Finance Committee on Nov. 25th, 2009

[Mike Wallace, Conservative, Burlington, ON]

Then their tax rate isn't based on $30,000; it's automatically based on $27,000.

[Jean-David Beaulieu]

That is correct.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Wallace.

We'll go to Mr. Rafferty, please.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thank you very much.

Thank you for appearing here.

We in the NDP do support this bill, but I do have some questions. Anyone can answer, or whoever can answer it best.

The first question deals with some of the terminology used in the bill: “designated educational institution” and a “recognized diploma”. What types of institutions and programs would be included in these definitions? Do you have an example of some?

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

I have a note here that answers your question. Because education falls within the jurisdiction of Quebec and the provinces, the diplomas that are recognized by designated educational institutions differ from one province to the next. In Quebec, for example, there are technical diplomas. The youth could have studied at a CEGEP. It could also be a B.A. or another university post-secondary degree. In the rest of Canada, it could be a college or university diploma, for example.

Ultimately, eligible institutions will be on the Master List of Designated Educational Institutions under the Canada Student Loans Program.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thanks.

That leads to the next part of my question. In my part of northern Ontario there is a very big shortage of tradespeople. I'm thinking of, for example, drywallers, and all sorts of tradespeople who need some incentive to go north. If they're in an apprenticeship program, that doesn't really lead to what I think you're talking about with a recognized diploma, but it does lead to a journeyman's status or something like that. Would that qualify?

[Lysiane Boucher]

I'd like to give you an example of how it works in Quebec. Through technical training programs, electricians, plumbers and others receive the necessary training. That training is provided by an institution that is recognized by the Quebec government. If my analysis of the situation is correct, the diploma they receive is also a recognized diploma, making them eligible to receive the tax credit in future.

[A voice]

—eligible for loans and grants.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Would the proposed tax credit interact favourably or unfavourably with other income eligibility rules for graduates, such as student loan interest relief and those sorts of things? How would that mesh with other programs that are available already?

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

In any case, the idea is not to use this credit to replace incentives that are already in place. I would say it is intended to complement what already exists, in order to ensure that young people will return to the regions.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

So for the example I gave of student loan interest relief, they may not be eligible if they receive a $3,000 credit. Are you saying that relief in that particular case would be separate from the $3,000 credit?

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

It is complementary. I don't know whether—

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

You have to pay income taxes in order to benefit from it. So, if an individual pays $2,300 in taxes the first year, he will receive $2,300 back. If he pays $3,000, he will receive that same amount. That's clear.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Let's say this bill comes into effect. For the 24 months prior to the bill coming into effect, are graduates who are already in the region eligible for this tax credit?

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

Yes.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

They are. So is there a concern that there would be a cash windfall for people who have already chosen to return to the region that's underserviced, but they've done it up to 24 months before the bill comes into effect?

[Jean-David Beaulieu]

Because the annual maximum is $3,000, we are not talking about large sums of money being paid out that have been accumulated over time. The bill clearly states that the maximum is $3,000 a year. So, if someone has been studying for three years, and has only one year of eligibility left, that person will only be entitled to $3,000. What is nice about this measure is that it provides an incentive to people who, after a year or two, may be in the process of assessing what the big city has to offer and may decide they want to improve their situation. So, it is an additional incentive for them to stay in the region.

[The Chair, Conservative, James Rajotte]

Fine. Thank you.

Point of order, Mr. Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. McCallum asked me a question about the terminology, or a paragraph, that appear in the French version but not in the English version. Now I have a better understanding of the questions that both the Conservatives and the Liberals have been asking about the scope or definition of the regions. In the French version of the bill, in an explanatory paragraph, it says:

« région désignée » S'entend au sens de l'article 3 de la Loi sur les subventions au développement régional.

Do you have the definition in English?

[Mike Wallace, Conservative, Burlington, ON]

“Designated region” has a meaning assigned under section 3 of the Regional Development Incentives Act, which includes provinces, if you read the act.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

In which version is that found? Where is it? Can you read it to me?

[Mike Wallace, Conservative, Burlington, ON]

The act has Saskatchewan as a region....

[The Chair, Conservative, James Rajotte]

Monsieur Laforest, can I suggest that we look at it? Mr. Rafferty has one minute left of his time, and then we'll go to Mr. Pacetti.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Chairman, he has answered my question. It's just that the two paragraphs are not opposite one another in the text, which makes things a little more complicated.

[The Chair, Conservative, James Rajotte]

Okay.