HUMA Committee Meeting

38th PARLIAMENT, 1st SESSION

Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Tuesday, November 2, 2004

Á

1110

The Chair (Ms. Raymonde Folco (Laval—Les Îles, Lib.))

Mr. Peter Nares (Executive Director, Social and Enterprise Development Innovations)

Á

1115

The Chair

Mr. Peter Nares

The Chair

Mr. Braden Hutchinson (Vice-President, Rideau River Residence Association)

Á

1120

The Chair

Mr. Richard Shillington (Principal, Tristat Resources)

Á

1125

The Chair

Á

1130

Mr. Richard Shillington

The Chair

Mr. Tom Lukiwski (Regina—Lumsden—Lake Centre, CPC)

Mr. Braden Hutchinson

Mr. Tom Lukiwski

The Chair

Mr. Tom Lukiwski

Mr. Barry Devolin (Haliburton—Kawartha Lakes—Brock, CPC)

Mr. Braden Hutchinson

Mr. Barry Devolin

Mr. Richard Shillington

Mr. Barry Devolin

Mr. Peter Nares

Á

1135

The Chair

Mr. Paul Forseth (New Westminster—Coquitlam, CPC)

Mr. Richard Shillington

Mr. Paul Forseth

Mr. Richard Shillington

The Chair

Ms. Christiane Gagnon (Québec, BQ)

Mr. Peter Nares

Ms. Christiane Gagnon

Á

1140

Mr. Richard Shillington

Ms. Christiane Gagnon

Mr. Richard Shillington

Á

1145

The Chair

Ms. Alexa McDonough (Halifax, NDP)

Ms. Jennifer Robson-Haddow (Manager, Policy Research and Development, Social and Enterprise Development Innovations)

Mr. Peter Nares

Á

1150

The Chair

Hon. Peter Adams (Peterborough, Lib.)

Mr. Braden Hutchinson

Hon. Peter Adams

Mr. Braden Hutchinson

Hon. Peter Adams

Mr. Braden Hutchinson

The Chair

Mr. Peter Nares

Á

1155

The Chair

Hon. Eleni Bakopanos (Ahuntsic, Lib.)

Mr. Peter Nares

Ms. Jennifer Robson-Haddow

Hon. Eleni Bakopanos

The Chair

Mr. Alain Boire (Beauharnois—Salaberry, BQ)

Â

1200

Mr. Richard Shillington

The Chair

Hon. Eleni Bakopanos

The Chair

Mr. Alain Boire

Hon. Eleni Bakopanos

Hon. Peter Adams

The Chair

Hon. Peter Adams

The Chair

Hon. Eleni Bakopanos

Hon. Peter Adams

The Chair

Ms. Christiane Gagnon

Â

1205

The Chair

Mr. Alain Boire

The Chair

Hon. Peter Adams

The Chair

Hon. Peter Adams

The Chair

Hon. Eleni Bakopanos

The Chair

Mr. Alain Boire

Mr. Richard Shillington

The Chair

Mr. Jean-Claude D'Amours (Madawaska—Restigouche, Lib.)

Â

1210

Ms. Jennifer Robson-Haddow

Mr. Jean-Claude D'Amours

The Chair

Mr. Braden Hutchinson

The Chair

Ms. Alexa McDonough

Â

1215

The Chair

Mr. Peter Nares

Ms. Alexa McDonough

Mr. Peter Nares

The Chair

Ms. Alexa McDonough

Mr. Richard Shillington

Â

1220

The Chair

Mr. Richard Shillington

The Chair

Mr. Peter Nares

The Chair

Mr. Braden Hutchinson

The Chair

Mr. Richard Shillington

The Chair

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CANADA

Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

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NUMBER 005

l

1st SESSION

l

38th PARLIAMENT

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EVIDENCE

Tuesday, November 2, 2004

[Recorded by Electronic Apparatus]

*   *   *

Á  (1110)  

[Translation]

    The Chair (Ms. Raymonde Folco (Laval—Les Îles, Lib.)): On the orders of the day of the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities, fifth meeting, we have, in accordance with the order of reference of Thursday, October 14, 2004, Bill C-5, An Act to provide financial assistance for post-secondary education savings.

    Today, we will be hearing witnesses from several organizations, beginning with representatives of Social and Enterprise Development Innovations, followed by representatives of the Rideau River Residence Association and of Tristat Resources.

[English]

    In the second part of this meeting we will be dealing in camera with committee business. We have two notices of motion, which have been received from Mr. Martin, and will be discussing these in the second part.

    Welcome to our witnesses. There are three groups. As usual, I will give five minutes to each of the three groups, after which we will go into the question period.

    I remind you that the time for questions includes the time for the answers. It is seven minutes for the first run and five minutes from then on.

    I will start according to the list I have in front of me, with Social and Enterprise Development Innovations. Welcome, Mr. Nares. Would you please introduce the people with you and then present your speaking notes.

    Mr. Peter Nares (Executive Director, Social and Enterprise Development Innovations): Merci, madame.

    My name is Peter Nares. I'm the founding executive director of Social and Enterprise Development Innovations.

    With me is Jennifer Robson-Haddow, who is the manager of our policy and research work.

    SEDI is a national charitable organization dedicated to enabling poor, unemployed, and underemployed people to become self-sufficient. We take a variety of leading-edge social and economic approaches to this goal in areas such as policy development, program management, information exchange, capacity building, public education, and research.

    Every aspect of our work is rooted in the community. We work hand in hand with non-profit groups and businesses across the country to design, manage, test, and deliver the programs and services Canadians have told us they need. SEDI has assisted thousands of low-income Canadians in hundreds of communities. We have been active in every province and territory in the country. Our position today is informed by nearly seven years of leadership in the international savings and asset-building field.

    It is our view that the Canada learning bond and CESG enhancements have been too narrowly contextualized as strictly a measure to finance post-secondary education; rather, Bill C-5 offers a way to begin to address the disturbing imbalance in the benefits provided for children's education savings in the country. This is part of a larger and disturbing pattern of imbalance in the benefits provided for asset accumulation to more affluent Canadians.

    We believe Bill C-5 is important for three reasons. First, it is the first time a Canadian government has acknowledged both that poverty is an issue of assets as well as income and that savings and assets are as important for low-income Canadians as they are for middle- and upper-income Canadians.

    Second, the bill will provide a much-needed cash incentive to encourage children from low-income families to pursue post-secondary education.

    Third, it will propel Canada into the forefront of a growing number of countries that are developing similar asset-building policies. Other countries also moving in this direction include the United Kingdom with their child trust fund, the United States with the proposed ASPIRE Act, and Australia with proposed nest egg accounts.

    Assets matter, and not just to those who already have them. Poverty is about more than income. It's also about opportunities to save and to invest in a better future. Savings and assets can leverage new income, cushion against sudden income losses or planned risks, and build social capital by enhancing inclusion and participation. The decision on whether or not to participate in higher education, or even whether or not to complete high school, can be significantly influenced by the presence of savings and assets. When provided the right supports and incentives, low-income Canadians can and do save.

    For example, 25% of families with incomes of less than $25,000 are already saving for their child's education. Some 3,500 low-income Canadians in communities including Halifax, Montreal, Calgary, Digby, and Toronto, are saving an average of $55 per month for higher education and training through Learn $ave, which is a project we manage.

    SEDI believes there are many positive attributes to the bill as proposed. It is an example of progressive universalism, which means that all get, and those who need more get more. It provides financial incentives that offer real value to low-income families with children. It starts at birth, maximizing opportunities to benefit from the effects of compound interest and early childhood interventions. It uses and improves upon an existing infrastructure, that being the RESP infrastructure. It is a recognition of the significant role of assets in economic and social inclusion.

    We offer four issues for consideration by the committee.

    First, we expect that the government will view this as a down payment and will continue to enhance the value of the bond and CESG as resources permit.

Á  (1115)  

    Second, we would also welcome future opportunities to improve the flexibility of the education savings system: first, to allow full transferability of bond and grant moneys among siblings within eligible families, just as wealthier families pool RESP savings—

    The Chair: Excuse me, Mr. Nares, we're having a little bit of a problem with the translation. Would you please slow down? This is something that happens to all of us.

    Mr. Peter Nares: Do you want me to repeat?

    The Chair: No, just slow down from now on.

    Mr. Peter Nares: —second, to consider opportunities to roll unused savings into a range of other asset-building accounts, so that other avenues to self-sufficiency may be more accessible.

    Third, we remind the committee that there will be a need for federal and provincial cooperation in the implementation of the program. That said, we are very optimistic and note that Quebec, Ontario, British Columbia, Nova Scotia, Alberta, and Manitoba have all variously signalled willingness to cooperate with this initiative and have indicated their broader interest in asset building.

    Fourth, the discussion of Bill C-5 highlights the need for investment in financial capability. We understand the government has already committed to a broad outreach and awareness campaign and hope it will include a range of measures to enable low-income families to increase their financial capability as it relates to education savings and planning.

    We further hope the strategy will make use of the expertise and capacity of the community sector to deliver services to low-income families.

    As with other government programs, the likelihood of participating in the bond and CESG increases significantly if you know about it. Participation increases even further if you have the knowledge, skill, confidence, and capability required to make use of it.

    Members have raised concerns about administration costs, and we urge them to consider the far greater costs of failure.

    We thank the committee for the opportunity to make this presentation. We look forward to any questions you may have.

    The Chair: Thank you, Mr. Nares.

    I will go on to the Rideau River Residence Association. Mr. Hutchinson.

    Mr. Braden Hutchinson (Vice-President, Rideau River Residence Association): Good morning. I would like to thank the committee for the opportunity to present today.

    My name is Braden Hutchinson and I'm from the Rideau River Residence Association. I represent students who come usually from out of town to seek education away from their homes. This often involves their moving, and it involves increased costs for that specific group of students.

    I would just like to start by pointing out that post-secondary education right now in Canada is facing some very large difficulties. There has been a decrease in funding over the years due to government cutbacks, and what's resulted is that those from low-income backgrounds are only one-half as likely to attend post-secondary education, and those from rural areas or areas without a post-secondary institution are only one-sixth as likely. The most commonly stated reason for this is finance: they don't have the up-front money to reach post-secondary education.

    That said, what we're facing right here in this bill is not going to do a whole lot to assist those students from low-income backgrounds or those who have to come from away to access post-secondary education. The grand total for the Canada learning bond, if one is so lucky as to qualify for it, wouldn't really be enough to even cover one full year of tuition, if you were lucky enough to live next to a post-secondary institution. If you come from away, you're looking at an up-front cost of about $15,000 per year, and that's not living luxuriously by any means. That's just paying your rent and attending classes.

    That being said, what follows is what I see as the minimum level of amendment this bill requires in order for it to actually be responsive to those students from low-income backgrounds and from away.

    First off, the Canada learning bond as it's currently structured won't get out to enough people, and the value is simply not enough to facilitate access for students. I would propose expanding the bond's franchise to include anyone who makes less than $35,000 a year.

    As I stated before, the current benefits aren't nearly enough to cover even the cost of one year of school, and that's the big battle here, getting students in the door that first year. What would happen is the Canada learning bond would need to increase to a value of around $1,000 per year for the first 17 years of a student's life. That way it would provide them, if they were from a rural background, basically enough to get there that first year. And if they're from an urban centre, it would be enough to pay for a couple years of school, maybe more.

    It's a good opportunity for those students and really does facilitate their access.

    Furthermore, by holding the CLB in an RESP account, this program would help pay for itself for the simple reason that the economy would then be able to capture some of those multiplier effects from increased investment and things like that. As we know, when the economy does well, so do the government coffers. So indirectly, this bill, although it's an up-front cost, does pay back some of its initial expenditure.

    Furthermore, as far as the CESG grant is concerned, it would not be a good idea to count the Canada learning bond value toward the total value of the CESG for the simple reason that on occasion, low-income families do come across money here and there through a variety of means. Also, students on occasion work part-time jobs and so do have a little bit of money to invest on their own, so it's important to allow them that advantage as well.

    That brings me to my next point. The CESG currently isn't high enough. There needs to be an increase in the maximum for a lifetime and also the maximum per year in order to encourage saving on the part of those families that do have the money to do so.

    Finally, the largest problem, as far as this being a financial or fiscal problem for the government is concerned, is that right now investment can be placed anywhere in the world through the RESP program, and people benefit from that. So we're exporting capital around the world as opposed to investing it here at home. That's why I would also support a foreign-content limit, which would encourage families and students to invest their money here at home, so some of those multiplier effects from increased investment would drive economic growth.

    That would help pay back the costs of this bill.

Á  (1120)  

    On top of that, there's also the issue of long-term payback. Many countries around the world have waived tuition fees altogether for the simple reason that the investment is paid back simply by the student then staying around and working in the economy for a few years. The economic benefit is so much greater than the initial investment. So in the long term, setting up a program like this would greatly increase that.

    Thank you very much.

    The Chair: Thank you very much, Mr. Hutchinson.

    We now go to Mr. Shillington.

    Mr. Richard Shillington (Principal, Tristat Resources): Thank you very much for this invitation. It's a pleasure to be here again before the same committee with so many new faces.

    Let me clarify my role in social policy research. My career has been based on conducting research on social and tax policy. That means I see things that can be improved. Sometimes I point these out to officials, and then sometimes when necessary I encourage others to change regulations.

    I don't represent anybody except myself. I don't have an organization. I wasn't voted for by low-income people. I wasn't selected by students to represent them. I speak only for myself. I know you've spoken to people and heard from organizations that do speak for low-income people and do speak for students.

    Most of the social policy experts I've spoken to are quite ambivalent about the learner bonds because of the inadequacies in the bonds as proposed. Many say they are opposed to them: send the legislators back to the drawing board. Why? Because they're going to hold out for something better.

    I must admit that to me learner bonds are mostly of a symbolic value because of the dollar values that have been proposed. Again, only representing myself, I'd say perhaps they are better than nothing. I'm saying that because of some of the work I've been doing over the last several years on the way we structure social benefits.

    I sent a newspaper clipping to the clerk last week about the woman in Barrie, Ontario, who was kicked off welfare for having an RESP. Did she distribute it to the committee?

    I must tell you about another woman--her name is Felicia--whom I met several years ago in Toronto while doing work for St. Christopher House. She had gotten to the point where she had $800 in her RESP and was told by her welfare worker that she would not be allowed to contribute anything more because she would exceed her asset limit. She then stopped contributing to her RESP, and she got a letter from the financial institution saying that since she had stopped contributing, they were going to wind up her RESP. She basically got the money refunded, less the $500 commission. So she got a refund of a couple of hundred dollars. When I gave this talk in front of social workers, the social workers then asked whether or not the $200 that she got as a refund had been deducted from her next welfare check, and I said I didn't know.

    Far from being morally limited, low-income people aren't saving in part because they're not allowed to save. The poorest of Canadians are not allowed to save. They're not allowed to have an RESP or an RRSP if they're in social housing; if they're accessing child care subsidies, in most provinces; or if they're on welfare.

    My understanding as we sit here today is that most provinces have agreed that RESPs will no longer be assets for determining eligibility for welfare and that all provinces will make that the case soon. Actually, I think that's pretty big. Out of 100 families on welfare, it may not affect 50 of them. It might affect the five or the ten, like Rachel and Felicia, the two examples I just talked about. But these are people who are actually prevented from saving, and under the current regulations, because of the learner bond, they will be allowed to save. So that's not a bad thing.

    The learner bonds attracted enough media attention or policy attention to the issue of assets for low-income people that the provinces were forced to change their previous idiotic regulations. That's a wonderful thing, but it doesn't address the equity issue at all.

    I contribute to an RESP for my one child who's still eligible for an RESP, and I get a $400 credit per year for my contribution, because I contribute the maximum. And we're going to give $100 to low-income families. This, in the name of equity? Four hundred dollars for me, and I don't really need it, and $100 for families who truly do need it--$100 after the first year, when they get $500. I have a limit of $7,200 of CESG money for my child over her lifetime. The limit for the learner bond is $2,000. So, $7,200 for an affluent family; $2,000 for a poor family--in the name of equity?

    This is not new for Ottawa. The tax expenditure around the CESG and the RESP is about $500 million a year. The learner bonds are going to cost $80 million a year. The CESG is for affluent children. The RESPs go to all children regardless of birth date, and these ones are going to be only for children who are born after Christmas.

Á  (1125)  

    As I said, in policy we repeatedly design supports for low-income families that are cautious, tentative, and restrictive. We live in fear that money might go to somebody who's not truly deserving. Supports to affluent families are pretty wide open--here's the money, and if you can match it we'll support you. That's my problem with the learner bonds.

    I have some--

    The Chair: Just one more sentence, please.

Á  (1130)  

    Mr. Richard Shillington: --administrative concerns.

    Please ask me a question.

    The Chair: All right. Thank you. I'm sorry to have to cut you off like that.

    We'll now go to the first round of questions.

    Mr. Lukiwski, please.

    Mr. Tom Lukiwski (Regina—Lumsden—Lake Centre, CPC): Thank you.

    Braden, you mentioned in your presentation that there are some jurisdictions throughout the world that have no tuition requirements for students. I'd like you to expand upon that a little bit more. If the world were a perfect place we'd all be millionaires--but it isn't.

    Are you advocating in any sense that Canada take a look at free tuition for post-secondary students, based on any kind of a means condition?

    Mr. Braden Hutchinson: I recognize first of all that tuition is obviously a provincial jurisdiction, so I realize the limited nature of any sort of response here. Ireland is often an example cited, and I believe the provincial Liberal party actually went to visit Ireland this past summer. There is free tuition in Ireland right now for all students. All they ask is that you stick around for five years in Ireland and give back to the economy after you graduate, and your tuition is free.

    Sweden, as we all know, has free tuition. The way it works is your tuition is free, and if you have added needs--say you come from a rural area and you need to pay rent and stuff like that--there are needs-based grants available for those students. Then for anything else over and above that level of need, you're offered an income-contingent loan.

    Am I saying that we should go in this direction in the long run? Yes, definitely. In the short term, though, in relation to this bill, there need to be some vast changes to start us in that direction, and the federal government needs to take a leadership role in pushing policy in that direction.

    Mr. Tom Lukiwski: Thank you.

    The Chair: You have more minutes if you want to continue. No?

    Mr. Devolin. Fine.

    Mr. Tom Lukiwski: I'll defer to Barry, but I may come back to Braden if I can.

    Mr. Barry Devolin (Haliburton—Kawartha Lakes—Brock, CPC): Thank you for being here today.

    I actually match what you described. I am from the rural community of Haliburton. When I started grade nine in my high school there were 175 students. When I was in grade 13, 25 of us graduated from grade 13, and I think about 15 went on to university. I was one of the 15, and actually came to Carleton University.

    As for something we struggled with last week, I think many of us recognize that this bill isn't going to fix all the problems, but it's possibly a small step in the right direction. I'm a new parliamentarian, so I'm not being offered six choices. I have two choices, and one is to support something that's imperfect. The other option is to oppose something that's imperfect. So in that regard I'd like to ask Braden, and maybe Peter as well, to just answer that question.

    In that context, do you think we should pass this as it is, or do you think we should hold out for something better?

    Mr. Braden Hutchinson: It's a tough decision to make, obviously, but given what we have in front of us, I don't think this is really going to do anything to substantively benefit students and their families. Obviously that's what we do when we make social policy. We look at whether it's going to be of substantive benefit--and this isn't.

    So I would have to say the best course of action would probably be to oppose this if it can't be changed, because the increase is merely a pittance for those who need it most.

    Mr. Barry Devolin: Okay.

    I think Richard probably wants to answer this too.

    Mr. Richard Shillington: I've thought a fair bit about how you compromise in social policy. I just had a conversation with Peter before we came in about the child care issue and the people who walked away from a child care deal in 1987, I think it was, who still think they made the right choice.

    I think you have an ideal situation you want. Does the compromise make it harder to get to the ideal, or easier? Is it a step in that direction, or is it a step away from the direction?

    So a learner bond that is adequate and as generous for low-income people as it is for rich people would be part of a good package. So I would vote for it, while pointing out its inadequacies.

    Mr. Barry Devolin: Right.

    Peter.

    Mr. Peter Nares: We think it should be passed because, as I said in my presentation, it is the first time a government has acknowledged that savings and assets matter to low-income people, like they do to wealthy people. We provide wealthy Canadians with somewhere in the neighbourhood of $24 billion in asset supports, and our two major income support initiatives total a little over $12 billion. So there is a huge inequity in terms of wealth generation and public policy in this country, and I think this bill gives us a start in dealing with that

    Is it perfect? No, but it's a start, and in the way it's been structured it allows for improvements over time, which is important.

Á  (1135)  

    The Chair: Thank you. We still have some time.

    Mr. Paul Forseth (New Westminster—Coquitlam, CPC): I would like to ask this of any of the members at the end of the table. Given the nature of the bill, is the amount of money that the federal government is going to put in enough of an incentive for parents, then, to open an account, whereas perhaps without it they never would have thought of it? I take it the government is basically trying to bait people into opening an account and taking personal responsibility and going down that road for asset building. Is that amount enough that it's really going to affect take-up rates? That's the issue I'm talking about.

    Mr. Richard Shillington: Felicia, the woman in Toronto I mentioned, was living on welfare. She was a single parent. She had an income of $925 per month and she was putting $25 a month into her scholarship fund, without her bonds thing. My reaction was, I think it's wonderful you're doing it. We all know even $25 a month is laughable in terms of adequacy. Again, it's not going to get you through the first four months of school, but symbolically, for her, it was important, and who are we to second-guess her?

    Mr. Paul Forseth: Okay, but the focus of the question was, is it enough to get these accounts opened and created?

    Mr. Richard Shillington: It probably will be, because it's a no-brainer. There's $500 in the first year. You don't have to match it, you don't have to put anything in, although there are some hurdles. Birth certificates, social insurance numbers, you have to make sure you can put all that in, and these will not be easy for low-income people, particularly immigrants.

    They're going to have to have all of those things, which cost money. So you're going to have to spend money out of your pocket, and if you're extraordinarily low income, this is money that's going to come out of your food budget in order to get the paperwork in hand for $500 that's going to go into a bank account you can't touch.

    The Chair: Thank you.

    I'm sorry, but your seven minutes are up.

    Madame Gagnon.

[Translation]

    Ms. Christiane Gagnon (Québec, BQ): Thank you for coming today and sharing your thoughts so that we can make the best possible decision.

    I have a question for Mr. Nares. You said earlier that people in Canada, people in Quebec, Alberta and Manitoba, were in favour of Bill C-5. I would like to know which people you consulted in Quebec. Does it come under your area of activities?

[English]

    Mr. Peter Nares: We are doing a presentation to the National Assembly's Committee on Social Affairs with respect to Bill 57, which is the new welfare reform proposal. So in preparing to be invited to Quebec to do that presentation, we talked with two MLAs, the chair of the committee, Russell Copeman, and the education commission chair, Geoff Kelley.

    Also, the other connection we have to Quebec is in the project $avoir en banque-Learn $ave that I mentioned earlier. We have a partner in the YMCA in Montreal who we're working with.

[Translation]

    Ms. Christiane Gagnon: Thank you.

    My second question is for Mr. Shillington

    Most, if not all, student associations, both in Canada and in Quebec, feel that this bill is not a good one and that it is misdirected. We know that in Quebec, the price of education is lower than in Canadian provinces as a whole and that these measures will not necessarily benefit low-income families. First, few of them have access to higher education. Furthermore, if the price of education increases, how would $2,000 or $3,000 help to cover part of the cost, since this bond--I am referring to the second part of the bill--will be deducted from grants? It will be categorized as income.

    We feel that, on the contrary, the education system is under-funded. This morning, as it happens, I read a report on education funding. Judging by the Canada social transfer, colleges and universities are experiencing a huge shortfall.

    I recall that you have worked on the Canada social transfer and appeared as a witness in that connection on several occasions. You are therefore very much in the picture. In your view, how can families best be helped? Do you not think that this program may get mired in administrative details and become costly and provide little in the way of resources to low-income families?

Á  (1140)  

[English]

    Mr. Richard Shillington: I agreed with you that it doesn't give very much in resources, and I think the amounts are almost insulting they're so low, especially compared with what we give to other people.

    For about four years, I have been advocating getting the welfare regulations changed so that low-income people would be allowed to accumulate money in an RESP, and I got very little attention, very little press interest in the issue. When you'd tell the story, everybody would nod their heads and say “Yes, that's terrible”, and nothing ever happened. When the learner bonds were announced, I remember talking to someone and saying “Well, this will attract attention to the issue of assets for low-income people that I never would have been able to do on my own”—and it did.

    So I think this legislation has forced people to think about the fact that under current regulations, in every single province prior to the budget announcing this bond, people were not allowed to save. It's just ludicrous. So I welcome the fact this legislation reached the tipping point whereby the welfare regulations were changed in a way that allowed low-income people to save. Other than that, I would want much higher amounts.

    I don't like the idea of being asked to choose between tuition reduction and supports for children currently in post-secondary schools and those who are in high school and those in preschool. When things are tight in a family, you don't say, “Which children are we going to feed and which are we not going to feed?” You want to do all of it, of course.

    If this legislation means that governments will say “Okay, fine, tuition accessibility has been fixed”, then there's a problem, because obviously this doesn't fix either inequity or access to university. This allows some low-income people to save for education, and that's all it does. The amounts they are allowed to save are almost insultingly small—but it's better than nothing.

[Translation]

    Ms. Christiane Gagnon: I would like to come back to your proposal concerning the Canada learning bond, with its ceiling of seven thousand and a few hundred dollars. You said that, given your financial means, you thought the ceiling was a bit too high and that it might be reconsidered.

    I would like you to expand on this. Are you thinking of a transfer designed to increase the learning bond for low-income families? In this case, would you get no credit?

[English]

    Mr. Richard Shillington: If you're looking for money to increase the learner bonds, one place you could go to is taking it out of the RRSPs for higher-income families with children. Right? It wouldn't be my first preference. If you want to know the tax preference that I need the least, it's the RRSPs. It's $15,500 now per year, allowing me to get a tax credit of $7,000 that I get to invest. The last time I looked at tax expenditures around pensions, they were about $20 billion a year.

    So we're giving $80 million to low-income families through the learner bonds. I guess it's only $80 million because Finance told HRDC or Social Development that we can't afford any more. That's my guess. Right?

    Let's assume that instead of doing it for children born after Christmas, we're going to do it for all pre-schoolers, starting the first time. Let's do it for five years...so it will cost $400 or $500 million. Where are you going to find it? Roll the RRSP limits back $1,000 and there you've got it, or roll back the tax treatment of capital gains on farms and small corporations, which is a few billion dollars. I could give you a whole list. You could take it out of the RRSPs for higher-income families with children, but I actually think since the tax system doesn't provide any tax recognition for parenting at all, I wouldn't go there first.

Á  (1145)  

    The Chair: Thank you.

    I'm sorry. Cutting people off is the worst part of chairing a committee.

    Madam McDonough.

    Ms. Alexa McDonough (Halifax, NDP): Thank you, Madam Chair.

    I appreciate the witnesses coming before the committee.

    I'm trying to think back to the first hearing we held last week, where there were three representatives of national student organizations. I don't want to put words in their mouths, but I think it was a pretty unanimous view that it is so woefully inadequate and fundamentally flawed in a number of ways that it should be scrapped. I think I hear, if I take all three of the positions advanced, that it's woefully inadequate but it's better than nothing, so go for it.

    What I want to ask about, however, picking up on what I think is the theme here, is that it's woefully inadequate for two reasons. It's just too little money to really make a difference for low-income families, keeping in mind that the stated objective of the legislation is to target low-income families. Secondly, the principal beneficiaries of this legislation will without a doubt actually be upper-income families.

    Richard Shillington, you made the point that a higher-income family can benefit to the extent of $7,200 while a low-income family's benefit would be at the $2,000 level. I'm trying to reconcile one point of view--well, go for it anyway even if it's really flawed because there's an important principle involved--with the responsibility all of us share to ensure the most efficient, most cost-effective investment of public dollars.

    I want to take the opportunity to say Richard Shillington is one of several people who've been very instrumental in getting us to understand that tax expenditures are in fact what we're talking about here. It is an expenditure. It's not, oh, well, do it anyway because it doesn't really cost anything. That of course doesn't take into account the opportunity cost, that is, what could that money have done instead?

    I just wanted to go further to pursue this because what it sounds like you're all saying is, well, there isn't a better alternative we should be going for here. I for one have overwhelmingly received input from people saying it is just inequitable and inadequate. Therefore, we should be going at it in a different way, which means scrapping this bill.

    I'd just be interested in your further comments on this.

    Ms. Jennifer Robson-Haddow (Manager, Policy Research and Development, Social and Enterprise Development Innovations): Maybe I'll just clarify SEDI's position. Our thoughts on the bill are not so much that it's woefully inadequate as that perhaps it's a very good starting point and something to build upon.

    You did raise the point earlier in the comments about whether or not this was providing enough of a financial incentive, and that was something that was raised earlier in the discussions as well. I think it's important to note that there are about one in four low-income families that are already saving for post-secondary education, and the vast majority of them are doing it without assistance in an RESP or the Canada education savings grant. For them, certainly, even one dollar is one dollar more than what they are currently getting in their current participation.

    I think it also raises the issue of the need for some support through financial capability. It's more than just about the dollars; it's about providing people with the information and the financial capability so they can take advantage of this program. There are a whole host of reasons for why people are not participating, not the least of which is just the current structure of the system. We feel this bill is at least a first step to addressing a lot of those.

    Mr. Peter Nares: If I may, I'll just quickly add one point about the issue of enhancement. I think it's also important to remember that the Province of Alberta has introduced its own centennial bond, which is available to all children born in the province of Alberta. They will be endowed with $500 and then annual top-ups. That money can be used in conjunction with the learning bond, so at least in that province we're talking about $1,000 to start with, not just $500.

    I think it's quite possible, and for us the value of this, as I said earlier, is that it's the starting point. It provides those of us who care about this with leverage to work with other provinces to get them to do some more things. This is the miracle of leveraging and compound interest; I think Einstein said something like that. That is what this is about. On the surface it appears to be inadequate and it probably is--on the surface--but it's the starting point. In some provinces it's going to leverage more resources, and we're confident that it will be enhanced over time.

Á  (1150)  

    The Chair: Thank you very much.

    Mr. Adams, we're still in the first round.

    Hon. Peter Adams (Peterborough, Lib.): Thank you, Madam Chair.

    The situation we're in, it seems to me, is that we have the highest participation in post-secondary education in the world but we have a problem with these low-income groups. A part of that problem has to do with federal and provincial relations. We have flowed scholarship programs, and some provinces have clawed back the benefits of those scholarship programs to students; for example, Braden mentioned our own province here, Ontario. We're trying to address, it seems to me, the participation of these low-income groups.

    Now, I've heard the remarks, but listen. There's Rachel, who we've been discussing here, with her $25, and I did a little calculation. With the $10 she would get from the 40% grant on the $25, at 3.5% she would have $7,500 by the time the child was 15. I know it's still not enough, but we can't control the tuition rates.

    I don't wish we could. I think we live in a confederation that's a confederation.

    I was attracted to this because of the potential for federal-provincial cooperation. We've already mentioned the exemption of the RESPs. In most provinces, including the province of Quebec, they're considering very seriously exempting RESPs from the calculation for low-income people. I think this is very attractive. Here's an area, unlike scholarships, where there's going to be an element of control with respect to what we do.

    The other thing is that in the bill, as you all know, there's a clause to bring in the provincial jurisdictions and allow the federal government to deliver provincial programs at very reasonable rates. We already know the Province of Alberta is waiting, with their centennial year, to launch a program in January. In Alberta the figure is already going to be--I don't really know what it is--at least $1,000 to start off with and it will be at least $200 a year for the first 15 years. Our hope is that gradually the other provinces will do the same because delivery is going to be very economical, and that's because we already have this delivery program for wealthier families.

    Now, I'd like any of you to comment on those things.

    Mr. Braden Hutchinson: I'd just like to point out the fact that there are lots of statistics cited about low-income families being able to save. I think the statistic that was just provided was that one in four--that means only 25%--of low-income families actually have money to set aside.

    Hon. Peter Adams: Madam Chair, I want to comment. I only used the example of one who was saving. The money is a grant. In another calculation we would do, it's $500 plus $100 a year from the federal government alone plus the interest up to the age of 15. That can be rolled over until you're over 40 years old and can be used in any way, not just for tuition but for trades, lifelong learning, or whatever you decide to use it for.

    Mr. Braden Hutchinson: What I'm saying here is that $3,000 is very, very little. It's not even a year of tuition. If you're going to--

    Hon. Peter Adams: If you're going into plumbing? Trades?

    Mr. Braden Hutchinson: If you're going into plumbing, then you have the fortunate ability to work and study in conjunction. My sister is actually going to be an electrician, so I'm familiar with that system. But for anyone who wants to seek any other sort of option, I don't think it's fair to suggest that everyone should go into the trades or that everyone has the opportunity to participate in a program where they can work and study all the time. That's not an option for a lot of students.

    The Chair: Mr. Nares.

    Mr. Peter Nares: I think it's correct that only one in four of all Canadian children has an RESP, so there are lots of choices that are made.

    I think for us the key is with respect to how this program is implemented locally. We strongly believe--and it goes back to a question from Mr. Forseth earlier--that this is only going to be successful if there is a connection and a relationship established around this product between low-income families and community organizations, which have the trust connection that's going to be required for this. If the community outreach administration--and we don't know what it looks like--that's been referenced in this.... Most of that money is going to community outreach--and we hope it is--and that community outreach deals with issues related to financial capability, which it's going to need to for this initiative to be successful. I think there's every reason to believe that if that relationship is engaged between the community organizations and low-income families.... It's not just with the money, but that relationship and the understanding of savings matter; assets matter; it isn't just about income. That's the kind of thinking and behavioural effect we believe community outreach can have.

    I point to the partners we have. Our partners in this exercise are United Ways, family service associations, credit unions, and church groups. There's a wide range in the community sector that supports this.

Á  (1155)  

    The Chair: Thank you.

    We're now into a second round, which is five minutes. Mr. Van Loan is away. I have a list, which is Madame Bakopanos, Monsieur Boire, and Monsieur D'Amours.

    Madame Bakopanos.

    Hon. Eleni Bakopanos (Ahuntsic, Lib.): I want to thank the witnesses today.

    I did speak last week when we had the students groups who were only interested in one aspect of asset building, which was the end, once you're in university.

    I do thank you very much for bringing the other aspect about asset building. I believe, just like Mr. Nares and others, that this is a first step in the right direction. It's a building block on which government has to start building policies that are innovative and that in the end will begin to build on a higher level in terms of asset building. One of the them is in fact the file that I was given, which is the social economy. It has a lot of possibilities in terms of asset building.

    I want to know more specifically, because the issue of other countries came up and I think that it might be interesting for committee members and for anyone who is listening to us, about the nest egg account in Australia. Is it a higher amount or a lower amount? Are there things we can learn, perhaps, from that experience, or even from the U.K., the child trust? I know that they're very much advanced in terms of asset building for low-income families. Perhaps you would like to comment on that.

    Mr. Peter Nares: Jennifer.

    Ms. Jennifer Robson-Haddow: Maybe I'll speak specifically about the child trust fund in the United Kingdom, which is the one we're publicly most familiar with. That's the universal initiative that provides a one-time grant at birth to all children resident in the United Kingdom.

    The grant amount, I believe, is in the neighbourhood of £500. Families who have children and receive an income supplement that is comparable to our national child benefit receive an additional top-up of £250. In terms of its structure, it is not dissimilar to what we are doing here in Canada, or what's been proposed here in Canada.

    The child trust fund also does include a strategy to ensure that parents are making informed and responsible choices in terms of going to the financial institutions with the financial capability that they're going to require to participate in this program.

    In the United States, there is a bill before Congress, I believe. I don't know what stage it's at. It's referred to as the ASPIRE Act. It's a bipartisan initiative to do a similar sort of thing.

    I think it's worth noting that in the United Kingdom, although they do currently have free tuition, they are moving away from that model. The child trust fund has actually been discussed in a number of circles as one of a variety of strategies that may enable families to afford post-secondary education and to increase participation in post-secondary education.

    Hon. Eleni Bakopanos: I think that's what we were trying to do as a government, to offer one part of the puzzle.

    The other thing that I liked about your presentation, let me say also, is the fact about working on the community-based assistance. I think that's something we have to look at in terms of our communication. I remember during the election campaign, in fact in my riding, that even though I had done a communications pamphlet on the learning bond, very few young mothers or fathers knew anything about it.

    Perhaps we can work with the community-based organizations in all parts of Canada to disseminate this information and also assist them in opening up an account. Some of the issues raised by Mr. Shillington are the issues that are raised when we talk to low-income families, especially immigrant families, about having birth certificates, having others. Perhaps there is an area where we have to look at that aspect of it as a government.

    I thank you very much for your presentation. I certainly share a lot of your views.

[Translation]

    The Chair: Thank you, Ms. Bakopanos

    Mr. Boire.

    Mr. Alain Boire (Beauharnois—Salaberry, BQ): My question is for Mr. Shillington.

    Bill C-5 stipulates that for the first three years, administrative costs would be $40 million. We know that it would cost about $13 million annually in administrative costs to distribute $80 million over the first three years.

    Do you think that this program would turn into another gun registry? Do you think that it could be beneficial for the provinces? If this money went directly to the provinces, they could invest it directly into education.

  (1200)  

[English]

    Mr. Richard Shillington: I was unaware of that administrative costs figure. It doesn't sound high in itself, but it sounds high as in proportion to the money. On the surface it sounds like half the spending is going to administration. Have I got that right?

    Yes, that does sound high. Whether or not those are going to be higher in reality I have no way of knowing, and I don't want to speculate. Whether or not it would be better to give the money to the provinces and have the provinces decide, I don't want to go there either. If I had my way, I would give the money to some provinces but not others. But I'm not going to be given that choice, I think.

    I am concerned about the administrative costs, and while you're mentioning administration, I do want to mention one other thing. Families who are eligible for the child tax benefit and not in receipt of it will not be eligible for the learner bond, I understand, and that's an issue. I have seen figures that 5% to 10% of families who are eligible for the child tax benefit have not applied for it and are not receiving it. They will now also lose access to the learner bond as a consequence of that, so we have to be careful about that.

    One of the things that the federal government could do on this that would help to ease this administratively is if the federal government would pressure provinces to have welfare systems pay for the obtaining of birth certificates, any documents like that, social insurance numbers, so that people who are on welfare, the people who are actually being given absurdly small amounts of money to live on, aren't asked to take milk money to buy a birth certificate so they can get a social insurance number for funds that go into an account they can't use. Certainly you could pressure provinces into providing funds to pay for that.

    The Chair: Madame Bakopanos.

[Translation]

    Hon. Eleni Bakopanos: A figure has been thrown out by the Bloc, with no explanation, concerning the program's administrative costs. I would like to see the document proving that this amount is accurate.

    In my view, if a figure like that is going to be thrown out, all members of the committee should at least have a copy of the document showing how it was arrived at.

    Madam Chair, I would like the Bloc to table, for the information of all members of the committee, the document showing how this figure was arrived at.

    The Chair: Mr. Boire.

    Mr. Alain Boire: Yes, this was done during the meeting at which officials provided us with explanations regarding Bill C-5.

    Hon. Eleni Bakopanos: So, provide the document.

[English]

    Hon. Peter Adams: I have a point of order, Madam Chair.

[Translation]

    The Chair: Yes, Mr. Adams.

[English]

    Hon. Peter Adams: With due respect to you, Eleni, I think it's an honest mistake. I think what he has done is he has taken the first year, which is $80 million, and he's taken the administration for the total program, which is over 15 years. By the way, the administration for the total program includes the launching and the outreach, which we have discussed here.

    If you wanted to get the right proportion, Eleni, you'd take the $500 of the first year and then you'd take $100 for every year for 15 years and you'd multiply that by the number of people involved and then the administration is related to that.

    I think it's a honest mistake. It's simply tying total administrative costs to one year and not 15 years of the program.

    The Chair: Madame Pakopanos, do you want to go on?

    Hon. Eleni Bakopanos: I think it's important to the discussion just the same that we make sure our figures are precise in terms of what we're actually.... You can use the figures in any way you want in any committee.

    Perhaps at this point Mr. Adams, as the parliamentary secretary, would like to table some figure in terms of the costs so that all the members then can have those costs available.

    Hon. Peter Adams: Madam Chair, I'm not stopping Alain. If he has the document, I'd be glad for him to table it. But I would be glad to table the administrative costs and an explanation of them, including the outreach.

[Translation]

    The Chair: Mr. Boire, would you agree to have Mr. Adams present the costs of this program, or would you like to present them as well?

    Ms. Gagnon...

    Ms. Christiane Gagnon: The officials said they would allocate $30 million to $40 million for the first three years, but that this figure should be re-examined, given that they did not know what the costs would be. It was a figure that was put forward. These costs would be determined after an analysis of the first three years...

  (1205)  

    The Chair: Ms. Gagnon, I apologize for interrupting you.

    In light of what was said by Mr. Boire, Ms. Bakopanos and Mr. Adams, I suggest that Mr. Adams present a brief document to the committee describing the costs. I also suggest that you do the same with respect to the figures you have just put forward. That way, everyone will be happy.

    Is that agreeable to you, Mr. Boire?

    Mr. Alain Boire: That is fine.

    The Chair: Mr. Adams?

[English]

    Hon. Peter Adams: Madam Chair, I'm quite willing to go along with that.

    The total cost of the program is close to $350 million. I think there's been a mistake with respect to the $40 million--which is true; the $40 million is true--

    The Chair: Mr. Adams, I don't wish to get into a debate right now, if you don't mind.

    Hon. Peter Adams: I know you don't, Madam Chair, but I do.

    Some hon. members: Oh, oh!

    The Chair: Thank you, Mr. Adams.

    Madam Bakopanos, is this satisfactory?

    Hon. Eleni Bakopanos: That's fine, thank you.

[Translation]

    The Chair: Mr. Boire, continue please. You still have time remaining. I know that you have lost the thread a bit with respect to what you were saying earlier.

    Mr. Alain Boire: Mr. Shillington, you said that between 5% and 10% of families eligible for the child tax benefit had not applied for it. The same thing happened with the Guaranteed Income Supplement: not knowing that they were eligible, many seniors did not apply for it.

    Is there some way of including a provision in the bill that would prevent such a situation? What solution could you suggest to avoid a repeat of the problem with the Guaranteed Income Supplement? People should automatically be informed beforehand.

[English]

    Mr. Richard Shillington: There are two eligibility outreach issues here. One is to ensure that everybody who's eligible for the child tax benefit is in receipt. The second is to make sure that everybody who's eligible for the learner bond takes that second step. You have to apply for the child tax benefit and then you have to apply for the learner bond after that.

    Both of these are issues where you can decide how much outreach you wish the officials to have. In a few years, the officials will have computer files of everybody who's eligible for the learner bond who hasn't applied. Past practice is to wait for them to show up, and then, if they show up, not to pay them past benefits. That's a past practice for seniors and for child benefit.

    To be fair, for the learner bond, they're going to have full retroactivity when they show up. You could ask that the officials actually write letters to people occasionally. You could even go further, if you wish--this would be a precedent for Ottawa--and phone people. You could say, by the way, you're eligible for the child tax benefit, the learner bond, old age security, the GIS, the Canada Pension Plan. You could tell them.

    The Chair: Thank you.

[Translation]

    Mr. D'Amours.

    Mr. Jean-Claude D'Amours (Madawaska—Restigouche, Lib.): Thank you, Madam Chair.

    It was mentioned during the presentations that increasingly--and this is true even today--jobs will required post-secondary education. This means in universities, CEGEPs or other colleges--in New Brunswick, we have community colleges--and any other post-secondary institution.

    People have often deplored the fact that low- and middle-income families were not in a financial position to save money, in this case to provide for their children's education. Even though we sometimes hear that low-income families are not necessarily able to borrow, nonetheless the debt load of families continues to rise.

    Considering the nature of this program, do you not think that it might encourage more families, even low-income families, to save? The case of the woman in Ontario, who sets aside $25 a month for her children's education, is a good example. Do you think that the program might help people understand the importance of saving, even if the amounts involved were not large? Rather than going into debt, they would thus use this program and save. I would be interested in comments from any one of you.

  (1210)  

    Ms. Jennifer Robson-Haddow: In Montreal, we have a project called Learn-$ave. Through this project, 150 low-income Canadians are putting an average of $55 a month into an individual development account. They can use this money to obtain a savings credit that they can use to further their education or to set up a small business.

    We find that thanks to their financial capability, support services and a fairly generous incentive, low-income families find a way to save, even if the amounts in questions are modest. It is seen as the cost of building one's future.

    Mr. Jean-Claude D'Amours: Madam Chair, I have a comment. I am interested in hearing these facts, which are not what we often hear about low- and middle-income families. These people must make choices, and they do. In this case, the choices are important ones, involving as they do the future of their children.

    To a certain degree, they have not necessarily had this opportunity. I find this initiative really interesting. In my view, more emphasis needs to be laid on the importance, even for low- and middle-income families, of choosing to save, rather than go into debt: this is the way to a better future.

    Thank you.

    The Chair: Thank you. Does anyone wish to add anything?

    Mr. Hutchinson.

[English]

    Mr. Braden Hutchinson: This type of thinking, this need for them to save rather than go into debt, is kind of based on an assumption that low-income families want to go into debt, or that they choose to go into debt rather than save for their education. The reality is that at $35,000 a year, it's very difficult to put together a lot of money.

    I come from a small rural community. I'm fortunate enough to be debt-free because I worked an unbelievable amount of hours for years and years and years. Right now, to be debt-free, I'm a full-time employee as well as a full-time student. My friends weren't so lucky. Most of them have probably $40,000 in OSAP by now, and they're not even finished yet. That's a huge debt burden to throw on someone's back when they're just starting out, when they're trying to build a house.

    We don't need to encourage people to invest, we need to provide people with funds to go to school. That involves a grant system rather than an investment scheme in order to encourage them to put aside what little money they do have for education. I'm sure there are all sorts of other priorities that low-income families have to meet that are more pressing than education.

    The Chair: Thank you, Mr. Hutchinson.

    Madam McDonough, for the last intervention.

    Ms. Alexa McDonough: Thank you, Madam Chair.

    I just want to thank Brad Hutchinson for that reality check. I think what we've heard from previous representatives of student councils across the country and also from a number of the national umbrella groups--I assume others have been consulting them--representing low-income and disadvantaged groups is that they would far rather see a grants-based financial assistance program and financial aid program in place for students so that we're not just looking 18 years down the road at the next generation but at today's generation of students, many of whom are themselves going to be impoverished and unable to access programs for their own children if we don't address the financial crisis. I appreciate that reality check.

    Our time is short, but I really want to go back to the issue of those many low-income Canadians now who are not free to save. Yes, it appears to be that some provincial governments and some government departments are starting to say, well, we can't just keep punishing and discriminating against social housing tenants, social assistance recipients, or registrants in child care programs that have a subsidy and so on.

    I'm wondering if you see it as a precondition of moving forward at all with this program to build into the legislation, if there is to be such legislation--personally, I still am very convinced that it's too flawed to salvage in its current form--a prohibition against clawbacks so that this becomes something that's actually a principle of standard that is enforceable in any agreement.

  (1215)  

    The Chair: I just want to remind you that you will have one minute to wrap up at the end.

    Mr. Nares.

    Mr. Peter Nares: I think the example of British Columbia might be instructive in terms of the jurisdictional response. It was actually under the previous regime in British Columbia that we were able to get an accommodation from the province to allow the people participating in Learn $ave, or $avoir en banque.... We have a site in New Westminster in British Columbia. The response by the government, and the reason it's actually quite easy to get, was that they accepted that investment, not just income, was important as well.

    In fact, that's the response we've had from most of the provinces we've talked to, including Manitoba, and Alberta, as I said earlier, and now Ontario. I think provinces are quite open to acknowledging that, one, there are regulatory barriers in place for people who are of low income or on welfare, and two, they need to do something about that.

    Ms. Alexa McDonough: Would you leave it on that chance basis?

    Mr. Peter Nares: No. I don't think it should be left on a chance basis, and it isn't.

    Again, as I referenced a few minutes ago, there's a fairly large network growing. We were at a conference in Coquitlam in British Columbia, where 170 people got together, co-sponsored by ourselves and Vancouver City Savings Credit Union. We got together and talked about how they're going to forward the agenda in that province.

    It shouldn't only be left to governments to resolve and push forward. There is community support growing for this.

    The Chair: Would anyone like to add something? Mr. Shillington? Mr. Hutchinson? No? Okay. Thank you.

    You do have some time left over, Madam McDonough.

    Ms. Alexa McDonough: I'd like to pick up on Mr. Shillington's earlier reference. He had an opportunity to outline what the nature and the extent of the administrative concerns were, but you basically invited a question about that.

    I have to say that going through the briefing and trying to read the legislation myself, I ended up thinking that as long as I had a good accountant, and as long as I had a good lawyer, and as long as I really totally understood how financial institutions work, then maybe I could get into this. But I felt like I was having a nervous breakdown in trying to make sense out of the legislation.

    In terms of administrative concerns, could I ask Mr. Shillington to comment further?

    Mr. Richard Shillington: Thank you.

    Some of you know that I have been intervening on the guaranteed income supplement on administrative issues for some years. What I've learned is that you have legislation that looks wonderful on paper—we're going to provide income support for poor seniors—and then you find out that 25% or 15% of the eligible people aren't getting it.

    This is actually built on another program that has take-up problems. The learner bond depends on the child benefit, and the take-up for the child benefit isn't perfect.

    In each of these programs, where possible, if the application process could be simplified, it would be a wonderful idea. I remember a survey that I helped design that was done by the food bank in Toronto. They found out that 25% of food bank users had not filed a tax return. If you don't file a tax return, you don't get the child benefit, you don't get the GIs, and you won't get the learner bond.

    So low-income people, with virtually no income, being cut off from benefits because they haven't filed a tax return seems kind of dumb. Sorry.

  (1220)  

    The Chair: I'm sorry, I have to cut you off, but you can say something in your concluding remarks. As a matter of fact, you will be the first one to present your concluding remarks.

    Mr. Richard Shillington: Excellent timing.

    The Chair: Go ahead, Mr. Nares.

    Mr. Peter Nares: In closing, I'll reiterate that we do support the bill, and we're looking forward to it moving through the House.

    I think I want to say two things in summary. One is that the bill needs to be enhanced over time. I think we need to get it out in the marketplace, see what kinds of responses we get to it, learn some lessons, and then move it forward.

    Secondly, on the issue of administration, the community outreach or financial capability strategy we're assuming is included in the administration. I mean, policy wogs everywhere will tell you that the devil is always in the details with respect to new policies. I would encourage the committee to really pay attention to the administration, not only from a proportionate money perspective, because I actually believe the community outreach strategy is going to be the key to the success of this initiative. If it is done properly, with the right partners, at the right level, and in the right way, it is going to have the capacity to address the issue that Richard has quite rightly pointed out.

    This will not only be useful from a learning bond point of view, but we're talking about access to financial services. We're talking about access to other benefits that people may not be aware they're entitled to and which they're not getting. This is going to be the community that makes this happen.

    The Chair: Thank you so much. Mr. Nares.

    Mr. Hutchinson.

    Mr. Braden Hutchinson: Thank you.

    I'd only like to say it's clear that this bill isn't going to do much at all for those from low-income backgrounds to substantively allow them to access post-secondary education. As such, I don't think this bill should be supported, because we're really past the point where scraps from the table are going to do anything to assist current students and future students.

    What we really need here is a full-out investment on the part of the federal government in post-secondary education. The money is there; there's a $9.1 billion surplus kicking around. I think it's absolutely ludicrous that we're not willing to make this a full effort and to merely offer scraps to those who need it most.

    The Chair: Thank you, Mr. Hutchinson.

    Mr. Shillington.

    Mr. Richard Shillington: Thank you very much.

    I want to take up a few questions. It's sad.... Affordability is a matter of choice, not a matter of the funds being available. We do have the money for other people.

    I want to caution the committee that when we're talking about the poor—and you heard this today—the poor are not morally deficient and imprudent. They live on incomes that none of us could possibly live on, so be careful about saying that we have to give them incentives to save; we have to allow them to save. It does get people's backs up when you hear people say that the poor have to be given incentives.

    The other thing, Ms. McDonough, is that this is not legislation that would give $7,200 over a lifetime to higher-income families and $2,000 to the poor. The $7,200 for higher-income families is already there, from the legislation that came into effect in 1997. If this legislation is defeated, then we're going to have $7,200 for affluent families and nothing for the poor. So we're actually arguing about whether or not we give $2,000 in addition. I say that's still not equitable, but it's less inequitable than the status quo.

    The Chair: Thank you so much.

    I'd like to thank the members of the panel. You've presented many ideas to us, and I think we will be using quite a few of the ideas presented today in our report on Bill C-5. Once again, thank you very much for coming.

    I would just like to advise the members of this committee that we'll continue directly into the second part of our meeting.

    Thank you very much.

    Since it will be in camera, I'll ask everyone to clear the room, except those allowed to remain.

    [Proceedings continue in camera]