Bill C-288 (Historical)

An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)

This enactment amends the Income Tax Act to give every new graduate who settles in a designated region a tax credit equal to the lesser of
(a) 40% of the individual's salary or wages,
(b) $3,000, and
(c) the amount by which $8,000 exceeds all amounts paid for a preceding taxation year.
The purpose of this measure is to encourage new graduates to settle in designated regions, thereby curbing the exodus of young people from those regions and promoting their economic development.

Income Tax Act

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I appreciate the opportunity to stand and speak to Bill C-288, which would give certain tax incentives to graduates who return to their regions or to rural regions across the country. In doing so, it would provide important services to those regions and the same kinds of services that people in metropolitan areas take for granted.

I live in a very rural area. My riding is slightly larger than the province of Ontario and within it we have a few people. We also had a very expanding economy in the last decade through the development of the diamond fields. Interestingly enough, as the economy expanded in the last four or five years, the population declined until we had a huge expansion in our gross domestic product.

Why was that? It was not because young people did not like living in the north. The allure of the north is big among young people across the country and there are many young people who would like to live in rural and remote areas. It was the cost of living. The cost of living in northern conditions is so high that people simply cannot make ends meet and they relocate.

We find that we replace a lot of these people with fly-in workers from across the country, from Newfoundland, from Nova Scotia, even from Ottawa here. I have sat in the airport in Ottawa and heard the talk of people around me who were headed to the Diavik diamond mines in the Northwest Territories. Right across the country, people take advantage of the economic opportunities in rural regions, but they do not live there and they do not provide continuity of service.

I lived in the north all my life and never had an opportunity to have a family doctor. I dealt with locum doctors throughout my whole life. I was lucky enough to live in a community that actually had locum doctors. Many of the smaller communities might be lucky to have locum nurse practitioners. They might be lucky enough to have a nurse in a nursing station. Many of the communities really do suffer because of the cost of living and the lack of the kinds of incentives that used to exist for living in the north.

My parents moved to the north in the fifties. Through the sixties, there were programs in place where all the costs of education for young northerners were paid. Young northerners could go to university. They could go to technical schools. They could go to colleges in the south and they would see that their costs were completely covered. It was a great system. It encouraged young people to get their education and as time went on, the governments of the region got smarter and said, “If you want to get that kind of break, rather than just giving it you, we will give you a remissible loan based on the years that you come back to the region and work there”. That system also has worked quite well.

What we are seeing with this type of program, this type of effort, is something that is actually replicated in the Northwest Territories now. It is one of the ways that we try to bring our young people back to the Northwest Territories and try to get them to work and live there.

Why is that important? It is because the north and rural areas in Canada are great revenue generators for the rest of Canada. Where are the mining industries in this country? Where is the oil and gas exploration? Where are the things that make our economy run? They are in rural areas. They are in northern areas.

Those things are so important to our economy and they are so important to the people who can live and work in those areas, and build those areas as successful places.

The mining industry estimates that it will need 80,000 new workers over the next two decades to service the mining industry. It is desperate to find people to come and work in those regions, to enjoy the opportunities that come with the mining industry and to settle and take the work there seriously.

The type of program we are offering with Bill C-288 is one example of utilizing the tax system nationally to help all the regions in a uniform fashion. We do have one program like that. It is something that I worked very hard on to get approved when I first came to Parliament. The northern residents tax deduction is an excellent program that goes right across the country and gives everyone in northern areas a tax break. If they are in an intermediate area in the northern parts of the provinces, including Conservative ridings, they are given a break on their taxes as well. That is good.

The problem with the program was it had been in place for 19 years and the real dollar amount had never changed over that time. Members can check the records. There was not much talk about this before that. When I got here, I worked very hard to get that into the mind of the government. In 2007 it agreed to increase the northern residents tax deduction by 10%. We were asking for 50%. Every organization in the north said that 50% was the only fair amount. The Canadian Chamber of Commerce came onside for the 50%.

The Conservative government realized that it had a problem. Its solution was not to offer up what was fair. It offered up a little so it could say it did it. I thank the government very much for the 10%. Everyone appreciates that. That is a couple hundred dollars a year extra in the pocket of the average northerner and the average rural person. That is great, but it was clearly not enough.

There is more work to be done there with the tax system to improve the lives of people in the regions of our country who make money for our country. The Conservative government wants to give away huge tax revenues from banks, from oil companies, from that same mining industry and from those that extract the wealth out of the country. When it wants to do that and not put money back into those regions and into the pockets of young people who want to build the region and build our country, that is sad.

It is a sad statement to make today in Parliament about the nature of a Conservative government that would stand up against this bill and against the idea of the bill. Yes, the bill has issues. These issues can be worked out. The principle of the bill is fine. What is wrong with the idea that we use the tax system to enhance the ability of people to live in northern or rural regions? What is wrong with the idea that we support Canadians in their efforts to build a better country that will be successful in the 21st century? What is wrong with the Conservatives? They cannot see past their end of their nose on this question of tax breaks.

I am glad it is Friday. I will have time to unwind over the weekend and return to Parliament with a slightly better feeling about my members on the opposite benches.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I am pleased to speak in support of Bill C-288. At the risk of losing the rest of my audience, I realize I am in competition with the great Canadian singer, Bryan Adams, who is in the lobby. I am glad to see that not everybody has disappeared, but I am glad to have them back.

This is a bill that has had a fair amount of debate. It has been through committee and is a bill that we are happy to support. It is an act to amend the Income Tax Act regarding tax credit for new graduates working in designated regions. It would give every new graduate who settles in a designated region a tax credit. The purpose of the measure is to encourage new graduates to settle in designated regions, thereby curbing the exodus of young people from those regions and promoting their economic development.

This is an age old problem. Anybody who has grown up in a rural area, lived in a rural area, recognizes that as cities develop and as facilities develop in cities, particularly in health care but not limited to health care, people are attracted to the cities. If they do not move there when they are young, because they need to further their education, children leave their local areas after grade 12 and move to the city to go to university. They form friendships there and eventually get jobs in the city, and they do not return to their homes.

Likewise, we have a problem, particularly in the west and perhaps across Canada, with people hitting retirement age who do the same. They sell their property in the country, their farms, and once again they too move to the city. Just in the space since 1970, the population in Manitoba was roughly 50% rural and 50% urban, and today, only 40 years later, the population pattern now is about 70% urban and only 30% rural, and that is continuing.

That is in spite of continuing efforts on the part of governments over the last 20 years to keep people in rural areas, to offer incentives, and to make it easier to transfer family farms from one generation to the other. It is interesting to me that most of the Conservative caucus represents rural areas. I would think that the Conservatives would be more in tune to this issue as members on this side of the House because they know the efforts we have to make to keep people living in and moving to rural areas.

In Manitoba, we have offered, and other provinces have as well, incentives to doctors to move to the rural areas. Even in the days when the member for Souris on the Conservative side was a provincial member of the legislature, we were working out programs to encourage doctors to move to rural areas, particularly doctors from Winnipeg, but also doctors that we brought in from outside the country.

We have discovered over the last 10 years that we were better off training professionals, training doctors, who actually came from those rural areas, with the hope that they would go back to their home town. We altered our strategy somewhat to encourage people, say, from Thompson to become doctors, and then move back to Thompson, because we found we had a better chance of getting them to go back and keeping them there.

The Conservatives have focused greatly on the cost of the program. There will certainly always be a cost and the question is whether the cost is justified. It seems to me to create a bit of a balance here to try to reverse the flow of graduates from the rural areas to the city, but this certainly would be justified. We could argue about what sort of provisions should be enacted and whether or not the bill has hit the spot one hundred per cent.

There is talk that the list we are going to follow for designated regions is over 30 years old. It should be simple enough for the government to update the list of regions. That is something that can be fine-tuned to more adequately deal with the problem.

In terms of the cost, this is something that has bounced around, not only with respect to this bill, but with respect to other bills in this House, too. The Conservatives have wildly inflated the cost of some bills in the past. Upon reflection and examination, when we in the opposition have also costed the government's bills, we have come up with a figure that maybe is one-tenth of the government's figure. What sort of statistics are being used to do this calculation?

Kevin Page, the Parliamentary Budget Officer from the Library of Parliament, appeared at the finance committee. He was asked about the cost of Bill C-288. As I indicated, the bill would provide non-refundable tax credits to new graduates who settle in certain regions of the country. He said that he had been drawing on the expertise of provincial governments, academics and government executives to assess the reasonableness of the cost assessment presented to the committee. There were two extremes, two diametrically opposed figures. The Conservatives' figure was on the extreme high side and the opposition's figure perhaps was a little more on the low side than it should be. I do not know. That is why he was asked to look at the issue.

As I outlined in my note, he said that the two cost estimates are based on different assumptions regarding the size of the regions that would be designated as eligible for the proposed tax credit and the propensity of new graduates to take up the new credit.

Last year the Conservatives knew that there was tremendous uptake on their home renovation tax credit program. The parliamentary secretary who is listening attentively now would say that he could not tell us what the total cost to the treasury was going to be until the end of the income tax season this year when the people who partook in the program filed their tax returns. Only then could the government tell what the renovation tax credit program was going to cost the treasury. It is true that until we actually implement the program and see how many graduates actually use the tax credit we will not know what the true cost to the treasury will be. It may be much lower than the government is suggesting.

I would advise the government to try it for a year. It could play with the designated areas. The Conservatives think that the current designations are 30 years out of date and cover the whole province of Saskatchewan and the oil sands area of northern Alberta. If they do not like that, we can always change the criteria to exclude those areas. Then based on what the uptake is, we will have a better idea over time about how this bill would work.

To reject the bill outright is absolute nonsense when there are increasing disparities between rural and urban parts of Canada. We do not want the urban and rural splits to widen. We want to lessen them. Anything that will help young graduates return to their hometowns to work in their hometowns and benefit rural Canada is something that we should be encouraging. Members should not be standing and saying that the sky is falling and that this is going to lead to terrible things, because that is not what is going to happen.

[The Deputy Speaker, Andrew Scheer]

Before I put the question to the House, I will give the hon. member for Laurentides—Labelle her five-minute right of reply.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Mr. Speaker, I am very pleased to conclude this long debate on my Bill C-288. Next week, this House will again have to take a stand on this bill.

It has been a year since I introduced Bill C-288, which would introduce a tax credit for new graduates working in designated regions. My colleague from Chicoutimi—Le Fjord and I have travelled throughout Quebec to tell people about how this bill would benefit them. In Abitibi—Témiscamingue and Saguenay-Lac-Saint-Jean, on the north shore, in Gaspé and in the Lower St. Lawrence, people support this measure, because it could help their region economically.

Bill C-288 has received the support of various groups and different generations throughout Quebec, including the Fédération étudiante collégiale du Québec and the Fédération étudiante universitaire du Québec, which respectively represent 40,000 and 125,000 students all over Quebec. Moreover, the Quebec Federation of Senior Citizens, which has 255 members, and the Fédération Québécoise des Municipalités, which represents 972 Quebec municipalities, have given the bill their full support. The bill also has the support of a number of RCMs, chambers of commerce and youth employment centres.

In recent debates, we have demonstrated the importance of this initiative to attract young graduates to remote regions. The bill would solve two main problems affecting these regions: the exodus of young people and the serious shortage of skilled labour.

It is important to encourage young graduates to move to the regions to start their professional careers, and to recruit skilled labour for the good of the regions. Much thought has gone into Bill C-288 so that we can eventually offer all young, eligible graduates in Quebec and Canada a tax credit. The problem with the exodus of young people is not unique to Quebec. Across Canada, economic activity has gradually moved from the so-called rural areas to the major centres. My Conservative colleague who spoke earlier said that my proposal was almost comical. This comment shows a lack of respect for provinces like Quebec, Saskatchewan, Nova Scotia, New Brunswick and Manitoba, which already have a tax credit similar to the one proposed in Bill C-288.

The Conservatives tried to derail the debate on this bill by grossly inflating the cost of the program. In his report of November 24, 2009, the Parliamentary Budget Officer assessed the proposal according to a number of different scenarios. I would like to clarify some of the data so that members can focus on the essence of the bill. The regions designated in this bill will be determined by the Minister of Finance, after consulting with the provinces involved.

Also, the regions will not be designated based on the number of people who would be affected; they will be based on the needs identified in these regions far from Canada's major cities. I should point out that the bill excludes metropolitan regions with more than 200,000 residents.

Furthermore, the bill must focus on areas that are far from large centres and on rural areas with low rates of urbanization that are struggling with long-term unemployment rates, an indicator of poor employment prospects.

Finally, we used economic and health regions as geographic criteria. We then used the long-term unemployment rate to determine the regions where job prospects are more difficult. Of these regions, we considered only those that had over 12% of their population living in rural areas. In total, we identified 34 health regions that met these criteria.

I am still counting on the support of my Liberal and NDP colleagues, and I also hope that my Conservative colleagues from Quebec will vote in the interests of Quebeckers.

[The Deputy Speaker, Andrew Scheer]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Andrew Scheer]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, Andrew Scheer]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 98 the recorded division stands deferred until Wednesday, May 5, 2010, immediately before the time provided for private members' business.

It being 2:15 p.m., House stands adjourned until Monday next at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:14 p.m.)

The House resumed from April 30 consideration of the motion that Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the third time and passed.

[The Speaker, Peter Milliken]

The House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-288 under private members' business.

(The House divided on the motion, which was agreed to on the following division:)

Vote #44

[The Speaker, Peter Milliken]

I declare the motion carried.

(Bill read the third time and passed)