All Posts Tagged With: "tax rebates"
New federal tax credit for graduates?
Finance committee sticks to economic role of universities–research “must be commercialized”
Unsurprisingly, those hoping for the federal government to take a robust role in higher education will have to wait. At least that is the view of the Standing Committee on Finance, which filed its pre-budget report yesterday. The report contains a litany of recommendations, including a few of direct interest to students and universities, that may or may not pop up in next year’s budget.
Though the committee met with several “witnesses,” or gaggles of interest groups, there doesn’t appear to be much connection between what the committee was told and what it recommended.
On education, the primary concern of witnesses were measures that would require the federal government to intervene deeply into provincial jurisdiction, and coordinate higher education policy from Ottawa. Chief among these measures would be a “Post-Secondary Education Act.”
Modeled on the Canada Health Act, a PSE Act would require that the Canada Social Transfer be divided between social services and post-secondary education. Stipulations would be put in place to make the funding contingent on the provinces actually spending the money on education, rather than on roads and other items. Presently, the only requirement placed on provinces with respect to the CST is that eligibility for services, like social assistance, not be tied to residence. They are free to make residence a requirement when concerning admission to university, however. While the federal government announced such a change in 2007, it was all but forgotten a year later.
After reviewing witness submissions, the committee instead recommended:
The federal government, in partnership with the provinces and territories, explore the development of a national strategy to promote greater emphasis on Canadian education services exports.
So while the committee did recommend the government explore a “national strategy” of sorts, and though universities may welcome it, it is not the type of strategy witnesses advocated. Why even bother calling for submissions from Canadians?
As for student aid, the committee advocates a new refundable tax credit be created to encourage graduates to relocate to regions having difficulty recruiting workers:
[It is recommended that] the federal government create a refundable tax credit for new graduates. The proposed tax credit should be available to those who move to designated regions and engage in employment in their field of study.
The question that comes to mind is, wouldn’t this duplicate policies already in place? Sasaktchewan, Manitoba, Nova Scotia and New Brunswick–who all have trouble attracting workers–already provide tax credits (or rebates) to graduates who live and work in the province, no matter where they went to school. And generous ones at that.
N.S. Tories promise post-secondary tax credit
Tax plan would save families a whopping $88 every year
Nova Scotia Conservatives are promising to provide a tax credit to match registered education savings plan investments.
Campaigning in the Bedford area on Monday, Premier Rodney MacDonald outlined a proposal he says will give families a head start on the cost of post secondary education.
Under the program, parents would receive a non-refundable tax credit, to a maximum of $1,000, made in the first year of their child’s life.
The premier estimated that would mean up to $88 in actual tax savings for a family.
Asked how much difference that would make to the average family, MacDonald responded that it was “an affordable” promise, and put it in the context of a variety of tax credits now available in areas such as recreational expenses and home renovations.
“Every dollar makes a difference. When you’re out buying groceries or buying diapers for a young child, or investing in your home, or saving for a child’s education, every dollar counts,” he said.
The premier said his hope is that the program will help thousands of families start preparing for their children’s education.
As the province turns towards a more knowledge-based economy, he said a post-secondary education will provide many more opportunities for young people.
“As a government, we lowered 10 taxes and took the provincial tax off of home heating costs to help families make ends meet,” he said.
Energy Minister Barry Barnet attended the news conference in his riding, and argued that he believed the tax savings could allow some students to attend college who might otherwise not be able to afford the cost.
“Eighty-eight dollars is a lot of money to many people, and sometimes it makes the difference between whether somebody can or can’t go to a post-secondary education,” he said.
Tuition fee increase debate continues
“Nobody has any idea how student aid works,” says post-secondary expert
Alex Usher, who raised a stir this week by suggesting that tuition fee increases are an acceptable means of raising additional funds for institutions hard hit by the economic downturn, has responded to his detractors in the Educational Policy Institute’s Week in Review.
Those with an interest in tuition fee and student financial aid policy should read the whole piece, but the two following passages are particularly well done and are central to Usher’s argument:
“Apparently, no amount of empirical, scientific findings about the determinants of access will change the debate about tuition fees. Over the last ten years, a lot of time, money and effort has gone into trying to figure out the effects of finances on access to PSE, and they have been very hard to find. Basically, at current levels of tuition and current levels of student financial aid, the effects of tuition as a barrier to education appear to be tiny or non-existent. I won’t bore you with the econometric data, but consider the weight of experience: BC raised tuition by 55% in two years in 03-05 – more people went to PSE after the cuts than before. Same with the 50-60% increase in tuition in Ontario in the mid-90s. Same with the 130% increase in Quebec in 90-91. As for the question of *who* goes to school – some of the worst results in terms of access from low-income youth come from Newfoundland, where tuition is quite low. Ontario does pretty well in comparison, even though tuition is around double here what it is there. But absolutely none of this matters, apparently. In the public mind, (and that of politicians, apparently), access is always and everywhere about money.
Nobody has any idea how student aid works. Many people evinced genuine concern about the less fortunate in case if a tuition rise. And of course, they’d be right…if we were to ignore the effects of student aid entirely. But the fact is that the less well-off are to a substantial extent protected by student aid. If their need rises, they don’t automatically get more debt; in many cases, grant and remission programs kick in more aid to help them. I think student aid is going to be called on to help an awful lot of new clients in the next few years – and it will be important for everyone who cares about fairness to defend these programs vigorously in the next little while, because I guarantee that the resulting explosion in program costs is going to make politicians eager to start cutting away at them. And if that means sacrificing programs which are more likely to benefit the wealthy, such as tuition tax credit programs, then so be it.”
Overview of federal/provincial tax credits and rebates
Depressed by the price of university? These programs can help lighten your debt
Tax credits from the Government of Canada
Tuition tax credit: $400/month for full-time students, $120/month for part-time students.
Textbook and technology credit:$65/month for full-time students, $20/month for part-time students
Tax credits from provincial governments
Alberta and Ontario: $460/month per student
Manitoba and Saskatchewan: $400/month per student
All other provinces: $200/month per student
Tax rebates from provincial governments
Manitoba: Introduced in 2007, the “Manitoba Tuition Fee Income Tax Rebate” provides post-secondary graduates with a 60 per cent income tax rebate on their eligible tuition fees. The rebate can be claimed over a period of 6 to 20 years by any graduates who have completed studies at a post-secondary education institution after January 1, 2007 and now work and pay taxes in Manitoba.
New Brunswick: The “Tuition Tax Cash Back Credit”provides graduates from an eligible post-secondary institution, who live, work and pay provincial personal income tax, eligibility for a non-taxable rebate of 50 percent of their tuition costs to a maximum of $2,000 per annum (maximum lifetime rebate of $10,000). The graduate has 20 years to utilize the tax credit.
Nova Scotia: The “Graduate Tax Credit” is available to anyone living and working in Nova Scotia who graduated from an eligible post-secondary program on or after January 1, 2006. The Tax Credit is only accessible by application and can reduce the provincial portion of income tax by $1,000 for a single year (unused portions can be carried forward for up to two years). In 2008, the credit has been expanded to $2,000.
Saskatchewan: Introduced in 2007, the “Saskatchewan Graduate Tax Exemption” replaced the Graduate Tax Credit (whose value was increased in 2004 from $350 to $500 with a target of $1,000 by 2007) allows graduates of any recognized post-secondary institution to be exempt from provincial income tax for $10,000 per year, or $50,000 during the first five years following graduation. The exemption is likely to result in annual tax savings for a graduate of $1,100 or $5,500 over five years.
Rising tuition? It’s a myth
New study says the real cost of university is falling. One province is even paying its students
On Nov. 5, the streets of downtown Ottawa were flooded with angry students frantically waving red-and-black “Drop Fees” signs. Nationwide, thousands rallied, demanding protection from what everyone knows are skyrocketing tuition fees. This is probably the image that springs to mind when you think about the price of a university education in Canada: students protesting, and tuition fees that just keep going higher and higher.
But according to a new report by Canada’s only higher education think tank, the cost of a university education for the average Canadian is actually going down: when inflation and a growing list of federal and provincial tax breaks are taken into account, a degree is now slightly cheaper than at the turn of the century. The real cost of an education has fallen in most provinces. In Manitoba, real tuition costs are down more than 100 per cent in the last eight years—which means that the average student in that province is effectively being paid $51 a month to go to school.
These surprising findings come from a recent report from the Educational Policy Institute (EPI). Alex Usher, director of the Canadian arm of the international think tank and the study’s co-author, says the commonly held view that university is becoming unaffordable is just plain wrong. “By any reasonable measure, education is a lot more affordable now here than it was 10 years ago,” says Usher.
More: Overview of federal/provincial tax credits and rebates
Tuition and related fees have been steadily rising in most provinces. But according to, “Beyond the Sticker Shock 2008–A Closer Look at Canadian Tuition Fees,” the tuition sticker price is not the real measure of the cost of university. Governments are offering a growing list of tax credits and rebates, targeted at students, which greatly reduce the real cost of university. It’s as if you walked into a car dealership and saw that the sticker price of a car was $20,000—but were also told all buyers would receive a $5,000 rebate. The real cost of the car would be $15,000, not $20,000.
That’s what’s been going with Canadian university costs: sticker prices are going up, but student tax credits and rebates are increasing, too. “Since 1999-2000, these credits have completely offset out the effects of any increases in tuitions,” says the report. “[Tuition] is no higher now than it was eight years ago.”
In order to accurately measure real tuition costs, Usher and EPI created a measure that takes into account inflation, as well as the growing amount of tax relief offered to students, calling the resulting number “Everybody’s Net Tuition”. Over the past few years, governments have introduced a number of large tax breaks targeted at higher education students. For example, for every month that they are enrolled, full-time students can claim a $400 tax credit from the federal government; part-time students can claim $120 per month. The textbook and technology tax credit, introduced in 2006, gives $65 off a month to full-time students and $20 a month to part-timers. Usher says taking such tax benefits into consideration and subtracting them from average tuition gives a more accurate picture of what university actually costs.
Value of Available Tax Credits per Full-Time University Student (click on charts to enlarge)
