Budget 1998 
Canadian Opportunities Strategy - 1
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Archived - Introduction

Canada's economic prospects will depend more and more on the skills and strengths of our people. Canadians must have the knowledge and skills to participate in the changing economy. A productive and innovative workforce can give Canada the vital edge in competing in world markets. Preparing Canadians for the 21st century is our goal.

For individual Canadians, knowledge and skills offer hope and opportunity: the prospect of better jobs and a higher standard of living. The acquisition of knowledge and skills is the greatest equalizer of all.

The Canadian Opportunities Strategy will help ensure that all Canadians -- especially those with low and middle incomes -- have an equal opportunity to participate in the changing economy. It will do so by reducing financial barriers and other obstacles that stand in the way of acquiring skills and knowledge. By expanding access to opportunity, the government is building a stronger economy and a more secure society.

Creating Opportunity by Expanding Access to Knowledge and Skills

Expanding Canadians' access to knowledge and skills is one of the most significant challenges facing us as we prepare for the 21st century. Our quality of life as Canadians and our economic prospects as a country depend on our abilities to think, innovate and create in a world transformed by information and technology. The changes that are taking place in the economy are altering the way Canadians work and the skills they need to find a job, to keep a job, or to move on to a better job.

In a rapidly changing labour market, the knowledge and skills that Canadians need for employment will evolve through their working lives.

Some think learning takes place solely in a classroom and that it is aimed only at the young. In fact, learning is important for Canadians of all ages. It takes place both through full- and part-time study, and in a variety of settings -- in universities, community colleges, vocational and technical institutes, and CEGEPs. Gaining work experience and on-the-job skills are vital ways of learning too.

The doors to knowledge and skills should be open to all because they are the doors to equal opportunity.

The link between knowledge, skills, and jobs

The premium that the economy places on knowledge and skills is reflected in Canada's employment statistics. Over the past two decades, job growth has been much faster for those with higher skills.

Since 1981, employment among those with high school diplomas or less has fallen by two million, but for people with higher qualifications, it has risen by almost five million jobs.

The chart below shows the growth in employment for those with more than high school education compared to those with high school or less, using 1976 as the benchmark year.

Over time, unemployment rates for young people with better education have been consistently much lower than for those with less education.

In 1996, the unemployment rate for university graduates was only 5 per cent, while for those with less than a high school diploma it was 15 per cent. This gap exists for all age groups.

The payoff

For the individual, investing in learning pays off in better and more secure employment and higher earnings. Even with rising education costs and the earnings forgone while at university, college, or vocational and technical institutes, the average graduate can expect to receive a rate of return for his or her studies ranging from 8 per cent to 20 per cent in future earnings. The rate of return to society as a whole is significant as well.

Over the 1984-1994 period, a graduate of a university, college or vocational and technical institute earned an average of 45 per cent more than someone who did not complete high school.

Enrolment in post-secondary education is rising

Increasingly, Canadians recognize the value of post-secondary education. Enrolments in universities, colleges, vocational and technical institutes, and CEGEPs are at an all-time high. Full-time enrolment is close to one million, with another 430,000 Canadians enrolled in part-time study.

Currently, one in every three young people is enrolled in full-time post-secondary education, compared to slightly less than one in every five 25 years ago. Today, Canada ranks first among industrialized countries for the proportion of young people age 18 to 21 pursuing post-secondary education.

And more adults are enrolling in universities and colleges -- often in part-time study.

Costs are rising

Most of the costs of post-secondary education in Canada are funded by governments. Tuition fees only covered about 14 per cent of the $16 billion that Canada spent on higher education in 1995-96.

However, tuition fees and other student costs have more than doubled over the past decade and have been rising faster than family income.

Last year, university tuition fees rose an average of 9 per cent across the country. University fees now average $3,120 a year, while community college fees average $1,360.

Access is not equal

In 1995, only 22 per cent of first-year university students came from families with incomes under $30,000, while 36 per cent of the population reported family income under $30,000.

And 32 per cent of first-year students came from families earning more than $70,000, while only about 20 per cent of comparable Canadian families earned that much.

Students from lower-income families rely more on student loans. A recent study suggests that an understandable reluctance to take on large debt deters many from pursuing higher education.

Student debt is rising

In 1997-98, more than 380,000 students (or about 30 per cent of students enrolled in universities, community colleges, and vocational and technical institutes) are being supported by the Canada Student Loans Program.

For a typical graduate with student loans, debt loads following a four-year program averaged $13,000 in 1990-91. This is projected to increase to over $25,000 next year. About $15,000 of this debt will be under the Canada Student Loans Program and $10,000 under provincial loan programs.

In 1990, fewer than 8 per cent of graduates had debt over $15,000. Today, over 40 per cent of graduates have student debt exceeding $15,000.

Over 80 per cent of graduates have paid their loans in full. Nevertheless, student debt loads are a serious problem for those who are unemployed or in financial difficulty for other reasons.

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