workforce, not to mention students.

What we're seeing is that for the summer job market it's going to be, again, very difficult. There were 400,000 Canadians between the age of 15 and 25 who were unemployed in March, and that's before the influx of university students in May and the influx of high school students in June. So I think we're looking at another very bad summer.

It's important to remember that only once in the last decade did student summer unemployment ever drop below 10%, and that's even in the so-called good times, so you've seen this has been a continuing problem of underemployment for our university students over the last decade.

In the jobs that are out there, we're finding that the jobs students are getting are lower-paying jobs. They're not career-related jobs; they're not related to their field of study the way they have been in the past. More and more jobs are demanding commission work with no salary, commission only. We're seeing jobs that are of a shorter duration, and the requirements for the jobs are continually going up as students are competing against other members of the unemployed workforce. I don't think we can see student unemployment separated from unemployment as a whole in the province. I think currently students are being hit in the same way, if somewhat harder, than other workers in the province.


Mr Jim Wilson: Some would argue -- and perhaps your group wouldn't, but go with me for a minute on this one -- that either students pay now or they're going to pay in the long run anyway. I think, to be somewhat critical, you do your group a disservice by saying that they're going to enter into a lifelong debt. You're right. But one way or the other they're going to end up going into lifelong debt because of the tremendous debt of the province and of the country, which I don't think can be dismissed. We've had too many years of dismissing it.

In the answer to my first question, you talked about priorities and that this should be a priority to the government. But again to play devil's advocate, if this should be a priority -- and I ask all groups this -- then what should be cut in government?

Mr Centa: Can I answer the first part of your question first, then come back to what should we cut?

Mr Jim Wilson: Sure.

Mr Centa: We feel that benefits accrue to an entire society from an educated population. Certain benefits accrue directly to the individual, and those are most readily seen in the form of increased employment opportunities, increased wage when you are employed; these are the benefits that accrue to the individual from education. We feel the fairest way for people to pay back into the system is a progressive system of taxation that takes into account their earning potential, because I think that's the only truly fair way to tax people, rather than utilization of user fees. Through the income tax system, we have a way of allowing people to pay back into the system. When students are accessing post-secondary education, I don't think it's fair to ask for upfront contributions in the form of user fees which are flat and don't represent the individual's ability to pay.

Ms Kingston: I'd just like to add that studies show that by the year 2000, fully two thirds of all new jobs will require some form of post-secondary education. I would argue that the distinction between post-secondary education and the rest of our educational system is one that is changing; it's one that is becoming harder to distinguish. I think that in many cases, if individuals are not permitted to access post-secondary education and are not helped to do so, we will be paying for those people at the other end in the form of unemployment insurance, in the form of social assistance. I think the key to having people employed is to educate them, and student assistance is an investment to that end.

Mr Drummond White (Durham Centre): I was very impressed with your presentation, Laurie and Rob. Thank you. I had a couple of questions. One of the things you mentioned about the bank collections I thought was really marvellous, because here we are at a time of recession and it seems like the banks are the only people who are making a profit. With the tremendous increase in demand on the OSAP program, that program was reinvested in last year because of the number of students applying. Basically what we're doing is offering a guaranteed minimum income to the banks. It almost seems logical to fund the system on the basis of taxation there alone.

You spoke highly of a progressive tax base, so students, when they are finished university, when they are at the beginning of their careers or their professional lives, would be able to invest in a profitable way for all of us and, as time went on, when they accrued the benefits of those investments, would then be paying through the progressive tax system. It seemed to make a great deal of sense.

On the other hand, I'm just thinking of the reaction there would be. I'm just looking at the news clippings there with Mr Harris. Just think of the outrage there would be from some members to an increase in taxation for the wealthy, and these are the very students who would later be paying those taxes. Any thoughts on that one?

Ms Kingston: I'd just like to re-emphasize that when we talk about corporate taxation, we're not talking about increasing the tax load on lower-income people and middle-income people; we're talking about 118,000 profitable corporations in Canada that paid no income tax at all last year. I think it's misleading, as soon as the word "tax" comes up -- and I'm sure that you're aware of this -- to say that the individual who's making $40,000 a year should be contributing a greater percentage of his or her income.

Mr White: No, I quite agree. What I was referring to was a progressive tax system, a tax system that would apply to people who have had the benefit of a university education, people who now have MBAs, doctorates in law, doctorates in medicine, people who are making substantial incomes, people who phone our offices and say: "How dare you raise my taxes? I'm only making $400,000 a year." Those are the very people who are now students.

Ms Kingston: Those people are the people who should be contributing. I think no matter what decision any government makes, no matter what policies, what changes it formulates or imposes, there are going to be people who are displeased with that. The notion of minimum corporate tax is one the New Democratic Party has long been fond of, for lack of a better term.

Mr Daigeler: That was then, this is now.

Mr Jim Wilson: Read the budget. The Treasurer explains very clearly why corporations get a break on tax.

The Chair: Order, please.

Mr White: We have a witness.

Ms Kingston: If I may be permitted to finish. Having read the budget, I think it is time that the New Democratic government returned to the Agenda for People and returned to the commitments that it made when it was running. I think that having the courage of your convictions and the courage to follow up on your own policy is something this organization will continue to ask for.

Mr White: Great.

Mr Centa: For a long time, corporations in North America, Canada and the province of Ontario have been gaining the benefits of a very well educated, very well skilled work force. They have been contributing very little to the education of these people when they're leaving post-secondary education, and this is not just universities but also the colleges in the province. If we as a province are going to remain or to become truly competitive within a global economy, our greatest natural resource will continue to be an educated work force; to be able to take the competitive advantage, to be able to innovate, to be able to make the sort of changes that we need to see in order to retool our economy. It's at this very time that corporations and society should continue to fund post-secondary education. We really see it as the only hope for the future economy of the province.

The Chair: Thank you very much. I'm afraid that brings us to the end of the half-hour. I might ask, as the hearings continue, if there are any particular issues that come up where you have some other information beyond what you gave to us today, the committee would be very pleased to receive that from you. Thank you very much for coming today.


The Chair: I call on the representatives of the Council of Ontario Universities. While they are coming forward, I will note to members of the committee that yesterday we had asked for a number of documents from the Ministry of Colleges and Universities. You should all have received three: One on athletic scholarships, one on the simulation model for contingent repayment that was prepared by David Stager of the department of economics and the final one on the francophone students and the Ontario student assistance program.

Second, I would also just note for those on the subcommittee that we will meet tomorrow at 3:30 in room 230. If we finish the question period earlier, we could get together as soon as routine proceedings have been completed.

Welcome to the committee. Please introduce yourselves. We will have the full half-hour from when you begin.


Dr Peter George: Thank you. Mr Chairman, members of the committee, we are pleased to be here today to speak to you on this important issue. I am accompanied by my director of communications and public affairs, Ms Patricia Adams, and by the director of research at COU, Mr Edward DesRosiers. My name is Peter George and I am president of the council.

We have prepared a brief for you and that has been circulated, along with an attachment. I hope you will read it thoroughly and be persuaded by its argument.

The Council of Ontario Universities believes that it is in the best interests of the people of this province that any student with the ability and the desire should have the opportunity to participate in Ontario's university system. If our young people are to compete in a world that is rapidly changing, one based on an information economy, they must be equipped with the knowledge and skills they will need. Their ability to contribute to the economic, social and cultural fabric of the province will benefit all the citizens of Ontario. This is the public benefit or social benefit derived from university education and it is the rationale for governments providing some 80% of the funds required for university level education in Ontario.

There are also private benefits which accrue from higher education. University graduates attain a much higher income level and enjoy a far higher rate of employment than those who do not benefit from a university education. The labour force participation rates for university graduates between 25 and 44 years of age, for example, are 98% for males and 86% for females in Ontario. These are extremely high labour force participation rates. The employment income of university graduates in Ontario in 1989 was almost double the average for the rest of the Ontario labour force. The private benefits which flow from university education provide the rationale for university tuition fees for the student's own investment in higher education.

Tuition levels should not be a barrier to young people seeking knowledge. It is important that we devise a student assistance plan that makes money readily available to students to support the cost of higher education without consideration of their family or personal income level. By developing such a scheme, we could eventually eliminate the current student assistance program which operates on the basis of a highly regulated means test.

Let me talk briefly about income-contingent repayment plans. We believe that an income-contingent repayment plan will offer all students who have the ability and the wish to attend university an opportunity to do so. The program, which would be administered by a government-sponsored agency, would establish a fund that would make educational loans to students regardless of their income or their parental income. These loans would be paid back by graduates through the income tax collection system.

The program would be optional. Any resident of Ontario who wished to be a student at a publicly funded post-secondary institution in this province would be eligible for financial assistance. Conditions in the loan contract would include the terms of repayment, the percentage of annual income to be paid, the maximum number of years during which payment would be required, the interest rate to be applied to the principal amount and any arrangement for full repayment of the outstanding amount at any time in the life of the contract.

If the graduate had a taxable income level that was less than a predetermined threshold level, payment would not be required. For those individuals whose income was not sufficient to repay the principal within a 20- to 30-year time period, the loan would be forgiven. No payment would be initiated until a predetermined level of income had been reached.

Details on policy options are provided in the attached report, Contingent Repayment Student Assistance Plans: An Outline of Policy Options, which we prepared last September. Council has also developed more recently a user-friendly simulation model to examine the financial repercussions of these alternative policy options. We would we pleased to provide a copy of the model to anyone requesting it.

The loan options are important and worthy of further comment. The plan provides flexibility among loan options. The total amount that could be borrowed could be limited to a specific amount, to some fraction of the tuition fee, or it could be the full fee plus other academic expenses: books, supplies, accommodation and travel. The amount borrowable is a variable in this model and could be set according to government policy.

It may be advisable to cap the total amount that a student could borrow over the duration of his or her program of study. Longer and more expensive programs are generally associated with higher earning levels of graduates of these programs -- for example, medicine, dentistry and law. Currently the plan is structured to operate at the undergraduate level. It could be extended to include students in post-graduate programs, but generally speaking these programs operate for undergraduates. Many students in post-graduate programs of course have available to them a variety of fellowships and assistantships to help defray the current costs of study.

Rough approximations of the annual capital requirement, that is, the total amount to be borrowed were existing levels of tuition to be covered by such a plan, are estimated at about $350 million annually. Versions of the plan that provide for larger annual grants in tuition fees, either for increased tuition fees or generic student assistance, would of course require a larger annual budget.

The repayment options are again subject to certain principles. The underlying principle of contingent repayment student assistance plans is that they rest on a graduate's ability to repay. Within this general framework several options present themselves:

First, the repayment might begin and would continue only after a graduate's income exceeded a certain threshold; for example, average labour force earnings.

Second, the unpaid balances after a fixed period -- and here we use, for example, 20 to 30 years -- might be forgiven.

Third, the rate of annual repayment might be graduated according to level of income attained.

Dropouts would not be exempted from repayment because such exemptions might, at the margin, result in students refusing formal graduation in order to avoid repayment.

The cost to government is an important issue. In 1991-92, the administration of OSAP cost the taxpayers of Ontario about $252 million. The costs of an income-contingent student assistance plan will vary depending upon the level of interest assessed and the method of repayment selected. Although highly variable, the cost can be estimated using the simulation model developed by COU. However, the important point is that the potential for significant cost saving exists.

Sources of finance could come either from the public or the private sector. The required financing could be provided, for example, by government borrowing. It could also be provided by borrowing from the private sector, especially from insurance companies and pension funds with appropriate government guarantees. This would make funds available at a lower rate without adding to government's own debt.

In the early stages of the program, the existing student assistance programs could be continued in order to provide the full amount of assistance required. As the incomecontingent plan matured, the existing student aid program could be reviewed and the various policy options favoured by government explored and implemented. The cost to government of student assistance could fall significantly and could be targeted on underrepresented groups or other groups designated by government policy.

Let me make a few comments in conclusion. Our interest in income-contingent repayment plans has been stimulated by the continual erosion of government financial support for Ontario's universities, and the growing realization that increased tuition fees may well be a necessary component of our financial recovery if the demands for greater accessibility and quality of education are to be met.

We have made these points before, most recently in this room in our brief to the standing committee on finance and economic affairs last November.

The current review of student assistance and tuition fee policy is timely and important. At COU we are continuing our investigation of income contingent repayment plans and we stand ready to participate with government in finding creative solutions to the fiscal challenges confronting us all.

We'd be quite happy to engage in discussion and to answer any questions the committee members might have.


The Chair: Thank you very much for your submission and also for the attached document. Was this document which is dated September 1991 presented to the ministry working group or committee?

Dr George: This has been shared with the ministry working group.

The Chair: Okay, fine. We will begin then with the Conservative caucus, Mrs Cunningham.

Mrs Dianne Cunningham (London North): Welcome. Good to see you again. I have some questions with regard to the third paragraph on page 2. I suppose it's the arrangements that would be made with the graduate with regard to payment or not. I'm just wondering if you'd explain to us how you came to this conclusion that in fact these loans would not be repaid under certain circumstances.

Dr George: I'm going to share responsibility for answering questions with my colleagues, but let me say first of all, and Edward may wish to embellish this answer, that in most of these plans there is a conscious attempt to acknowledge that for different kinds of disciplines, the level of private benefits accruing to the graduate will differ, and there are arguments that could be made, quite cogent and persuasive arguments, I believe, that a homogenous pattern of tuition fees might better be replaced by a varied set of fees at the time one is a student which attempts to capture some of the differences in expected incomes.

For example, somebody who is taking a BSW, a degree in social work, might pay a minimal tuition fee and somebody who is studying an MBA, which has high expected lifetime earnings, might pay a much more sizeable fee. So that is one thing.

The second thing is that the repayment systems are an attempt to gauge those private benefits from different activities and to tailor repayment to the levels of private benefits enjoyed by the graduate. If somebody is a graduate of social work in that instance, for example, it may be that private rates of return are relatively low and that social benefits are relatively higher. It may be that incomes then are not much above average labour force earnings, so average annual repayments are relatively low and a more protracted period of repayment is in order. It may even be that by the end of the 20-year period, for example, not all repayments have been made, in which case there would be a conscious attempt to lift the burden, to say that this private earning capacity has been well-documented for 20 years and the burden should be erased.

On the other hand, somebody with very high earnings may repay the burden of the debt much more rapidly, and may even opt, especially if there are incentive systems, to repay it all at once very early on in the time period. The differences in repayment packages are really an attempt to capture the differences in the private benefits accruing to students who invested in degrees. I don't know if Edward wants to add anything to that.

Mr Edward DesRosiers: It's our expectation that the typical graduate would repay outstanding loans within a 10- to 15-year period, but there are going to be exceptional cases where, for example, an individual has taken time off from his working life to pursue non-remunerative activity. We feel that it's important that the debt burden not go on in perpetuity, that there be some element of forgiveness in recognition of the differences in earning patterns over an extended period of time.

Mrs Cunningham: That's helpful.

Mr Jim Wilson: Thank you for your presentation. On point 5, I'm staggered at the cost of administration for the OSAP program. Does that just include shuffling the paper around, or is that default on loans?

Mr DesRosiers: That includes the grants and the forgone interest costs of the loans, plus the administration, but you would do better to ask ministry officials for those relevant details than us.

Mr Jim Wilson: That's a very good suggestion; I think I will. But in your suggested model, how is it that the administrative costs would be lower?

Dr George: The fact is that with these models, one can simulate different degrees of subsidy, for example, to the students. The elements of subsidy can be affected by, for example, the rate of interest that is charged to students on outstanding burdens and the repayment provisions generally. The administration costs would, I think, be probably less in this system, especially with the incentive of recourse to the private capital market as a market --

Mr Jim Wilson: Which leads us to my next question.

Dr George: Edward is more familiar with administrative details of these programs than I.

Mr DesRosiers: One of the features of the plan, I think, is its administrative simplicity. There isn't a means test to administer, which is a considerable element of the administration of the present OSAP scheme.

Mr Jim Wilson: As I gather, it's consumer choice. You could ask for the maximum amount or not if you were student.

Mr DesRosiers: That's right, and depending on the level of subsidization of the interest rate, you may get more or less pickup of the plan. I think that's one of the policy options you've got to weigh very carefully when you look at the amount of subsidization of interest rate which you're prepared to offer.

Mrs Irene Mathyssen (Middlesex): In your brief, you talk about sources of finance. You mention that the government's borrowing power might be utilized and that borrowing might take place from the private sector, insurance companies and pension funds. I am wondering -- and I'm basing this question on the presentation we heard just prior to yours regarding the fact that the corporate sector also benefits greatly from the students who graduate from our colleges and universities -- do you see the corporate sector as a source of funding? Do they have a role to play in providing the kind of funding we need to keep that quality and very productive student available to that sector?

Dr George: I am going to suggest a couple of thoughts on this and then ask Edward to comment further.

I think one way to approach this is to say that the corporate sector would already be providing an indirect contribution. If the wages and salaries that are paid to university graduates are reflective of the market and of the value added provided to those graduates by a university education, then in the act of paying wages and salaries that are then taxable by the personal income tax system, the corporations would be making that indirect contribution to the support of university education.

Second, I tend myself to put rather more emphasis on the role of the corporate sector in the research partnership opportunities with universities. I'm a very strong advocate of the cooperation between private industry and university research as is exemplified by the centres of excellence program, the university research incentive fund program and so forth. I think that is a much more significant direct contribution of the corporate sector, especially since the indirect contribution through the wages and salaries that reflect market processes are already feeding personal income tax revenues.

Edward may want to embellish that.

Mr DesRosiers: To the extent that there's a general public benefit from universities that the tax system supports, and corporations pay taxes, as do individuals, there's that additional degree of corporate support being fed into the system. I agree with Peter that the market value attached to the university graduate being employed in the corporate sector is in fact probably the most direct link, albeit indirect, that you could establish for the corporate contribution.


Mr Gary Wilson (Kingston and The Islands): I'd like to return to the question of tuition and, just to be clear about this, whether you see deregulation then of tuition at universities so that in fact the university could charge whatever it wants per program.

Dr George: There are a number of dimensions to this. The first dimension I would reiterate, because it is an opportunity to do so, is that the university system, in order to provide for accessibility and a high quality of education, requires significant additional revenues. It's quite clear to us that for the immediate future those additional revenues will not come through transfer payments. Our other principle source of revenue is tuition fee revenue, so one of our interests in income-contingent approaches to student assistance is certainly to provide additional revenues to the university system.

Second, as an economist, it's my own personal view that tuition fees should attempt to capture a greater share of the private benefits or rents that accrue to individuals who invest in higher education. In my view tuition fees are lower than the appropriate fraction of those expected future earnings.

Third, I believe as a result that one should look at different fields or disciplines in terms of their expected future profitability to the students who invest in them. There is a significant difference in the market attraction, and hence the market yield, of fields that one can study at university. I think a greater reflection of those market differentials in tuitions fees would be appropriate and would be efficient.

Mr Gary Wilson: The next thing, then, I'm interested in is, do you see some kind of grant system that would be in place to make sure there are enough students in the kinds of programs that we as a society think we'll need?

Dr George: I think that's an extremely important point and that's why at the top of page 4 I do allow for the fact that some student assistance programs would remain in place and could be targeted to underrepresented groups. I think the one thing I'm conscious of, and I think many people are conscious of, is that students from relatively disadvantaged backgrounds, whether economically or educationally, often come from circumstances where the act of investment, especially the act of investment in something as nebulous as higher education, with an uncertain future return, or perceptions that the return is uncertain, might need special encouragement to participate in higher education. It may be that for such students a loan program related to income-contingent repayment is something just too abstract to be persuasive and that this might effect barriers to access.

It's my own view that what we must do in a well-designed system is to mitigate against the possibilities of economic barriers to access. Those economic barriers to access include the sort of circumstances within which students from disadvantaged backgrounds are making the higher education decision. I could see, for example, that part of the student aid program that remains in government hands might be tailored to providing grants to students from such backgrounds to try to stimulate participation rates in university-level and college-level education, to be, if you like, a kind of seed money to increase participation rates, because I think that for uninformed consumers there will still be a possible barrier to the loans system.

I think, of course, if such a system were introduced, it would be important to have an educational program to explain the nature of the program to possible customers for it, but as an economist, I know that the market works. Especially if the interest payments are subsidized officially, there will be a lot of people who will be anxious to participate in this program.

Mr Daigeler: Thank you for coming to appear before the committee and presenting your views. Let me ask, first of all, is the income-contingency repayment proposal now the official policy of COU with regard to tuition assistance? Is that the main plank that you're proposing to the government at the present time?

Dr George: This is our major initiative with respect to student assistance, yes.

Mr Daigeler: You touched on this somewhat, but frankly I was still somewhat surprised how somewhat suddenly this idea seemed to appear. What were the reasons for this particular proposal to become all of a sudden the major focus of your requests of government?

Dr George: I'd say two things, I think. First of all, this is not our first initiative on the tuition fees side. As you will recall, a year ago COU put forward a recovery plan in which there would be a partnership among government, the universities, students and the corporate sector to contribute additional funding to universities to help restore the quality of university education and provide for greater accessibility. So we have been active in considering alternative ways of improving the university funding situation for some time.

Second, in this form, income contingency is a relatively new phenomenon. It was recently introduced into Australia. There is a similar kind of program in Sweden, but most of the programs that exist in the world are not contingent programs. There are other models, of course, like graduate taxes or education taxes on the corporate sector and so forth, but because of our studies with the assistance of Dr Stager we have come to embrace income contingency as an equitable and efficient way of introducing tuition fee increases.

I would say that our enthusiasm has grown as we have come to understand the concept better and as our simulation studies have built upon our survey of the terrain, as it were.

Mr Daigeler: So far, at least, I haven't sensed that enthusiasm on the part of the government. Personally I'm somewhat glad that the enthusiasm is not that strong, at least not yet, because I do have some questions about this particular idea. But I appreciate the situation you are coming from and that certainly you have urgent financial needs. I think you're to be congratulated for looking for new solutions and innovative ideas. Certainly I think this is an option that has to be looked at. That's the purpose of our work here: to get a better assessment of the merits of this particular proposal.

Let me finally ask, before I pass it on to my colleague: Are any of the other Canadian provinces presently looking at an income contingency idea? Are they even studying it? Is it on the horizon for any of the other provinces?

Mr DesRosiers: We're not aware of any serious initiative in any other jurisdiction. There have been some discussions at the federal level. Ultimately I think it would be to everyone's advantage if this notion could be introduced at the federal level, but from our perspective there have been so many hurdles to overcome in Ontario that we didn't want to complicate the issue by taking it to the federal level without first ensuring we had wide support for it within Ontario. But I think ultimately it would be desirable to see this as a national program.

The Chair: Time for a very short question.

Mrs Fawcett: I'm interested that quite a few constituents ask why our universities don't offer athletic scholarships. I notice there's a policy prohibiting universities from giving athletic scholarships. I just wonder, why and what can I tell them, and are you considering any form of that kind of help?

Dr George: I think the simple answer to that, Ms Fawcett, is that we look at the experience in the United States. While there are some programs where athletic scholarships and bursaries are administered with integrity and with respect for the academic programs, we see reports of many institutions where the opposite is true. I think there is a great deal of concern that the latter model is the one that prevails, that our basic philosophy of education in Ontario --

Mrs Fawcett: We always do things better than the States, though.

Dr George: No, but our basic philosophy of education is that the athlete is a student first. We emphasize "student athlete."

Mrs Fawcett: I agree, but if they happen to have the athletic ability that could help out, then the two very often can --

Dr George: In ideal circumstances, but that is the exception to the rule in the United States, I'm afraid.

The Chair: I'm afraid we'll have to leave that question unanswered. The ultimate is that I'm afraid our time is up, but I want to thank you very much for coming. If there is anything else that you wish to send to us as our hearings go on, please do so.

Dr George: Thank you very much for the opportunity.



The Chair: I'd like now to call the president of the University of Toronto and the assistant vice-president. Welcome to the committee. If you would be good enough to introduce yourself and then proceed with your presentation, we'll have a full half-hour from when you begin. That clock is a little strange.

Mr White: Mr Chair, I'm wondering if I should declare a conflict of interest as I'm on the faculty at the university.

The Chair: I think that by declaring it we'll be able to handle that.

Mr Robert Prichard: Colleagues and distinguished colleague, my name is Robert Prichard. I work as a professor of law and as president of the University of Toronto. My colleague is Dr Daniel Lang, who is the assistant vice-president, planning, and registrar for the University of Toronto. Under the jurisdiction of the registrar lies the office of student awards and admissions. Therefore, that's the office responsible for financial aid, grants, loans and similar programs.

I'm very grateful for your invitation, although I note that it came on short notice in the absence of someone else's ability to appear, with the result that I do not have a written presentation. I have given the secretary my notes and would be happy to provide any documentation subsequently if that would be of assistance to the committee. I wasn't here for the earlier presentations. If there's some risk of repetition in my remarks, please, Mr Chairman, don't hesitate to stop me on some point if it's not helpful to your consideration.

I've read the material that gave rise to this committee's hearings and I should just state at the outset that I'm personally not familiar with any specific proposal at this time from the government with respect to the substitution of a loan-only program in lieu of the current loan and grant program under OSAP. I'm aware there have been various proposals floating around in committees, but I'm not in a position to respond to any particular proposal because I don't know what proposal I would be responding to. So I plan to speak at the level of principle rather than to a particular proposal that's before us for consideration.

I want to make four points by way of context. Mr Lessard, Mr Daigeler and Ms Cunningham, all of whom have been good enough to pay a good deal of attention to these issues in various committees, will have heard me before on these points of context, but I think it is important to set the context of these discussions with one minute on each.

The first point is simply the centrality of education to the future of the province of Ontario and to Canada, both in terms of social justice and economic growth. Within that it is my view that higher education, post-secondary education, can play a critically important role and a role of leadership for the whole system of education.

Second, it continues to be the case, regrettably, that the resources available for post-secondary education in Ontario are by every measure I know significantly inadequate. I think it is a source of continuing embarrassment for the province that Ontario's support for post-secondary education is so poor relative to the other provinces of Canada, much less the 50 states to the south of Canada.

This is a difficult time in our province's history in terms of the fiscal situation. It is therefore difficult for people like myself who represent publicly supported institutions to talk about underfunding and inadequate resources because I know it's difficult in the province and we run the risk of sounding as though we're whining and simply complaining. I say it because I feel duty-bound to continue to draw to your attention the inadequacy of the resources that have been dedicated over a 20-year period to higher education in Ontario. I don't think it serves us well and I think it's important every time we appear to remind members of the Legislature of Ontario of the current situation.

The current situation has Ontario last out of 10 provinces in Canada with respect to university operating expenses as a percentage of the provincial gross domestic product. We in Ontario are last of the 10 Canadian provinces. In terms of the usual measures, we come ninth out of 10 provinces in Canada. If you look at provincial operating grants per student, provincial operating grants and fees per student and total operating income per student in Ontario's universities, we are ninth out of 10 in Canada. It makes no sense for Ontario to continue to languish in this position, particularly when the government and the opposition parties have all made clear how central they believe strengthening education will be to strengthening economic growth in Canada. If we allow the current situation to persist, it inevitably will retard the development and renewal of Ontario's economy.

The third point, by way of context, relates to the student share. It is the case in Ontario that the share of the cost of a university education borne by students is at a historic low point, and it is the position of the University of Toronto that this share should be increased. At present, the share borne by students is less than 20% of the cost of a university education. In the University of Toronto it is about 18.5%. This is low compared to elsewhere in Canada, low compared to elsewhere in North America, low by historical standards and, as the brief from the Council of Ontario Universities argued, I think it is low relative to the private benefit of university attendance enjoyed by our graduates. I think the private benefits in terms of expected income, expected security of employment, expected opportunities and access more broadly in the community all justify a movement back up in the student share, in the size of the student contribution to the cost of his or her education.

There is no magic as to the appropriate student share, but it remains my view that a figure of 25% of the cost of university education to be borne by the student would be a fair and reasonable goal for us to take in the first instance. When I say that the University of Toronto's position supports this and supports the particular of 25%, that reflects a unanimous vote of the governing council of the University of Toronto, a university that has a unicameral system of governance. Students, faculty, administrative staff, alumni and government appointees are represented on a 50-person council. The position I put to you was supported unanimously by the members of that council reflecting all of those constituencies -- students, staff, faculty, alumni and government appointees.

The fourth and final point of context I want to put to you is that, as they are for this committee, access to post-secondary education and equity of access should be a central concern of yours. As a matter of both social justice and economic growth, we must be particularly attentive to ensuring equity of access to our institutions, particularly given the importance of opportunity that attendance at university represents.

The key of course to access is adequate student aid. The current student aid programs in Ontario are not adequate to the task. Again, I don't believe there's any difference of view among the three parties represented here on the proposition that financial aid is the key and that the current aid programs are inadequate. The University of Toronto strongly, unequivocally supports reform of student aid programs. In saying that I should emphasize critically the difference between the importance of financial aid and the magnitude of tuition fees. The issue of access and equity of access to our universities is an issue of financial aid. It is not in the first instance an issue of the magnitude of tuition fees.

As I'm fond of saying in speeches I give across the province, Harvard University is in many senses more accessible than the University of Toronto, even though Harvard University has tuition fees about 10 times the level at the University of Toronto. The difference between the two universities in terms of access is as follows.

Both Harvard and Toronto admit students regardless of need, blind of their need. Having admitted them, though, Harvard University then sits down and says: "We will ensure you can attend Harvard University regardless of your financial means. We will put together a package of financial aid that will permit you, regardless of your means, to attend," even though the starting point is about C$15,000 in tuition fees. Once admitted to the University of Toronto, if a student says, "I need help," we say: "Go speak to OSAP. Make an application to OSAP." The limits of OSAP are the limits of the assistance on the whole that can be provided. We have some supplementary bursary programs and some supplementary work programs for our students, but on the whole we can do less at the University of Toronto to assist access to our institution than Harvard University does for its students, despite the fact, as I say, that tuition fees are tenfold at Harvard compared to Toronto.


The issue before you, properly I think, is the issue of reform of the financial aid programs for our students. The narrow issue then, as I understand it, is whether it would make sense to move to a system that more heavily emphasizes loans in place of the current system, which has a blend of grants and loans to students. As a general matter, the general position I want to put to you today is that a system that more heavily emphasizes loans is more appropriate, that loans are more appropriate than grants so long as the terms of repayment of the loans are sensitive to equity of access.

Our basic position then will be that loans are more appropriate than grants in designing a student aid package, so long as the terms of repayment of those loans are sensitive to equity of access to our universities. Why do I take that position? In simplest terms, it's because it is possible to get more bang for the dollar by using loans than grants. We can provide more aid to the students of Ontario principally through using loans than we can through a system that relies more heavily on grants. But whatever commitment the province of Ontario is prepared to make to financial aid for our students, we can stretch that aid further and increase equity of access more by emphasizing loans instead of grants. We can stretch those dollars that are available by using loans.

We can make more loans and we can make larger loans by focusing the resources on loans than spending them on grants. Loans permit the recycling of the funds to the benefit of future students instead of the simple expenditure of those funds on current students through grants. That is, the government commitment is to servicing of temporary loans and not the making of grants when we stretch the dollars by putting them principally into a loan portfolio for our students.

Beyond simply stretching the resources, the second reason why we prefer loans to grants is that on the whole it's our judgement that the current system of grants is not sufficiently focused on those students in the most extreme need. That is, we support providing grants to those in the most extreme need, the most disadvantaged students. But our assessment of the current system would be that it is not as focused as it would need to be to fit within the principle of extreme need for students receiving grants.

The importance of this shift in emphasis to loans in order to stretch the available aid package to our students is particularly urgent now. As I said earlier, I think there is widespread consensus that the current financial aid available for students is inadequate today and will continue to be inadequate with the necessary increases in tuition fees that will be essential in order to continue to keep our universities even standing still in terms of resources through this difficult period in Ontario's fiscal history.

It is our position then, that the emphasis on loans should be there in order to maximize the effectiveness of the financial aid budget that is available at present and to maximize the effectiveness of any additions to that financial aid budget that might be proposed by the government. That's the general principle. Are there exceptions? Yes. We would anticipate there would be exceptions made for those most disadvantaged and most underrepresented groups of students. That is, in those cases where groups of students have been historically very underrepresented or where there's extreme financial need, we would support the provision of grants to them in order to overcome those long-standing barriers to participation.

Similarly, in a system of loans it will be necessary on occasion to forgive loans. We would imagine the forgiveness of loans in cases of extreme hardship. Forgiveness of loans is very much like the provision of a grant. That's our general position. But I should make it all conditional, and it's conditional on the scheme of repayment of these loans. It is essential that the repayment schedule for student loans be designed to achieve two goals: first, to maximize equity of access to universities in Ontario, and second, to minimize the distortion of career choices by our students after they graduate.

That latter point is worth emphasizing, I believe. When our students graduate it would be a shame if their choice among careers was driven to an undue extent by financial considerations of the need to repay their loans. I think it's important that students feel free to continue to take jobs of public service, of service to their community, even where those jobs will pay a relatively lower salary or wage.

It's for that combination of reasons, equity of access and not distorting career choices for our students, that we support strongly the development of income-contingent repayment of loans that are made available to students for financial aid. I will not go into the detail that has been covered by the Council of Ontario Universities submission. I'd prefer to respond to your questions, Mr Chairman, rather than do that, but let me simply say that our position in favour of loans in preference to grants is conditional upon the introduction of appropriate income-contingent repayment plans for those loans in order to continue to emphasize what should be your central preoccupation: equity of access to our institutions, given that access to our institutions is such an important privilege for those that enjoy it.

In conclusion, Mr Chairman, my advice to your committee, and through you to the government of Ontario, is to urge that the most urgent and concentrated attention be given to the development and implementation of an income-contingent repayment plan that would substantially increase student loan opportunities.

We would also urge that your committee understand and accept that the current situation in Ontario is really not acceptable, that the status quo is not an option that should be considered by this committee, and that the combination we face now of inadequate resources available to our universities and inadequate student aid being available to our students is leading to a situation that promotes neither equity of access nor the sort of high-quality, post-secondary institutions that Ontario will require to participate fully in the process of economic renewal.

Mr Chairman, those are my comments. Unless my colleague tells me I've said something wrong, I suggest we be quiet and take your questions.

Mr Tony Martin (Sault Ste Marie): You certainly present some interesting information and an exciting perspective. I think you put this whole thing in quite clear perspective.

It seems to me from listening to you and the group before, and particularly the students initially, that what we have here is a question of how we get enough money into the system to run our universities in a way that provides opportunity for people to participate fully and get the education they need, how we make that most accessible to a larger group of people, and who in fact ends up paying for that. It doesn't matter, it seems, how much that costs. It probably comes from a limited few sources, and one of them certainly is government, but ultimately, you know, money flows from people and communities and the government.

You mentioned that Harvard had a package it could share with its students, and it obviously included more than just government assistance and the possibility of work around the university and some of the things that you've mentioned. I'd be interested in hearing from you what else makes up those packages. I think probably there's a fair contribution to the university system in the States by the corporate sector by way of bursaries and that kind of thing. I was wondering how we might entice our corporate sector to be more interested, because it obviously benefits from a good-quality product from the university system so that it might continue to be on the cutting edge of its particular industry. I guess there are two questions there: What's in the package at Harvard and how can we entice that sector to participate more fully, and is there some other way of generating some dollars that might be available to the system other than what we have now?

Again, the students this afternoon talked about the fact that in the present system a group that reaps a fair profit on what's happening, it seems, is the banking institutions because of the interest paid on the money that's borrowed. Is there some way of maybe taking that interest and putting it in the loop so that it's used more directly for education as opposed to shoring up the profit margin of the banking institutions?


Mr Prichard: Thank you very much for those questions. On the specific of the composition of a financial aid package at a major private American university -- and I use the word "private" because there'll be a large distinction between Harvard on the one hand and Berkeley or UCLA as a great public institution on the other -- it would be made up of a combination of loans; work opportunities for the student on campus or close to the campus; in extreme cases, some grant, some forgiveness of a portion of the tuition; and in some cases provision from a private scholarship or bursary funds that had been donated to the campus by individuals or organizations. A package is crafted to take account of the student's particular circumstances, and family circumstances where family might be involved in the support as well.

How much of that money is -- to use your word -- corporate support? Directly, I would guess, very little of that money would be corporate in the sense of being directly provided by corporations. Indirectly, of course, the major American research universities, like our university, enjoy substantial private support for many of our activities, and indirectly that helps meet the cost of the institution. But in terms of the financial aid package itself, I expect there would be a terribly modest contribution of corporate funding to that package even at the major private universities.

On the second question, "Can we entice more private sector support for our universities?" I think the answer is yes, and I think we are obliged to do everything we can in our power to attract it. I think the record has significantly improved from what it was 10 or 15 years ago, and if we work hard at it we can be optimistic that 10 or 15 years from now there will be further major increases in the level of private support from our alumni, from corporations, and from members of the community able to engage in significant philanthropy.

I think the government of Ontario could significantly assist that effort through appropriate incentives for private support for universities. As you're probably aware, in British Columbia every dollar of money given privately to the university is matched by the government of British Columbia, which means every donor gets a double bang for the contribution. In Alberta, for a period, for every dollar given by private interest, $3 were given by the government on a matching basis.

The Council of Ontario Universities proposed prior to the 1990 election that a similar program be brought forward in Ontario. It hasn't yet seen the light of day, but I would strongly endorse that, because if we can harness a greater partnership of private sector with alumni in the universities, I think it would be absolutely terrific, and would make the universities more successful and more accountable and with a stronger sense of partnership. I strongly endorse it and I think it can be done. We could use some help.

On the third question, "Are there other ways to attract dollars into the university system to ease the problem?" I think your introductory remarks squarely put the difficulty we face. I think the budget document presented last week by the Treasurer offers a real possibility on one side, which is financing of capital expenditures in the universities along with hospitals and other institutions.

As you know, the Treasurer has proposed moving to a debt financing of capital expenditures in our sector, and I believe that's entirely appropriate. The University of Toronto has strongly supported that for two years, and I hope it is proceeded with forthwith. If that is done, it would free up some funds for operating purposes and help narrow the gap we now face, so I think that's an extremely desirable development.

Your very specific question at the end was, "What about banks and corporate profits from the student aid packages?" I would urge, if you are able to develop an income-contingent repayment scheme, that you give the most serious consideration to having that financed in the private sector, and I think you'll find highly competitive market behaviour in the private sector competing for that work. I think that will bid out any potential surplus that might be enjoyed at present, and this would be the most efficient way to provide those loans. It would come not in the form of direct support, but it would be by bidding down the price of that student aid that we would best advantage, I think, our students and the institutions and the province, which ultimately will have to stand behind that debt.

I would urge that at least in the first instance you examine the possibility of partnership with the private sector. Our early soundings are that the private sector would warmly welcome such a partnership. I think the prices, especially in these times, would be highly competitive and would advantage all of us.

Mr Daigeler: Thank you, Professor Prichard, for appearing before the committee on a subject that's obviously dear to your heart and dear to the heart of the whole university community. I don't know whether you had a chance to read an article that appeared in Time magazine about three weeks ago or something like that, which I found a quite interesting description of the problems the American universities and colleges are experiencing.

That article made reference to the tuition policies of the American universities and that they were significantly higher than ours, and also that they increased their tuition fees significantly. Despite all that, they're still basically facing the same challenges Canadian universities are experiencing at the same time. In fact, it was mentioned in the article that tuition fee increases were a kind of vicious circle, because they increased them and then the universities found out they had to increase the budget in order to support some of the students who otherwise couldn't fully participate; in order to make up for that shortfall they then had to increase the tuition fees again, and in the end the situation was worse than in the beginning.

Frankly, I thought the gist of the whole series of articles -- because it was a series -- was that the universities in the US and I would say perhaps by implication the Canadian universities, Ontario universities included, have to look deeper than just seeking the solution in increases in funding, increases in tuition fees in particular. Have you had an opportunity to read that article? What was your reaction to it and to my comments or my summary? I'm obviously highlighting certain things. What is your reaction?

Mr Prichard: I read all the articles in the special issue dealing with universities. It won't surprise you that I'd caution you from relying too heavily on Time magazine as a source of major public policy analysis and advice, but it does provide a context. It provides a broad picture, but it is at best a broad-brush picture.

Three comments: First, on the US comparison, let me put it in context for you. There's an organization called the Association of American Universities, which is the 50 leading private and public universities in the United States; it's Harvard, Yale and Princeton, but it's also Berkeley, Michigan, UCLA. There are two Canadian members of that organization: McGill and Toronto. In fact, I spend quite a lot of time with that group of 50 presidents plus the two Canadians, and we talk about this financial situation. It is the case that for the first time in 20 years the major American universities are feeling some financial pinch with the slowing down, and it is real and it's significant for them. Time magazine is a reflection of that reality of the past 12 to 24 months in the American universities.

That said, the comparisons are staggering; that is, what they believe is hardship has nothing to do with the Ontario situation. The comparison, as you know, between the public University of California and the University of Toronto is that at Berkeley or UCLA there is $2 for every $1 available at the University of Toronto to teach our students: same students, same needs, twice the resources available at the University of California than at the University of Toronto despite the slowdown in the American situation.

If we go to Stanford or Yale or Harvard, we're talking $5 or $6 for every $1 available at the University of Toronto. If we go just to the average American state public doctoral university and compare it with the University of Toronto -- this is Tennessee, Alabama, Georgia and Arkansas as well as California, New York and Pennsylvania -- 40% more per student is available to educate the students. Yes, the American situation is tougher now than it was 24 months ago, but the Canadian situation, the Ontario situation, is radically different in resources available for our students than those universities, radically different. Our students, in my view, are significantly and systemically deprived relative to those students because of the funding situation.


Second is the point about gross versus net: It is the case as you raise tuition fees that you have to put more and more dollars back into financial aid. In Ontario we believe the amount that needs to be put back into student aid as a percentage of the tuition fee increase is about 20 to 25 cents on the dollar, so we have a long way to go before the amount of extra money that needs to be put into financial aid begins to become an undue tax on the new tuition fee revenues. If our tuition was at $15,000 instead of $1,500 or $1,800, then the number would be higher.

At some private institutions, you're right that the net revenues from increasing tuition have become quite modest. But in the Ontario, Canadian, in the American public situation, the Time magazine article I don't believe provides support for the proposition that the net effect is modest. The net effect of tuition fee increases, even putting the money back into financial aid, is still a very large improvement in the university situation.

As to your third question, should we be looking deeper at ourselves, of course we should. I'd be happy to share with you my most recent document from the university, looking more deeply into itself as to: How can we focus more squarely on our mission to be as effective as possible, to be as imaginative as possible in the use of resources available to us? Of course that's our obligation at each of our universities, and I believe we're fulfilling that to a significant extent. That said, we cannot deny the reality that through 20 years of public policy in this province we have left Ontario at the bottom in Canada, way behind our major North American competitors, in a world that is highly interdependent and highly competitive. It's an intolerable situation and, in my view, it's a mistaken situation for Ontario.

Mr Jim Wilson: Thank you, President Prichard and Dr Lang, for appearing today. I wanted to put on the record that I did serve on your governing council for the years 1984 to 1985.

The Chair: Is that the reason for the problem?

Mr Jim Wilson: I don't know that I have to declare conflict from that long ago.

You did mention that really the experience in Ontario is that we have to send our students off to OSAP. You also just mentioned that perhaps with the increase from 18% to 25% in tuition fees some of that money would be recycled back in terms of grants or improving access, I gather. You mentioned 25 cents on the dollar. Can you explain that a little further? Second, would that be administered by the university? Are you looking to administer and recycle that money yourselves?

Mr Prichard: We're easy on that question, the precise question. The general proposition is that we have always advanced -- I shouldn't say always. In recent years the University of Toronto has advanced more and more precisely the need to increase tuition fees. We have always made that contingent upon increasing student aid simultaneously to make sure that access is at least maintained. My own position is we can do better than maintain access: We can improve equity of access while increasing tuition fees.

The Council of Ontario Universities plan for recovery proposed just that. The COU plan for recovery said that for every dollar that was raised we should put aside 30 cents for increased equity of access to the universities. We took 30 cents to be on the high side, knowing, looking backwards, that about 20 cents on the dollar is required. We said, "Let's put it at 30 cents and let's put it into genuinely increasing equity of access." Whether that's done through a university-by-university supplementary financial aid program, whether it's done by increases to OSAP, whether it's a third government-driven scheme -- we're agnostic; that is, we want to be partners with the government in working out what makes the most sense for the government and for our students. We have no fixed position going into that discussion.

We're happy to help in any way we can. If we can help more by doing it ourselves, we'll do that. If we can help more by being part of a province-wide scheme, we want to do that. My point simply is that if someone is committed to social justice, to genuine progressivity of access, in my view higher tuition and higher student aid is a better mix, a more socially just mix, than the current situation. We want to be full partners in developing that as best we can.

Mr Jim Wilson: I just want to do a quick supplementary because I know Ms Cunningham wants to ask a question. But has SAC taken a position one way or the other on your proposal?

Mr Prichard: SAC has, and I'd be happy --

The Chair: For the record, could we identify SAC?

Mr Prichard: I'm sorry. The Students' Administrative Council is the student government organization representing full-time undergraduate students. We have three student bodies, graduate students, part-time students and undergraduate students, and SAC represents 32,000 students, I believe.

The SAC position has varied a little bit over time, over the last two or three years, depending on elections and pushes and shoves, and I'd prefer to get a letter filed with you from the current president; she was just elected. As I understand their position -- but I'd be prepared to stand corrected -- the SAC position has consistently been that an appropriate blend of improved student aid and increased tuition is consistent with the policies that SAC has professed. SAC has distanced itself from the OFS position and has not joined OFS in our campus: Our campus took another referendum this spring, and the students rejected, by a meaningful margin, membership in the Ontario Federation of Students. The SAC position has been closer to the position taken now by a number of university student groups favouring increased aid and increased tuition fees.

The Chair: A short final question, Ms Cunningham.

Mrs Cunningham: In following along the lines of Mr Martin's questions about how we can be helpful, is the crown corporation legislation that we're looking forward to, which provides tax relief to donors, something the University of Toronto would like to see soon? Have you got people on waiting lists to give you money? Is this an incentive that the government should be pushing along quickly? Perhaps you could just update us on your point of view.

Mr Prichard: This legislation would treat universities as the crown for purposes of charitable gifts, which would make possible large gifts by individuals and other organizations. I think it would be ideal to have three-party agreement in the next week to get that legislation done within two weeks. All three parties have said they favour it. It is absolutely in the interests of Ontario, and the urgency is that, again, other provinces -- Alberta, British Columbia -- have this legislation, and large gifts are being made from Ontario to British Columbia and to Alberta because Ontario doesn't have this legislation in place. We are simply sending money out of the province to those universities in Alberta and British Columbia, and the benefactors are telling us, "Until Ontario has this legislation, we won't make these gifts." If your party, Ms Cunningham, Mr Daigeler, your party, Mr Lessard, your party, could get together and get this done by next week, it is a measurable, doable improvement --

Mrs Cunningham: Decks cleared. Decks cleared publicly.

Mr Prichard: It has been sitting and sitting and sitting. It can be done. It can be done quickly. It can be done with no measurable cost to our fiscal situation in Ontario, and it would be the clearest signal that all three parties do want to make a difference and do want to have a partnership in the province.

The Chair: On that very positive note, I'll bring this part of our session to a close. I want to thank you both for coming and for a number of very interesting suggestions you made.

Mr Prichard: Thank you very much, sir.


The Chair: I now call the representatives of the Ontario Confederation of University Faculty Associations. While they are coming, I just note to members of the committee that we're running about 15 minutes behind. I'm sure that as we pose our questions we'll keep that in mind, but the Chair will not see the clock, so everyone will get half an hour.

I ask the representatives from the faculty associations if they would be good enough to identify themselves and then please begin.

Dr William Graham: Thank you very much, Mr Chairman. My name is Bill Graham. I am president of the Ontario Confederation of University Faculty Associations, and I am a faculty member at the University of Toronto. With me is Marion Perrin, who is the executive director of OCUFA, and we also have two of our professional staff in the audience, Glen Brown and Heather Webster.

I want to say at the outset that we're very pleased to be invited to the committee, and we thank you very much for providing us with this opportunity to speak on behalf of our students. University teachers across Canada and particularly in Ontario, from our point of view, of course, are not a group that has a self-interest in any kind of financial or political way in the funding of students and students' assistance; that is, we don't stand to gain directly ourselves financially or politically. However, our interest is strictly on the side of being able to enjoy and to be able to educate and deal with and work with the best students, the best young people across the province.


We have a special interest in this sense to ensure that those who gain entry to our universities do so because of an ability to learn, and a desire, rather than an ability to pay, and I think unfortunately the present situation in which we find ourselves is based primarily on an ability to pay. I certainly share the views of the president of the University of Toronto that we don't want to see students excluded on the ability to pay.

That said, there are some things that are shared across Canada by university teachers, university teachers' organizations and associations such as associations at particular universities, the provincial associations and the national association, the Canadian Association of University Teachers. Those are an opposition to increased tuition fees and also an opposition to income-contingent repayment loan schemes. These are two items on which your democratically elected voice of faculty across Ontario and across Canada has consistently been 100% clear. Our passion for higher education fuels our belief that access to educational resources must not be based on ability to pay, and therefore we recommend that the present position has to be changed. The status quo cannot continue to go on.

This principle becomes even more crucial as our society's challenges become more complex and as our economy relies increasingly on knowledge and information. Studies as diverse as the Michael Porter study on the Canadian economy and the Ontario Premier's Council report, People and Skills in the New Global Economy, have emphasized the higher education needs of the future workforce. One study concluded that 40% of all new jobs created between now and the year 2000 will require at least 16 years of education, including post-secondary education.

We believe therefore that the primary goal of government policy cannot be to preserve the wealth, class, race and gender barriers which exist in our universities in too many cases, making education a kind of scarce resource, but must be to remove barriers to participation, particularly for groups that have been traditionally underrepresented, for working-class students, for students who are entering education and post-secondary education at an older age and for our visible minorities. We also believe that public investment in a healthy, accessible post-secondary education system is critical to the social and economic wellbeing of the province. We approach the question of student assistance with the objective of providing access to higher education and a belief that the funds thus spent are wisely invested.

We are alarmed at the tone of the current discussions within the government of Ontario that raise the possibility of further reducing the grant portion of OSAP. A shift in student aid from grants to loans would be precisely the wrong move at precisely the wrong time and would significantly affect the access of working people, of people who are older and of minorities. We oppose any policy which would shift the burden of financing post-secondary education further on to students. We believe that education is a societal concern and should be publicly funded.

We have therefore called for a reduction and eventual elimination of user fees for post-secondary education, and this policy is shared by many groups concerned with social equity, such as the Canadian Association of University Teachers, the Ontario Federation of Students, the Ontario Federation of Labour and the New Democratic Party. It is also a policy consistent with the 1976 United Nations International Covenant on Economic, Social and Cultural Rights, to which Canada is a signatory. The covenant states that "higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education."

The benefit to post-secondary studies and university studies is not simply the benefit to the individual alone. In fact, in the case of some individuals of minorities, studies in the United States have shown that upon graduation, for example, African-American students earn 17% less than white students. There is a benefit of course to the individuals from university studies, but that's not the entire benefit. There's also a corporate and business benefit to university education, post-secondary education, and that is the highly trained and skilled working force that comes out of our institutions of higher learning and then is hired by our corporate and business partners.

There is an immense benefit to society. I believe that funding post-secondary education is the biggest tax break going for the citizens of Ontario. They get more from their universities per dollar invested than they do from almost any other resource in this province.

A shift from student aid grants to loans would without doubt affect access to post-secondary education. Students are already graduating with debt loads ranging from $15,000 to $23,000, requiring payments of up to 15% of their starting salaries. Any increase in student debt expectations would undermine access for non-wealthy students.

Economically disadvantaged people are understandably wary of incurring a large debt load. This is particularly true during recessionary times and when current student and parental earnings are down and future job prospects uncertain. I think you must have seen studies that even middle-class earnings are down from what they were some time ago.

What happens to student assistance programs when the grant portion is reduced in proportion to loans? The experience with minorities in the United States provides very good evidence. It is a good laboratory. I recommend your studying the experience in the United States of moving from a basically grant-based student aid system to much more of a student loan system.

The American Council on Education showed that student aid "had a good deal to do with the upswing in college participation by African-Americans" in the 1970s. By 1976 the proportion of blacks aged 18 to 24 enrolling in higher education had risen to 25%, just 4 percentage points less than the whites' enrolment rate of 27%, but by 1980 the enrolment rate of young African-Americans had fallen to 19%, according to the National Center for Education Statistics.

What happened? Why did this happen? Harvard Professor Charles Willie wrote two very important policy studies in 1991 showing that financial aid programs to racial and ethnic minorities as well as to poor and working class people in the early 1970s emphasized grants over loans. This changed in 1978 to place more emphasis on loans over grants. As a consequence the proportion of African-Americans and poor white university students in the 1980s dropped.

I believe the same thing would happen here, namely, if we moved from a grant and loan system to a loan-only or substantially loan system, we would experience the same kind of results, simply further making our education inequitable and freezing out our minorities and working people, and also our older students who are now beginning to try to make some access to post-secondary.


The other thing I want to mention is that I was at a conference in Chicago of the American Association for Higher Education, which is an enormous North American conference consisting of administrators, college teachers and students from basically the United States, but also from Canada. One of the speakers there, Louis Harris, may be known to you as a major pollster. He was speaking on the condition of post-secondary education in North America. He said that we are grouping education around exclusion instead of inclusion and that we cannot use public funds to practise exclusion. We must do something, he said, to make post-secondary education free or easily within the reach of all our citizens who have the ability to make use of it.

Some have proposed that a loan repayment policy geared to income would ameliorate the access problems caused by inadequate grants. The income-contingent loan repayment proposal is often peddled as a means by which dramatic fee increases could be excused. We strongly reject the argument that income-contingent repayment plans would make higher student debt or higher student fees any more tolerable. Increased debt expectations will deter students from low-income backgrounds, regardless of the niceties of repayment schedules. This is especially so given the reality that repayment variables -- interest charges, repayment rates and possible loan forgiveness -- will be amended to suit the financial constraints of the government of the day.

The more sinister aspect of the income-contingent loan repayment plans is the underlying principle that students should assume more of the financial burden for post-secondary education. Should the principle that higher user fees and higher debt loads are tolerable if payment is deferred be established, we wonder where it could lead. Would the plan's advocates suggest a similar approach to the funding problems of primary and secondary education? What percentage of education costs should students bear?

Beyond questions of principle and of access, the plan may be financially unfeasible. In a 1991 study of student loans commissioned by the Ontario Ministry of Colleges and Universities, Dr Peter Atherton of Brock University concluded of the income-contingent loans: "For the province it would appear that little would be gained financially, at the cost of a possible loss of equity for the borrower." I am ashamed to say that the study by Dr Peter Atherton has been buried along with the late Dr Peter Atherton because it didn't give the kind of answer which some people wanted to hear. That was put on the back burner and another study was commissioned -- we don't know at what kind of cost.

There are abstract arguments made by Professor David Stager, by Stuart Smith, by Rod Fraser and by the Council of Ontario Universities, most of which are both self-interested and short-sighted. It's as if these studies entered a time warp, talked about students wearing raccoon coats and swallowing goldfish, a different era, and did not address the serious need that our students face today. We don't have simply a wealthy group of 18- to 24-year-old students; we have a massive multicultural population out there to educate. We have older people coming back to post-secondary education in order to better improve their abilities to contribute to the welfare of the Ontario economy. This is an entirely different kind of situation and must be addressed with a new kind of funding resolve on the part of our government.

Rather than reducing student aid grants we believe that improvements in OSAP are necessary and long overdue. Key to the improvements will be a shift from loans to grants, not the other way around. We attach as appendix 2 other recommendations we have made toward OSAP improvements.

It is ironic that OSAP is in jeopardy while the Ontario government is embarking on a major labour training initiative. The implications could be alarming: that low-income, disadvantaged people, working people, would be channelled into limited skills training opportunities and discouraged from participation in universities, which would be accessible only by the wealthier. We believe this direction is short-sighted and inequitable. We believe that a public investment in student aid is an investment that provides high returns in social equity, economic recovery and cultural diversity.

We hope you will direct the Ontario government to strengthen, not weaken, our student assistance program.

Mr Daigeler: I guess we are pressed for time so I'll try to be brief. First of all, thank you for bringing forward a different approach to some of the previous presentations. I think that's the usefulness of a committee of this nature. You get the broad spectrum of views and a very thorough examination of the pluses and minuses.

I do accept the premise that the university administrators and presidents are coming from, and I think you are coming from that as well: the financial squeeze on the universities. I also accept the premise from which the Treasurer is coming: that Ontario's finances are just not in very good shape and, frankly, won't be in a while, and even if they improve there will be significant pressures from all kinds of areas.

I'm somewhat inclined to say that something has to give. The university presidents, in particular, have been saying, "What has to give is the tuition fees." I think that has been a major focus for their policy approach for some time.

In your view, what do you think has to give, or do you feel it just has to be the Ontario government that has to give more and, by implication, the Ontario taxpayer?

Dr Graham: Of course the government of Ontario certainly faces a problem with regard to its budget. I think we all recognize that. The problem is: What should take priority? Where should our priorities as a society be in training our people -- in preparing them to contribute to the future wealth and growth of this province, or in placing them in jeopardy and possibly on welfare rolls in the future?

There was a letter written by the chancellor of the City University of New York and published in the Chronicle of Higher Education, April 29, which says: "Do we want the 1990s to go down in history as the decade which abandoned public higher education?" It's a very interesting question, but I think it is the fundamental question: Where do we put our priorities?

There are some creative solutions that might be tried. I sit on the general advisory committee of the OSAP review committee. While the majority of the proceedings of that committee are not set and therefore it's not appropriate to make particular comments about where that particular study is, we do know that students are now asked to live on substantially less than welfare recipients.

Why is that so? Why couldn't the government, together with the other two parties, get together and say, "Let's redraft the welfare and the student assistance program so that at least students could be living on welfare"? They'd be a lot better off if they were living on welfare than living on OSAP. They're getting about $127 a week on OSAP as opposed to $167 or so on welfare. I think this is something that could be tried out.

The other thing is, of course, that we provide health care for people as a form of social assistance because we consider it to be a high priority, and we certainly all do. We should begin to treat post-secondary education in the same manner.

It used to be that years ago people in the upper classes went to universities and most of the captains of industry sort of pulled themselves up by the bootstraps; but that's, as I say, a kind of time warp era. We are now in a new world of global competitiveness where we need to have economic growth and be able to compete with the rest of the world. To do that we have to have trained and educated citizens capable of taking up the challenges of the future. To starve the system at its fundamental levels is not just shortsighted; it could lead to a real disaster.


Mr Jim Wilson: I very much appreciate your presentation, particularly page 3 where you bring forward the 1991 US studies concerning access. I do want to share with you very briefly my experience on access.

The studies are interesting; they show that when loans went up and grants went down access for minority groups was decreased, but I want to tell you my own experience when I was on the Students' Administrative Council for four years at the University of Toronto. We were paid by Toronto Board of Education to bring inner-city schools to the campus, grades 10 and 11, to introduce them to university as a viable option after graduation from high school.

We found in the Toronto Board of Education at that time -- and it's a very limited four-year span in the history of things, I know -- that each of those years the board would put money forward because they found that the problem wasn't necessarily money. A lot of these people, their fathers were bricklayers or well-paid tradespeople, and we found that women in minority groups would shame their fathers if they thought of university or college because the father didn't have it; the barriers were more cultural than money.

In fact, I can tell you that in four years money didn't come up in these tours. These kids were all well clothed. They were members of our population and we found the greatest barrier was that they never thought of university or college as a viable alternative after graduation.

Can you point me to studies that might shed some light on that or just your comments on that?

Dr Graham: I agree with you very much, actually. It reminds me of when I go to New York City every once in a while and walk down the streets. The traffic and parking situation on the streets of New York City are almost impossible and in some driveways or whatever you very often see a painted sign that says, "Don't even think of parking here," so you don't even think about it. I should preface this by stating my own background: I come from a working-class family that was not able to attend university.

Mr Jim Wilson: So do I.

Dr Graham: I had to work my way through and I'm not sure I could have made it in the present circumstances. I often think of our universities having a sign painted on them which is visible only to certain groups of people, and it says, "Don't even think about coming here." You can't see it when you're on the inside. I've even forgotten about that. A lot of people from the outside can't even see that.

Mr Jim Wilson: I am just wondering if we concentrate too much on the money and not enough on educating people.

Dr Graham: I think there are two aspects here. One is the financial viability of being able to support yourself. As I say, I'm not sure that I could do it in the present circumstances. The other is that the Ontario Confederation of University Faculty Associations has developed a very substantial educational equity policy, which we presented before the Employment Equity Commission. We would be happy to send you a copy of it. We certainly believe very strongly that the various educational sectors -- primary, secondary, colleges and universities -- have to work together along with government partnership to provide educational equity to all our people. I certainly agree with you to a large extent there.

Mr Jim Wilson: I think the financial element is one of the two features. One is cultural and one is financial.

Mr White: I recall when I was a student I used to go out and put on my best jacket and I'd go and check out Jaguars and Alfa Romeos. Money was never mentioned but it certainly was a barrier.

The issue you have brought up in terms of the publicly funded exclusivity is very significant, I think. We don't want to have the kind that we can't afford as a community, the desire for the kind of exclusivity that was traditional, that was certainly of the raccoon-coat and goldfish-chomping era. So, I would suggest, is OSAP and the whole loan program of a different era. We no longer have a system where you are primarily funding people at universities who are 18 to 22; you are funding people who have returned to university or who might be there only for one or two terms -- and of course the community colleges. The numbers of people, the proportion of women who are recipients of OSAP loans, the proportion of moneys that go to older people and of course to colleges, have changed dramatically in the last 10 years, as I have seen from my own stats.

I would suggest, along with you, that this program needs to be changed dramatically. Of course we recognize that there are limitations in terms of funding; we want to be as effective as we can with the dollars we have. I am wondering: In addition to the kind of access funds that we have already put into place for non-traditional students, how would you suggest improving access on a non-cost level? You have a number of excellent suggestions, but I am wondering about a non-cost level or a dollar-for-dollar equal level.

Dr Graham: I am glad you've mentioned that. I was waiting the other day during the budget speech for the Treasurer to announce a minimum corporate tax. I really believe that if individuals are being asked to contribute to their own education and if society is being asked through the government to contribute to post-secondary education, then the businesses and corporations that profit from the services of the graduates should be contributing to post-secondary education.

I believe that could occur if our corporations and businesses were paying a fair and just tax. I'm not asking to soak the rich. I'm saying we need a fair tax, and let's also consider the notion of income-contingent repayment plans. These are very complicated, potentially very costly and unwieldy mechanisms, and the whole thing could be done much better through the income tax system, in which wealthier people do pay more. It is an income-contingent system or internal revenue system, and why not make use of that rather than inventing new types of mechanisms? Why not make use of a minimum corporate tax to fund our social programs and educational programs?

Mr White: So essentially it's for the tax system that those people who have benefited would be --

The Chair: Mr White, I'm afraid we're more than running behind. I just want to thank you for your presentation, and if there is any other information that you would like to make available to us as we continue our work -- you did mention one report earlier that you had in answer to Mr Wilson's question. Perhaps we could have that so that we can check it.

Ms Marion Perrin: Would you like a copy of our employment equity material?

The Chair: Please.

Ms Perrin: We'll provide that.

The Chair: Okay. Thank you very much.

Dr Graham: Thank you very much.



Le Président (Charles Beer) : J'invite maintenant le représentant du Comité consultatif des affaires francophones, Monsieur Giguère, s'il peut nous joindre. Bienvenue au Comité. Je pense que tous les membres du Comité ont reçu une copie de votre mémoire, si vous voulez bien vous présenter et indiquer votre titre et l'organisation et présenter votre mémoire.

M. Michel Giguère : Merci beaucoup. Mon nom est Michel Giguère. Je suis agent de recherche principal dans le nouveau Comité consultatif des affaires francophones, qui est une agence de type 1 du ministère des Collèges et Universités. Notre présidente, Mme Dyane Adam, avait été invitée à participer. Malheureusement, elle est en poste à Sudbury et n'a pas pu se libérer pour être ici aujourd'hui.

Le Président : Donc vous êtes fonctionnaire du Ministère ?

M. Giguère : Oui.

Le Président : Bon. C'est juste pour être clair que c'est un organisme du Ministère.

M. Giguère : C'est un organisme du Ministère. Par contre, il est géré par un groupe de personnes qui sont complètement externes au gouvernement.

Alors, on tient à remercier le Comité permanent des affaires sociales pour l'occasion qui est offerte de formuler nos inquiétudes quant aux modifications proposées au régime d'aide financière aux étudiants en Ontario. Malheureusement, nous avons dû préparer cette présentation en un temps très court. Nous avons été avisés seulement la semaine dernière de l'invitation du Comité. Nous aurions sans doute été à même de vous faire une présentation plus étoffée, n'eût été de ce délai serré.

J'aimerais vous décrire rapidement ce qu'est le CCAF. Le CCAF a été créé par un décret ministériel à l'été 1991. Son but est de conseiller le ministre des Collèges et Universités sur toutes les questions relatives à l'enseignement postsecondaire de langue française en Ontario, tout autant collégial qu'universitaire. Les huit membres du CCAF ont été nommés par le gouvernement à l'automne dernier et le CCAF s'est réuni pour la première fois en novembre 1991. Le CCAF a depuis été autorisé à embaucher deux agents de recherche qui sont entrés en fonction en février 1992. Début avril, nous sommes entrés dans nos nouveaux locaux et nous sommes devenus complètement fonctionnels.

Les huit membres du CCAF représentent le milieu universitaire francophone ontarien avec trois représentants ; le milieu collégial, trois représentants ; le milieu syndical, un représentant, et le milieu des affaires un autre représentant. La présidente, comme je l'ai mentionné plus tôt, est Dyane Adam, vice-rectrice adjointe à l'Université Laurentienne à Sudbury. Par ailleurs, nous avons six membres qui siègent sans droit de vote. Trois de ces membres représentent, respectivement, le Conseil de l'éducation franco-ontarienne, le Conseil ontarien des affaires universitaires et le Conseil ontarien des affaires collégiales. Le CCAF maintient d'ailleurs des liens étroits avec ces trois organismes. Enfin, les trois autres membres non votants proviennent du ministère des Collèges et Universités.

Le CCAF se réunit régulièrement et se penche sur les questions que lui soumet le ministre en plus d'étudier toute autre question relative à l'enseignement postsecondaire de langue française qui lui semble pertinente.

J'aimerais aborder maintenant nos préoccupations quant à la réforme du régime d'aide financière, d'abord, sur la question des taux de participation des francophones aux études postsecondaires. Dès le départ, j'aimerais mentionner que le CCAF est très préoccupé par la question des taux de participation des jeunes Franco-Ontariens et Franco- Ontariennes aux programmes d'études postsecondaires.

Des recherches récentes des professeurs Frenette et Quazi, de l'Institut d'études pédagogiques de l'Ontario, démontrent clairement que le taux de participation des francophones aux études postsecondaires est nettement inférieur à celui des non-francophones. Les auteurs ont démontré qu'en ce qui concerne la population étudiante, à temps plein du moins, les francophones sont sous-représentés dans les programmes d'études postsecondaires. Par exemple, entre 1979 et 1989, la proportion de francophones de 18 à 21 ans inscrits aux études postsecondaires (collégiales et universitaires de premier cycle) passait de 20 % à 31 %, alors que la proportion chez les non-francophones du même âge passait de 32 % à 49 %. C'est-à-dire donc qu'en tout temps au cours des années 80, un non-francophone avait environ 50 % de chances de plus qu'un francophone d'être inscrit à temps plein à un programme d'études postsecondaires.

J'aimerais vous signaler la figure 1, qui est à la dernière page de votre graphique, où vous allez voir que pendant toutes ces années il y a toujours cet écart de taux de participation entre les non-francophones et les francophones qui se maintient à peu près constant entre 1979 et 1989. Donc, même si vers 1989 les francophones atteignent environ 31 %, ils sont encore loin derrière les non-francophones en ce qui concerne la participation combinée au collège et au premier cycle universitaire, du moins pour ce qui est du groupe de 18 à 21 ans.

Bien que la participation des francophones se soit accrue au cours de la décennie 1980 à 1989, elle n'a en somme fait que progresser au même rythme que celle de la population non francophone, de sorte que le décalage qui existait en 1979 est à peu près le même ; il existe toujours.

De même, alors que les Franco-Ontariens et les Franco-Ontariennes représentent environ 6 % de la population ontarienne, ils ne sont que 4,8 % de tous les inscrits aux études postsecondaires, incluant les étudiants à temps partiel. Or, ils sont sur-représentés à temps partiel, mais même en incluant les étudiants à temps partiel cela représente déjà plus de 5000 francophones «manquants» dans le système d'enseignement postsecondaire pour obtenir une proportion de 6 % dans le système.

Dans ce contexte, il n'est pas étonnant que l'augmentation du taux de participation aux études postsecondaires soit une priorité pour la communauté francophone. D'ailleurs, le ministère des Collèges et Universités a reconnu cette préoccupation de façon explicite en mettant sur pied le programme Éduc-Action, dont le mandat est justement de financer des initiatives qui visent à inciter les jeunes francophones à s'inscrire à des études postsecondaires, et donc à accroître les taux de participation des francophones à l'éducation collégiale et universitaire. Ce programme a été mis sur pied comme conséquence directe des recherches des professeurs Frenette, Quazi et Churchill, auxquelles je faisais allusion toute à l'heure. Il est aussi dans la mouvance de la Loi sur les services en français ; je ne vous apprendrez rien là-dessus, Monsieur Beer. Ce programme se justifiait d'autant plus que la mise en place de la Loi sur les services en français laissait entrevoir une pénurie de professionnels et de diplômés franco-ontariens pour assurer les services en français dans la province.

Au CCAF nous endossons la préoccupation de la communauté quant au faible taux de participation des francophones aux études postsecondaires. Nous tenons par conséquent à rappeler au gouvernement que tout ce qui peut nuire à l'accessibilité de la population en général aux études postsecondaires a un impact encore plus dramatique chez la population de langue française. Compte tenu du taux de participation déjà faible des jeunes francophones aux études postsecondaires, toute diminution de ce taux ne pourrait avoir, d'après nous, que des conséquences désastreuses sur la vitalité et le développement de la communauté franco-ontarienne.

Le CCAF recommande donc que le gouvernement s'assure que toute modification au régime d'aide financière soit précédée d'une étude fouillée d'impact anticipé sur les taux de fréquentation de l'enseignement postsecondaire. Toute modification devant entraîner une baisse du taux de participation devrait être rejetée. En corollaire, toute modification pouvant entraîner une hausse du taux de participation devrait être encouragée.

Quant à la situation économique des Franco-Ontariens, il est indéniable qu'un des facteurs qui entre en ligne de compte lorsqu'un étudiant prend la décision d'entreprendre des études postsecondaires est l'accès à des ressources financières suffisantes. Le régime d'aide financière est un moyen de réduire le nombre de jeunes qui ne poursuivent pas d'études postsecondaires pour des raisons financières alors qu'ils sont qualifiés pour le faire sur un plan strictement intellectuel. Vous avez entendu cela plusieurs fois aujourd'hui.

Les données du recensement de 1986 tendent à démontrer que sur les plans du revenu individuel, du revenu familial et du taux de chômage, les Franco-Ontariens sont défavorisés par rapport à la population en général. Par exemple, le taux de participation au marché du travail en 1986 était de 62,5 % pour les francophones, alors qu'il était de 69 % pour la population ontarienne en général. De même, le taux de chômage en 1986 était de 8,7 % chez les francophones, alors qu'il était de 7,0 % chez les anglophones. D'ailleurs, 5,5 % de la population anglophone avait un revenu supérieur à 50 000 $ en 1986, alors que seulement 4,4 % des francophones étaient dans la même situation. Le revenu moyen de la population ayant le français seulement comme langue maternelle atteignait 16 700 $ en 1986 ; celui de la population ayant l'anglais uniquement comme langue maternelle s'élevait à 17 586 $, une différence de 5 %.

Il nous semble par conséquent que toute diminution de budget des programmes sociaux visant à accorder des suppléments de revenu, et le RAFEO en est un, est davantage susceptible de heurter la population francophone que la population ontarienne en général. Le CCAF recommande donc que le niveau de financement total distribué par le RAFEO ne diminue pas. Si l'aide donnée par le RAFEO devait être réduite, la population francophone en souffrirait probablement de façon disproportionnée.

J'ai aussi essayé de trouver des statistiques sur l'utilisation du RAFEO par les francophones. De façon assez surprenante à première vue, compte tenu de ce qui précède, les francophones ne représentent que 1,7 % des demandes d'aide acceptées par le RAFEO cette année. Compte tenu qu'ils proviennent d'un groupe économiquement défavorisé, on pourrait s'attendre à ce que les francophones bénéficiant d'aide financière soient plus nombreux que leur proportion dans la population étudiante en général.


Plusieurs facteurs peuvent expliquer cela. D'abord, les francophones sont, toutes proportions gardées, davantage inscrits à temps partiel dans les universités que les anglophones. Ainsi, bien qu'ils représentent 4,9 % des inscrits à l'université, ils ne représentent que 4,1 % des inscrits à temps plein. Or, le système d'aide financière tel qu'il existe actuellement n'est pas conçu d'abord pour les étudiants à temps partiel, puisque même chez les anglophones à peine 1 % des bénéficiaires sont des étudiants à temps partiel.

D'autre part, la définition de «francophone» utilisée par le RAFEO peut créer problème. On utilise le fait que le demandeur a utilisé le formulaire français pour le classer «francophone». Or, d'après nous, il est très possible que de nombreux francophones remplissent le formulaire en anglais simplement parce que le formulaire français n'est pas disponible ou parce qu'ils n'en connaissent pas l'existence.

De fait, lorsqu'on a demandé à un groupe de 259 jeunes francophones s'ils connaissaient les différents volets du régime d'aide financière, ils ont répondu oui à 63 % pour les bourses, à 56 % pour les prêts et à 33 % seulement pour les prêts canadiens. Le système semble donc être assez méconnu, ce qui pourrait aussi expliquer en partie le faible taux de demandes francophones.

Les données du RAFEO démontrent cependant que les francophones ont un plus haut taux de succès que les anglophones dans l'obtention d'aide financière. En moyenne, les francophones reçoivent des bourses plus élevées et des prêts moins élevés que les anglophones. Ceci est sans doute dû, d'après les responsables du régime d'aide financière, à ce que les francophones ont moins de ressources financières que leurs homologues anglophones et se qualifient donc plus facilement pour une bourse. Encore une fois, on peut voir que les francophones seraient davantage touchés que les anglophones par une modification qui réduirait le montant accordé en bourse.

Comme les bourses vont surtout à des étudiants provenant des familles à très faible revenu et que les francophones proviennent proportionnellement plus de ce milieu que les anglophones, une réduction du montant accordé en bourse affecterait les francophones de façon significative.

Enfin, un dernier point sur l'endettement étudiant. Bien que les données ne soient pas disponibles selon la langue maternelle, les responsables du RAFEO calculent qu'au sortir du collège, un étudiant ayant bénéficié du programme doit en moyenne plus de 8100 $, alors que l'étudiant qui termine son programme universitaire est en moyenne endetté de 14 400 $. Ce dernier montant est déjà très élevé puisqu'il représenterait, selon l'étude du professeur Peter Atherton qui a été citée par l'intervenant précédant, environ 8 % à 10 % du salaire initial moyen d'un diplômé universitaire, ce qui constituerait la limite acceptable d'endettement d'après les institutions financières. C'est donc dire que tout accroissement de l'endettement aurait tendance à faire franchir cette limite d'endettement acceptable aux étudiants universitaires.

Dans le cas des francophones, la situation serait encore plus grave. Les travaux de Frenette et Quazi montrent que les étudiants universitaires de langue française sont peu inscrits aux domaines lucratifs comme les sciences de la santé, les sciences de la nature et le génie. Ils sont par contre beaucoup plus présents dans des domaines comme l'éducation et les sciences sociales, domaines traditionnellement moins lucratifs. Il apparaît donc clairement que l'accroissement de l'endettement des étudiants universitaires toucherait bien davantage les francophones que les anglophones.

D'ailleurs, le remboursement lié au revenu, bien que certainement complexe à mettre en place, aurait au moins l'avantage de tenir compte du fait que les francophones se retrouvent dans des carrières traditionnellement moins rémunératrices. Dans un esprit de justice sociale, il nous semble que ce principe devrait être appliqué.

En conclusion, il serait péremptoire à cette étape-ci de tenter déjà de prédire l'impact de transformer le système de prêts et bourses en un système de prêts seulement. Les données établissant les relations entre la participation aux études postsecondaires et l'accès à des ressources financières suffisantes semblent partielles. Tout ce qu'on a pu consulter semblait inutile pour prévoir les conséquences des changements proposés. Cependant, pour nous une chose semble claire : tout changement qui irait dans le sens de diminuer l'aide aux étudiants, de diminuer l'accessibilité à l'enseignement postsecondaire ou encore d'augmenter l'endettement pourrait avoir des conséquences désastreuses sur la communauté francophone.

Les Franco-Ontariens, avec l'appui de leurs institutions communautaires et du gouvernement provincial, ont entrepris un effort pour diminuer l'écart qui sépare leur taux de participation aux études postsecondaires de celui de la population en général. Cet effort a donné de timides résultats jusqu'à maintenant, et le gouvernement devrait être très prudent pour s'assurer que tout ce travail ne sera pas effacé du jour au lendemain suite à une décision trop rapide quant à la réforme du régime d'aide financière.

Comme vous le savez, la communauté francophone est déjà très préoccupée par la rareté des ressources disponibles en matière d'enseignement postsecondaire de langue française. Je pense ici aux questions des collèges de langue française qui sont réclamés par la communauté. Toute diminution de ces ressources, dont celles que les francophones reçoivent à travers le régime d'aide financière, provoquera inévitablement un mécontentement important dans la communauté.

Par conséquent, nous aimerions suggérer à nouveau que toute modification au régime d'aide financière soit précédée d'une sérieuse étude d'impact anticipé, afin de s'assurer que l'accessibilité aux études postsecondaires ne soit pas compromise ni pour la population en général ni pour les francophones de l'Ontario en particulier.

Le Président : Merci beaucoup pour la présentation et, en effet, toute une série de points qui ne touchent pas simplement au programme mais aussi à l'éducation au niveau postsecondaire auquel font face les francophones. Maintenant, nous avons le temps pour une question par caucus. Je vais commencer avec Mrs Cunningham. Do you have a question?

Mrs Cunningham: You'll have to excuse me, because I don't speak French. I do speak English, if we have a translator.

Were you here for most of the afternoon?

Mr Giguère: No, I just arrived.

Mrs Cunningham: Then my question probably won't be particularly relevant. I was going to ask if you had heard about the presentation that was made on behalf of the colleges and universities with regard to structured payments and the repayment of loans and a shift away from grants. You haven't had a chance to look at that.

Given the presentation you made, there are probably a couple of things you are interested in. First, there's the accessibility; the second is to be able to get more francophone students into the universities. In the short term, I just wonder if you think the greatest deterrent is the financial problem, or is it another one that we should be looking at?

Mr Giguère: I'm pretty sure finances are quite important. As Mr Wilson said a bit earlier, it's certain that there is a cultural barrier as well. But the organizations in the community are working on those cultural barriers, and there is already a little program at the Ministry of Colleges and Universities trying to encourage young francophones to register in colleges and universities. This is good work that is being done.

My point is that any reduction in financial assistance would be felt even more in the francophone community because of the average income being lower and the rate of registration being lower as well.

M. Drummond White (Durham-Centre) : Vous avez un bon sondage sur le sujet des taux de participation, mais j'ai une petite question. Pour la participation des francophones, il est vrai que ceux qui ont réussi sont bons, mais le taux de participation est peut-être le résultat du fait que nous n'avons que deux ou trois universités bilingues et pas une seule université francophone. Qu'en pensez-vous ?

M. Giguère : Vous parlez des taux de participation à l'enseignement universitaire ?

M. White : Oui.

M. Giguère : Ça peut être le cas. On n'a pas vraiment de données là-dessus. Ce qu'on pense c'est qu'en ce moment il y a des programmes disponibles dans le Nord à l'Université Laurentienne, dans l'Est à l'Université d'Ottawa et d'autre part au Collège Glendon de l'Université York. Ces programmes ne sont pas suffisants pour couvrir l'éventail de toutes les disciplines. Par contre, il y a beaucoup de progrès qui a été fait depuis deux ou trois ans et c'est certain qu'il y a encore du progrès à faire.

Par contre, on s'aperçoit, avec les statistiques des professeurs Frenette et Quazi, que les étudiants ne semblent pas s'intéresser à s'inscrire à l'enseignement postsecondaire. Il semble y avoir un peu cette barrière culturelle qui empêche les étudiants vraiment de s'inscrire en aussi grands nombres.

C'est vraiment sur des choses comme ça que l'Association canadienne française de l'Ontario, par exemple, et beaucoup d'autres organismes communautaires travaillent en ce moment pour encourager les francophones à s'inscrire dans les collèges et dans les universités et leur montrer quels avantages ils pourraient tirer d'un passage au collège et à l'université plutôt que simplement laisser tomber les études après la 13e année. Cet aspect-là est quand même assez bien couvert par les organisations communautaires.

Maintenant, si un jeune francophone, une fois qu'il a brisé cette barrière, se rend compte qu'il n'a pas les ressources financières pour accéder à l'enseignement postsecondaire, là toute bonne volonté pourrait tomber. Le fait que les francophones, au régime d'aide financière, obtiennent des bourses plus élevées que les non-francophones nous semble indicatif qu'ils en ont plus besoin encore que la moyenne de la population en général.

M. White : Oui, c'est un bon signe.

Le Président : Une dernière question. Monsieur Daigeler.

M. Hans Daigeler (Nepean) : D'abord, je voudrais vous féliciter pour avoir préparé une excellente soumission même si vous n'avez pas eu beaucoup de temps pour la préparer. Je trouve que vous avez touché aux questions les plus importantes d'une manière très logique et très bien présentée.

Vous avez déjà répondu d'une certaine manière à ma question : quelles sont les initiatives de la communauté franco-ontarienne elle-même pour augmenter la participation des étudiants et étudiantes francophones ?

Au Québec, le taux de participation est aussi un peu moindre que la participation du reste du Canada dans les universités et les collèges. Alors, est-ce qu'on pourrait dire que le taux de participation des francophones est inférieure à l'ensemble du pays ou est-ce que c'est un problème spécifique à la situation minoritaire en Ontario ?

M. Giguère : Je ne pourrais pas vous répondre de façon définitive -- je n'ai pas les chiffres -- mais je lisais récemment dans Le Devoir une enquête qui disait que le Québec avait fait un rattrapage énorme dans les dix dernières années par rapport à l'Ontario, pas l'Ontario francophone mais l'Ontario en général. Il semble y avoir eu beaucoup de rattrapage sur les taux de participation au Québec. Par contre, ces rattrapages-là ne se sont pas faits chez les minorités hors Québec.

Je ne sais pas exactement quelle serait la situation par exemple en Acadie ou dans d'autres provinces où les francophones sont en minorité, mais j'ai l'impression qu'il y a un peu un décalage entre les francophones hors Québec et les francophones au Québec, de sorte qu'on peut espérer que, dans la prochaine décennie, il y aura soudain ce rattrapage ici.

Mais je pense que le graphique à la dernière page nous montre qu'il n'y a pas de rattrapage qui se fait entre les francophones et le reste de la population en Ontario en ce moment. La croissance est bonne, mais ce n'est que la même croissance que celle de la population en général. Le retard n'est pas comblé.

The Chair: Merci beaucoup, Monsieur Giguère.

Just before ending our meeting, I would remind the subcommittee again: tomorrow at 3:30 in room 230, or earlier if routine proceedings have ended. I also remind committee members that next Monday we'll be in committee room 2, not in this room. There are representatives from a number of the European countries who are going to be here and they'll be making use of this room, so it will be in committee room 2. This meeting stands adjourned.

The committee adjourned at 1814.