{"id":521,"date":"2023-09-03T18:47:16","date_gmt":"2023-09-03T22:47:16","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/?post_type=chapter&p=521"},"modified":"2024-11-28T17:12:14","modified_gmt":"2024-11-28T22:12:14","slug":"government-incentives-for-trade-apprentices","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/chapter\/government-incentives-for-trade-apprentices\/","title":{"raw":"Government Incentives for Trade Apprentices","rendered":"Government Incentives for Trade Apprentices"},"content":{"raw":"As there\u2019s so much benefit from governments and organizations to support the skilled trades, it is listed the most common supports available to all trade apprentices.\r\n\r\nEmployment Insurance (EI) \u2013 Apprentices<\/em>\r\n\r\nApprentices leaving their work to attend full-time technical training (ie. block-release training) may be eligible to receive Employment Insurance (EI) benefits while unemployed and attending technical training.\r\n\r\nApplying for Employment Insurance as an Apprentice is slightly different than EI regular benefits.\u00a0 Trade Apprentices are required to provide proof of referral to receive EI benefits.\u00a0 The apprentice\u2019s provincial or territorial training institution will issue a 16-digit reference code as proof of referral when you are approved to attend full-time technical training.\u00a0 This reference code is required in completing the online application.\r\n\r\nApprentices can apply for EI benefits up to seven days before your last day of work.\u00a0 This is earlier than personnel applying for regular EI benefits.\r\n\r\nThe employer will issue a Record of Employment (ROE) to each employee that has an interruption in work.\u00a0 The ROE submitted is the primary information that determines whether a trade apprentice is eligible to receive EI benefits and how much one will receive.\r\n\r\nFor most people, the basic rate for calculating Employment Insurance (EI) benefits is 55% of their average insurable weekly earnings, up to a maximum amount.\u00a0 As at January 1, 2024, the maximum benefit amount to be received is $668 a week.\u00a0 An amount of 10% is usually withheld from the net amount issued to assist in covering some of the potential tax liability at the end of the year.\r\n\r\nApply for Employment Insurance (EI) benefits through Service Canada, part of Employment and Social Development Canada (ESDC).\r\n\r\nEI benefits are taxable income in the taxation year in which they are paid.\u00a0 Individuals are issued a T4E \u2013 Statement of Employment Insurance and Other Benefits slip for tax purposes the following calendar year.\u00a0 Any EI benefits received are to be reported on the individual\u2019s income tax return.\r\n
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Example: Employment Insurance Benefits<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nBobby is an ironworker obtaining work-based hours with a sponsoring ABC Company in Manitoba.\u00a0 Bobby has been registered into the next Level 3 of block level training at Red River College and will have a break in work weeks.\u00a0 During the 9 weeks of full-time technical school, Bobby will be unemployed.\u00a0 Bobby is to obtain a 16-digit reference code from the Manitoba province or training institution so Bobby can apply for Employment Insurance as an Apprentice.\u00a0 If Bobby\u2019s last day of work prior to attending technical training is September 30, 2024 then an application for EI can be sent to Service Canada as early as September 23, 2024.\u00a0 Bobby can potentially qualify for 9 weeks of Employment Insurance benefits.\u00a0 Any EI benefits paid to Bobby during calendar year 2024 will be reported on a T4E tax slip issued to Bobby by February 28, 2025 for the filing of the 2024 tax return.\r\n\r\n<\/div>\r\n<\/div>\r\n \r\n\r\nFederal and Provincial Tuition and Education Tax Credit<\/em>\r\n\r\nGenerally, tuition fees paid by an individual to a post-secondary educational institution in Canada are eligible for the Federal and Provincial Tuition Tax Credit.\u00a0 Post-secondary institutions will issue students Form T2202 \u2013 Tuition and Enrolment Certificate outlining the amount of eligible tuition fees paid to be claimed on the tax return.\r\n\r\nThere are many courses that are not at the post-secondary school level but are still eligible for the tuition tax credit if the individual is enrolled in the course to obtain skills for an occupation.\u00a0 Example short term courses and certifications common for trade apprentices may include Occupational First Aid, Workplace Safety, and Forklift \/ Scissor Lift \/ Boom Lift operator.\u00a0 The Educational Institution will issue an official tax receipt that can be used as supporting documentation if asked by CRA for making the tax credit claim.\r\n\r\nFees paid to an educational institution needs to be more than $100 in a calendar year to qualify as eligible tuition fees.\u00a0 The Federal tuition tax credit available is 15% of the eligible tuition fees paid.\u00a0 Some provinces have a corresponding Provincial tuition and education tax credit available.\u00a0 This can equate to another approximately 5% to 12% of tax credit depending on the Province.\u00a0 The Federal and Provincial tuition tax credit is a non-refundable tax credit.\u00a0 This means that the tax credit will be applied against any current taxes owing during the year but if an individual owes $nil in taxes, the credit difference will not be refunded in cash.\r\n\r\nIndividuals with eligible tuition fees paid can report on Federal Schedule 11 as part of the filing of the T1 Tax Return to claim the non-refundable tax credit.\u00a0 If the tax apprentice resides in a province with a Provincial tuition and education tax credit available, an individual needs to complete similar form on the Provincial tax return (usually Provincial Schedule 11).\r\n
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Example: Federal and Provincial Tuition Tax Credit<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
<\/td>\r\n<\/td>\r\nEligible Amount<\/td>\r\nNon-refundable tax rate<\/td>\r\nNon-refundable tax credit<\/td>\r\n<\/tr>\r\n
Federal tuition credit<\/td>\r\n<\/td>\r\n$7,700.00<\/td>\r\n15%<\/td>\r\n$1,155.00<\/td>\r\n<\/tr>\r\n
Provincial tuition credit (NFLD)<\/td>\r\n<\/td>\r\n7,700.00<\/td>\r\n8.7%<\/td>\r\n669.90<\/td>\r\n<\/tr>\r\n
Provincial education credit (NFLD)<\/td>\r\n<\/td>\r\n600.00\r\n\r\n(10 months x $60)<\/td>\r\n8.7%<\/td>\r\n52.20<\/td>\r\n<\/tr>\r\n
<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n$1,877.10<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nThe $1,155.00 of federal tuition credit can reduce federal income taxes owing, and the provincial tuition and education tax credit ($722.10) will be applied against any provincial income taxes owing. \u00a0\u00a0If Joseph cannot utilize any portion of the $1,877.10 of tax credit, then Joseph can carry forward any unused tax amount differences to the next taxation year filing.\u00a0 Unused tuition and education amounts carried forward do not have an expiry date of usage.\r\n\r\nJoseph may also transfer up to $5,000 of eligible amount to certain immediate family members such as a parent, if Joseph\u2019s tax liability has been brought to $nil and there remains unutilized tuition amounts.\u00a0 To designate a transfer, the second box on the back of Form T2202 \u2013 Tuition and Enrolment Certificate needs to be completed and signed.\u00a0 This designation does not have to be submitted to CRA if the tax return is electronically filed.\u00a0 However, the supporting documentation needs to be kept in the chance that CRA asks for supporting documentation.\r\n\r\n<\/div>\r\n<\/div>\r\n \r\n\r\nApprentice Incentive Grant (AIG) - Ending March 31, 2025<\/strong><\/em>\r\n\r\nThe Apprenticeship Incentive Grant is a taxable cash grant of $1,000 per year or level, for a lifetime maximum amount of $2,000 per individual.\u00a0 An apprentice needs to be registered with the provincial\/territorial apprenticeship authority as an apprentice in a designated Red Seal trade, and provide proof that the individual has successfully completed the first year or second year block training.\r\n\r\nThe deadline to submit an application for this grant is 12 months following your date of progression or March 31, 2025, whichever is earlier.\r\n\r\nTo receive this taxable cash grant, a trade apprentice is required to complete the application with Service Canada and provide required supporting documents.\r\n
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Example: Apprentice Incentive Grant<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nCarl is a plumber (gasfitter) apprentice in Nunavut, and is now studying Level 2 technical training.\u00a0 In order to apply for the Apprentice Incentive Grant for Level 1, Carl needs a copy of the Certificate of Status for the Second Period Level as supporting documentation.\u00a0 In this Territory, the certificate acknowledges that Carl has completed all Level 1 requirements including work-based hours.\r\n\r\n<\/div>\r\n<\/div>\r\n \r\n\r\nApprentice Completion Grant (ACG) - Ending March 31, 2025<\/strong><\/em>\r\n\r\nThe Apprenticeship Completion Grant (ACG) is a one-time taxable cash grant lifetime amount of $2,000 per person for registered apprentices who get journeyperson certification in a designated Red Seal trade.\r\n\r\nTo receive this taxable cash grant, a trade apprentice is required to complete the application with Service Canada and provide required supporting documents.\r\n
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Example: Apprentice Completion Grant<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nSarah is a construction craft worker (CCW) in New Brunswick and has completed the requirements for the Red Seal endorsement.\u00a0 In order to apply for the Apprentice Completion Grant, Sarah needs a copy of the Completion Letter from the New Brunswick apprenticeship issuing authority as supporting documentation.\u00a0 In this Province, the Completion Letter acknowledges that Sarah has met all the requirements of qualification and apprenticeship completion.\u00a0 Sarah is thinking of pursuing another Red Seal trade certification.\u00a0 Sarah would not be eligible to apply for the ACG taxable grant again.\r\n\r\n<\/div>\r\n<\/div>\r\n \r\n\r\nCanada Training Credit<\/em>\r\n\r\nThe Canada training credit (CTC) is a refundable tax credit available to help Canadians with the cost of eligible training fees.\u00a0 The government is encouraging Canadians to invest in lifelong learning and up skill themselves in an evolving economy.\r\n\r\nIn 2019 and subsequent tax years, an individual \u00a0from 25 \u2013 64 years old can accumulate $250 towards the individual\u2019s Canada training credit limit (CTCL)<\/em><\/strong> for the next year up to a maximum of $5,000 in a lifetime.\r\n\r\nAmount of the credit is the lesser of the individual\u2019s Canada training credit limit for the taxation year, and half of the eligible tuition fees paid to an eligible educational institution during the year.\r\n\r\nThis tax credit is available to individuals between the ages of 26 \u2013 65 at the end of the taxation year, have eligible tuition fees paid to an educational institution, and have built a Canada training credit limit greater than zero.\r\n\r\nIndividuals eligible for the Canada training credit can report on Federal Schedule 11 as part of the filing of the T1 Tax Return to claim the refundable tax credit.\u00a0 Note that any claim of the Canada training credit will reduce the amount of eligible tuition fees available to apply for the Federal tuition tax credit during the same taxation year.\r\n
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Example: Canada Training Credit<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nLori is age 33 at the end of 2024.\u00a0 During the taxation years 2019 - 2023, Lori has been filing individual tax returns and accumulated $250 in the Canada training credit limit.\u00a0 The latest 2023 Notice of Assessment shows that Lori\u2019s CTCL is $1,250 (5 years at $250 per year).\u00a0 During 2024, Lori takes a pre-apprenticeship trades program and pays eligible tuition fees of $3,200.\r\n\r\nLori\u2019s Canada training credit claim amount is calculated as follows:\r\n\r\nAmount of eligible tuition fees paid at 50%: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $1,600 ($3,200 x 50%)\r\n\r\nCTCL from latest Notice of Assessment:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 1,250\r\n\r\nLesser amount:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $1,250\r\n\r\nTuition amount that can be claimed for 2024 is $1,950 ($3,200 - $1,250).\r\n\r\nLori will have a $250 CTCL balance for 2025 that can be claimed on the 2025 tax return filing if there is sufficient eligible tuition fees paid.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Year<\/td>\r\nCTC Annual Limit<\/td>\r\nCTC Claimed<\/td>\r\nCTC Balance<\/td>\r\n<\/tr>\r\n
2019<\/td>\r\n$250<\/td>\r\n$0<\/td>\r\n$250<\/td>\r\n<\/tr>\r\n
2020<\/td>\r\n250<\/td>\r\n0<\/td>\r\n500<\/td>\r\n<\/tr>\r\n
2021<\/td>\r\n250<\/td>\r\n0<\/td>\r\n750<\/td>\r\n<\/tr>\r\n
2022<\/td>\r\n250<\/td>\r\n0<\/td>\r\n1,000<\/td>\r\n<\/tr>\r\n
2023<\/td>\r\n250<\/td>\r\n0<\/td>\r\n1,250<\/td>\r\n<\/tr>\r\n
2024<\/td>\r\n250<\/td>\r\n1,250<\/td>\r\n250<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n<\/div>\r\n \r\n\r\nCanada Tradesperson\u2019s Tool Deduction<\/em>\r\n\r\nEligible tools purchased during the taxation year in order to earn employment income as a tradesperson may be deductible as employment expenses on an individual\u2019s income tax return.\u00a0 This cost includes any GST \/ HST and provincial sales tax (PST) you paid.\r\n\r\nThe total cost of eligible new tools cannot exceed the total of the employment income earned as a tradesperson and any apprenticeship grants received to acquire the tools, which are required to be included in income.\r\n\r\nComplete Form T777 \u2013 Statement of Employment Expenses on the Individual and Benefit Tax Return to claim the Canada Tradesperson\u2019s Tool Deduction.\u00a0 Please note that in order to make employment expense claims on Form T777 \u2013 Statement of Employment Expenses, it is required to have Form T2200 \u2013 Declaration of Conditions of Employment issued from the employer stating that these tools are required for the purpose of your work.\r\n\r\nFor 2023 and subsequent taxation years, the maximum employment deduction for tradesperson\u2019s tools has increased from $500 to $1,000.\r\n\r\nPlease note that there is a different calculation specifically for apprentice mechanics.\r\n\r\n \r\n\r\nTuition Tax Credit \u2013 Licensing Examination Fees<\/em>\r\n\r\nExamination and licensing fees paid as a trade apprentice to obtain qualification or certification in the trades are eligible for the tuition tax credit.\u00a0 This may include fees to write the provincial\/territorial apprenticeship level exam or Canada Red Seal trade exams.\u00a0 A receipt should be provided to substantiate the eligible exam fees and needed as supporting documentation if CRA inquires.\r\n\r\nIndividuals with eligible licensing fees paid can report on Federal Schedule 11 as part of the filing of the T1 Tax Return to claim the non-refundable tax credit.\u00a0 If the tradesperson resides in a province with a Provincial tuition and education tax credit available, an individual needs to complete similar form on the Provincial tax return (usually Provincial Schedule 11).\r\n\r\n \r\n\r\nSample Provincial Apprentice Funding\r\n\r\nBC Training Tax Credit for Apprentices<\/em>\r\n\r\nBritish Columbia residents registered with SkilledTradesBC as an apprentice in an eligible non-red seal or red seal program can apply for refundable income tax credits upon completion of levels of an eligible trades training program.\u00a0 This tax credit is directly applied against any provincial taxes owing.\u00a0 As this tax credit is refundable, if the trade apprentice does not have any BC provincial taxes owing that year, the excess credit amount would be issued to the taxpayer as a cash refund.\r\n\r\nThere are three types of training tax credits: basic, completion, and enhanced.\u00a0 The basic tax credit is available when you complete the requirements for tax credit level 1 or 2 of a BC recognized (non-Red Seal) program.\u00a0 The completion tax credit is available when you complete the requirements for tax credit level 3 or 4 of a Red Seal or non-Red Seal program.\u00a0 An enhanced tax credit is available if one is a First Nations individual or a person with a disability.\r\n\r\nIf a trade apprentice qualifies for this training tax credit, one can complete BC Tax Form T1014 \u2013 British Columbia Training Tax Credit (Individuals) and submit it as part of the Individual Income Tax Return filing.\r\n\r\nRefer to BC Provincial website<\/a> for further eligibility details and tax credit amounts.\r\n\r\n \r\n
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Tax Tip: BC Tax Training Credit<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nIt is recommended that a trade apprentice not apply for this tax training credit on the filing of the tax return until have met all the requirements for each level and have the necessary supporting documents. The BC Tax Training Credit for Apprentices is a refundable tax credit, in which a taxpayer would get a refund if one does not owe any taxes.\u00a0 As this tax credit is not very common (specific to BC Trade Apprentices) and the amount is on the high end of refundable credits available to individuals, there is increasing likelihood that CRA will flag the return in a pre-audit and request for proof of supporting documentation.\u00a0 If one was to obtain this refundable tax credit and then later CRA denied the claim, a taxpayer would have to not only pay the amount of the tax credits back but also there could potentially be interest and penalties assessed by CRA.\r\n
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Example: Red Seal Trade Apprentice - British Columbia<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nKevin is a glazier trade apprentice in the province of British Columbia.\u00a0 Glazier is a red-seal trade and Kevin would qualify for the BC Tax Training Credit on completion of Level 3 and Level 4 of the program.\u00a0 Kevin is required to complete 4,800 work-based hours for completion of Level 3 for this tax credit.\u00a0 It is recommended that Kevin not apply for this tax credit until at least 4,800 work-based hours are recorded on Kevin\u2019s transcript with SkilledTradesBC.\r\n\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n<\/div>\r\n \r\n
\r\n

Tax Tip: T1 Adjustment Request<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nIf a BC trade apprentice has already filed the tax return related to the year that one qualified for this tax credit, Canada Revenue Agency allows a taxpayer to file a T1 Adjustment Request to apply for this significant refundable tax credit. An individual usually has 3 years after the date of the latest Notice of Assessment is issued to file a request to change the tax return.\r\n
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Example:<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nJustin is a forklift mechanic trade apprentice, an eligible non-Red Seal program in the province of British Columbia.\u00a0 Justin has already filed the 2023 tax return into CRA electronically April 28, 2024.\u00a0 CRA issued Justin a Notice of Assessment dated May 15, 2024.\u00a0 Justin realizes in July 2024 that he did not apply for the BC Tax Training Credit for Apprentices on the 2023 tax return even though Justin completed all the requirements of Level 1 in 2023.\u00a0 Justin can file a T1 Adjustment Request to CRA to change his tax return and apply for this credit.\u00a0 Justin has until May 15, 2027 to initiate this request with CRA, but will apply for this basic level 1 tax credit so that he can obtain the $1,000 cash refund earlier.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\nAlberta Apprentice Training Award<\/em>\r\n\r\nThe Apprentice Training Award is a $1,500 financial award for registered apprentices who are unemployed in their trade and attending classroom instruction at an Alberta-approved classroom instruction provider.\r\n\r\n \r\n\r\nOntario Tools Grant<\/em>\r\n\r\nThis is a non-repayable tools grant that is available to Ontario apprentices, to assist trade apprentices to pay for tools and equipment related to the apprentice\u2019s trade.\r\n\r\nAmount of the grant depends on the type of trade one is apprenticing in:\r\n