Grad students question CFS tax plan

MONTREAL (CUP) – Graduate students at several schools across the country are taking issue with a national student lobby group’s call to end tuition and education tax credits.

The call is part of the “Education Action Plan” released by the Canadian Federation of Students (CFS) in October. According to the plan, non-refundable education and tuition fee tax credits cost the federal government almost $2.5 billion annually – money that the Federation wants to see redirected to upfront grants.

A group of graduate students at McGill, the University of Manitoba and the University of Calgary, who sent out a joint press release on Monday, say that if these tax credits were cut it would hurt them.

By taxing graduate scholarship and fellowship income, recipients of such income could be taxed as much as 30 per cent of their funding, say the group members. Fellowship funding is a key income component for graduate students who often, because of the extent of their research, have no opportunity to seek other employment. Taxing that income would make it even more difficult for some graduate students to get by.

“Broadly speaking, there would be thousands of people who would be paying a lot more money,” said Daniel Simeone, president of the McGill Post-Graduate Students' Society.

Most graduate students who receive funding are supported by fellowships from federal or provincial granting agencies.

According to Simeone, “the average federal or provincial scholarship is in the $17,000 to $20,000 range.” He said that taxing these scholarships would hurt anyone receiving such funding.

But Gaétan Beaulière, deputy chair of the CFS graduate caucus said that because many students have low incomes, they would not be taxed to a great degree in the proposed Education Action Plan.

“We’re talking about the largest grants that are available to graduate students,” he said. “[Like] the Vanier Scholarship for instance, which is $50,000 a year, and students currently don’t pay any tax on it.”

But since most of that kind of funding for graduate students is based on merit, Arman Vahedi, a senator with the University of Manitoba Graduate Students’ Association, said that taxing graduates would unfairly target the best students.

Beaulière said that if the tax breaks were scrapped, the money should be put in to needs-based upfront grants that would be available to graduate students.

While undergraduate students outside of Quebec now have access to the Canada Student Grants – which replaced the government’s millennium bursaries this year – graduate students do not.

“If this recommendation were to be accepted all students who have financial needs would be better off,” said Beaulière. “Tax credit measures are simply not the most effective way to alleviate student debt or improve access.”

But Simeone said the tax exemptions have helped many students deal with increasing inflation. He said that fellowship amounts have not increased in over five years.

“Part of the nature of graduate studies is that it’s very time intensive,” he said. “If you’re in chemistry lab you have to be in your lab from 8 am to 7 pm every day, so you can’t get a another job.”

At McGill, the largest percentage of graduate students is in the sciences.

“For the vast majority of graduate students who are working in labs,” said Simione, “it’s like a job, but it’s like a badly paid job, and the tax free status of your low salary makes it a little bit more reasonable.”

The CFS’ Education Action Plan also calls increased funding for the social sciences and humanities and a doubling of the number of Canada Graduate Scholarships (CGS).

According to Beaulière only four percent of the over 140,000 graduate students in Canada receive the scholarships.

Simione likes the idea, but doesn’t think it’s very likely. “Kudos to them for suggesting that we have more CGS fellowships,” he said. “ I would be very surprised, but pleased, if the Harper government were to put that forward.”

Vahedi said he had problems with the way the way the action plan was drafted, citing a lack of consultation between the CFS and graduate students’ associations.

But Beaulière said that all CFS campaigns are voted on at national meetings.

“Direction comes from the membership,” he said, adding that the recommendation to cut tax credits is “more than 12 years old.”

//Jacob Serebrin
CUP Quebec Bureau Chief

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