03 Apr Robbing students to pay… other students… less money

A smart Nova Scotia native who turned down professional opportunities elsewhere to make her career here, and who recently returned to university to take an advanced scientific degree, writes:

Last Friday, the Liberal government announced they were eliminating interest on the provincial portion of student loans. Education Minister Kelly Regan said:

Regan
Paying Paul

We know that every dollar counts when graduates are beginning their careers, and we hope this provides some relief to young people as they build their lives in Nova Scotia.

Today, the other shoe dropped. In her 2014-2015 budget, Finance Minister Diana Whelan eliminated the Nova Scotia Graduate Retention Rebate, retroactive to January 1, 2014.

Implemented by the NDP in 2009, the program provided a $15,000 tax credit over six years for people who graduated with a degree and continued to work in the province for those six years. The tax credit was $7,500 for people who graduated with a diploma or certificate. The rebate attempted to compensate for lower wages and higher income tax in Nova Scotia, to make the province a more attractive place to work. 

Whelan
Robbing Peter

There are various arguments for whether the program was good policy. It was expensive; the Chronicle Herald quoted an estimate of $49.5 million per year. The issue in Nova Scotia tends to be a shortage of jobs rather than a shortage of people willing to work here. But when you want to retain the best and the brightest, it’s less relevant that there are people in line willing to take the job if they don’t.

I benefitted from the rebate for the past five years. It factored into my decision to stay here on two occasions when considering job offers in another province.

I expect the Liberal government conducted a thorough evaluation of the benefits and costs of this program, rather than simply turfing a program that was a legacy of the NDP. But it was dishonest and un-transparent to make a display of handing students what amounts to hundreds of dollars over the lifetime of a loan (according to CBC) on Friday, knowing they would be taking away $7,500-$15,000 per student less than a week later.

Making the change retroactive to January 1 shows no consideration for the people who are affected by their decision. When I filled out tax forms with my employer for 2014, I requested that less tax be deducted, knowing I was eligible for a $2,500 rebate. Now I am retroactively ineligible for it—a quarter of the way through the tax year.

All in all, it seems an odd way to “provide some relief to young people as they build their lives in Nova Scotia.”