Budget 1998
Budget Speech - 2
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Archived - Preparing Canadians for the Jobs of the 21^st Century: Providing Access to Opportunity

Mr. Speaker, equal access to opportunity is a question of fairness, of fundamental social justice.

But it is also about the fundamental economic challenge we face, the challenge of jobs.

For 200 years in Canada, prosperity and knowledge have gone hand in hand. However, let us understand the true nature of the dynamic at play. As a society, we are not educated because we are prosperous. We are prosperous because we have extended the frontiers of education.

And today more than ever, getting a good job, achieving a higher standard of living requires even greater skills and broader knowledge.

The creation of jobs in the new millennium will be anchored in two essential components: the infrastructure of innovation, and the infrastructure of skills and knowledge.

In today's evolving world -- to get a job, to keep a job, to move on to a better job -- there is only one resource that will equip Canadians to succeed, and that is to develop the very best skills they can.

In a very real way, the opportunity to learn must be the central part of any national jobs strategy.

The facts speak for themselves.

Those who graduated from university, community college and vocational institutes enjoy incomes 45 per cent higher than those who did not complete high school.

During the last recession, for those with only high school, 640,000 jobs were lost. However, for those with degrees or diplomas, 450,000 jobs were gained.

Thus it is not surprising that the unemployment rate for those with less than a high school diploma is 15 per cent, while for those with a university degree, it is only 5 per cent.

However, this is by no means only about university. It is about every community college and vocational and technical institute in the country.

The demand for knowledge and skills spans all occupations, at all levels, in all sectors -- from factory to farm, from software to sales, from medicine to mechanics.

Nor is this only about young people.

It is also about the need to upgrade skills and develop new ones consistently throughout all of our working lives.

Furthermore, if knowledge and skills underpin a strong economy, so too, they underpin a secure society.

The backbone of a country is the strength of its middle class.

There is no better way to reduce the gap between rich and poor, no surer way to widen the mainstream, no more meaningful way to reduce the numbers of those left behind, and no better way to provide a higher quality of life for Canadians, than to facilitate the path to greater education.

Quite simply, every Canadian who wants to learn should have the opportunity to do so.

Yet today, from Corner Brook to Coquitlam, there are tens of thousands who do not have that opportunity. It is a fact that students from lower-income families are under-represented in our institutions of higher learning. And the fault line widens every time a young Canadian is denied access to the skills they need -- not because the courses are too hard but because the costs are too high.

Too many are deterred from pursuing higher education because of fear of large debt. Too many who have made the decision to go forward are struggling with rising costs. And too many parents worry that they will not be able to save for their children's future.

It is a great irony -- and a greater tragedy -- that at the very moment when the country cannot afford to do without higher learning, it is becoming more difficult than ever to afford.

Now, before proceeding further, let me be very clear on one point.

Education is a matter of provincial jurisdiction. It is the provinces that are responsible for the curriculum, for educational institutions, for quality.

We are not talking here of the content of what is taught. What we are talking about is equal access to opportunity. Indeed, what we are dealing with is the responsibility of all governments and all sectors of society to ensure that Canada builds on its strengths in an increasingly competitive and interdependent world economy.

Each of us must do our part. We will only be truly successful in creating opportunity for all if we act in partnership -- a partnership of parents, of educators, of the private sector, and of provincial and federal governments. In that partnership, some roles are exclusive. Others are shared.

For decades, both the federal government and the provinces have played their part in providing equality of access to those in financial need.

Today, as demands evolve, we must strengthen and adapt that assistance to better ensure that all Canadians are provided an equal opportunity to participate in the knowledge-based economy of the future.

Why? Because the need is so great. Because the cause is so clear.

Mr. Speaker, let me quote directly from the communiqué issued by the Prime Minister and the provincial premiers at their meeting last December.

"The First Ministers agree on the importance of lessening students' financial burden. Furthermore, it is agreed that the Minister of Finance and the Minister of Human Resources Development will accelerate work in concert with provincial and territorial Education Ministers so that the Minister of Finance can take account of this work in the next federal budget."

Mr. Speaker, today we are taking action in response to that consensus and that request.

I would like to set out the Canadian Opportunities Strategy -- a co-ordinated set of measures building on the thrust of the last budget, designed to create opportunity by expanding access to lifelong learning.

Clearly, action is required on seven fronts.

First, promoting access by helping students in financial need cope with rising costs.

Second, helping those who have graduated manage growing debt burdens.

Third, providing Canadians with access to the financial resources required to upgrade their skills throughout their carreer.

Fourth, assisting families to save for their children's education.

Fifth, supporting graduate and post-graduate students so that they can continue to develop their skills and do the research that will pay off for the whole country.

Sixth, helping young people make the transition from school to work.

Finally, connecting Canadians -- young and old, rural and urban -- to the technology of the information age and all the knowledge it makes possible.

The Canadian Opportunities Strategy, which we are detailing today, helps move Canada forward on all seven of these fronts.

The Canada Millennium Scholarship Foundation

First, last fall in this House, the Prime Minister said and I quote: "There can be no greater millennium project for Canada, and no better role for government, than to help young Canadians prepare for the knowledge-based society of the next century." He then went on to call for a major investment to provide thousands of scholarships to deserving Canadian students. In this budget, the Prime Minister's commitment and vision become reality.

Today, we are announcing the largest single investment ever made by a federal government to support access to post-secondary education for all Canadians.

The Canada Millennium Scholarship Foundation -- a private, independent institution -- is being created. The government will provide the Foundation with an initial 10-year endowment of $2.5 billion. As a private foundation, it will be able to receive donations and bequests from across the country.

This investment will provide over 100,000 scholarships to low- and middle-income students each and every year over the next decade. The scholarships will average $3,000 each, per year. As a result, a student receiving a scholarship over four years will see his or her debt load cut by $12,000, half of what it otherwise would have been.

These scholarships will be awarded to Canadians of all ages, part-time as well as full-time students.

Those attending all publicly funded institutions -- not simply universities, but colleges, CEGEPs and vocational and technical institutes as well -- will be eligible to apply.

Canada Millennium Scholarships will be for the students at Durham College in Oshawa and the Northern Alberta Institute of Technology in Edmonton just as much as they will be for those at the University of Montreal or Dalhousie.

Many Canadians would like to be able to attend college or university outside their home town or home province, at an institution of their own choosing, but today, rising costs make that less and less of a possibility. We believe that more Canadians should have the opportunity to attend the institution that best meets their needs. We also believe that Canadians should get to know their country better. Therefore, recipients of Canada Millennium Scholarships who want to travel to study outside their home town or province will be provided help to do so.

The Canada Millennium Scholarship Foundation will be a private, independent body. It will be managed by a board of directors, each and every one of whom will be a private citizen. They, not the government, will decide how best to design the scholarships within the mandate they are given.

The Council of Ministers of Education, representing the provinces as well as representatives of the education community, will be given a key role in identifying who the directors should be. We will ensure that a student is on the board.

Mr. Speaker, once established, the Foundation will consult closely with provincial governments and the education community. The goal will be: to award scholarships by the Foundation to individuals in a manner that avoids duplication, to build on existing provincial needs assessment processes, to complement existing provincial programs. The legislation creating the Foundation will provide it with the administrative flexibility required to meet these objectives.

In particular, the Foundation will have the authority, subject to mutually agreed needs, merit and mobility criteria, to contract with appropriate provincial authorities for the selection of those recipients in a province to whom the Foundation will award Canada Millennium Scholarships.

Above all, we must significantly increase access to post-secondary education for low- and middle-income students.

Mr. Speaker, this investment in the future of our country is the result of our successful battle against the deficit. It is an investment that will pay for itself over and over again in the years ahead.

The Prime Minister stated it best last fall and I quote:

"I hope this can do in the 21st century for our economy and our country what the investment after World War II in post-secondary education for our returning soldiers did for our economy and our country in the last half of the 20th century. … This will not be a millennium monument made of bricks and mortar, but when future Canadians look around they will see its legacy everywhere."

Helping Graduates Manage Their Debts

Next, Mr. Speaker, Canadians do not need to be told that student debt has become a major problem. Students know it. Their families worry about it. Graduates must deal with it.

In 1990, only eight years ago, the average debt load after a four-year program was $13,000. By next year, it will have almost doubled -- to $25,000. At the beginning of this decade, fewer than 8 per cent of borrowers had debts larger than $15,000. Now, almost 40 per cent do.

Students are graduating with a mortgage before they even consider buying a house -- and, for many, before they have been able to land a job. There are few students who do not find the burden of loan repayment to be a difficult one.

Mr. Speaker, businesses are able to deduct the interest cost of buying equipment when investing in their future.

We believe that individual Canadians should receive similar treatment when investing in their future.

Therefore, this budget announces that, for the first time ever, all students will be given tax relief on interest payments on their student loans. This will be provided through a tax credit, which can be carried forward for five years.

For a student just graduating with a loan of $25,000, this means a reduction of $530 in their taxes in the first year alone. Over a 10-year paydown of a student loan, this could mean as much as $3,200 in tax relief. Mr. Speaker, this measure will help one million Canadians who are repaying their students loans.

That being said, there are those who need further assistance in shouldering a debt burden that is simply too large for them to handle alone.

To help these individuals, changes will be made to provide further interest relief on their loans and for longer periods of time. This will benefit up to 100,000 graduates in financial hardship.

For most, these measures will be sufficient. However, there will still be a very small minority who, despite interest relief, cannot cope with their debts. For these people, after careful examination of all of the circumstances, the principal amount of the loan itself will be reduced so that payments are more affordable.

This form of help will be considered five years after an individual has ended their studies.

The measures we are announcing today will help to ensure that Canadian students are not mired in a swamp of debt from which they can never escape.

However, in order to ensure that Canada Student Loans continue to provide as much assistance as they can to those who need it, we will be taking steps to ensure that both educational institutions and students use the program as it is intended.

Canada Study Grants

Mr. Speaker, the costs of study are a challenge for many Canadians, but there are some for whom the problem is particularly acute. We all know young people who made the decision early in life to have a family and as a result were unable to continue their education. Many are women who are today heading single-parent families.

Today, many want to return to their studies to improve their prospects and those of their children. Given the family obligations they have, the road ahead can be a very rough one indeed.

Therefore, in order to expand opportunities for these Canadians, we are announcing today that new grants of up to $3,000 per year will be made available to over 25,000 students in financial need who have children. These grants will help them whether they pursue their studies full time or on a part-time basis.

Supporting Learning During Canadians' Working Lives

Mr. Speaker, Canadians know that their ability to continue earning depends on their ability to continue learning.

There are a growing number of part-time students, the majority of whom are trying to manage the difficult balance between work, family and study.

We have already announced that part-time students will be eligible for Canada Millennium Scholarships and those with children, for special grants. Today, we are also announcing two additional steps to support part-time study.

The education credit is one of the major ways government provides tax assistance to students. It helps with the living expenses of those at university, community college or vocational school. Up to now, this has been available only to full-time students. We are announcing today that, for the first time, part-time students will have access to the education credit as well. This will assist 250,000 students who could not take advantage of this credit before.

Next, the 1996 budget enabled full-time students who are parents to claim the child care expense deduction against all types of income. Today, we are making part-time students as well eligible for that deduction. Fifty thousand students will benefit from this action.

As a result of these two measures, the tax savings for a typical part-time student with two young children will more than triple -- from $300 to almost $1,000 per year.

Mr. Speaker, there is more to be done. Many Canadians already in the workforce need and want to upgrade their skills through full-time study. Yet many do not have reasonable access to the financial resources this requires.

Today we are moving forward to help meet this challenge.

Effective January 1999, Canadians will be able to make tax-free withdrawals from their RRSPs to support full-time education and training.

There are few things more critical to ensuring an adequate income in retirement than ensuring a good income when working. Providing opportunity to improve skills is an important way to make sure that happens.

The office worker who wishes to enhance their computer skills, the assembly line worker who wants to retrain as a machinist -- these Canadians and more will now have access to a resource that, until now, they were prevented from using.

Assisting Parents to Save for Their Children's Education

Mr. Speaker, much of what we have announced so far concerns today's immediate needs.

But we must look ahead to the students of tomorrow.

Part of the answer lies in the over 100,000 Canada Millennium Scholarships that will be awarded each year. Part of the answer lies in assisting parents to prepare and plan for their children's future education.

Today, Canadians are already saving for their children in many ways. Some buy bonds. Some set up special bank accounts. Many simply set aside a bit of money whenever they can. Grandparents, aunts and uncles put money away at birthdays and at Christmas.

One way government assists Canadians in saving for their children's education is by supporting registered education savings plans -- RESPs. Money placed in these plans grows tax free until the child is ready to go on to college, to a vocational institute or to university.

Over the past two years, Mr. Speaker, we more than doubled the annual contribution limit for RESPs. Today, we are taking a significant further step.

Today marks the beginning of a new partnership with parents. We believe government has a role to play investing alongside those who seek to save for their children's education.

Therefore, effective January 1 of this year, the government will provide a Canada Education Savings Grant to supplement new contributions made to RESPs.

For every dollar contributed, up to an amount of $2,000 a year, the federal government will provide a Canada Education Savings Grant equal to 20 per cent of the total. This money will be paid directly into the child's plan.

If contributors are unable to save the full amount in any particular year, they will be able to carry the unpaid amounts forward, allowing them to catch up in later years.

Let me illustrate the impact of saving with a Canada Education Savings Grant beginning when a child is three.

If parents were to save $25 every two weeks -- for example, through an automatic deduction from their pay cheque -- even if conservatively invested, their child, beginning at age 18, would receive $4,700 each year for four years to finance his or her schooling. And of that amount, almost $800 each year would be the direct result of the Canada Education Savings Grant we are announcing today.

As a result of the initiatives we are taking, RESPs will now be among the most attractive savings vehicles available for a child's education.

We believe that RESPs will soon come to be considered as essential for future planning as registered retirement savings plans are now.

They represent one of the best things parents can do for their children, one of the best things grandparents can do for their grandchildren -- it speaks to the partnership of generations.

Support for Research and Development and Graduate Study

Mr. Speaker, there can be few things more critical to determining our economic success in the next century than a vigorous, broad-based research and development effort. The fact is the more R&D that is done in Canada, the more jobs that will be created for Canadians.

That is why, for instance, we created the Canada Foundation for Innovation last year, to provide the facilities at our hospitals, universities and colleges that will support world-class research.

This year we are providing new support for researchers themselves, so the best and brightest can realize their dreams and fulfill their promise right here in Canada. They will do so by opening up new frontiers of knowledge in medicine and in the natural and social sciences.

For two decades, the government's granting councils -- the Natural Sciences and Engineering Research Council of Canada, the Medical Research Council of Canada and the Social Sciences and Humanities Research Council of Canada -- have provided crucial support for these researchers and their projects.

For example, Dr. John Polanyi, Nobel Prize winner and inventor of the chemical laser, has been a recipient of such support throughout his career. So, too, has Dr. Fernand Labrie of Laval University whose research work on enzymes and hormones has opened up vast possibilities for the treatment of breast and prostate cancers.

As we brought the deficit down, many difficult choices were made. One of these was a reduction in funding for the granting councils. Today, we are announcing that, effective April 1, 1998, their budgets will be restored to their original 1994-95 levels. In the years ahead, these resources will grow further. Indeed, by the end of the year 2001, they will have received more than $400 million in additional resources and their budgets will be at their highest level ever.

Supporting Canada's Youth to Find Jobs

Mr. Speaker, the youth unemployment problem remains grave in this country. As we have just seen, an important part of the answer lies in higher education. However, too many of our young people still confront the dilemma they know only too well -- no experience, no job, no job, no experience.

To help address this problem, the government launched a Youth Employment Strategy in February last year. As part of that strategy, more than 120,000 career summer placements and over 50,000 internships are being created over a two-year period.

Clearly, the private sector is the engine of job creation. Many employers are rising to the challenge of helping to hire and train more youth. However, much more remains to be done. Many more employers must rise to the challenge if it is to be overcome.

Today, we are introducing two measures that we believe will support the private sector and others in this endeavour. They, along with the measures announced today and others previously taken, are part of what we believe must become a country-wide effort to deal head on with the problem of youth unemployment.

First, we are announcing that, over the next two years, employment insurance premiums paid by employers will be eliminated for new jobs they create for young Canadians between the ages of 18 and 24.

Second, we recognize that the challenge of finding a job is toughest for those who have dropped out of school. For these young people, the need for skills is great and on-the-job training is often the best way to develop them.

Today, Youth Service Canada is helping over 5,000 unemployed young Canadians get work experience in local businesses and community-based projects. One year after completing their Youth Service Canada work experience, 85 per cent of participants had found work or returned to school.

In this budget, we are more than doubling the resources devoted to this program in order to assist those, particularly between ages 20 and 24, who have not completed high school. Wage subsidies of up to $10,000 will be provided to give them the kind of work experience that is key to long-term employment.

Connecting Canadians to the Technology of the Knowledge Economy

Mr. Speaker, computer skills have now joined reading, writing and arithmetic as one of the basics of learning. Having access to a computer puts the world literally at one's fingertips. There are two programs in place to give Canadians access to the technology and knowledge that makes it all possible.

First, SchoolNet, introduced by the government four years ago, is bringing the Internet into the classroom, making it a vital learning tool in every school in Canada. It allows students to access huge volumes of material in a matter of seconds -- making learning more satisfying and teaching more effective.

The Computers for Schools Initiative, which is part of SchoolNet, donates thousands of computers to schools across the country, helping our children develop computer literacy at an early age, the easiest time to learn.

Second, the Community Access Program is bringing Canada on-line. Five thousand communities and libraries are being connected. Five thousand more sites await.

The goal of both these programs is to make sure that, no matter where Canadians live, no matter how small a town, how small a school, rich or poor, every student -- indeed every citizen -- has access to the same storehouse of knowledge.

To bring that goal ever closer to realization, the government is significantly increasing the resources available to both SchoolNet and the Community Access Program. There will be additional investment as well for CANARIE, Canada's world-leading research effort into next-generation communications networks.

This unique and extensive private and public sector consortium will enable Canada to put in place the world's fastest coast-to-coast information network, accessible to schools, communities and businesses. At the dawn of the information economy, this will provide Canada with an important leg up on the rest of the world.

Mr. Speaker, let me summarize what the Canadian Opportunities Strategy means for Canadians.

For the student at college or university or vocational institute, it means a comprehensive system of scholarships, study grants, student loans and tax credits.

For the graduate coping with student loans, it means a new tax credit to support repayment and new loan relief if they are in a situation of financial hardship.

For the worker seeking to renew his or her skills -- whether through part-time or full-time study, whether at university, college or vocational institute -- it means increased support that will now be available for students of all ages, plus the opportunity to draw on RRSPs to increase earning capacity.

For parents and grandparents, it means the Canada Education Savings Grant that will make RESPs the best way by far to save for a child's future education.

For post-graduate students and researchers, it means greater support of their important work through the granting councils.

For the young person having difficulty joining the workforce, it means new opportunities to gain practical work experience.

And for children, as well as communities across Canada, it means new access to computer technology and information networks.

The Canadian Opportunities Strategy is based on a very straightforward proposition: that people, regardless of their income level, who are serious about getting an education should have that opportunity.

That is their right. It is our duty. And it is a responsibility that we are acting upon today.

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