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.