Week of August 14 – August 18, 2021
Canada’s new Conservative Government is delivering on another campaign promise with three new programs that make it easier for young people to enter a career in the skilled trades. The three new programs are: the Apprenticeship Job Creation Tax Credit, the Apprenticeship Incentive Grant, and the Tools Deduction.
Canada is facing a serious shortage of tradespeople. Meanwhile, many young Canadians find themselves stuck in low-paying work and are either not encouraged to consider the trades or unable to do so because of financial barriers. The Government recognizes this shortage and the many obstacles faced by young people, and as a result, is taking action to encourage more young people to choose a career in the trades, as well as to encourage employers to create more jobs for apprentices. Canada’s new Government will tackle this promise by offering grants to apprentices, tax credits for the employers who hire tradespeople, and tax deductions for tradespeople on the cost of their tools.
The Apprenticeship Incentive Grant is a cash grant of $1,000 per year to most apprentices in the first two years of an apprenticeship program, to help new apprentices cover the cost of tools, boots, and work accessories. This particular grant will be included as taxable income in the hands of the recipient. The Grant, along with the proposed tax credit for employers, will provide a strong incentive for more young Canadians to pursue apprenticeships and hence, meet the future need for a skilled workforce that is crucial to the sustained growth of the economy. It is estimated that approximately 100,000 apprentices will benefit as a result of the new Grant and tax credit.
The Apprenticeship Job Creation Tax Credit became effective on May 02, 2006, and is designed to encourage employers to hire new apprentices. Eligible employers will receive a tax credit equal to 10 per cent of the wages paid to qualifying apprentices in the first two years of their contract, to a maximum credit of $2,000 per apprentice per year.
Budget 2006 also included a new Tools Deduction of up to $500 to tradespeople for the cost of tools in excess of $1,000 that must be acquired as a condition of employment. This particular deduction (along with the Canada Employment Credit) could provide tax relief to about 700,000 employed tradespeople in Canada.
Our Government’s support for the skilled trades is just another example of how Prime Minister Harper is delivering for ordinary working Canadians. If you are interested in learning more on the Government’s support for the skilled trades, please visit www.hrsdc.gc.ca.