January 25, 1990

The Gem

Tories Tack ‘Tax’ On Student Loans

OTTAWA (CUP) -— Students

borrowing under the Canada Stu-

dent Loan program will have an -

extra three per cent to pay back after 1991. :

Secretary of State Gerry Weiner announced a three per cent “administration fee” on student loans last month, to re- coup costs of defaulted loans.

“We have just heard about this through research of the Canadian Federation of Stu- dents,” says UPEI SU President Lisa Murphy.

“If you need a loan, you obvi- ously don’t have a lot of money,” said Canadian Federation of Stu- dents chair Jane Arnold. “And yet they’re making these people pay more. This is really regres- sive.”

Secretary of State official Len Westerberg said the fee, which will apply only to new loans, will be tough on students now, but will help them in the long run.

“If we don’t start getting some of the [defaulted loan] money back, the tax payer will end up with the bill,” Westerberg said, a fice ae ; ;

He said students have de- faulted on $150 million worth of loans. “That’s money we can’t loan out to students,” he added.

Lisa Murphy UPEI SU President

Westerberg said the new fee would bring in $60 million in the , first year. He said it was part of the government’s overall effort to reduce spending.

“It’s- tough, but students aren’t the only segment of society being affected by cuts,” he said.

“This,” Lisa Murphy says “is yet another indication that gov- ‘ernment does not have education as a priority.”

Westerberg said the new tax wouldn’t affect students decision to go to college or university.

“I don’t think it’s going to affect students,” he said. “But it depends on the student’s out- look, whether he’s determined to get through school, and he’s will- ing to work, or whether he’s just looking for a free ride.”

Arnold said the fee had noth- ing to do with cutting costs.

“It’s a tax,” she said. “It’s a money making venture. That they would tax a loan is absurd.”

“Its been a rough year for the Canadian Student thanks to the Feds,” says Lisa Murphy. “I mean we’ve got the Bill C-33 funding cutbacks, the VIA_ Rail cutbacks, no indication of sum- mer employment, as the best form of Student Aid, for summer 1990, and now this.

In 1987-88, 221,268 students borrowed more than $588 mil- lion through the Canada Stu- dent Loan Program. Canadian Federation of Students -statistics show about 20 per cent of them will graduate owing more than $10,000 from both federal and provincial programs.

“People are really up in arms about this fee,” Arnold said. “It’s really slimy.” , :

Lisa Murphy echoes C.F.S.’s argument that, “Those students who can least. afford the cost of post-secondary education are be- ing taxed for going into debt.”

Get Off That Fence! Fight The GST!

MONTREAL (CUP) - If you’re still groaning over the cost of your textbooks this year, just wait until next January.

In 1991, the federal govern- ment’s proposed goods and ser- vices tax (GST) will push the price of textbooks up by at least seven per cent, .with Canadian books costing as much as 12 per cent more.

Proposed GST legislation, in- troduced Dec. 19, is a seven per cent tax which will be added to goods and services at the retail level.

It is designed to replace the

hidden manufacturer’s sales tax (MST) of 13.5 per cent which

is tacked onto about one-third -

of Canadian manufactured goods before they reach the consumer. The GST is expected to gen- erate $18 billion in revenue, is what the MST brings in now, ac- cording to federal finance depart- ment public relations official Rick Doyon. However critics argue that the tax is compounded. It is

paid on new books and then again when those books are resold.

The GST will be applied across the board with few excep- tions, making books, magazines and newspapers taxable for the first time.

Concern about the effect the tax will have on the Cana- dian publishing industry has prompted publishers and book- sellers to form the Don’t Tax Reading Coalition.

The Toronto-based coalition is lobbying the government to ex- empt the Canadian publishing in- dustry from the GST, as well as encouraging other groups, includ- ing students, to join the fight against the tax.

“Students will be hit hard- est by this tax,” said David Hunt, spokesperson for the coali- tion. “They spend more on books, magazines and newspa- pers than anyone else. Students can’t refuse to buy compulsory textbooks just because the prices

go up.”

A study by the Association of Canadian Publishers suggested GST would increase the price of the average Canadian book by 11 or 12 per cent.

“The increase in book prices due to the GST will reduce de- mand for books and will lead to smaller print runs, smaller or non-existent profits,” Hunt. said. “This will force publishers to raise prices by more than seven per cent just to make up for lost sales.”

The average student with five courses spends $400-500 on books, according to Lina Lip- scombe, manager of the Concor- dia University’s bookstore.

When the tax kicks in, that will go up to between $428 and $560.

“What really infuriates me is that the government is showing all this concern about literacy and then they tax books,” Lip- scombe said. “Books are a need, not a luxury.”

“The government is taxing ed-

Page 7 Canadian Federation CFS of Students Fédération Canadienne FCE des étudiant(@s 7 va

Some of my Best Friends are Students:

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PC Education Policy is BORN

ucation.”

Lipscombe says Canadian books, which make up approximately 25 to 30 per cent of the texts in university book- stores, are particularly vulnera- ble to the tax. And students buy a bigger proportion of Canadian books than the general public.

“Students will be paying the tax and the increased prices while other consumers will buy Ameri- can or not buy at all,” Hunt said.

Don’t count on savings at

ther.

Graphic: The Charlatan

used or discount bookstores ei- The GST will have to be paid on those sales as well.

Canadian University Press, a national co-operative of student newspapers is also a member of the coalition. The organiza- tion joined the lobby group last month.

Most of the nation’s newspa- pers are also contributing to the campaign: the Canadian Daily newspaper Publishers Associa- tion and the Canadian Commu- nity Newspaper Association are members.

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Elections

Are you interested in politics? Do you enjoy the election pro- cedure and would you like to learn more about it? Do you want to

help out at the Student Union?

If the answer is yes to the above questions, you should join the Student Union Election Committee. Just call the Barn at 566-0530 or drop by and leave your name with the administrative assistant. Help make the elections a success at UPEI.