The government of Quebec is offering five-year income tax holidays in an effort to lure foreign academics in information technology, engineering, health sciences and finance to take jobs at the province's universities.

Officials claim the tax enticement is needed to help universities "bolster their ability to recruit professors" and to reverse an alleged brain drain.

But the plan was announced the same day a new report was issued that casts doubts on the link between tax levels and the loss of highly educated and skilled Canaians to the United States.

Ross Finnie, a research fellow and adjunct professor at Queen's University's school of policy studies, says it's not true there are "great hordes of Canadians leaving en masse" and there are not "great swaths being cut through the ranks of our 'best and brightest'."

Finnie's study, The Brain Drain, Myth & Reality — What It Is & What Should Be Done, shows there is a net loss of nurses and post-secondary teachers to the U.S., but concludes it's a myth they are being lured by lower taxes.

Finnie says the real problem stems from a lack of opportunity in Canada brought about by steep public sector cutbacks in health and education.

"Where we've been slashing our public spending, some of our top people have been leaving," he said. "We shouldn't be too surprised."

He adds this suggests tax cuts are too blunt a policy instrument because they don't deal with the real problem.

CAUT criticized the Quebec plan, saying the province would be better off increasing core funding for universities and colleges.

"If you really want to attract quality people to your universities, you won't do it with a tax break," said CAUT president Tom Booth. "It makes little sense to offer foreign professors a few extra dollars in their pocket if class sizes are increasing, research facilities are in disrepair, and working conditions are deteriorating."

Booth is also concerned the tax holiday will apply only to foreign academics and Canadian expatriates. "I'm worried about the signal this sends to our colleagues and to recently graduated PhD students who won't qualify for this special treatment because they've remained in Canada," he said. "Does this mean they're second best?"

Officials with the Quebec government estimate the tax incentive will help universities recruit 1,000 professors over the next five years, a figure that Booth says is "wildly optimistic."

An aide to Quebec Finance Minister Bernard Landry claims the loss of tax revenue to the province will be offset by the skills and knowledge the new professors will share with their students.

Ross Finnie's report The Brain Drain, Myth and Reality is available at www.workingpapers.cc.