Question Period: Eliminating Tuition Tax Credit – Tuesday April 7, 2015
Mr. Coon: The decision to eliminate the university tuition rebate tax credit effectively raises the personal income tax of newly minted university graduates. I have heard from many of my constituents, who are furious, on this matter. One constituent wrote: This rebate was not intended to help needy students enter the system, but it was intended to keep young professionals like us working in this province. Many of the young people we know were influenced by the rebate to stay here, and some are now making plans to leave. This is not the message we need to be sending to our young people, she said.
Did the minister evaluate the effectiveness of the tax rebate in achieving its objectives before cutting it from the budget? Yes or no?
L’hon. M. Gallant : Je remercie le député de Fredericton-Sud pour sa question. Oui, bien sûr, nous avons regardé aux faits, aux données et à plusieurs rapports afin de savoir si ce programme fonctionnait ou non.
We have seen that this program is not working. We want to put this in context. This was a credit that was given to people who had graduated from postsecondary education and who had found a job and were making enough money to be able to pay taxes. Asking people to accept a little less and to have fewer programs is always tough. Do not get me wrong. We recognize that it is not an easy decision. However, we want to help people get into postsecondary education and help them while they are in postsecondary education. We also want to have programs to have people come to New Brunswick and stay in New Brunswick.
We saw that Nova Scotia looked at this program. We have seen reports saying that this does not work. It does not incent people to come to New Brunswick or to stay in New Brunswick. We need to make good public policy based on evidence.
Mr. Coon: Many constituents explained to me that their decision to start their careers in Fredericton was based on the tuition rebate and that they planned on it as a major factor in their budgeting for paying down their student debt. Canceling the rebate is a mistake, and there is no shame in fixing mistakes. Will the minister reverse his decision to cancel the tuition rebate?
Hon. Mr. Gallant: I would like to quote an op-ed that was sent in by the New Brunswick Student Alliance over the weekend:
A 2014 study by Higher Education Strategy Associates on the effects of various factors on students’ decisions about where to live after graduation found that of the 20% of students who could be convinced to live (or stay) in New Brunswick by a financial incentive of $5,000 or less, 90% indicated that they would choose to do so for no financial incentive whatsoever. Despite legitimate concerns about youth outmigration, there remains no evidence other than anecdotal that tax credits are an effective way to attract or retain young workers.
I very much feel for the people that the member for Fredericton South is citing in his e-mails. We understand that many could be frustrated with this. No decisions we make that are tough are going to be easy. We understand that. We have to make our money go as far as possible and invest in programs that are working, and that just was not the case for the tuition tax rebate.
Mr. Speaker: Time.
Mr. Coon: Budgets are about making choices. The minister has been quoted as saying that he had no choice in making the decisions he made, but those decisions were, in fact, all about choices to favour one thing at the expense of another. For example, the Minister of Finance decided to end the tuition tax rebate designed to keep graduates in New Brunswick rather than, say, increase revenue by bringing corporate tax rates in New Brunswick just up to par with those in Nova Scotia.
Why would the Minister of Finance turn away from raising the $68 million that would result from simply putting our corporate tax rates on a par with Nova Scotia’s? Why would he decide to jack up the income tax paid by our recent university graduates instead?
Hon. Mrs. Landry: We face financial challenges—major financial challenges. Our government wants to help students access postsecondary education. We want to have postsecondary education at an affordable price. This is why we are freezing tuition at public universities in the province and we are also eliminating the parental and spousal contribution.
Mr. Speaker: Order.
Hon. Mrs. Landry: In order to encourage students to stay in the province, we want to create jobs. We want to help them find jobs, and we want to help employers create opportunities to employ them. That is why we have created the Youth Employment Fund—so that they can get experience on their first job. Thank you.