Hidden in a series of recommendations in the Education Action Plan recently released by the Canadian Federation of Students (CFS) is a plan that would drastically reduce the amount of funding available to graduate students by removing the tax-exempt status on fellowships and scholarships.
The effect of this plan would be to undermine the long-term feasibility of the Canadian education system – reducing the accessibility of graduate education, increasing the cost of the training of the next generation of university professors, and pitting students against one another in a fight over limited education funding.
Presently, graduate student recipients of fellowships enjoy tax-exempt status on fellowship income. This means that the entire value of federal, provincial, and university fellowships goes to the graduate student. Federal and provincial fellowships vary in value from $18,000 for master’s fellowships to $20,000 or $35,000 for PhD fellowships.
According to CFS, the money raised by what is literally a tax on graduate students (roughly $38 million) would be used to help fund a $1.5-billion student grants program. What CFS fails to mention, however, is that this $38 million represents less than 2.5 per cent of the funds required. Any such program, even if funded to the $1.5-billion level recommended by CFS, would most probably exclude graduate students receiving major scholarships from grant funding, as fellowships between $18,000 to $35,000 are more than likely to place the award holder beyond the range of eligibility for grant funding. Award holders would not see the loss from the tax made up elsewhere.
The loss of tax-exempt status could cost graduate students up to $3,000 in additional federal taxes (up to $35,000 for Canada Graduate Scholarship – Doctoral (CGS-D) holders), and for non-Quebec students up to $6,000. Similarly, graduate students holding Post Graduate Scholarships – Doctoral (PGS-D) and CGS/PGS-M (for master’s studies), which amounts to between $18,000 and $20,000, could stand to lose $1,200 in federal taxes, and non-Quebec students up to $2,400 in total, while holders of Quebec doctoral fellowships (approximately $20,000) could lose $1,200.
The recommendation to eliminate the tax-exempt status of scholarship and fellowship income would have adverse effects on thousands of graduate students at McGill alone, and hundreds of thousands across the country. All fellowship holders, federal, provincial, or local, as well as recipients of non-salaried research assistant stipends, would be required to pay taxes on their funding.
The Post-Graduate Students’ Society (PGSS) Policy on Guaranteed Funding for Graduate Student Researchers maintains that all funding received from scholarships or for research should have tax-exempt status. CFS’s lobbying position is doubly troubling as the provincial government has already exhibited a willingness to remove tax-exempt status from students in its recent decision to tax the fellowships and stipends of post-doctoral researchers. The government may do the same to graduate students.
It is odd that a group like CFS, which purports to represent the interests of all students, would propose a policy the effect of which would be to pit student against student, with graduates and undergraduates scrabbling to lay claim to each other’s funding.
PGSS has been a member of CFS since the early nineties, and pays more than $68,000 in annual fees. As a member of CFS, PGSS should have been given input in the drafting of any policy plan, especially of a plan that so disproportionately impacts the interests of its members. Instead, CFS’ plan was not subject to consideration at the last semi-annual general meeting of the federation in May, and since then, Quebec has been denied its seat on the National Executive – the National Executive refuses to recognize the June election of the Quebec component of CFS. PGSS was first made aware that the CFS National Executive was lobbying for changes that would cost graduate students thousands in a press release published October 19.
A national student lobbying organization should be democratic, open, and responsive to the will of its members. That a lobbying plan so detrimental to so many graduate students can be released without proper consultation and oversight indicates that CFS lacks these three traits.
Daniel Simeone is the president of the Post-Graduate Students’ Society. Undermine him at email@example.com.