by Nathan White

Nearly half of New Brunswick graduates applying for the provincial government’s tuition cash-back credit have come away empty-handed in the program’s first year.

In many cases, recent graduates beginning their careers haven’t earned enough taxable income to receive the credit. Meanwhile, critics say the initiative will do little to achieve its goals of building an educated workforce and making post-secondary education more accessible.

According to figures provided by the Department of Finance, almost 3,000 New Brunswickers have applied for the rebate, which was implemented by the previous Conservative government. The Liberals kept the program, which took effect this year. People working in New Brunswick who graduated from a post-secondary institution in 2005 or later can apply for annual rebates of up to $2,000, to a maximum of $10,000 lifetime.

“This initiative will help people who want to pursue higher education access post-secondary institutions, return to their studies for upgrading, or move to New Brunswick to work and contribute to the social and economic advancement of our province,” Finance Minister Victor Boudreau said when announcing a marketing campaign for the program in April.

“The eligibility criteria is simple: they must have obtained their post-secondary diploma after Jan. 1, 2005, and they must work and pay taxes in New Brunswick,” Boudreau said.

However, only about 1,500 applicants have received a total of $1.6 million in rebates because the payouts are tied directly to the individual’s provincial personal income tax payable.

That’s an average rebate of $1,067 per recipient, while hundreds of other applicants will have to wait until their taxable income increases to qualify.

“We are going to give you money back if we owe you money, but if you don’t pay income tax, we are not going to give you money back,” said Finance spokeswoman Vicky Deschenes.

To receive the full $2,000, an individual’s taxable income would have to be $30,638 after deductions, she said.

“It’s normal when you start to work that you don’t pay a lot of income tax because you have a lower salary. It can take a few years until you start to pay income tax (but) they can still have credits in the future,” explained Deschenes, adding that graduates have up to 20 years to collect the $10,000. She said nearly $5 million has been “banked” this year by individuals who may become eligible in the future when their incomes go up.

Zach Churchill, national director of the Canadian Alliance of Student Associations, doesn’t believe the program will have its desired effects.

“It (immediately) benefits those who get better jobs when they graduate, who tend to come from the upper quartiles of family income,” said Churchill.

Over the long term, the province needs to find more ways to for its residents to access post-secondary education, he added.

“They hope to keep educated people in the province to bolster the economic base. But if you want to bolster the economic base, you need to get more people educated,” said Churchill.

He said another of the province’s post-secondary education initiatives, a $2,000 grant for first-year students, makes more sense in that regard.

“Tax credits in general don’t directly benefit students as much as front-end support for students would,” said Churchill. “Tax credits aren’t always the best option for students, especially for students from groups that don’t traditionally attend such as aboriginals, low-income background and rural students.

“It’s really important to note the fact that not only New Brunswick is going through this. There is a lack of federal support for the provinces, especially for Eastern Canada,” Churchill added.

Charles Cirtwill of the Atlantic Institute for Market Studies, an independent public policy think-tank, also criticized the tax credit.

“I think these types of programs are stupid from the get-go. I don’t think they’re going to achieve the objectives they’re trying to achieve, of supporting students getting education or encouraging people to stay in New Brunswick,” said Cirtwill. “This is the wrong way to go about it. The way is to give more money to individual students to allow them to get the education they want and need.”

Deschenes defended the program, calling it “very positive and very good.” She said the province will be advertising in campus newspapers across the country in an effort to attract graduates to the province.

“The goal of this program is to keep New Brunswickers in New Brunswick. We also want to repatriate New Brunswickers to New Brunswick and we want to encourage people to finish their studies. Whatever place you graduate, we’d like to incite people to finish school, stay in New Brunswick, work in New Brunswick and help build the self-sufficiency province.”