Changes in Canadian postdoc funding
Posted by Eva Amsen, on 17 August 2010
Some Canadian postdocs are awaiting the next academic year with bated breath: will they earn less than they did during their PhD, or twice as much as their colleagues?
Canada’s 2010 research budget, announced this past spring, was full of surprises for the thousands of postdoctoral researchers in the country. To promote top-level talent, the government put aside $45 million for the next five years to award a select group of postdocs with $70,000 per year. These Banting post-doctoral fellowships are almost twice as much as the average Canadian postdoc salary of approximately $35,000-$40,000. Applications for the prestigious awards have opened on August 10, and are being accepted until November 3, 2010. But the lucky few who get the top awards will also receive another, slightly less pleasant, surprise: postdoctoral fellowships in Canada are no longer tax exempt. Even postdocs who previously paid no taxes on the funding they received, will be charged next year. Until now, postdoctoral stipends often fell under the same – tax-free – umbrella as student scholarships. Surprisingly, this now means that a fully-funded PhD student can end up with more money than they will receive as a postdoc paying taxes on a basic postdoc fellowship!
With such mixed funding news, reactions from young Canadian researchers have been all across the board. What do you think: is the $45 million well spent on the new competitive awards (boosting the international prestige of these researchers, and perhaps being a way out of the previously discussed issue of “too many postdocs”), or would you rather have seen a continuation of the tax exemption for postdoc stipends? The Banting fellowships are open to international applicants, too: would knowing that there was a very small chance of a competitive postdoc salary lure foreign researchers to Canada, or would it succeed in keeping Canadian graduates from seeking top funding elsewhere in the world?
(image by lsiegert on Flickr)
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Postdoctoral fellowships are no longer tax exempt? News to me. Possibly in some cases where fellowships are direct-paid to the recipient these might count as “scholarship” or similar, but every PDF I know is paid via institutional payroll (fellowship goes to the institution). That counts as T4 insurable income and is taxable.
If not, Revenue Canada owes me a lot of money.
The ones in my lab didn’t pay taxes, or at least one of them didn’t (I didn’t discuss tax with everyone). One of the discussions linked above goes a bit more into which things were and were not taxed. It’s really complicated! At least it’s now the same for everyone, I suppose…
P.S. You know it’s illegal to photograph Canadian legal tender, right?
That’s why it’s a tiiiiny picture with not-quite-complete bills =)
I go taxed plenty, and even got asked to pay Canadian tax rates while paying US income tax in Massachusetts; it took 5 years of fighting for them to return the $20,000 that they appropriated from my pay cheque (in addition to the US income tax I had paid already). So yes, they bloody well tax postdoctoral fellowship! Incidentally I have set a legal precedent.
And I think it’s a terrible idea to have haves and have-nots, esp at that level.
(I meant to that degree…that’s a huge difference in income)
It seems the tax free policy was after 2006, so I never benefited (nor did the folks in my lab, since that was the year I moved to the USA). So it’s really just back to the status quo, after a 4 year tax holiday.
That explains it. I vaguely remember it being introduced, but thought it was longer ago.
Problems with scientific funding are widespread, I guess. Here we have the serious problem that the Chilean Agency giving funding for science, is giving to the graduate students applying to funding to attend courses and meetings outside Chile, the news that they have to wait -fellowships were going to be awarded un July, but now, the results will be published in October-, making impossible to attend meetings for the students.
About the question, well… Some non-scientist people would argue that a postdoc is indeed a more advanced job and hence, postdocs should be fully integrated into the economic system (just imagine that one idea here in Chile is to eliminate fellowships for doing a PhD and to make prospective PhD students to look into the banks for loans to pay the PhD). I disagree, obviously, specially because science is still bad-paid and the benefits of research are for all the people, not only for the researcher. It’s a strange job, being a scientist.
Ah, that does explain it, thanks Benoit.
I have a friend who postdoc’ed in Australia, and was part paid by a Canadian MRC (now CIHR) fellowship and part by his Australian lab. He filed two tax returns, one in Canada and one in Oz, claiming the relevant basic personal tax exemption on each. Whether or not this is legal is beyond me, but it was certainly a nice workaround for him at the time.
@Pablo – the question of whether a PDF is a “job” or a “training position” comes up frequently here. The answer seems to depend on who’s asking and why – for a government report, I’ll call them “trainees” because that’s one thing we’re supposed to be doing, traning scientists. Most recent PhD graduates view it as a “job” though.
The taxation for postdocs has been a real mess. In some institutions postdocs has been regarded as employee with all benefits, and pay tax, at least as I know prior to 2006.
In recent years, postdocs has been enrolled as “students” and they get T220 forms and the T4A form, with no benefits, as in some universities in Quebec.
The new 2010 budget explicitly indicates that postdoc are no more exempted.
What puzzles me now is, whether the new regulation takes effect retroactively, and the postdocs with T220 (exempted) has to pay for prior years?
I was exempted in 2008, and I don’t know how to deal with this…any suggestion appreciated…