As a student my preference would still be to work for cash Youth Options falls short.
Maroney on Money for June 10, 1998
Premier Glen Clark, wearing his Minister Responsible for Youth hat, launched an interesting new program this week. Known as Youth Community Action (YCA), this is a one-year pilot program designed to provide 1,000 youth, aged 15-24, with job experience and credit for post secondary tuition fees.
A visit to the Youth Options B.C. website (www.youth.gov.bc.ca) tells me the goals of the program are:
1. To increase the number of youth who complete their studies with work experience;
2. To encourage high school completion and pursuit of post-secondary education and training;
3. Increase the affordability of post-secondary studies;
4. To increase access to career-relevant work experience opportunities;
5. To increase opportunities for youth to develop community service and leadership skills, and
6. To leave a legacy of community enhancements in areas related to community development, culture, heritage, literacy, recreation and community safety.
Lofty goals indeed but, then again, that seems to be a hallmark of announcements coming out of Victoria these days. I’m particularly impressed by the last goal – all that accomplished by putting 1,000 unemployed students to work at what amounts to $8 per hour is clearly tremendous value to the taxpayer!
The website goes on to state that “the program benefits youth in two ways: by allowing them to earn credit – at $8 per hour and up to a total of $2,400 – that can be applied toward their post-secondary tuition fees. Also the program allows youth to reap the benefit of gaining valuable work experience”.
Under the YCA program, applicants will be offered a “volunteer” job (clearly an oxymoron) at host agencies essentially consisting of non-profit organizations and public sector institutions. Rather than receiving a cash payment for services rendered, students will earn credits that can be applied against post-secondary tuition fees.
The community volunteer work experience opportunities will range from a minimum of 100 hours to a maximum of 300 hours. At $8 per hour, this means that students putting in the minimum number of hours will earn an $800 that can be applied against tuition fees. At the maximum the credit will amount to $2,400.
Although the program is set to run from this month to June 1999, when I called the listed phone number to ask some specific questions, details were sketchy.
What I would really like to know is how these credits are going to be treated for income tax purposes? Since Income Tax Act defines employment income to include “other benefits of any kind whatever received” I would expect that the credits earned to be taxable to the student as employment income. Does this mean that the student can expect to buck up for the employee share of CPP if it becomes payable and EI which is now assessed on every dollar of income earned? Where is the host agency going to get the funds to pay their share of CPP and EI? How about WCB? Is the volunteer covered if they become injured on the job?
What about other benefits made available to employees of the host agency? Can participating students take advantage of these or is the program essentially a cheaper way to provide labour to the host agency?
Is there a means test applied for entrance to the program? Apparently age is the only test. Unlike student loans, financial need does not matter. It doesn’t matter if the applicant already has a job or the financial means to pay for their own tuition.
What happens if the volunteer is unable to attend a post-secondary institution for reasons beyond their control? Will there be a cash payment or simply a pat on the back for a volunteer job well done?
Finally, given the narrow range of eligible host agencies, the breadth of the job experience is very narrow. Not all post-secondary graduates will be working in either the non-profit sector or the public service. What about private industry? I don’t have the statistics to back me up but I believe the private sector does still contribute to job growth in this province.
Although working for a tuition credit certificate is far better than not working at all, as a student my preference would still be to work for cash. Tuition fees aren’t the only cost incurred by students and this program doesn’t address that issue at all.
Jim Maroney is a chartered accountant with Andrews, Brown, Maroney in Maple Ridge.
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