Tuition rebates, what’s the point?

I know I have blogged on this before but I remain confused about the value of tuition rebates. Manitoba will now offer $25,000 in tax breaks to new university graduates that stay in that province after school (there’s a TJ article this morning on this subject).

I haven’t read the fine print on these programs (like the $10k NB tax rebate) but here’s why I don’t understand the value to the province.

Let’s say you have 2,000 new graduates coming out of Manitoba universities each year. Let’s say for argument’s sake that 1,000 of those would have stayed in the province anyway because there was an attractive job in government, a local utility, etc. The other 1,000 would not have stayed without the $25k incentive to stay.

So, in my opinion, you have wasted $25 million on the 1,000 that would have stayed anyway and probably most of the other $25 million as the others stayed for less than optimal reasons. It is most likely they will just leave after their tax subsidy runs out.

Am I wrong?

What is the real issue here?

If the real issue is that some employers need university graduates and can’t find them, why not give them the $50 million to attract the right people into those jobs through a comprehensive recruitment program? Better still, why not spend $50 million to match potential employees from around the world to the jobs in Manitoba?

I know from working on a few of these ‘repatriation’ projects that governments (NB, MAN, SK, etc.) are spending less than a million to a few million tops on recruitment of out-of-province workers (including immigration). $50 million would allow Manitoba to develop and implement over five years the most aggressive recruitment and repatriation program in the country.

A lot of Manitoba kids want to leave. They want to experience other cultures and communities. They want to spread their wings. And I think it’s bad public policy to try and force them to stay either through coercive measures (like Hamm’s proposed levy if they leave after graduation) or inducments (like short term tax incentives).

The real issue is opening up Manitoba to a national workforce with better access to the millions of immigrants that settle here every decade. $50 million would go along way to help Manitoba do that.

Now, last time a couple of bloggers that I respect posted that they had availed themselves of the New Brunswick tuition rebate program and that they think it’s a great idea given the crushing weight of the cost of education in this province.

Fine. But that’s a separate issue. If you want to give students a $10k scholarship to ease the pain of education costs, that’s one public policy issue. But using it as a tool to try and get kids to stay here when they otherwise wouldn’t is not, in my opinion, good public policy.

10 thoughts on “Tuition rebates, what’s the point?

  1. I do not disagree with you David that trying to force students to stay is bad policy. I encourage any youth I meet to travel and experience the world. I’ve been fortunate to work for a Nb based companie that enables me to travel and experience different cultures. What I also tell students is to come back with their new wealth of knowledge and pass it on to their communities.

    I have benefited from the $10k student rebate. Working full time for Whitehill for 4 years I wanted to pursue more education to give me more opportunity. Because I wanted to work and obtain my Bachelor’s degree at the same time the cost became a huge obstacle. What made me reconsider my earlier decision not to get my degree was the rebate program. Like the dozen other individuals in my Adult learners program at university many of us have families to support financially so the $10k releives us of the huge fiscal burden. In return, I continue to pay taxes as I work full time and have used my newly acquired knowledge to help grow the NB economy. At the same time, my cohorts and I are working at increasing the stat of university grads in the province.

    I beleive the best way to keep students here is to offer them work opportunities that will help them develop and challenge them. The reason why students leave is because their opportunity to grow their careers is primarily limited to call centers. It’s changing in cities like Saint John and Moncton, but we are still a call center province. That’s why strategies like an incubator for tech companies, R&D projects at our universities, access to venture capital and foreign investment are crucial to help reverse the trend of out-migration.

    BTW, Happy New Year!

  2. You’re forgetting the main requirement of government these days: “do as little as possible but make it look like you are attending to the problem”.

    The problem, as any student will tell you, is tuition costs. NB is among the highest in the country, for what is arguably, a very mediocre post secondary system.

    However, for government to actually attend to that issue is far too much for them to handle. Shovelling more money at universities rarely does it, while nobody has the stomach for real institutional change at that level.

    UNB recently brought in consultants to make recommendations on the university’s web and regulatory system, they met with students to find out what was wrong, then presented these to the committee. The committee spent the time arguing that the consultant’s ‘were wrong’, even though they were simply restating what the students were saying. The rules and regulations it seems, were INTENTIONALLY vague and misleading and this is what the university wanted, they simply wanted the consultants to say that their doing nothing was ‘on the right track’.

    That’s a fundamentally flawed institutional policy, but there is simply no way to change that, so like tuition, the government prefers to leave it alone.

    As you say, rebates do nothing, but like most elective policies if you get a good job in province you may not be bothered with the credit,which will save some more bucks.

    However, I think your “hey, lets just more immigrants to solve our problem” is not the correct approach. Local people are just as likely to positively contribute when educated as immigrants are.

    The problem, once again, is dependance on resources. Irving wants a large labour pool for its companies, so its no suprise that as late as last year a government spokesman was talking about how to get MORE people into forestry (now, if its NOT the case that this is for Irving, you’d have to admit that these people must clearly be insane).

    Likewise, the big three companies have extensive operations, unfortunately most of them, virtually ALL of them are in low educational industries like trucking and oil refining. So they have a vested interest in making sure there are plenty of workers. So now we see even these ‘expats’ from awhile ago who are making policy recommendations that NB tie its education into ‘oil refining’.

    Immigration doesn’t change that, in fact it can’t change that. Immigration is fine, but once again you need strong supports for the industries of that many people. Anybody with half a brain knows that in ten years once the oil refinery is built that Irving doesn’t give a *&^% about those construction workers, they’ll simply have to reboard the plane and find work elsewhere.

    Once again, so I don’t sound completely negative, a public provincial television station would go a long way. In that industry NB is embarassingly short, there is virtually no work for producers, actors, or the oft mentioned animation. These people all pack up and leave. That doesn’t even get into the other benefits of the actual content. IF there were decent jobs in such an area people WOULDN”T leave, as you say.

    The trouble is, and most people still haven’t wrapped their heads around this-is that those making these decisions DON”T CARE. As often mentioned here, they rarely even SAY anything negative about the economy here, if they did care, they ‘d be going on about it night and day.

  3. Public provincial TV anon? What do you call CBC (granted national in scope) but they can’t even put together a local newscast that NBers will watch and they have your and my money to do it. There’s little reason to think a New Brunswick government sponsered one would do better except give a couple of people jobs at significant public expense unless you don’t live in NB than I suppose why would you care. Our taxes are high, the debt (while better than the other Atlantic Provinces) is still far too high with little light at the end of the tunnel. Creating a quasi CBC is not in the cards (for now).

  4. Fortunately since you only speak for yourself you have no idea ‘whats in the cards’. Fortunately, once again, policy is not up to YOU and your beliefs.

    CBC IS national in scope, hence the problem. Not only do they function out of Toronto but like our government they represent the populations, not the regions. So we see nothing of, say, acadian culture, but a new sitcom advertised constantly about a mosque (seemingly designed simply for representation because the jokes are as dumb as hell).

    But once again, policy is not up to people who really don’t give a *&^^ about the province and are only interested in their own bank accounts. Many New Brunswickers have expressed the wish to see New Brunswick stories and authors shown, and the privately owned stations certainly aren’t doing it.

    This is why New Brunswick is a cultural wasteland, there is simply no medium for these stories, and narratives are what define people. CBC makes an attempt because they have to, but not much more, and the other stations don’t even try.

    And of course the reasoning above is completely false, as there is EVERY reason to believe it would ‘succeed’ because many other provinces do it. Newfoundland has NTV, Ontario has TVO, and both Saskatchewan and Manitoba have public television. There is virtually no public complaints about them in those provinces, and it provides a vehicle for issues important provincially.

    Of course once again the biggest obstacles are not people like the above, it is people like Irvings who have a vested interest in making sure they control the cultural landscape of the province. Or people like Rogers, also run out of Ontario who do Irvings the biggest favour by ignoring political issues completely (except superficial coverage)

    For those with satellite, check out Manitoba’s station, or Saskatchewan, and I guarantee you’ll be impressed by what is possible.

  5. But you should look the student as is own company.
    Why should Irving and ClientLogic have 0% interest loan and tax credit when I fund directly the economy(my education) with a 8.5% loan and no tax-credit. Those industries benefit directly from my education. They pay me 50,000$ but how much do they get in return. Why should I fund the start-up cost alone.

    You preach the same thing for the industry. We should put money in R&D and attracting new industries.

    We should give both end the same treatement.

  6. Of course thats exactly what USED to be done. When I was at university, the first term was free in the form of grants, the second was a no interest loan from the government (and I made almost enough working to cover it). In my final years that changed to private banks, where the aforementioned interest rates kicked in. It took me five years after graduating to pay off the loans for ONE year of university, five times longer than it took me to pay off the government loans (and I was working)

    Once again, this is a global problem, the costs have shifted from corporations to workers. To spout a familiar marxist line-from OWNERS to workers, as the chief owners of corporations are typically the 1-5% of upper level management (a story not in the press much is that the Center for Policy Alternatives states that the highest paid CEO”s have already earned in 2007 what the average canadian brings in.

    In NB its probably far worse, JK Irving, who wonders so much at ‘how there can be so much poverty in downtown Saint John’, probably earned the NB average on his first day of work.

    Take a university like St. Thomas, we’ll have to pretend that they have a program that is actually designed for the current economy, but a liberal arts college quite simply needs nothing but a professor and a room. Today, I can use peer to peer software and download lectures from the worlds best lecturers on any subject. I can walk into a book store and buy the text, read it, then go online to any number of chat groups and have far more discussion on topics than I will ever get in a classroom.

    So for that type of education it literally costs nothing. All that is necessary is that an individual is provided with the nominal means of survival (and students are very good at ‘making do’) while engaged in these activiities.

    Combine that with some form of testing (keep in mind many course still grade on ‘class participation’) and there is a new model for education that costs the government almost nothing, and costs the students nothing. In fact, you can design a ‘workfare’ program while they do it so that a percentage of time is spent volunteering with the poor, the elderly, or the indigent.

    That’s the arts, but the same is EASILY done in business, in fact its already being done, which is why you saw so much pressure to privatize MBA programs. Universities know all about the ‘accreditation industry’ where people go for more and more designations, and the biggest MBA programs in the country, which are also the most expensive, don’t require students to step onto the campus at all except for a final exam!

    Not only should education not cost anything, it quite simply should be REQUIRED. We KNOW that a university graduate earns an average of 20 grand a year more. I had a girlfriend who was at a dead end job at K-Mart, the best she would have ever hoped for was a 35K a year job in a precarious industry (you saw what happened to KMart), in a fairly mindless job. She went back as an older adult to university and got a teaching degree and got a job at a private school. Even more important than the salary, is the fact that it is a good and interesting job that is secure (if not enjoyable a person can certainly go back to retail).

    It was a HORRIBLE experience getting through university though, she had to collect welfare at one point, and as an older adult certainly wasn’t the ‘partying’ type (those are the kids with rich parents who get their education ‘free’). Somebody else may not have made it, but when you make things into such ordeals and combine it with a mean society that thinks ‘adversity builds character’ then you have, well, Canada.

    So every person without a univerrsity level education is a failure of society. Education is not simply important becuase of financial gain, but for the reasons that anybody that has one can give you (of course education isn’t a guarantor of intelligence, but that’s another issue)

  7. No way harma (anon3:22), 6000 people out of 730,000 watch the nightly CBC NB newscast. It’s great to suggest things though when YOU wouldn’t pay for it in Ontario.

    If you have satellite in Ontario you can watch CBC NB there and add one to the numbers but I’m not alone when I say it’s an awful show. Obviously NBers don’t want to buy what they’re selling (at least not enough to justify setting up another quasi-CBC. Maybe if CBC could get its act together, your idea might have some merit. For now, yeah, I’m not interested in spending my tax dollars on it.

  8. Obviously the above poster has never watched TVO, NTV or Manitoba or Saskatchewan’s public channels. We aren’t talking about CBC here or the news, culture is far more than news events as the poster above seems to not comprehend (and its amazing how many ideas people can hold when they’ve never bothered to investigate them).

    As we’ve discussed here before, animators would benefit as well as all the others, NONE of these people have any market whatsoever. So ask this question: if nobody had any computers in the province, imagine trying to build a call centre industry.

    Saint Andrews has managed to build a community channel with next to no resources, its really weird to hear people say “we don’t want to pay ANY money that might go to enhance the culture of the province and provide a good vehicle to build an industry and create jobs, but there’s really no problem giving Irving hundreds of millions of dollars for an industry that will give EIGHT jobs”.

  9. NTV isn’t a public channel. It’s a for profit channel that runs some CTV and Global programming because neither has a station in Newfoundland.

  10. That’s well known, but they also feature Newfoundland shows. That’s the perfect example, because as the comparison between TVO or SCN and NTV shows, the MORE ‘privately owned’ a station is, the LESS likely it is to feature local programming.

    TVO is more of a PBS style channel, because of course ontarians can afford it, and the producers of shows made for the channel benefit from the government legislation that gives tax credits in exchange for wages.

    That, of course, is among one of the policies touted by our blog owner-give government money according to wages, NOT subsidies. In New Brunswick there are similar tax credits available to producers, the folly of this is of course there are few equitably trained people because there is no industry (hence, very few outside productions come to NB).

    The reality in programming is that those who take the most advantage of labour rebates are productions that are local or provincial. Nova Scotia was an exception for awhile because of the dollar and its aggressive marketing, as well as the presence of Salter Street which was a one company industry in the province (and often that’s all it takes).

    However, with the sale of Salter Street and then its parent company and the sinking of the dollar the province has seen such investment sink. It has a similar problem to NB, no local venue. Taking a look across the country we find BC with its own station, the same in Alberta, an even better one in Saskatchewan and then Manitoba. Ontario has several, however, TVO virtually exclusively features provincial themes. Then you have Quebec with dozens of channels.

    Then, suprise suprise, you have FOUR provinces with no channels whatsoever. No wonder maritime issues are never even mentioned elsewhere-nobody knows what they are!

    Of course many people, certainly not all people, but certainly the most vocal people, do not care about ‘culture’. Their outlook is essentially american and continental and if you don’t engage in cultural practices, you don’t know they exist, hence, you have no reason to mourn them when they are gone.

    I suspect that when such a beast occurs it will be in the acadian community, since they have a more recognizeable culture and adhesion, and more reason to protect it. That’s too bad, since most of it is in a different language and other NBers won’t benefit from it.

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