Brain food I: the post-doctoral trap

Post-docs stand to take a substantial tax hit

Let’s take Prime Minister Stephen Harper’s announcement today at Perimeter Institute in two parts.

The PM announced $45 million over five years (that’s kind of like $9 million a year, but not quite because there’s a ramp-up from zero to full cost) for 700 so-called Banting Post-Doctoral Fellowships. There was some chatter on Twitter that this is a re-announcement of something that was in the spring budget. In fact, I said as much myself. The opposition Liberals quickly sent me the same talking point. But I’m not one for dwelling on such things. When governments announce the allocation of funds they’d earmarked in a budget, to me that’s essentially just a confirmation that the budget meant something real. And indulging in games of “he announced it before!” is one way to avoid discussing the merits of the actual policy.

Related: Brain food II: Smart aid for Africa

So on to the actual policy. The federal science and technology strategy as it has evolved through the governments of Mulroney, Chrétien, Martin and Harper is by now so elaborate that it’s getting into areas most people won’t even be familiar with. What the heck is a post-doc? Of course Wikipedia has an answer, but it’s essentially a way station between graduate research — Master’s and doctoral-level scholarship — and a full career in science. The Banting post-docs seek to attract the best fledgling researchers from Canada and abroad and launch their careers well. At $70,000 a year, they’re quite generous.

But here’s the thing. The spring budget also announced a decision on a question that’s been hanging over the many hundreds or thousands of pre-existing post-docs for years now: will their income be taxed the way yours and mine is? Perhaps not surprisingly, the budget said “Yes.” If this is a problem, it is so for only two reasons. First, hundreds of post-docs haven’t been paying income tax on their fellowships before this year. And second, graduate student awards remain tax-free.

The Ottawa Citizen‘s Tom Spears explains it better here than I’ve seen it explained elsewhere. The upshot is that students who have slaved away for petty but livable wages as PhD-level research assistants now stand to take a substantial tax hit for the crime of graduating to the next level of their academic career. Or that post-docs who paid no income tax last year will now pay tax — making these exquisitely well-trained but economically vulnerable citizens, many of them young parents, the only class of Canadians who were hit with a substantial income-tax increase this year.

And finally, it means today’s announcement of a small number of fancy post-docs was financed entirely by taxing all pre-existing post-docs (as well as the recipients of the new Banting awards themselves).

The association representing Canadian post-docs has been ringing the alarm bells over all this. Of course the temptation is to write that off as so much special-interest pleading. But when even as stern a fellow as Jack Mintz echoes these concerns, it’s worth more attention than the government has given it.

Obviously there are both horizontal and vertical fairness issues to be weighed here. Huh? I mean that arguably a post-doc shouldn’t be protected from taxation while a plumber or schoolteacher or newspaper reporter of similar income level has to pay the taxman. That’s horizontal fairness. But vertical fairness means you don’t penalize someone by hiking their taxes arbitrarily, and the peculiar career path of scientific researchers ensures that most of them will face a tax hike at about the time many of them start a family and decide how ambitious they want their research careers to be.

What needs to be done is to reconcile these two legitimate fairness imperatives and the tensions between them. That’s one reason why we need a national conversation about the future of our knowledge economy. With, like, all hands on deck, from feds to provincial governments to university administrators, teachers, granting councils, business, what have you. The good news is that the feds also announced that, or something like it, in the spring budget:

“To ensure that federal funding is yielding maximum benefits for Canadians, the Government, in close consultation with business leaders from all sectors and our provincial partners, will conduct a comprehensive review of all federal support for R&D to improve its contribution to innovation and to economic opportunities for business. This review will inform future decisions regarding federal support for R&D. The Government is currently developing the terms of reference for the review.”

The prime minister had nothing to say about that today. Not a problem. Tomorrow’s another day. When he does announce this review, the question won’t be Is he re-announcing something from the budget? but rather, Is this well-designed and helpful?

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