Higher learning, higher flying.

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Higher learning, higher flying

Income-contingent loans can improve post-secondary education + It's high time for Canada to negotiate a real open skies deal

Post-secondary education is finally attracting the kind of provincial attention usually reserved for health care. And while this new focus is a good thing, the policy suggestions of late have been disappointing.

Access to higher education is a crucial business issue. Current figures show that less than half of Canadians have any post-secondary training. This is wholly insufficient, given federal government estimates that 70% of all new jobs will require some form of advanced schooling. So how to encourage greater participation by students and at the same time solve the funding constraints?

When former Ontario premier Bob Rae released his interim report on how to fix his province's university and college system last fall, we were impressed by his attention to the concept of income-contingent loans. This form of student financing, pioneered by Australia and Britain, defers tuition payments until students leave school. The ultimate repayment schedule is determined by their income after graduation.

Income-contingent loans have the ability to solve all the major problems facing our post-secondary system. They permit the deregulation of fees--tuition can rise and fall based on the market--while keeping higher education accessible to all income levels. That graduates should be expected to pay their share strikes us as fair, since they stand to make the greatest gains.

So it was disappointing to see Rae push this notion aside in his final report and instead promote a boggling system of grants, loans and differential fees based on student income levels entering school. This will only make the system more administratively complicated and less responsive to the market.

At the same time, Alberta recently announced a freeze on tuition and pledged to create 60,000 new post-secondary spaces. Again, the sentiment is well-placed, but the implementation is wrong. Capping tuition and forcing schools to rely even more heavily on the whims of government funding is not a permanent solution to higher education's problems.

Both Alberta and Ontario had the opportunity to adopt the innovative income-contingent loan model--allowing the education system to respond to market forces while simultaneously eliminating financial barriers to entry. Instead, they appear set to create more top-down regulation and a bigger role for government. But if improving quality and broadening access to higher learning is key to boosting national productivity--and it is--then we must lift the heavy hand of government off the education system.

FEDERAL TRANSPORT MINISTER Jean-C. Lapierre has a knack for saying the right things. We hope he can deliver on those right things as well.

Apart from his recognition (without solution) of the contentious issue of airport rents, explained elsewhere in this issue (see page 58), Lapierre has been outspoken on the need to negotiate a new open skies agreement with the United States to permit greater cross-border air travel. "I may be moving faster than you think," he said on the matter recently.

Well, the faster the better, we say.

While Canada has long satisfied itself with a 1995 open skies deal with the U.S., the status quo is inadequate and dangerous to the continued health of the Canadian air travel industry. In particular, the existing deal does not permit Canadian or American carriers to pick up and drop off passengers in the other's country and puts needless restrictions on courier flights.

There is a tendency among nervous nationalists in this country to look at things from the border in. These folks suggest that Air Canada or its domestic competitors will be swamped by cheap flights from U.S. carriers if we sign a new deal. On the contrary, we believe sufficiently in the power of competition and Canadian ability that such a deal will inevitably create new opportunities for both Canadian airlines and consumers. But it is also necessary to look beyond our borders.

Next month, the U.S. and the European Union will reopen their own discussions on open skies. If successful, such a deal should greatly improve the flow and convenience of travel between the Continent and the United States. And this has important consequences for Canada.

Our ability to act as a gateway to North America could be severely comprised if we lack solid open skies credentials with both Europe and America. If Canada is not able to triangulate itself onto any U.S.-EU arrangement, our airlines, as well as airports in Toronto, Montreal and Halifax, could find themselves shut out of the profitable transatlantic traffic business. Such a fate could also await Vancouver, if and when the United States turns to Asia for a similar deal.

Canada cannot afford to maintain barriers to air travel at a time when the rest of the world is embracing free trade. Lapierre has promised to surprise us with his eagerness to sign open skies deals. Let's hope he does.

By The Editorial Board

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