Finance Committee on Nov. 25th, 2009

[Mike Wallace, Conservative, Burlington, ON]

So in fact in your presentation you were discussing how it was important to get young people who are from rural areas to move back to rural areas, but this bill doesn't necessarily apply to them. It applies to absolutely everyone. Is that correct? It applies to every student regardless of where they live.

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

Yes.

[Mike Wallace, Conservative, Burlington, ON]

So why do you have this deemed residence piece in the last segment of your bill?

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

One of the goals of the legislation is to avoid out migration by young people to the urban centres. This is an incentive designed to enable young people to return to the regions designated under the legislation.

[Mike Wallace, Conservative, Burlington, ON]

As you know, I only have a short period of time.

So yes, it applies to all people, all students, which is what I wanted to know. Do they have to find a job in the field of their study, or can it be any employment?

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

They have to find work in their area of study.

[Mike Wallace, Conservative, Burlington, ON]

I'll give you my own example. I graduate with a political science degree and I go back to a rural area of Ontario and I work as a salesperson. Does that qualify or not?

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

No.

[Mike Wallace, Conservative, Burlington, ON]

It has to be within their field, so you expect CRA, the revenue agency, to be able to determine whether the job the individual has applies to the degree the individual has.

So they'll have to list on their tax form what degree they have to be able to qualify for that tax return. Is that correct?

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

Yes.

Let me give you a specific example, Mr. Wallace. I have a son living in a region of Quebec who has received training. There is a detention facility—a penitentiary—where a large number of correctional officers are retiring from their jobs. So, they have to be replaced. These young people have pursued their studies and come back to the region. They secured employment at the regional detention centre, where they are entitled…

[Mike Wallace, Conservative, Burlington, ON]

Did they come back to that region because the job was available or because of the tax deduction?

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

First of all, they returned because most of them were originally from the area and felt they had a strong connection to it. They wanted to stay there. Secondly, being able to take advantage of a tax credit, up to a maximum of $8,000, is a fairly attractive incentive for young people who have just completed their studies. These youths will remain in the area. Also, they are participating in the economic life of the community. Fourteen of them were hired last May, and have been able to buy a car, a house, and services. That is what it's all about.

[Mike Wallace, Conservative, Burlington, ON]

I don't disagree, Madame.

Obviously I'm not going to be supporting this bill, because I don't think it's the tax incentive. I believe in the mobility of labour. People should go where the jobs and the opportunities are. The tax system should be used to get people to move around, but to bring them home where there might not be the same opportunities is not it.

I want to ask you more specific questions before I get to some others.

In clause 2 you have “40% of the aggregate of all amounts” of each salary. Let's assume they get one salary of $30,000, and 40% of that is $12,000. You're telling me today that if your bill passed they'd automatically get a $3,000 deduction from their tax bill as it figures through from the gross amount of their salary. Is that correct?

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

Mr. Wallace, if you don't mind, I would like to let Mr. Beaulieu answer you, but first, I want to add something.

You said that you would vote against this bill because you are in favour of labour mobility. You believe that people should be able to go where there is work. What I find sad about that attitude is that young people are abandoning the regions to go and work in large urban centres where there is work. The negative impact of that is that our communities are dying out.

[Mike Wallace, Conservative, Burlington, ON]

Why should the taxpayer pay for someone to go back to a region where there are no jobs? That is my issue.

[An hon. member]

They wouldn't go back if there wasn't....

[Mike Wallace, Conservative, Burlington, ON]

Then we don't need the tax system to do it.

[An hon. member]

They'll have to get a tax credit.

[The Chair, Conservative, James Rajotte]

Order.

[Mike Wallace, Conservative, Burlington, ON]

We don't need to do a tax credit, John—which you voted against last time.

[The Chair, Conservative, James Rajotte]

Order.

John, you're not on the witness list here.

Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

I'd like to hear Jean-David.

[Jean-David Beaulieu, Researcher, Bloc Québécois Research Bureau, Bloc Québécois]

Actually, it is quite simple. If someone earns $30,000, he can deduct $3,000 from his federal tax payable the first year, $3,000 the second year, and $2,000 the third year.

[Mike Wallace, Conservative, Burlington, ON]

Is that before other deductions? Is it off their gross or off their net? What does this bill do in terms of their income?

[Jean-David Beaulieu]

It's off gross salary.