Funding Opportunities for Trades Workers
23 Methods of Obtaining Funding
Anne Lee
As a trade apprentice, there are two common methods of accessing funding to be applied to technical school training:
- Sponsoring organization directly pays associated costs (eg. tuition fees/textbook fees) to post-secondary institution on behalf of the trade apprentice. The amount is not included into the apprentice’s income.
Example: Sponsoring Organization Directly Pays
Kevin is a metal fabricator trade apprentice, and is registered for his next Level 2 technical training. Kevin works for ABC Company, and they would like to support his Level 2 technical training. The tuition fees are $1,500 plus ancillary fees of $200 for a total of $1,700. ABC Company directly pays $1,700 to the trades training institution to Kevin’s student number account. Kevin is not required to have sufficient cash upfront to pay the tuition.
- Trade Apprentice is required to have the funds upfront and then directly pays the post-secondary institution for tuition fees and ancillary fees. The sponsoring organization then subsequently reimburses the trade apprentice, usually upon completion of the course.
Example: Trade Apprentice Pays Upfront and is Reimbursed
Julie is an automotive mechanic trade apprentice, and is registered for her next Level 3 technical training. Julie will be reimbursed fully from an earned bursary of $2,000 from XYZ Transportation Association. The tuition fees are $1,500 plus ancillary fees of $200 for a total of $1,700. Julie is required to pay the full $1,700 directly to the educational institution prior to class commencing. XYZ Transportation Association will provide the full bursary amount of $2,000 to Julie. Julie is able to use the $2,000 however she wants. A tax slip (T4A) will be issued to Julie the next calendar year reporting that she received $2,000 in the form of a bursary.
Tax Tip: Tuition Fees Paid
If the individual student pays the tuition fees for technical schooling directly to the Canadian accredited post-secondary institution, a T2202 Tuition and Enrolment Certificate will be issued by the education institution the next calendar year. Trade apprentices are usually eligible to claim the federal and provincial tuition tax credits for tuition fees paid, which equates to approximately 20% of the tuition fee portion. If the qualifying tuition is $1,500 paid directly by the trade apprentice, the estimated tax credit advantage will be $300 ($1,500 x 20%). Please note that if the student is reimbursed for any portion of tuition fees paid, then the CRA federal and provincial tuition tax credits cannot be claimed.
If a Company sponsor pays the tuition fees directly to the post-secondary institution on behalf of the trade apprentice and the amount is not included as income, then the apprentice will not be able to claim this tuition fee amount for the Federal and Provincial tuition tax credit. There are tax credits available where the trade apprentice fully pays the educational fees themselves. These tax credits can be applied against any taxes owing on filing of a T1 – Individual Tax and Benefits Return.
An advantage with Method 1 is that the trade apprentice does not have to have the entire tuition fees available on hand to pay the education institution directly. However, there are outlets for trade apprentices and students to obtain interest-free loans.
