Thousands of students' tax rebates go unclaimed

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“Frankly, I don’t think a rebate would stop people from trying to get out (of the province), if they could,” says Michael Kozakewich, a Red River College student who signed up for the rebate after graduating from the U of M in 2007.

WINNIPEG - The Manitoba government has paid out less than a third of the cash it budgeted for its much-touted tuition tax rebates because barely half of Manitoba students are claiming the free money.

A freedom of information request revealed that, since 2007, only 13,000 grads have applied for the rebate designed to reward them for staying and working in the province.

The records do not reveal how many grads applied more than once.

Still, this figure falls significantly short of the 21,000 students that have graduated from Manitoba’s top five post-secondary institutions – University of Manitoba, Red River College, University of Winnipeg, Brandon University and the University College of the North – since the rebate was implemented.

The province has paid out nearly $8 million, well short of the $26 million the NDP government budgeted to pay out.

Students and government critics suggest the government is off the mark.

"Frankly, I don’t think a rebate would stop people from trying to get out (of the province), if they could," said Michael Kozakewich, a Red River College student who signed up for the rebate after graduating from the U of M in 2007.

An informal survey of RRC students showed that only 14 out of 50 knew of the rebate’s existence.

But the province says it’s too early to evaluate whether the rebate will be successful.

"We need more like three or four years experience before we can start to see the impact," said Steven Watson, director of taxation and analysis for Manitoba Finance. "It’s hard to judge these programs after just two years."

Tory advanced education critic Gerald Hawranik echoed Kozakewich’s comments and said the rebate program is "missing the mark" when it comes to what students want once they graduate.

"Students are looking for hope and opportunity. A vibrant economy and jobs with advancement opportunities," Hawranik said. "If you don’t have that, a rebate makes absolutely no difference. It’s not about short term relief, it’s about long term hope and opportunity."

The rebate gives back up to 60 per cent of a graduate’s tuition if they stay and work in the province to a lifetime maximum of $25,000. Saskatchewan, New Brunswick and Nova Scotia offer similar programs.

Watson blamed the recession and said that students are finding it tough to find a job and start earning enough income to get the rebate. He also said students aren’t necessarily in a rush to claim the rebate.

"We found the initial numbers are a bit lower than we expected," Watson said. "We think part of the reason for that is you have up to 20 years to claim it, and in the first year someone graduates they’re typically going to graduate part way through the year and it might take them a couple of months to find a job."

Colin Craig, Manitoba director of the Canadian Taxpayers Federation, said the program only further segregates Manitoba taxpayers.

"It doesn’t help workers that didn’t go to post-secondary institutions," Craig said. "Dropping income tax for all would be better than going in picking certain segments of taxpayers.

"We advocate for broad-based tax relief," he said.

Government documents also revealed that the province hasn’t been tracking the rebate’s recipients and can’t accurately say if the rebate is keeping Manitoba students in Manitoba.

"We can’t with high confidence estimate the impact of programs like this," Watson said.

That makes for a useless program, said Hawranik.

"If they’re not keeping statistics, why even do it?" Hawranik said. "There has to be a performance evaluation with the program.

"The government will say, ‘Look, we kept 13,000 students,’ but maybe 13,000 would have stayed without the rebate anyway," he said. "They don’t now it’s a factor [students] are staying and if you’re not evaluating, then it’s a useless program."

The government is relying on employers and schools to inform students of the rebate and draw Canadian graduates to the province.

"Just as we’ve suggested to employers to use this as a recruitment tool, we’ve suggested to universities they could be providing information to students," Watson said.

Sid Rashid, president of the University of Manitoba Students’ Union, said the government is working the wrong way.

"The onus falls on the government, it’s their program. They should make sure students are aware," he said.