The federal government’s 2010 budget delivered a measure of good news and bad news to postdoctoral fellows, by pledging to create a generous postdoctoral fellowship program but putting in place income tax changes that could remove a tax benefit for some postdocs.
First the good news. The budget provided $45 million over five years to Canada’s granting councils to create up to 140 fellowships a year to help universities attract “top-level talent to Canada.” The fellowships will be valued at $70,000 a year for two years.
“It’s a recognition that if we want to be innovative as an economy we need postdocs,” said Carolyn Watters, dean of graduate studies at Dalhousie University and past president of the Canadian Association for Graduate Studies.
The program is expected to give a boost to efforts by universities to recruit international scholars. Government sources said that the new fellowships will be open to both domestic and foreign applicants.
Universities have sought the creation of high-profile doctoral and postdoctoral scholarship programs to compete more effectively with other countries that have similar programs. The presidents of 13 research-intensive universities, in an open letter published by several newspapers in the Canwest chain, said the 2010 budget gave universities “a clear signal to get on with the job of laying the foundations for a sustainable economic recovery.” They singled out the postdoc fellowships as “a very positive initiative” that would “attract top postdoctoral trainees and support the internationalization of graduate studies in Canada.”
The value of the fellowships is much higher than postdocs currently earn. A recent survey found that a majority of Canadian postdocs earn between $35,000 and $45,000 a year before taxes. “We feel [the new program] should raise the bar with respect to monetary compensation for other postdoctoral positions,” said Jesse Greener, president of the University of Toronto Post-Doctoral Association.
The announcement of the generous fellowships prompted some of same reaction as the Vanier graduate scholarships when they were launched by the federal government in 2009 with a similar goal of helping universities attract top-notch doctoral students from Canada and abroad.
“I think a lot of my colleagues would feel that the investment is wonderful and it’s great that the government has perceived a need to support postdocs more in their research endeavours and the production of high-quality personnel throughout the country,” said Martin Kreiswirth, dean of graduate and postdoctoral studies at McGill University. “But that money could be disbursed in smaller amounts and actually have a larger effect.”
Meanwhile, on the tax side, the budget proposed that postdoctoral fellows wouldn’t qualify for income tax measures that make students’ scholarships, fellowships and bursaries tax-exempt. A minority of the country’s 6,000 postdocs (including those at most Quebec universities, the University of Alberta, Dalhousie University and the University of Ottawa) had been taking advantage of the students’ tax exemption to claim the full amount of their stipend tax-free. Those at other institutions weren’t able to do so because of their classification status.
Universities classify postdocs variously as trainees, students, employees or contractual workers, depending on the duties they perform and other factors. And some universities have different classes of postdocs in the same institution. This has led to an uneven situation across the country, with only some receiving employment benefits and only those with trainee or student status qualifying for the tax exemption.
Marianne Stanford, chair of the Canadian Association of Postdoctoral Scholars and a postdoctoral fellow at the Ottawa Hospital Research Institute, an affiliate of the University of Ottawa, said the tax change will result in a steep pay cut for many postdocs. She said it also could result in some graduate students on tax-free scholarships earning more than their more senior, postdoctoral colleagues.
Dr. Watters of CAGS said the ruling is helpful in some respects because it provides clarification for universities that have been struggling with the issue. But, she added, it will disadvantage those postdocs who have accepted work contracts assuming their salaries would be tax-free. She said it might put Canadian universities at a disadvantage when it comes to recruiting foreign postdocs. CAGS plans to ask the government to delay implementing the measure, which is set to take effect this year.
Still, not everyone saw the tax ruling in a bad light. Dr. Greener, head of the U of T postdoc association, said his group welcomed the change. Currently, many of the 1,500 postdoctoral fellows at U of T and its affiliated research institutions qualify neither for the tax exemption nor for employment benefits. “We kind of had the worst of both worlds,” he said.
The ruling, he hopes, will allow postdocs to argue more effectively that they are employees who ought to be entitled to full job benefits. “We are anticipating having a new conversation with the administration in light of this ruling,” he said.