Proceedings of the Standing Senate Committee on
Issue 6 - Evidence - Meeting of April 28, 2009
OTTAWA, Tuesday, April 28, 2009
The Standing Senate Committee on National Finance met this day at 9:30 a.m. to examine the following elements contained in Bill C-10, the Budget Implementation Act, 2009: Parts 1-6, Parts 8-10 and Parts 13-15, and in particular those dealing with employment insurance; and to examine the Estimates laid before Parliament for the fiscal year ending March 31, 2010, (topic: Part 6 — Payments and Part 8 — Miscellaneous Provisions.
Senator Irving Gerstein (Deputy Chair) in the chair.
The Deputy Chair: Honourable senators, this morning we are continuing our consideration of the Budget Implementation Act 2009, which was formerly known as Bill C-10. Our focus today is on Part 6 and Part 8 of the act and, more specifically, on improving infrastructure at universities and colleges and financial assistance for students.
We will be hearing from two panels, the first represents students and the second represents university and college administrations.
In the first panel, we are pleased to welcome Zach Churchill, National Director of the Canadian Alliance of Students. He is accompanied by his Government Relations Officer, Rick Theis. We are also pleased to welcome Ian Boyko, Campaigns and Government Relations Coordinator for the Canadian Federation of Students.
Honourable senators, we have a second panel this morning. I would ask for your continued cooperation in keeping questions concise. You may also take into consideration the number of people sitting around the table today, so you may not have to be as concise as you would have thought initially. I am sure we will all have an opportunity to ask questions.
Please proceed with your opening statements.
Zach Churchill, National Director, Canadian Alliance of Student Associations: We would first like to thank you and the members of the committee for inviting the Canadian Alliance of Student Associations before the committee today. CASA is an alliance of student associations from 24 post-secondary institutions representing over 300,000 students across the country.
We will focus most of our comments today on how our members view Bill C-10 and the preceding 2009 federal budget. However, I will begin with a comment on what was absent in the aforementioned legislation.
CASA has advocated for investing at least $3.2 billion in dedicated post-secondary education funding into the Canada Social Transfer on top of what was allocated in Budget 2007. This would restore funding levels to those of the early 1990s before the infamous budget cuts. This has become far more urgent now given the effect the current economic conditions have had on the operating revenues of our universities and colleges.
For example, Queen's University has reported losses of $152 million to its endowment fund. Despite campus-wide cutbacks and spending freezes, they face a projected $33 million deficit, or about 9.5 per cent of their operating budget, by 2011. Queen's principal, Tom Williams, suggested yesterday that, given this deficit, layoffs and further reductions in services may be unavoidable over the next few years.
This illustration is representative of the situations at many post-secondary institutions across the country. Faced with less revenue, institutions are choosing to reduce staff and faculty, reduce the number of classes offered and increase the size of those that remain. In other words, the quality of our institutions is eroding as a result of inadequate resources.
There is widespread agreement across all sectors and governments, nationally and internationally, that investment in post-secondary education and research is one of the most reliable inputs for sustained economic growth and strong social cohesion. That consensus must be followed up with the resources necessary to provide our citizens and our industry with the support of a quality, accessible and affordable post-secondary education system during this current recession and beyond.
It is no secret that there is a serious backlog of unfunded major maintenance and renewal projects at our universities and colleges; nor that this build-up negatively affect an institution's ability to attract and support leading faculty, staff and students.
This very committee initiated the first government study of the deferred maintenance problem in Canada in 2001. CASA played an active role in those deliberations and has since worked alongside the Association of Universities and Colleges of Canada, the Association of Canadian Community Colleges and the Canadian Association of University Business Officers to push successive governments to alleviate this glut of necessary repairs and upgrades to our post- secondary institutions.
We were understandably pleased with the federal government's decision to provide $2 billion in funding over two years for accumulated deferred maintenance as a part of the 2009 budget. When combined with the matching funds being provided by the provinces, this money will help finance improvements to the quality and scale of our teaching and training facilities and our ability to conduct high-level research. It will also help meet basic health and safety concerns and much-needed environmental upgrades on our campuses.
CASA will continue to scrutinize the distribution process, including an assessment of whether the 70-30 split in funding between universities and colleges responds effectively to the needs of colleges given the central role they will play in providing advanced skills and training to our labour force.
We are thus far encouraged by the speed with which the application and allocation process is proceeding. The federal government has already announced its cost-sharing plan with B.C. and it is anticipated that most of the remaining provinces will be ready to make similar pronouncements by summer's end.
Rick Theis, Government Relations Officer, Canadian Alliance of Student Associations: Budget 2009 also provided for a temporary three-year expansion of the Canada Graduate Scholarship program, including $17.5 million for the Social Sciences and Humanities Research Council, SSHRC, which according to the language of the budget documents will be focused on business-related degrees.
The government included these provisions because it felt that graduate students in these disciplines had been treated unfairly under the current system. They comprised approximately 30 per cent of students in the social sciences and humanities, but received only 2 per cent of Canada's graduate scholarships each year.
The government estimates that this new funding will furnish an additional 300 targeted scholarships. This raises the total number of Canada Graduate Scholarships for students in business-related degrees that SSHRC will support to 10 per cent per year.
CASA has two concerns that arise from this assertion. First, directing funds in this manner constitutes a worrisome interference by the federal government into how SSHRC and, by proxy, all the tri-agencies make funding decisions. To state the obvious, a sustainable research capacity depends on the use of merit and peer review as the best means to ensure that the best possible research is funded as well as to insulate the academic research we do from the potential for politicization and other popularity tests. This is why the Social Sciences and Humanities Research Council Act stipulates that the council may choose to expend the money it receives at its own discretion. It is also why SSHRC and the other agencies have tried to uphold the merit principle since their inception.
Second, there is no guarantee that attempts to earmark scholarships for business-related degrees will have the desired effect. The very definition of what is business-related is so nebulous and unstructured that a student from virtually any of the social science disciplines — from history to economics, sociology and marketing — would qualify, thus watering down the scholarships' intended effect.
CASA acknowledges the important contributions that students of business make to our country. However, we would ask the government to invest in a more effective, holistically designed system aimed to enlarge the access and funding opportunities for all social science graduate programs.
In addition, the growth of many non-research-based graduate degrees, which are inclusive of business and management programs, has not been matched by a similar growth in graduate scholarships for students enrolled in these programs. Nor has there been anything offered for graduate students with high financial need, who often do not qualify for funds offered through the tri-agencies.
This must change if we are serious about boosting access to graduate programs in this country, including those with a business focus.
Bill C-10 also contained a series of amendments to the Canada Student Financial Assistance Act. On the whole, CASA has no exhaustive issues with these changes. However, CASA would like to direct the committee's attention to one particular area, section 363 in Bill C-10, where we see a potential issue.
Prior to Bill C-10, the Student Financial Assistance Act authorized a fine of up to $1,000 for a student who obtained their loans or grants by providing false statements by misrepresentation or false or misleading information in their application for funding. Section 363 of Bill C-10 provides the Minister of Human Resources and Skills Development with additional punitive powers on top of this fine, including denial of future lending, denial of the interest free period for loans, termination of that period if the borrower has completed their studies, et cetera.
This new authority has been provided without broad allowance for appeals, as the legislation authorizes the minister to hear appeals based only on new facts. There also appears to be no room for consideration of mitigating factors, appeals based on procedural fairness and administrative justice or those based on proportionality of the punishment.
CASA has always been concerned with the lack of an appeals mechanism regarding borrower need as it is assessed through the Canada Student Loans Program. CASA believes that an effective extrajudicial appeals mechanism is important, given that these students, if innocent of the accusation and of high need, will be without the ability to get a loan and unable to secure legal representation to take their appeal to the court. This would delay the borrower's ability to continue their education.
As a remedy, we would point to the example of the Province of British Columbia. It has an appeals committee with representatives from the civil service, institutional financial aid offices and students. It acts as a final independent arbiter of appeals. We think a similar model that would hear appeals and advise the minister would be positive, provided the grounds for appeals were expanded.
In future, preventing these kinds of oversights is why changes to this or other legislation, which have the potential to affect students, should be carried out in a more deliberative way involving student stakeholders in the crafting process. Such practices help facilitate smoother communications. This includes meaningful dialogue in advance about legislative intent on behalf of the government and input from students on the clarity and effect of the legislation being pursued.
We extend our thanks again to the committee for allowing us to present before you today. We look forward to answering any questions.
Ian Boyko, Campaigns and Government Relations Coordinator, Canadian Federation of Students: Thank you for allowing us to speak here today. I will be addressing three facets of the budget: infrastructure for universities and colleges, research funding and the student loan crackdown.
My remarks will begin today by discussing the unanticipated crackdown on student loan holders that crept into Bill C-10. Testifying on this particular issue is a little awkward for us because, like my colleagues, we do not oppose measures that increase the integrity of the Canada Student Loans Program, nor would we counsel anyone to deliberately commit fraud on their student loan applications. However, it is frustrating that the government, with all of the other pressing issues facing students and student financial assistance, is introducing new powers for the department without — at least as far as we can tell — any notice for study.
If students and their families are desperate enough to stretch the truth on their student loan applications, they need more aid, and that is the issue. It is not about a pandemic of student loan fraud. The problem is that the government is underfunding post-secondary education and, as a result, it is becoming increasingly unaffordable.
The problem might be a flawed student loan application process that does not meet the needs of average income earners. It could be quite likely that the budget's student loan changes could target those for whom Canada's debt- based financing system has failed. The Canada Federation of Students urges the committee members to think carefully about diagnosing the right cause before deploying the right cure.
Moving on to infrastructure, the 2009 budget's allocation of more than $1 billion in 2009 and $1 billion in 2010 for campus infrastructure is a significant financial commitment to our public institutions. However, the budget dictates that only approximately one quarter or 30 per cent of this funding will be distributed to colleges and technical institutes. Canada's colleges play a critical role in replenishing the skilled workforce and we are somewhat confused by this allocated funding split.
Beyond the college-university split, the government has decided there should be at least two more caveats to receiving this funding, both of which the Canadian Federation of Students opposes.
First, the $2 billion in infrastructure funding for campuses will be directed, according to the budget language, to research facilities. This is generally unhelpful. Research facilities already have significant federal funds flowing to them, including the Canada Foundation for Innovation, to name just one. Many institutions, large and small, but perhaps especially our small institutions, will not benefit from infrastructure funding that goes exclusively to research laboratories because their needs lie elsewhere — in classrooms, residences and offices.
The second caveat on the funding is that the federal dollars for infrastructure be matched, which is also somewhat unhelpful. Many institutions with urgent needs will likely have difficulty leveraging that funding from some provincial governments, or worse, from a private sector already limping because of a recession. It is our hope the government will apply the broadest criteria possible to the infrastructure project applications as they come forward.
I would like to finish by talking about the Canada Graduate Scholarships. In our pre-budget submissions, we were vocal advocates for increasing the number of Canada Graduate Scholarships, and we were encouraged initially to see there would be an increase in Budget 2009.
However, we were very disappointed to see the government's proposal to increase the social and cultural research funding for only a narrow band of disciplines, and we were disappointed by almost $150 million in cuts to the granting councils. The business-only scholarships, in our view, are short-sighted and divorced from the realities of graduate student enrolment in Canada.
There is another interesting angle that I want to share with you today, and that is about the gender perspective. About 50 per cent of all student researchers in Canada work in the social sciences and humanities. A majority of those researchers are women. Of these, roughly 7 per cent of students are in graduate business programs eligible for the new government scholarships, a majority of which are men.
I am not talking about the professional degrees or MBAs. Those people generally do not do research that qualifies for federal grants. We are excluding MBAs from this calculation. When you remove MBAs, we are talking about 7 per cent of all those in the social sciences and humanities who will qualify for these business-only scholarships.
It is our view that it is not the government's role to direct the granting agencies as to who should be the winners of a competitive research process. This is precisely the reason why the tri-councils are independent from government. Each of the granting councils allocates funding based on peer review of applications. As such, each proposal is judged according to its merits and there is no good reason to change this process.
The government's interference in this area is unwelcome and contrary to proper science. We implore you to let the experts do their work and give research grants to those who deserve them, business students or otherwise.
In closing, the government has correctly identified some urgent areas of need in the post-secondary education sector, that is, infrastructure and graduate student research. The student loan changes in section 8 are not unnecessary by themselves, but do not successfully strike at the heart of the matter, which is unaffordable tuition fees and skyrocketing student debt.
With the research spending, there is a new level of interventionism. This directing of the Canada Graduate Scholarship is brand new this year — we have not seen it before. That kind of intervention is generally unwelcome and might actually be detrimental to the budget's stated goals of fostering innovation.
I look forward to your questions. Thank you for the opportunity to discuss the budget today.
The Deputy Chair: Thank you, gentlemen. I will start by asking Mr. Churchill a point of clarification. The Budget Implementation Act 2009, as I understand it, contemplates $1 billion in each of the next two years. Could you give us some background as to what you view the matching funds will be and what the sources will be? Is it both universities and provinces that are included in the matching funds?
Mr. Churchill: The way we have interpreted it is that the institutions need to find the matching funds themselves, and that will either come from the provinces or potential private donors.
Mr. Theis: It was envisioned as Mr. Churchill outlined. It would be up to the institutions to figure out where the matching funds would come from, whether it is private donations or the provinces.
In terms of how much money the government anticipates will be allocated to this, the anticipation is that they will have had enough matching funds provided to allocate the full $2 billion before the end of the summer. I take Mr. Boyko's point that there are some institutions that probably will not benefit to the same degree as others, but there is matching money out there, which is a good thing.
The Deputy Chair: I understand $3.3 billion is being transferred from the federal government to the provinces for post-secondary education. I believe that is $100 million more than last year and $900 million more than it was two years ago. Are not a number of the issues that you are raising provincial issues, as distinct from federal issues?
Mr. Churchill: This is a question we are always asked when we are lobbying the federal government on post- secondary education. We recognize the Constitution, in that education falls under provincial jurisdiction. However, we believe — as does the federal government, according to their own actions, programs and policies — that the federal government has an important role to play when it comes to post-secondary education; particularly with general funding to the provinces so they can spend money on post-secondary education, but also with student financial the aid and research.
The federal government, historically, has been very involved in post-secondary education. We think, with the new contracting of provincial spending capacities, that the federal government's role is actually going to increase. There is a need to increase, from our perspective.
Mr. Theis: If I could add to that, one of the problems is that you had an area the federal government was heavily involved in. The reason we have the gap is because in the 1990s, to deal with some of the deficits, the government had to cut social spending, specifically in post-secondary education. We are talking about an area where the government was already invested and has withdrawn. We are asking them to get reinvested in a spot they have traditionally committed themselves to.
Senator Callbeck: There are a couple of areas I want to ask about. For the graduate students, the money that is going there for scholarships has to be to business-related degrees. Have you talked to the government about this? What is the rationale for doing this? Have they any analysis to show that we will be short of people in that area?
Mr. Theis: Harkening back to the remarks we made, the rationale is that by the government's calculations — and we can quibble about how they have come up with that, I think it would be an interesting question — 30 per cent of those people who are represented by the social sciences should be eligible for these scholarships, but only 2 per cent of the scholarships going out through the social sciences are going to people in these programs. They are trying to rectify that.
Our problem is twofold. First — and where we have common agreement — is that you see the government becoming involved in decisions that really should be made by the academic community. The best research that comes forward, whether from business or otherwise, should be the kind of research that gets money. We are concerned about that.
As well, because of how this is defined, I would ask you to ask yourselves: What exactly is business related? Is it sociology; is it someone who studies the economy? Is it someone who studies the psychology of people who make transactions in the stock market? Using those metrics, who can apply for these scholarships?
Are we adding to the bucket of scholarships available and not meeting any kinds of goals?
As well, the government is being slightly short-sighted about the need to fund all graduate students, including those who have significant need. Currently, we do not have needs-based grants for students in graduate programs with high financial need. We have only tri-agencies and institutional funding. We have addressed those issues with the federal government.
The Deputy Chair: Mr. Boyko, did you wish to add a comment to Senator Callbeck's question?
Mr. Boyko: Yes. We have concerns that the government's public justification goes beyond righting historical wrongs. We have fears that it is a bit more ideological. If it were about righting historical wrongs, the virtually all graduate scholarships would go to the social sciences and humanities because they have been underfunded historically. Even with the 2006 reinvestment in Canada Graduate Scholarships, graduate students in the social sciences and humanities, who represent about 55 per cent of all graduate students, received only 20 per cent of the Canada Graduate Scholarships distributed in 2006.
We fear that this is a growing and systemic undervaluing of the research in social sciences and humanities. There might be a perception among some in the PMO or in the minister's office that if you cannot produce a widget within four years down the line, then it is not valuable research. Lack of funding for research on child poverty or on the impact of terrorism on travel, for example, creates a sense in social sciences that there will be no funding available because it is all going to applied sciences and business-related degrees.
We are part of a broader coalition in the research sector that wants to send out the message that the value in social sciences and cultural research is not being recognized in recent federal funding patterns. The most recent manifestation of that is the business-directed scholarship funding, but it is part of a larger problem about the way in which the government views this kind of research.
Senator Callbeck: Have you discussed this with the government?
Mr. Boyko: We have discussed it. We went to Parliament Hill with our members about two weeks to a month ago and raised the issue with members on all sides of the house and in this place. We are making headway but these decisions are not being run by back-bench members of Parliament and some senators. We want to build support at every level at every opportunity about the value of social sciences and humanities. Many people in the Senate and the House of Commons studied social sciences and humanities but, for some reason, they are turning their back on this generation of researchers in this area.
Senator Callbeck: Have any of you been given figures or analysis from the government?
Mr. Theis: The numbers that we quote have come from the government, although the government is unclear about where their numbers have come from. That is important to note. Those are the best metrics that we have.
Senator Ringuette: I am concerned mostly about the major shift in post-secondary funding to the provinces in Budget 2007 under the social transfers. The formula was changed to remove fiscal capacity — what the bureaucracy calls "associated equalization." Government removed from the formula the fiscal capacity of the provinces to fund post-secondary education. The end result is that the provinces with the least financial ability to fund post-secondary education, faced a reduction in transfers from the federal government.
I will give you an example. I am from New Brunswick, which is definitely a have not province. From 2007 to 2014, funding to New Brunswick through the social transfer system, which includes funding for post-secondary education, was reduced by $237 million. The total funding from the Government of Canada is the same globally, but most provinces have lost; Quebec, for example, has lost over $1 billion because of the changes to the funding formula for post-secondary education. Only two provinces have gained. Ontario gained a little, but the biggest gain was in Alberta, which realized a gain of more than $3 billion. I find it quite amazing and crucial, sitting at the very heart of what you are saying. Essentially, there is a gap between students living in have-not provinces and those living in have provinces. The former are being discriminated against by this government.
What kind of action have you taken in this regard? What do you think we should propose?
Mr. Boyko: You raise an important point. The deputy chair is right in saying that the federal government has made substantial investments in the Canada Social Transfer in recent years, more than was invested during the previous decade. We are still suffering from the austerity measures introduced to balance the budget. Despite recent investments, we are far short of where we were at the beginning of the 1990s and billions of dollars short of where we were per student at the beginning of the 1980s. Part of the solution to what you identify is continued investments in core operating grants to universities and colleges through the Canada Social Transfer, ideally with some sort of guiding mechanism — perhaps a piece of federal legislation akin to the Canada Health Act.
The fact remains that it is not enough to simply invest in the Canadian Foundation for Innovation, which is a one- off envelope, or to increase grants. Rather, it has to be more holistic than that. There have to be increases in the Canada Social Transfer. We are of the view, which might resonate in certain places in the Maritimes, that we should move to a system whereby the Canada Social Transfer is calculated on a per-student basis, not on a per-capita basis. Certain provinces face a tremendous influx of students but do not receive the same level of funding per student from the federal government as those who do not see that kind of migration to their provinces. Nova Scotia is the paramount example of that.
Mr. Churchill: Thank you, senator for raising that concern; and Mr. Boyko, for your comments. We share those concerns. We have many members in New Brunswick and Nova Scotia. We have been advocating that the federal government work collaboratively with the provinces to develop a national vision for post-secondary education so that we can deal with these issues. We want to ensure that no regions in Canada and no students are left behind. We believe in a dedicated transfer for post-secondary education and support funding on a per-student basis, not on a per-capita basis. It makes sense in our view that provinces that are net importers of students, such as Nova Scotia, should be funded based on the number of students that they educate.
Senator Ringuette: I am a little concerned about what I have just described to you. Those two tables show that the changes that have been brought about only help two provinces in Canada.
You have students — members — in all the provinces of Canada. I know that the university association has been pointing this out and has been publicly voicing their dissatisfaction with this, but I have not seen anything coming from the students. I certainly hope that we will see something soon.
Senator Mitchell: I will further the point made by Senator Ringuette. It seems to me that, if institutions must match in order to receive the infrastructure funding, the wealthier institutions would be more likely to be able to match.
Regarding the $2 billion you are indicating has essentially been matched, do you have a regional breakdown on how that might be disproportionately going to those regions that are wealthier rather than to those that are less so?
Mr. Theis: At this point, no. We have only one announcement. That being said, if you review the British Columbia announcement made on April 8, there is a decent balance in both the types of institutions that are receiving funding and the kinds of projects that they are funding.
One of the concerns we have, and Mr. Boyko has pointed out, is that things that tended to go towards research would push out other things, especially things such as replacing plants. Environmental upgrades and things that do help a university's bottom line and increase the long-term longevity of buildings and so on have priority, and it seems like there is a good balance in there for those kinds of projects and things that have a comprehensive balance.
One of the things that conditions whether that happens is how fast these projects can get under way. Everything has to be on the way to completion point by March 2011 in order to qualify for this funding. That limits some of what I think you are addressing.
That having been said, it is a concern of ours; it is why we want to consistently monitor how these things are happening. Many of our members come from the very provinces you are addressing. For example, it is a chief concern of ours to ensure the $500 million deferred maintenance problem in the Province of Nova Scotia is taken seriously, and it is something we have been able to continue to be a very vocal advocate for.
Senator Mitchell: One of the concerns I have that compounds this focus on business is that business faculties, science faculties and engineering faculties receive lots of money from the private sector because there is a natural affinity. Often, business people are engineers, scientists or MBA students.
There has been a traditional underfunding of those things that enrich our society in other ways: the arts, fine arts, philosophy, sociology and political science. All of the liberal arts, which I believe — I agree with Mr. Boyko — have been ideologically displaced by this government.
Would you say that this line of analysis underlines that, in fact, this focused research funding on business actually exacerbates a problem that already exists in our university and college institutions today? You can say yes or no, if you want.
Mr. Churchill: It may. Our concern is that we have employed professionals to allocate this funding in areas where it is needed, where people deserve this funding and it is merited. We do not want to see this potentially ideological intervention — or any intervention — on this. Let us allow the professionals to do their work and allocate this funding as they were supposed to do.
Senator Mitchell: You made the point which rings so true, so often, so unfortunately: These grants will be disproportionately applied to areas that men and not women are inclined to be doing research in. Are you aware that the government did any kind of gender-based analysis of the granting structure before it was implemented? Also, did they consult you at all before they brought these initiatives in?
Mr. Boyko: I suspect the answer is "no" and "no." I was under the impression that a gender analysis had to be included for every budget item. I think that has fallen by the wayside. I do not think it is a new problem.
In terms of consulting with us, we made the Canada Graduate Scholarships Program one of our key asks for the federal budget. Therefore, I think there is a degree to which the government has responded. It responded on the Canada Graduate Scholarships and on the Canada Summer Jobs program. We are here to talk about areas where there is room for improvement within those investments.
We and our members are unhappy. Graduate students are a dormant bunch and they are hopping-mad about the directing of scholarships within SSHRC, and we want to ensure that mistake is not repeated. It is a mistake from our view. I do not think you will find many people in the entire post-secondary sector outside of the Dean of Business at the University of Toronto who would say this is a direction that we want to be going in with our graduate scholarships.
Senator Nancy Ruth: Welcome, gentlemen. This is about the social sciences and humanities in part. Certainly, there is often a dependence on the private sector to pick up on this, as Senator Mitchell said. U of T got 15 new chairs in that area some years ago from Hal Jackman. I know there are other private funders across the country who do this.
It may be the social sciences that will drive business but, since the government's agenda is to stimulate the economy, do you think another 100 archaeologists, for instance, will do that? They might create a new museum for Aboriginal artifacts in London, Ontario, but I rather think some of the more business-oriented faculties would be more useful at this time in Canada. What do you think?
Mr. Boyko: The vast majority of funding that goes out to university researchers in the sciences and engineering is for basic research. That is not research that will deliver a stimulus to the economy in the next two or three years.
The idea that, by giving funding to scientists at the university research level, we will stimulate the economy in 12 months is a myth. We are talking about long-haul research that will yield results downstream in five, ten or fifteen years. We are not talking about an engineering or chemistry researcher stimulating the economy in the short term. That is not how basic university research works.
We should not be applying that philosophy to the social sciences and not the sciences if we are to be fair. A lot of basic research on both sides of that fence does not provide immediate economic stimulus. It is unfair to say, "our historians will not stimulate the economy, but all our chemists will," because that is not how university research typically operates. Some of it does. There is applied stuff that will be commercialized quickly but that is only a sliver of what happens in the sciences and engineering.
I think we need to apply the same criticisms to both sides of the fence if we are to talk about the ability of research to stimulate the economy.
Senator Nancy Ruth: Universities do have officers whose specific job is to take the application of the research and drive it into industry and perform the copyright work, too. That does not necessarily happen in a field like archaeology. There is a difference and the impact may not be immediate within two years, but it may be within three, four or five. Right now, you did talk about suffering from austerity. As I see it, the government's job is to stimulate the economy and I think it will do better doing it the way it is.
The second question is around your interesting idea that there should be an appeal process for student loans that got knocked out.
I was interested in the ethical premise that any means to an end was okay; that it is okay to lie on your loans if your family was starving, but there should be an appeal process so you could appeal that. What I want to know is in British Columbia, where there is such an appeal process, how many cases have gone forward and what has the outcome been of those cases?
Mr. Theis: It is an excellent question to which I do not have data before me, but I will be happy to provide that to you.
The Deputy Chair: Could you circulate that to the clerk so all the members of the committee could see it?
Mr. Theis: Absolutely. Stimulative effect is a good thing, but I would echo Mr. Boyko's comments and take it further to say that the problem of stimulus out of this is further muddied, given the fact that there is no guarantee that it will do what the government wants it to do, even if that would be effective.
Another thing of paramount importance is about the kinds of things we learn from the social sciences that help us inform about how business operations and business models, are decided upon, which is crucial. Nobody coming out of the business world in the 1960s failed to read The Great Crash by John Kenneth Galbraith, a Canadian economist. It is those things we need to think critically about when we make these kinds of decisions and really develop a holistic system for developing basic research and knowledge about how we know about ourselves, because those have important impacts on things like business and other more technical kinds of research lines.
Senator Nancy Ruth: I would like to say that every government — this one, the last one, and I am sure the next one — would love to be able to develop schemes to eradicate poverty, have cities with proper sewage; everyone wants to do everything all the time, but you cannot. You do it bit by bit.
Senator Eggleton: I hope the government's position is not that we gave $100 million more in transfers to the provinces last year and $900 million more in the year before, so pack up and go away. I do not think that should be the approach at all. We are all interested in education and what it will do for our future prosperity.
A visionary approach would be far more useful than just the dollars and cents on the balance sheet. There is also the question of course of how this additional money is spent and whether it is being targeted in the best way.
That brings me back to many of the comments made about science policy of this government, and what it is putting into the stimulus package in terms of research. I agree with what the witnesses have said about that today.
There are cut-backs in some areas of research, and there are enhancements in others. It is great that there is additional money being put into infrastructure, for example. However, if you do not fund the programs for the people who operate in that infrastructure, then you will have some lovely research facilities that are empty or half-empty.
If you look at what is happening in the United States, they have billions upon billions being put in by President Obama, understanding that the economy of tomorrow is tied to those kinds of investment decisions that will now be made.
We are cutting back, though. We have cut-backs to our three major granting councils. That is a reality. President Obama is going in the opposite direction. He will end up stealing a lot of our researchers. Many of them will go south where they can see the possibility of their work being nurtured.
I want to ask about basic research as well. I am concerned that the government — while I think they are trying to put money into applied research so you can produce a widget in a couple of years — is not too interested if you have the basic research involvement, it seems. That is a shame, because under current science policy in this country, you would not be funding the kind of research that led to projects like the Canadarm or to the Dextre program. You would not be funding someone like John Polanyi, who won the Nobel Prize in chemistry, under the current program because much of that is basic research which you need to get to that stage at which you can produce those widgets. Not going that route seems narrow in thinking.
I am concerned about these moves. I do not think they are in the best interests of the country and I do not care if there was an additional $100 million transferred last year. If we do not get the programs right, if we do not get the kind of vision we need to move forward with education and research in a way that will be helpful to the economy of this country, both through the current condition and through the future, then I think we are in deep trouble. Tell me something about your thoughts on basic research.
Social science and humanities, yes, have been very much cut back. That is a mistake. You have to think about that. There are many lessons learned and many things that can be beneficial to us in the future, in an economic and social sense, by further investment in that area.
Mr. Theis: There would be no disagreement from us. One good illustration is if Stephen Hawking came to this committee and asked for money, under some of the provisions in the budget and the way the money is allocated, he would be unable to get funding. I do not think anyone would consider not funding Stephen Hawking.
Mr. Boyko: I will make a plug for continuing to invest in graduate students. We have a lot of ground to make up. There are still many graduate students who go unfunded, and those are the researchers of tomorrow. It is great that we have the John Polanyis and the John Hawkings, but we need to ensure that we are fostering and not losing tomorrow's John Polanyis to the United States or other countries.
Mr. Churchill: This is about creating a culture of avant-garde thinking in this country which, according to many economists, is what will push us out of this recession or at least put Canada in a competitive position coming out of it. If we are going to create this culture of innovation, then basic research is the fundamental component to that. We do agree with those comments.
Senator Di Nino: Welcome, gentlemen. I have had the opportunity to chat with some of your representatives from time to time who visit the Hill, particularly CASA. I must congratulate you on your aggressive lobbying. You come to see us and put your positions forth clearly and effectively, which is good.
Why there are two separate organizations of students.
Mr. Churchill: We do love this question. There are two separate groups of students because certain student leaders throughout the history of the organized student movement in Canada have wanted different things from their organizations. There are some structural differences between our organizations and there have been policy differences in the past.
What is important to focus on are the areas where there is strong agreement, especially on the issues we have talked to you about today. We have agreed on basically every point. We share a common vision about access for education in this country, about making sure that our education system is affordable and of the highest quality. We share a vision of creating a national strategy for post-secondary education that the federal government is involved in, and we support needs-based grants and student financial aid that is non-repayable. Just because there are two different groups does not mean there are not areas of mutual interest that we can work together on. We will always work together with government to ensure that these ideas and visions we share can be brought forward together.
Mr. Boyko: I do not know why there are two groups. I do not think there is a good reason. History is history. I think we are here to talk about the budget though.
Senator Di Nino: There were some comments made by one of my colleagues about regional disparity. Do you have any data on whether the funds the Government of Canada made available throughout the year favour or disfavour some regions?
Mr. Churchill: Senator Ringuette made a good point, and it speaks to a concern our organization has had about disparity in funding. It comes down to, we believe, the issue of per student funding versus per capita funding.
Provinces that are net importers of students bring students in to educate them in their province, but no-one knows if the students will stay in that province afterwards or not. It is important that the provinces are funded based on the number of students they are educating.
Students have presented a number of policies since I have been involved with this association, at least four years, which we think can help address the issue. This issue is on students' minds, and we would love to work with your office and with other senators to help push forth these policies regarding a pan-Canadian core on education, a dedicated transfer and per student funding, in the Senate and in the House of Commons.
Senator Di Nino: I have some statistics on this issue that address the distribution of federal support to provinces and territories. My statistics indicate that the province of New Brunswick has grown, since 2005, including 2009-10, by some 20 per cent, which is quite a lot of money. My colleague Senator Ringuette is suggesting that Alberta is being unfairly positively treated while New Brunswick is not.
Is this a normal, standard increase for all the provinces and territories? You deal with this on a regular basis. I wonder if you could make some comment, because it seems that the information the senator provided may not have been correct.
Mr. Churchill: We do have a concern about the issue of per student funding. We believe every province should be funded based on the number of students they are educating and not their population, because that might not reflect the number the number they are educating, as is the case in Nova Scotia. If we are expecting our provinces to educate students in an appropriate fashion and to prepare them to move forward in life, we want to ensure the education is of high quality. If we are not providing funding that supports the number of students that are in a particular province, we might be missing the mark.
Mr. Boyko: I think this side of the table is in agreement that there needs to be some federal leadership on this issue. We are of the mind that something much stronger needs to come forward, and there needs to be more collaboration that centres around an act for education that is akin to the health act to prevent events like what I am about to describe from happening.
In the 2006 federal budget, the federal government increased funding to the Canada Social Transfer for post- secondary education by $800 million. That is a substantial increase. British Columbia's share was over $100 million.
The following fall, the British Columbia government cut back more than $50 million to universities and colleges in that province. Its books were balanced. It had $100 million more from the federal government, yet students and their families had to shoulder a burden of a $50 million cut as programs and faculty were cut.
We are not suggesting the federal government has to go in and crack the whip and tell Gordon Campbell what to do. That is not what we are suggesting. We are suggesting that there be broad cooperation that has some kind of framework legislation. There should be agreed-upon principles and objectives to make our universities and colleges the best in the world, both in terms of affordability and quality, but also in terms of the research that is done on campus. That cannot be done when the federal government writes a cheque to the provinces and has absolutely no say how that will hit the ground. Those are federal taxpayer dollars for which the federal government exercises no authority or control whatsoever.
Senator Di Nino: I think all three of you are aware of the can of worms you open up when you start to put conditions on transfers to provinces. That is an issue that relates to the comment made by our deputy chair at the beginning. This issue really should be discussed with the provinces, since, under the Constitution, they do have the authority, and any tinkering with that is something that none of us would necessarily like to see.
Mr. Churchill: When we are talking about a national strategy, "pan-Canadian" is perhaps the word we should use. We are not talking about imposing federal policies on the provinces; this is about coming together as a country, as we have in the past, and dealing collectively with an issue that is of importance to everyone across the country. This is about bringing the provinces together, with the federal government, and having this important discussion, which to date we have not had.
What do we want post-secondary education to look like in this country? What programs and policies can we put forward collectively that will help us achieve the goals that we have across the country? This is about collaboration, not about imposing anything on anyone. We are looking to the federal government to play a leadership role in bringing forward this partnership in Canada and facilitating this national conversation.
Senator Ringuette: The numbers I have are from the Department of Finance, and I am sorry that Senator Di Nino does not have that data.
In regard to Mr. Boyko's comments about B.C. and the $50 million cut, if I look here at the cuts that B.C. incurred in the social transfer for budget year 2008-09, it went from $1.5 million to $1.4 million. The B.C. government was cut $100 million in that budget year only in regard to social transfers, which include post-secondary education. I would be happy to have copies of this very important data distributed to all the members of the committee so that they can understand what they are talking about.
Senator Rivard: We know that once their studies are completed, opportunities are extremely scarce, if you compare that with the early 1970s, when employers came to meet us at the university. At that time, it was students who had the choice, whereas it is very difficult today.
My question concerns student loans. Is there a federal act requiring you to repay the loan but enabling you to be released after so many years in the event of bankruptcy?
If I take the Quebec as an example, student loans are repayable over a period of 10 years. If you go bankrupt before seven years are up, the debt is not erased, you are not released from bankruptcy, but, after seven years, that is included with the creditors. Is there such a clause at the federal level? If so, is it the same thing, seven years?
Mr. Boyko: That is an important question because there is a tiny proportion of graduates who find themselves in desperate circumstances as a result of their student loan and other life events. The federal government changed the law in 1997 to go from no prohibition, to a two-year prohibition; and then, with no notice, it went from a two-year prohibition to a ten-year prohibition in 1998. That prohibition on declaring bankruptcy on student loans stood until about a year and a half ago, when the federal government finally implemented legislation to change it from ten years to seven years for Canada student loans.
We are working with Senator Goldstein, from Montreal, who I understand retires next month, and perhaps with Senator Baker after that, on private member's legislation that would reduce that prohibition to five years for all applicants. Senator Goldstein is proposing two years for a hardship hearing, which is critical.
The attitude in parts of the bureaucracy is that people declare bankruptcy for sport, which I think is offensive. There is a tiny core of graduates with tens of thousands of dollars of debt, who simply cannot afford to make those commitments. They deserve a hearing before a judge and to let the judge decide whether they will ever be able to get out from underneath that debt. I encourage you all to help get that private member's bill passed on the Senate side.
Senator Chaput: Perhaps our witnesses would answer my first question in writing; that could save us some time.
My first question concerns the additional power granted to the minister. She is now able to deny or suspend financial assistance.
You mentioned that there were no appeal mechanisms under the bill. Consequently, students may not defend themselves or present their point of view.
I was wondering what you would have liked to see in the way of support mechanisms. Do you have any examples of these kinds of mechanisms in one province or another? And I would like to know what you mean by "support mechanisms".
My second question concerns the fraud and abuse that may occur when the minister has the leeway to deny or suspend financial assistance. To your knowledge, have there previously been many such incidents of abuse or refusal? In your view, what is the reason for this measure? Are there any supporting figures showing that it was necessary to grant this additional power?
Mr. Theis: I could provide a brief answer, and the rest I will provide in writing.
To the first question, we do have a model that we like. It is in the province of British Columbia where there is a consortium of student financial aid officers, people within the civil service and students who advise the minister on how to view a particular appeal.
In terms of what the minister can do with regard to fraud and how many cases there have been, we posed that exact question to the Human Resources and Skills Development Canada, the Canada Student Loans Division. We are still awaiting an answer. We would be happy to forward you more information on that later.
Senator Mitchell: The government has re-instituted the Canada Summer Jobs program for students. Could you confirm for me what year it was that they cancelled it? I think it was two years ago. Could you give me a rough idea of how many jobs were cancelled? It is interesting they are taking credit for implementing a program that they actually cancelled.
Second, could you give us an idea, obviously not now, on what the funding would look like by province in 2009-10 based on per capita student funding rather than per capita provincial funding?
Mr. Boyko: To answer your first question —
The Deputy Chair: In writing, please.
Mr. Boyko: About the Canada Summer Jobs program?
The Deputy Chair: If you have a quick answer, please go ahead. If not, please provide it in writing.
Mr. Boyko: The Canada Summer Jobs program was cut by 50 per cent in 2007, restored almost immediately thanks, I would like to think, to pressure from students, to about 90 per cent of its former funding, and then this budget increased it by 10 per cent. Roughly, we are approximately where we were in summer 2006.
The Deputy Chair: Thank you very much. On behalf of my colleagues, I would like to express to all of our witnesses today our thanks. Your comments, I must say, have been most informative and most constructive and we thank you very much.
Our second panel this morning consists of two organizations representing universities and colleges. First from the Association of Universities and Colleges of Canada, we welcome Claire Morris, President and CEO, and André Dulude, Vice President, National Affairs. From the Association of Canadian Community Colleges, we welcome James Knight, President and CEO, and Terry Anne Boyles, Vice-President, Public Affairs.
Do you have an opening statement that you would like to make?
Claire Morris, President and CEO, Association of Universities and Colleges of Canada: Thank you. It is a pleasure to be here today.
Canada's universities are working hard to contribute, both economically and socially, to the country during the most significant global economic downturn in decades. They are modern and vibrant institutions firmly rooted in their communities, as well as important partners with businesses, governments and not-for-profit organizations. They are also a portal to Canada for the world, attracting over 70,000 international students and sending Canadian students and researchers abroad.
We continue to provide the labour market with record numbers of graduates from a wide range of disciplines. These graduates are not only the most likely to find employment but are also the most likely to be high performers in job- creating industries.
Canadians clearly see the value of a university education, as enrolment is at record levels nationally, with over 815,000 full-time university students currently attending our institutions.
Universities also continue to produce cutting-edge research that not only results in ideas to help companies create new products and improve processes, but also helps communities and governments address social, economic, cultural and environmental challenges.
In fact, the university sector is the second largest performer of research in Canada. In 2007, Canadian universities performed an estimated 36 per cent of the country's R & D activities, and the worth of those activities was over $10 billion. These efforts would not have been possible without significant federal investments in Canada's universities.
While successive federal governments, from parties on both sides of the aisle, have made higher education and university research a priority, it is worth highlighting the magnitude of the investment in postsecondary infrastructure contained in the 2009 Budget. This infrastructure investment responded to the calls of many stakeholders, including AUCC, and will create jobs in the short term in communities across the country as well as helping institutions to attract, train and retain highly skilled researchers.
As part of the Economic Action Plan of 2009, the federal government introduced the Knowledge Infrastructure Plan, a two-year, $2-billion economic stimulus measure to support infrastructure improvement of Canadian post- secondary institutions, including universities and community colleges.
The impact of this funding is multiplied by the government's requirement of matching funding from the provincial governments, the private sector or universities themselves. It is anticipated that in the next two years at least $4 billion will be spent in communities across Canada restoring existing and building new post-secondary infrastructure. An investment of this magnitude will go a long way toward addressing the infrastructure backlog at Canadian universities.
AUCC welcomes the program design that supports infrastructure improvements across a broad range of teaching and research facilities. This broad definition is important because it recognizes that the research contributions universities make to the economy include not only science and technology but the social sciences and humanities. Graduates from all disciplines go on to contribute their skills and talent to the creative economy.
We understand that most of the institutions and provinces have submitted their project proposals to Industry Canada, and the first of the announcements of projects that will receive support from both orders of government was made in British Columbia on April 8.
Budget 2009's commitment of $150 million to existing Canada Foundation for Innovation competitions, as well as $600 million for future competitions, will continue to build a strong cutting-edge infrastructure backbone for the university research enterprise. A further $87.5 million for a three-year expansion of Canada Graduate Scholarships and $3.5 million for internships in science and business were also announced, underlining the importance of investments in highly skilled people.
These are investments that will assist the country in attaining both its short-term and its longer-term economic and social objectives. In the short term, they will provide much-needed economic stimulus; in the longer term, they are investments that will help Canada create and maintain its knowledge and people advantages, as outlined in the government's science and technology strategy.
We believe it is important that these investments be viewed as part of the multi-year plan the government has put forward in the S&T strategy. In the three budgets previous to this one, new investments in S&T-related activities included increases in funding for the three federal granting councils to expand their core programming and created new programs such as the Canada excellence research chairs and the Vanier scholarships aimed at enhancing Canada's research talent.
Importantly, these investments build upon the very substantive investments in R&D made by previous governments and demonstrate Canada's commitment to excellence and peer review. These new investments in CFI, in the Knowledge Infrastructure Program, and in the SERCS and Vanier scholarships, are very strong signals of the government's long-term commitment to research.
However, it is important that, over time, investments in the university research enterprise support what we call the four foundational elements in a balanced way that creates the optimal environment for innovative research. It is in the mix of highly skilled talent, operating in world-class infrastructure, with the necessary research funding and institutional support, that Canada's university research can make its contribution.
Canada must keep pace with the competition, given the international context in which our research community operates. Countries around the world are continuing to make significant investments in their research enterprise.
The new U.S. administration recently approved an injection of billions over the next 18 months in its R&D enterprise, including large increases in the amount of funding available to researchers. President Obama, in a major speech on research policy yesterday, confirmed that these investments are part of a broader plan that will see significant increases in U.S. research funding over the next few years.
Canada's continued investments for research through the multi-year S&T strategy will determine Canada's ability to compete on the world stage.
Currently, our universities are busy taking steps to allow them to initiate the maintenance, repair and construction projects that will be made possible by the significant investments in this budget. Our member institutions in the AUCC are committed to accounting to Canadians for the money received and demonstrating the short- and long-term impacts of these investments in higher education and research. All senators, I believe, have recently received a copy of our flagship research publication, Momentum, which documents the contributions university research has made to Canada.
Moving forward, we are committed to working with the federal government and parliamentarians from all parties to optimize these investments as a foundation for a vibrant university research enterprise that will continue to provide the highly skilled workers and innovation needed to create long-term economic and social prosperity.
Once again, Mr. Chairman, thank you for the time and I welcome any questions that committee members may have.
The Deputy Chair: Thank you for your opening comments.
Mr. Knight, do you have opening comments to make?
James Knight, President and CEO, Association of Canadian Community Colleges: Thank you, and thanks to the members of the committee for the invitation. The Association of Canadian Community Colleges represents 155 CEGEPS, polytechnics, university colleges, colleges and related institutions which remarkably have 1,000 campuses across Canada in different communities. There is extraordinary local penetration. I must comment that our invitation was very recent, and we have managed to cobble together a brief, but my comments will be informal.
My experience in this sector is quite recent. I have been 18 months in this position. I cast my mind back a remarkable nine months to remember a very different economic environment. At that time, employers and employer associations were approaching us to tell us that their economic growth and economic opportunities were limited by a principal factor: a shortage of advanced skills.
About 20 of these associations took the time to meet with us, primarily to engage in a campaign to increase investment in colleges in order that their businesses could attract or access the advanced skills necessary for growth.
In September of 2008, this group had the first public unveiling of its campaign. It was called the Employer's Group for Advanced Skills, and most of the major business associations that you have contacted or been in contact with over the years participated.
Things then started to change quickly. The economy clearly was in a downward trend. It was not until January this year that I managed to sit down with some of these people again in a consultation held in Toronto by the finance minister. About 20 presidents of large Canadian corporations — banks, oil companies, manufacturing companies — were around the table, and I was a participant.
For at least two and a half hours, the discussion was entirely about the shortage of financial capital, the difficulty of accessing funds and how this was constraining their situation and how grave it all was. No one mentioned human capital in that meeting, except at a certain point. I said: We have been talking about financial capital for two and a half hours, but only a few months ago, all you could talk about with us was human capital and the need to invest in advanced skills at colleges. I have a great concern that when the recovery comes — and it will come — that it will stumble and fall unless we pay attention to this pan-Canadian skills crisis that is constraining many industries and businesses.
You could have heard a pin drop. It was such a short time from their previous perceptions to their current perceptions that it struck them as notable that no one in the meeting had raised that issue.
We made two prime recommendations for the current budget. The first recommendation was that the government take the opportunity to invest in post-secondary education, and particularly in college infrastructure. There were three determinants of the shortage of advanced skills. The first is clearly demographic and the retirement of large numbers of workers.
The second is the capacity of colleges. It was, and remains, remarkably inadequate for the task at hand. Algonquin College in Ottawa turned away 7,000 fully qualified applicants last year because they did not have the capacity in their system to get them the skills that would, in turn, get them jobs. This is indicative of our large urban institutions, in particular, but generally all of our institutions from coast to coast. There is an enormous capacity shortage.
It struck us that in a stimulus package it would be important to invest in advanced skills training. Indeed, that happened. As my colleague Ms. Morris reported, there is a $2 billion, two-year investment in post-secondary institutions, and a significant portion of that will be invested in college infrastructure.
Our second major recommendation was that there must be investment in re-skilling or retraining displaced workers from many sectors that are suffering acutely. We are happy to say that there was a strong response to this, and in the order of $1.5 billion has been inserted into provincial budgets primarily for advanced skills training. It will be advanced skills training in colleges that will absorb the largest number of displaced workers because colleges train for employment. They do not offer courses that are not closely tied to the needs of the local economy and to employment opportunities. They engage robustly with local businesses and other employers to ensure that their graduates are quickly employed in their fields of expertise.
Even in this economy, remarkably, very large numbers of college graduates are successful in getting employment quickly. There remain remarkable shortages in many areas of advanced skills, and still limited capacity inhibits our ability to put the number of people through the system that could be employed if they had the correct training.
We have given you an analysis of the skills shortage, and we have a number of specific recommendations for your consideration for future budgets. If there is a second round of stimulus spending, we are ready. There is much that can be done.
You should give thought to ensuring that transfers under the social transfer intended for post-secondary education in fact find their way to post-secondary education. It is not clear that they do. The federal economic development agencies are great allies of colleges because they know the employment capacity that college graduates have, so those are critically important institutions.
Perhaps most important, because of their local presence in a thousand communities, colleges are remarkable partners of small business. Colleges have the capacity to assist those businesses through applied research. That applied research can improve the productivity and the profitability of these businesses, and Canada invests almost nothing in applied research in colleges. Our goal is that 5 per cent of federal investment in research and development should support colleges and their private sector partners in these communities to improve productivity and profitability and to create jobs.
The Deputy Chair: Thank you, Mr. Knight.
May I ask for a clarification from you, Ms. Morris? Will the monies forthcoming from the federal government for the repairs and maintenance of post-secondary institutions be funneled through the provinces, or will it go directly to the university?
Ms. Morris: When the program was announced, the provinces were contacted directly, as were the institutions. In the case of provinces other than Quebec, the work that is being done is matching the institutional priorities with the provincial priorities, because the provinces, of course, are being asked to contribute 50 per cent of the project cost. That is how it unfolded in British Columbia. The province and the institutions agreed on the priorities, submitted that to the federal government, and the announcements were made.
In Quebec, because of the legislative framework, the interaction is directly between the Government of Canada and the Government of Quebec.
The Deputy Chair: Thank you for that clarification. We are now open for questions.
Senator Neufeld: I have a couple of questions as a result of the remarks of the previous presenters.
I would first like to say to Ms. Morris that I was pleased to hear, in her remarks, contrary to what we heard earlier, that the stimulus that is being presented and the thought process in universities and colleges for the future is something that will, in your own words, meet the long-term strategy but also provide some stimulus for the short term.
I would like you to expand on that so I understand exactly what you meant, because I certainly did not get that from the previous witnesses.
Ms. Morris: When we put our proposal to Minister Flaherty in early December, we were all very conscious of the need for an economic stimulus budget. We knew that that was going to be the driving force of that budget. After our October board meeting, we issued an open letter to Canadians saying, "We are present in 80 communities across the country. We are the major employer in many of those 80 communities and we will do our part in terms of economic stimulus."
We had a well-documented case with respect to deferred maintenance in our universities. The average age of Canadian universities is about 32 years. They are all reaching the point in their life cycle when investments are necessary.
The Canadian Association of University Business Officers has kept a watching brief and had a well-documented case with respect to about $5 billion worth of infrastructure investments that were needed. We simply used that information to tell the government that these could move very quickly, could serve to employ a wide range of trades people who will be laid off in other sectors, and would address a very short-term need to get people working again in communities across the country. We told the government that it would be making investments in those institutions that will contribute to the recovery; in other words, training the qualified people and doing the innovative research will help the country emerge from the downturn.
That was the message that we conveyed in our pre-budget submission to Minister Flaherty.
Senator Neufeld: Thank you. I heard words of white elephants, that is, that we will fix up a lot of universities and then there will be no one in them. What you tell me is totally different, and I appreciate that. In fact, I am quite happy about what you are saying.
I also heard that the transfers for universities and colleges to provinces should be student enrolment driven rather than per capita, as it is now. I can envision some problems with that. I am sure that our current system is not perfect, and I am not here to say it is. However, what can of worms might going to per-student enrolment open up for people across Canada? In my own mind, I have some pretty good ideas about what would happen.
I would like to hear from both the colleges and universities associations as to what they think would happen.
Mr. Knight: Thank you for that question, senator. In our case we were not uncomfortable with per capita for the simple reason that, in all jurisdictions, college capacity is inadequate. All colleges are turning away qualified applicants for courses.
When we discussed this with Minister Flaherty, we were comfortable with a per capita allocation. In a different environment, where some colleges or institutions did not have a full student capacity, I could understand that approach. However, it is simply that our reality is very different. No one has adequate capacity.
Ms. Morris: The issue of transfers to the provinces is not an easy one and it obviously becomes part of a much larger dynamic in the interaction between the federal and provincial governments. AUCC has long been on record advocating a dedicated transfer for post-secondary education; in other words, one that had more of a guarantee that it would, in fact, be dedicated to post-secondary education.
The transfer announced in Budget 2008, I believe, was, in fact, a targeted transfer but without the same defined conditions. That is because every province is at a different point in its own investments and its own range of investments. However, the formula that is used for transfers is obviously part of the much bigger machinery that the Department of Finance must consider when looking at the range of transfers to the provinces. We have not taken a position on a different formula for calculating those transfers.
Senator Neufeld: Mr. Knight, when you talked about skills shortage, it was not that long ago in British Columbia when our unemployment rate was around 3 per cent, as it was in Alberta. We were having tremendous skill shortages across the whole spectrum.
I know British Columbia looked at ways to get people out of colleges with tickets, for instance, in carpentry. Rather than having to go through and become a full-fledged carpenter, you could break it into sections. For example, you could become a framer in a short period of time because there was such a shortage of them, et cetera. There were some innovative things done and those are just two examples.
Is that common across Canada, because I know Canada's economy was doing well and most provinces and territories were having problems getting skilled trades.
Mr. Knight: I would put it in a somewhat different context. During those times, the private sector often viewed colleges as a competitor for human resources because their needs were so great, in so many sectors, in so many parts of the country. In fact, potential students would be attracted to very good-paying jobs, even if they did not have the full level of skills required.
The market made the adjustment itself. The market has changed, and, as a result, we have huge numbers of people coming back to finish their training or to acquire the skills that will maintain their careers. That is another short-term issue we are struggling with; there are so many applicants and, at this point, without additional space, it is a real problem.
Senator Neufeld: The answer to the question —
Mr. Knight: There are examples of that, but I do think the marketplace is a bigger element of that dynamic.
Senator Mitchell: I have a couple of questions about research grants and infrastructure funding. I was quite interested, Ms. Morris, to listen to your comments and hear nothing whatsoever about the fact that the government has cut research operating grants. When the statement was made about "white elephants," the implication was not "white elephant" universities; it was "white elephant" research facilities.
In your estimation, what are the cuts to research operating grants, and what impact will that have, to use your words, on Canadian universities' — in your case — and colleges' ability to compete with, what I believe to be, an enlightened 21st century U.S.-Obama science policy that will crush the paltry efforts evident in this 2009-10 budget?
Ms. Morris: As I noted in my remarks, we have taken a view over time, as we always do. It was absolutely clear this year that the focus of this budget for Canadians had to be economic stimulus, and that was the essence of our brief to the minister.
We are, however, very aware and continue to work within the framework of the Science and Technology Strategy, which is a multi-year commitment to investments in research and development. As I noted, we have seen remarkable investments in the talent piece. The Vanier scholarships which will be announced later this week, and the Canada Excellence Research Chairs which were announced last week, represent significant investments in attracting and retaining some of the best and brightest scholars, both in Canada and from elsewhere.
As I indicated, there is a need for the balance. You can have the most talented people operating out of the very best facilities and of course, they need the tools to work with to be able to fully contribute. However, we are confident that, because this is a multiyear strategy, we will continue to advocate for that balance in investments. We believe the substantial infusion in investments in infrastructure send a very strong signal that these are institutions that are recognized for what they contribute to the economy. You do not make investments in institutions that you do not think will be there in 10 years' time. That is an important signal.
Clearly, the government cannot do everything at once; it never can. It is a question of trying to move the yard sticks ahead in every one of those important areas.
The federal granting councils, as you probably know, were subject to the strategic review process that every government department will ultimately go through. They are asked to identify the bottom 5 per cent of their priorities. Each one of the granting councils had to identify those areas where they thought some adjustments could be made. In the case of the granting councils, a number of those were accepted and that money was reinvested in the Canada Graduate Scholarships which, again, is meant to serve the purpose of attracting that highly-skilled talent.
Senator Mitchell: You said you had to keep moving each front forward but, in fact, they have reduced the operating grant/support/researchers front. It would be interesting if you could tell us whether you are tracking the numbers of high-quality researchers we are losing from your institutions going elsewhere — probably to the United States and elsewhere — because of this reduction in funding.
My specific question relates to your point about the research scholarships that will be focused on business — the huge problems with defining what constitutes a piece of business research. Are you supporting that kind of focused research funding when everything we know about research is it should be broad-based and creative, and things come out of that, in spite of the fact that you do not know necessarily where it will go? Can you tell us why you would not be advocating so strongly for balanced — to use your word — research funding that not only promotes business, which can get private sector funding more easily than the social sciences and humanities? Why are you not advocating research funding balanced with the social sciences and humanities research, which is so critical, both to economics in many ways and also to promote the true value, essence and rich quality of life in this country?
Ms. Morris: I think if you were to look back at our many presentations before finance committees in the Senate and in the House of Commons, you will find that we have been very vocal about our support for what we call the four foundational elements. We have strongly supported the increases that have come every year to the granting councils' operating and funding budgets and the proportional increases to the institutional cost program, which supports the research that is done within universities.
With respect to the new Canada Graduate Scholarships, you will know that those scholarships were divided between the three granting councils. It was that portion that was ascribed to the social sciences and humanities — just that portion of the new amount — that indicated the focus on business-related research, with the recognition that there are any number of disciplines that contribute to the success factors in any business.
In fact, if you look at the research environment these days, it is more and more multidisciplinary in its nature, because nothing can be simply tracked through a particular silo anymore. We will continue to advocate for that. We will continue to advocate for the broad base of discovery research — that basic research where you may not know that in three years, you will have X product, but you may have a discovery that will go on to make a huge contribution.
If you have a chance to read our report, Momentum, you will see we speak extensively both to the contributions of that basic research and then to some of the more focused research in areas of priority to the country.
Senator Mitchell: To the extent that you are supportive of discovery research, and given that you have underlined that the research graduate funding is very precise, you must be disappointed in how this budget has addressed that. Is that not the case?
Ms. Morris: The Canada Graduate Scholarships, as I indicated, were divided up between the three councils.
Senator Mitchell: But they are going to business and science. That is the emphasis.
Ms. Morris: Not the graduate scholarships going to CIHR, the Canadian Institutes of Health Research, or to NSERC. Within the SSHRC allocation of Canada Graduate Scholarships, they have been asked to focus on that area. It is a portion of those new scholarships; there is still the full base of existing scholarships in all of the three granting councils.
As I have said, we were very committed to contributing to the economic stimulus measures. In November and December, it was clear that these were where the investments had to be made. However, we will continue to advocate along the lines of needing that balanced mix of talent, infrastructure, research grants and institutional costs.
Senator Chaput: I have two brief questions. The first is more for Ms. Morris and Mr. Knight. If I am not mistaken, there is an association of francophone universities and colleges of Canada. Is that association one of your members or is it a separate entity? And if that is the case, what communication links do you have with that association?
Ms. Morris: Thank you, senator. Yes, the members of the Association des universités de la francophonie canadienne are francophone universities that are also members of AUCC. Within the AUFC, they are able to take a much more specific look at the role of francophone universities outside Quebec and in Canada. The ties are very close; we meet often and we are invited to their meetings.
Obviously, the meetings, which bring together 94 presidents, rectors across the country, also include the rectors of the francophone universities that are members of the AUFC. So it is very well integrated.
Mr. Knight: It is exactly the same thing for us.
Senator Chaput: My second question concerns infrastructure projects. Ms. Morris, you said in your presentation, and I quote: "Currently, our universities are busy taking the steps that will allow them to initiate projects."
I was wondering whether some projects were already at the top of the list. If so, what kind of projects are they and what is the merit basis for deciding whether the value of one project is greater than that of another, apart from the fact that the university has to be ready, that they need funding from the province or the private sector? What happens to the smallest universities and colleges in regions like Prince Edward Island or Manitoba? Is a francophone university like the Collège universitaire de Saint-Boniface, which is much smaller, taken into consideration?
Ms. Morris: Absolutely. We can also cite the example of British Columbia, but it would be worthwhile to consult the website and to look at the details of projects that have been approved in British Columbia. That includes universities and colleges, the large universities and the small ones. There you will find an overview of the scope of the projects that have been approved.
The reason why British Columbia was the first province in mind is that they were waiting for an election call; so they had to make announcements before the election was called.
If I understand correctly, they are expecting that all the announcements will be made before the end of May in all the provinces. And that obviously involves, as I said at the very start, an agreement between the federal government and the province in question, priority projects, the commitment of the provincial government to share project costs. And the projects, to a large degree, are approved on the basis of the criteria stated at the time the infrastructure program was launched. However, very great attention is paid to the projects that are really ready to start quickly because they have a two-year period to complete all projects.
Senator Chaput: But what does "readiness" mean in your mind? The fact that they are really small, is that a business plan; is that funding; what is it?
Ms. Morris: "Readiness" includes the approval of the municipality, the funding already in place, the environmental assessment that have been conducted or the prices that have already been requested. In other words, that means that the project, a business plan, is ready to be launched.
Senator Chaput: All that has been asked of the universities since the infrastructure project was announced. That does not allow a lot of time, does it?
Ms. Morris: No, and that is why we were very confident, given the work the association had done with our universities. We knew that there were projects that had been waiting for a long time and that could be activated and advanced very quickly. I encourage you to take a look at the British Columbia website because it will give you a very good idea of the scope of the projects at the colleges and universities.
The Deputy Chair: To follow up on Senator Chaput's question, how is money being allocated between provinces and how is it being allocated between universities and community colleges? Who is being left out?
Mr. Knight: I believe money is allocated on a per capita basis. That was the plan going in and we supported it. It appears to be notionally a per capita allocation. With respect to the allocations within provinces, the federal and provincial governments must agree that a particular project is worthy. It seems, in the case of British Columbia, they were able to do that quite readily. The federal government does not have detailed knowledge of the post-secondary educational needs in different jurisdictions, so they rely heavily on provincial governments.
Senator Ringuette: Infrastructure investment is more than bricks and mortar to me. It should also include technology to address the first issue that Mr. Knight mentioned, which is capacity. If you can provide distance education, then you can increase the number of students to whom you can supply skills from your institutions.
For example, you would have only courses on-site that require physical laboratory environments. The rest could all be done via distance education on the Internet. Distance and space in regards to physical space requirements would no longer be a major issue for your community colleges. The requirements for trades could be met by co-op placements, allowing the laboratory aspect of training to be provided by potential employers.
I see that as the future in looking at infrastructure needs for education because you must bear in mind demographics. Currently, we have a major need for training. However, we also must understand the demographics in our not too distant future will have fewer students requesting post-secondary education in Canada.
Mr. Knight: Regarding demographics, Statistics Canada tells us that college enrolment will increase by 30 per cent over five years simply because of the employability of the graduate. There is enormous demand and limited capacity. Therefore, we expect that institutions will grow.
Distance education is possible in some courses. There is remarkable technology in place in many institutions. An interesting example is Yukon College, which has 13 campuses. Every community in the Yukon has a campus, but they are all supplied by technology from the main campus. It is similar for Nova Scotia Community College and New Brunswick Community College.
Many types of training require facilities as you suggest. Trades are one, but trades are only 15 per cent of college enrolments. There are many other advanced skills. There are approximately 40 allied health professions where college training is given and requires a presence in an institution. Therefore, we need infrastructure for those kinds of programs.
You mentioned the cooperation of employers. Much of the equipment that colleges have has been donated by employers. I have been to the technology labs in Ottawa at Algonquin College. It is absolutely full of high-tech equipment donated by Ottawa companies, particularly Nortel, because they need the graduates. That is not true for Nortel as much now, but historically there has been an enormous demand for graduates. In Montreal where Collège Édouard-Monpetit provides aerospace workers, Bombardier has provided much of the equipment and technology to the college.
I want senators to leave this meeting with the sense that employers and colleges are highly integrated in their communities. Colleges produce graduates who are job ready for those employers, and, of course, placements in co-op education is part of that mix.
Senator Ringuette: That is where I see possibilities of increased co-op programming to liberate and increase the capacity of colleges in certain areas if possible.
Mr. Knight: Another thing colleges have done is to extent open hours of facilities. In the case of Algonquin College, they are open from 7 a.m. until 10 p.m. to keep the facilities going seven days per week, which is rather remarkable.
Senator Ringuette: I agree. Thank you for bringing this issue to this committee.
Senator Di Nino: Ms. Morris, in regard to a question from Senator Chaput, does your organization represent every university in the country?
Ms. Morris: Yes. Our 94 universities are public and private, not-for-profit universities and degree-granting colleges.
Senator Di Nino: I want to put that on the record. Are you the only voice that represents them?
Ms. Morris: Yes, we like to call ourselves the voice of Canada's universities nationally and internationally.
Senator Di Nino: During the 2009 budget, the information I have is that in effect science and humanities received an increase in scholarships from the funds made available. It might have been a substantial increase making more scholarships available to more graduates. Is that your understanding?
Ms. Morris: Yes. As I indicated in my opening remarks, an additional investment of $87.5 million was made in Budget 2009 for Canada Graduate Scholarships distributed between the three granting councils, including the Social Sciences and Humanities Research Council.
Senator Di Nino: The other issue that came up during the previous panel was a concern about a gender imbalance on the scholarship distribution. Have you any comments on that?
Ms. Morris: I have not seen the remarks on scholarships made by the earlier panel. For years we have been tracking the concern that there was not an appropriate gender balance in the Canada Research Chairs awarded across the country. Our board of directors at AUCC, who are university presidents from across the country, have asked us to report at each meeting on the progress made in that area. The balance has been righting itself slowly but surely in the allocation of Canada Research Chairs.
Senator Di Nino: If we could have updated information on that, it would be useful because the issue arises regularly in our discussions.
The Deputy Chair: Would it be possible for you, Ms. Morris, to forward that to the clerk of the committee?
Ms. Morris: I would be happy to do so.
The Deputy Chair: We will circulate it to the committee.
Senator Di Nino: Mr. Knight, you provided a statistic that shocked me: Algonquin College turned down 7,000 applicants last year.
Mr. Knight: Yes.
Senator Di Nino: Does this rejection of applicants occur across the country?
Mr. Knight: Absolutely, but not as much in some rural colleges. Any large urban college has an enormous surfeit of applicants. In some programs there can be as many as 20 applicants for each position available. It is a great opportunity cost on the economy, because we know that these people can be employed and become an asset, not a burden. This country needs to consider college capacity seriously.
Senator Di Nino: Would you be prepared to send a brief note to the committee on that, including some statistics across the country?
Mr. Knight: I have given you some general pointers, but I can provide you with some specifics. We would be happy to do that.
The Deputy Chair: Ms. Morris and Mr. Knight, you have given us many answers. Mr. Dulude and Ms. Boyles, do you have additional comments to make?
André Dulude, Vice-President, National Affairs, Association of Universities and Colleges of Canada: I will expand on the point made about gender balance in awarding Canada Research Chairs. The percentage of women who have been appointed chairs has risen from 8 per cent to 25 per cent over the last couple of years, which is a substantial increase.
Terry Anne Boyles, Vice-President, Public Affairs, Association of Canadian Community Colleges: I want to re- emphasize the work of the colleges in the area of training vis-à-vis employment insurance programs. This committee is looking at length of time so that people can access training and at the limited access to training as they move off EI.
As well, I want to emphasize the role of colleges in applied research and work with small and medium-sized business communities that take the basic R&D and transfer it to companies. This depends greatly on their local partners in the colleges and institutes. Of the $2.9 billion on research in Canada, less than $10 million per year is invested through the colleges.
The Deputy Chair: On behalf of all committee members, I thank the witnesses appearing today.
(The committee adjourned.)