Executive Summary
In June 2009, an Order of Reference from the Senate authorized the Standing Committee on Social Affairs, Science and Technology to “examine and report on the accessibility of post-secondary education in Canada,” including current barriers, funding mechanisms for students, mechanisms to fund scientific research and development in post-secondary institutions and its commercialization, and the federal/provincial transfer mechanisms for post-secondary education. This Order of Reference was renewed in June 2011.
Between October 2009 and June 2010, the committee held 19 meetings on the accessibility of post-secondary education (PSE) in Canada, heard from 69 witnesses and received many briefs. The committee considered barriers to PSE as a whole and did not limit the study to financial factors, allowing for a broader debate that included a wide range of issues often overshadowed by the cost of PSE and student debt.
Context
While the Canadian Constitution gives provincial governments authority over education, the federal government has a constitutional obligation for education with respect only to First Nations people on reserve, members of the armed forces and their families, and inmates of federal correctional institutions, among others. However, the federal government has more flexibility with respect to PSE, and is involved indirectly in funding the provincial PSE systems through transfer payments, financing research through granting councils, and supporting students through the Canada Student Loans Program and other programs that provide support to students.
The committee recognizes the complexity of the post-secondary education system in Canada, as it varies across the country, and includes not only colleges and universities, but also private career colleges, technical and trades institutions, and apprenticeship programs. The committee also notes that the benefits from investment in PSE are considerable, for both individuals and Canada as a whole.
Evidence of the benefits to individuals includes the following: according to the most recent data (2007), employment rates for college and university graduates were 50% higher than for those who had not completed high school; from 1990 to 2010, for every four jobs created for PSE graduates there was one job lost for those with high school or less; and, on average, adults aged 40 to 59 with a university degree earned more than twice what those with high school or less. From a collective perspective, in member countries of the Organisation for Economic Co-operation and Development (OECD), each additional year of full-time education is associated with an increase in output per capita of about 6%.
In 2008, a higher proportion of Canadians were post-secondary graduates than in any other country within the OECD. While Canada did not fare so well with respect to graduation rates from undergraduate university programs, it does have a substantial college sector that struggles to provide the specialized training in demand by students and the economy.
Current Barriers
Non-financial barriers
With respect to barriers to post-secondary education, the committee heard clearly that while financial barriers persist, they are not the only obstacle. Rather, family background and earlier education experiences play a major role. First, the committee notes that a high school diploma is an obvious requirement for accessing PSE, yet Canada’s graduation rate from high schools was just over 70% in 2008, ranging from a low of 32% for Nunavut, to a high of almost 85% in Prince Edward Island. While the drop-out rate has been declining, the committee recognizes the importance of improving graduation rates.
The probability of completing high school and participating in PSE is reduced by low grades, lack of exposure to post-secondary institutions, and parents who have not attended such institutions. However, the committee heard of specific programs that have been successful in overcoming these disadvantages.
Financial barriers
Witnesses, particularly from student groups, identified tuition fees and related expenses of PSE as barriers to access. Despite recent regulation of tuition fees for most or all programs in some provinces, the committee heard that costs are rising faster than financial assistance levels, and anticipated debt levels are often a major deterrent for students considering PSE. At the same time, the committee heard evidence that decreases in tuition fees would not increase participation in PSE, nor would predictable, modest increases in tuition lower participation rates.
A significant barrier related to financial considerations includes inadequate information about both costs and benefits of PSE, combined with limited knowledge about existing financial aid programs.
The committee also recognizes the additional cost burdens on students who must move to attend a PSE institution, including students from rural and remote communities and francophone students from outside Quebec, and costs associated with accommodating impairments for students with disabilities. The committee also heard of the particular financial barriers facing older students with financial obligations to families; for these students, employer-supported education and training is particularly important.
Testimony before the committee highlighted the importance of having the necessary skills to succeed in post-secondary education, including those related to literacy. Half of all Canadian adults tested at literacy levels below those necessary for participation in the knowledge economy, and require supports to improve their skills and to permit them access to PSE.
The committee notes that data demonstrate that males constitute a declining proportion of those completing high school and participating in PSE. The committee learned that differences between girls and boys in aptitudes and learning styles in the early years of elementary school could make boys less likely to conform and excel, with an impact on grades that continues into high school. This, combined with more employment opportunities for males with only a high school diploma than for females, can result in a lower proportion of males among those pursuing PSE.
Aboriginal Participation in PSE
As noted above, the federal government has a particular responsibility and authority with respect to education for Aboriginal people. The data demonstrate that twice as many Aboriginal people aged 25 to 64 have not completed high school, and that three times as many non-Aboriginal people as Aboriginal people in that age group have university degrees. Witnesses told the committee that the employment rates and incomes of Aboriginal people increase with participation in PSE, and that the gap in median income between Aboriginal and non-Aboriginal people also declines with increasing education levels.
As with non-Aboriginal students, the first hurdle to overcome to access PSE is participation in and graduation from K to 12. For on-reserve students, there is a clear federal responsibility for education at this level. Among on-reserve First Nations, 60% have not completed high school.
The committee heard that Aboriginal PSE institutions demonstrate high levels of success with Aboriginal students, and that federal funding supports not only these institutions, but also specific Aboriginal programming in mainstream institutions. Previous Parliamentary committee reports and Aboriginal organizations have raised concerns that current funding levels are insufficient to meet genuine needs, and with the methods used to allocate available funds.
The committee also heard of the importance of the Post-Secondary Student Support Program (PSSP) funding supporting Inuit and First Nations students registered under the Indian Act. The committee also learned that increases in this funding have been restrained to 2% per year since 1996, a rate lower than inflation in most years with no capacity to accommodate the increasing Aboriginal population. The committee heard from federal officials that the number of students receiving support has declined over the last 10 years, while student organizations estimated that as many as 13,000 students could have been denied funding because of the constraints on resources for this program.
Noting that these programs are currently being reviewed, the committee heard testimony calling for the inclusion of Aboriginal organizations in this review and in the development of reforms.
As noted above, these programs are available only to First Nations and Inuit people registered under the Indian Act. Other Aboriginal groups told the committee that their young people are effectively excluded from the financial assistance they need to overcome the particular barriers they face.
Post-Secondary Funding Mechanisms
The committee learned of a range of federal funding programs related to PSE, in addition to those dedicated for Aboriginal PSE.
Direct assistance to students
Starting with assistance directly to students, the committee notes that the Canada Student Loan Program has provided funding to more than 4.3 million students since its launch in 1964, and that it covers up to 60% of the average financial requirements to a maximum of $210 per week. In Quebec, Northwest Territories and Nunavut, funds are transferred to the province or territory, each of which administers their own student aid program. Repayment of the loans does not start until after students leave school. Maximum weeks of eligibility are 340 weeks, though PhD students can receive up to 60 weeks for their doctoral studies, and students with a disability are eligible for up to 520 weeks of assistance.
A Repayment Assistance Plan has been available since 2009, setting 20% of the borrower’s income as a ceiling and allowing for federal government payment of interest for those unable to make the monthly payments for up to five years of a 10-year period. If the loan is still not paid at that point, federal government payments will include both interest and principal, ensuring that there is no remaining student debt 15 years after the completion of studies, or after 10 years for students with a disability.
Finally, in 2009, all federal student grants were consolidated into a single program, with variations for students from low-income families, with permanent disabilities, and with dependants, and for part-time students.
While many witnesses were critical of the financial assistance available to students, others said the financial assistance system seemed to operate well overall.
Among the concerns raised with the committee, students told the committee that the ceilings established under the loans program were lower than the real costs many students face, with gaps ranging from just over $1,000 in Ontario to more than $5,000 in Nova Scotia.
The committee also heard that the permitted earnings before federal contributions were reduced were too low at $50 per week; Budget 2011 doubled that, but based on minimum wages in most provinces and territories, earnings beyond that earned in 10 hours per week at minimum wage result in are effectively reduced by offsetting reductions in loan allowances.
The complexity of the student financial aid system is a particular barrier identified by witnesses, with a multitude of federal and provincial programs, and different administrative models even for federal student aid. In four provinces, students need apply only once for all federal and provincial programs. The committee notes the need to simplify the application process, and encourages the federal government to involve both students and financial assistance officials in their on-going efforts to simplify this process.
As noted above, the committee heard of the lack of program information available to potential students and the long delay in notifying students of the level of assistance they will receive. As well, the anticipated accumulated debt level can be a deterrent to pursuing PSE: the debt level of post-secondary graduates doubled from 1990 to 2000, and has begun to increase again since 2005 While most students do not find themselves with large debts upon graduation, debt aversion remains one of the most common reasons given by students who never pursued PSE, and is a major barrier for students from low-income families.
Students with a disability may face high costs associated with accommodating their disability, yet their eligibility for assistance is based on income limits for all families. Similarly, while the student loan program takes into account the costs associated with moving from the family home, students from remote communities and French-speaking students from outside Quebec often face higher debt levels than their more urban, English-speaking peers.
Tax measures to support PSE
The committee was informed of tax measures that support students and their families, valued at $1.6 billion in foregone tax revenue each year. This compares to approved loans valued at $2 billion annually. This assistance takes the form of tax credits for tuition, education, textbooks and student loan interest; tax deferral of the returns on contributions to the Registered Education Savings Plan; and a deduction for apprentice vehicle mechanics’ tools deduction. The savings to students can raise the level of income at which they would begin paying taxes to just over $20,000 for a student paying $5,000 in tuition. Finally, up to $5,000 in tax credits can be transferred to parents, grandparents or spouses, with unused amounts carried forward to a later year.
While these tax credits are intended to offset students’ limited ability to pay income tax, and are designed to help families put aside money to help their children with PSE, witnesses told the committee that these credits have little impact on accessibility. Since most students have low incomes, they are not able to claim the credits, and since the credits are not related to financial need or family income, they are of greater benefit to wealthier students and families.
Some witnesses flagged that savings from eliminating these credits could be targeted to those in need of the assistance. However, the committee notes that these measures have other goals, including making PSE more attractive financially, both in the short-term and in the longer term as deferred benefits increase the return on the investment in PSE.
Savings incentives
As noted above, the federal government has provided incentives to save for PSE, including the Registered Education Savings Plan (RESP), enhanced by the introduction of the Canada Education Savings Grant,
which provides federal contributions to households making RESP contributions. The federal government’s contribution matches 40% of the first $500 contribution, and declining percentages as contributions rise, varying by the income level of the family. From 1998 to 2008, the federal contribution was more than
$4 billion.
To encourage low-income families to open RESPs, low-income families receive a contribution of $500 to an RESP for any child born after 2003. An additional $100 per year is contributed up to age 15. The committee suggests that the federal government make a greater effort to promote these programs to lower income families. However, the committee also heard that some families simply do not have enough income to put money aside for savings for education, and that charitable organizations are not permitted to raise funds to contribute to individuals’ RESPs.
The committee heard testimony with respect to the importance of summer employment for students as a measure to improve accessibility to PSE, and especially of jobs related to students’ field of study. The committee recognizes the increased allocation of funds to the Canada Summer Jobs program in 2009 and 2010, and the permanent increase of $10 million announced in June 2011, and suggests that federal government research and implement effective mechanisms to contribute to the large-scale and on-going creation of summer employment.
The committee is aware of the increasing demand for skilled trades and technical workers, and learned of financial support offered by the federal government to apprenticeship training, through incentive grants to both begin and complete apprenticeships and amendments to Employment Insurance to make it more responsive to the cyclical nature of the work and study components of apprenticeship. The committee heard testimony of the preference of many parents for university rather than training in skills, trades and technology for their children. This barrier is compounded by the delays that occur because apprentices are unable to find employers who can offer them the on-the-job training opportunities their apprenticeship requires. While the federal government provides a tax credit to employers equal to 10% of the salary to be paid to the apprentice, the committee heard that only 20% of employers who could train apprentices actually do so.
Research at Post-secondary Institutions
The federal government’s funding of research in Canadian universities increased from less than $800 million in 1997-1998 to almost $3 billion in 2008-2009. Most of this amount is distributed by one of three federal research councils. Most of these funds take the form of grants allocated competitively following a peer review process; however, these councils also administer a number of other federal programs.
The Canadian Research Chairs program, created to assist universities in attracting and retaining excellent researchers, was enhanced in Budget 2011 with 10 chairs added, some of which would be focussed on research related to the digital economy, and 30 new Industrial Research Chairs in Canadian colleges.
An additional program funds the indirect costs of research, including operating and maintaining research laboratories and managing intellectual property. In a 2008 study into Canada’s science and technology strategy, the committee recommended an increase in the proportion of indirect costs covered by this program, noting that funding to cover 40% of costs was essential to Canada’s ability to compete internationally.
Finally, the Canadian Foundation for Innovation manages federal funding for modernizing research infrastructure at post-secondary institutions.
Support for graduate students
The committee heard testimony on the importance of ensuring an adequate number of graduate students who have benefitted from research experience to Canada’s economic development. Federal funding is provided in the form of graduate and post-doctoral research scholarships. The Canada Graduate Scholarships Program provides scholarships to master’s and doctoral level students, with funding up to $17,500 for one year for master’s students and $35,000 per year for three years for doctoral students.
In 2008, the federal government also created the Vanier Canada Graduate Scholarships Program, specifically targeted to attracting and retaining world-class doctoral students at Canadian universities. Both Canadian and international students are eligible for these scholarships, which are valued at $50,000 per year for three years.
Witnesses noted that these scholarships are based on merit, and do not take financial need into account. While graduate students are eligible for student loans, they are not eligible for the grants for low- or middle-income families available to undergraduate students.
For international students wishing to study in Canada, the committee heard that cost, including tuition fees that are considerably higher than those charged to Canadians, is a significant barrier. The committee notes that there are several federal scholarship programs targeted to international students, each with specific eligibility criteria. In the interest of efficiency and to raise the profile and appeal of these scholarships, the committee urges the government to explore the possibility of rolling them into a single program that would encompass a very wide range of countries.
The committee heard that post-doctoral students, who are highly trained professional researchers, number only 6,000 in Canada, of whom almost 40% are from another country. Post-doctoral fellowship programs were announced in Budget 2010, valued at $70,000 per year for two years. These are targeted to recent PhD graduates.
The committee notes that innovative post-doctoral researchers need to gain industrial experience, and one of the funding councils administers such a program with $5 million per year. The federal government has recently provided partial funding to a highly innovative pilot industrial post-doctoral program called “Elevate” administered by the Mathematics of Information Technology and Complex Systems and focused in southern Ontario. The funding is available to all disciplines.
Allocation of research support
The committee heard that research and development (R&D) activities are not limited to university graduate programs, and that colleges may be best equipped to apply the results of basic research from universities to businesses in Canada. This is supported with the federal College and Community Innovation fund, and the creation of the 10 chairs in industrial research chairs at colleges. The Committee heard that a larger portion of federal research funding should be directed to research at the college level.
The committee also heard that students at smaller universities, including French-language universities outside Quebec, are disadvantaged by the allocation of federal funds for research to larger universities in larger urban centres. As even undergraduate research opportunities often require supervision by professors with federal research grants, students at these institutions are disadvantaged at the undergraduate level as well.
The Role of the Federal Government
The principal federal investment in PSE takes the form of the Canada Social Transfer, a federal block transfer, calculated on a per-capital basis, to provincial and territorial governments. This fund supports not only post-secondary education, but also social assistance, social services, early childhood development and early learning, and childcare. While the federal government publishes information about the notional allocation among these purposes, indicating that over one-third should be allocated to PSE, provincial and territorial governments are free to use the funds as they choose. In the committee’s deliberations on the CST, two common themes were the level of funding and accountability by provincial and territorial governments.
A reduction in federal funding for PSE was among the spending reductions implemented in 1995, when the form of the transfer changed as well. From the time of those changes to 2001-2002, the committee heard, the federal portion of the costs of an undergraduate education have declined from more than 80% to less than 60%, with the portion covered by tuition rising from 13% to more than 34% in the same period. The introduction of a 3% escalator in the CST in 2009-2010, in place through 2014, may reduce the gap between previous and current funding levels; however, with even a 1% inflation rate, it would take ten years to eliminate that gap.
The committee heard that provincial and territorial governments are appropriately responsible for determining their priorities both among the service areas covered by the CST, and within the portion each allocates to PST. Other witnesses told the committee that this flexibility makes accountability to Parliament impossible. The committee heard from many witnesses that a designated fund for PSE would be more transparent, yet the committee respects provincial jurisdiction. The committee’s recommendation is included within the framework of a national strategy, outlined in detail below.
The committee heard from many witnesses that to address the accessibility challenges identified above, and others outlined below, only a co-ordinated approach can assure increasing access to PSE in Canada, particularly for currently under-represented groups. A first step toward such a goal would be the establishment of targets by provincial, territorial and federal governments together. This would necessitate the development and collection of consistent data, particularly for college-level data.
In addition, the committee heard that mechanisms for transferring credits among institutions within a single province or territory and between provinces and territories are complex and that such mechanisms vary widely across the country. Online learning creates great promise to promote accessibility, and would benefit from improved recognition of credits earned in one institution or jurisdiction by other institutions or jurisdictions.
Finally, the committee notes the need to know more about barriers, including non-financial barriers, to accessibility to PSE, and to know much more about what works in addressing the barriers, and about the necessary conditions for the replication of such promising practices.
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