The Canadian federal government is investing more than $1.7B over five years to help workers reduce the cost of training that supports their career growth. Through the Canada Training Benefit (CTB), workers will be able to secure Canada tax credits to help cover expenses associated with training, use Employment Insurance (EI) to help cover living expenses during training, and take leave from jobs in order to complete training.
Beginning in 2020, the CTB will help workers reduce the cost of training by up to 50%.
First announced in Budget 2019, the CTB comes as a response to the changing nature of Canada’s workforce. Fifty years ago, a worker might stay in the same role or with the same organization for decades, but today’s economy requires workers to change jobs many times over the course of their lives. This means that employees need training, not only to help them keep existing jobs that require new skills and responsibilities, but to prepare them for their next roles as well.
As more and more businesses automate processes and digitally transform their operations, employees require training to tackle technical skill shortages and continue successful employment.
Parts of the Canada Training Benefit
The Canada Training Benefit includes four parts: the Canada Training Credit, an Employment Insurance (EI) Training Support Benefit, an EI Small Business Premium Rebate, and new leave provisions for workers.
Canada Training Credit
Eligible workers will accumulate a credit of $250 per year, up to a lifetime limit of $5,000. They can use this Canadian tax credit to refund up to half the costs of training fees at colleges, universities, and other institutions that provide occupational skills training.
Each eligible worker can qualify for a lifetime maximum of $10K in eligible tuition fees under CTB and have up to 50% of these costs covered by the training tax credit.
Workers can claim tuition fees as refundable tax credits on their tax returns. For example, an employee can start to claim the Canada Training Credit on training fees incurred in 2020 and receive money back when she or he files a tax return in 2021.
The federal government estimates that, each year, around 600,000 Canadians will claim the Canada Training Credit.
EI Training Support Benefit
The EI Training Support Benefit will provide up to four weeks of income support to workers through EI, while workers are on training leave and not receiving regular paycheques.
Workers could receive up to four weeks of paid leave, at up to 55% of their weekly earnings.
Workers can take the four weeks off for the training over four years, either all at once or spread out over the period.
EI Small Business Premium Rebate
The federal government has also proposed an EI Small Business Premium Rebate, to make sure that the program benefits employers as well as workers. This small business rebate would help offset the upward pressure on the EI employer premium rate due to the new program.
Both the Benefit and Rebate are expected to launch late in 2020.
New leave provisions will protect employees’ ability to take time away from work to pursue training, without fear of job loss. The government is consulting with provinces and territories on the design of this aspect of the CTB.
Eligibility for the Canada Training Benefit
To be eligible for the Training Credit, workers must:
- Be between 25 and 64 years of age
- Have at least $10K in earnings from work in the preceding year
- Have an income below $150K
- Have filed a tax return in the preceding year
- Have been resident in Canada throughout the preceding year
To be eligible for the EI Training Support Benefit, workers must accumulate 600 hours of insurable employment during their qualifying period.
To be eligible for the EI Small Business Premium Rebate, employers must pay employer EI premiums of no more than $20K per year.
Impacts of the Canada Training Benefit for Small Businesses
While the CTB offers a strategy to help workers gain crucial new skills, business owners will need to plan carefully to minimize disruptions to ongoing business as a result of employee training. The federal government recommends that workers take the following steps to plan their training:
- Workers identify a training course and discuss their plan with their employer, letting the employer know the amount of time they’ll need to attend the course.
- Workers register for the course and provide proof of enrollment, so that their employer knows the leave is for training.
- Once on leave, workers apply for the EI Training Support Benefit to take advantage of the paid training leave.
- After completing the course, workers return to work. They apply for the training tax credit on their next tax return.
Business owners may want to encourage employees to choose courses that align with the business’s needs, while at the same time respecting employees’ individual career goals. Such discussions could be part of regular performance reviews and ongoing development meetings. Even if the employee’s chosen course doesn’t directly benefit the employer organization, giving staff time off to pursue goals can help boost morale and, subsequently, increase productivity.
Owners and managers may also want to leverage the CTB themselves in order to receive training and stay on top of the latest technologies and business strategies in their industries.
Small business owners can watch for details on the EI Small Business Premium Rebate later in 2020.
Government Funding for Workforce Development
The CTB is only one workforce development program offered by the federal government. Business owners may also be interested in the Canada Job Grant, for example, which supports training for employees, or in hiring grants that help offset the costs of bringing on new employees.
Learn how to support your business’s hiring strategies by registering for one of Mentor Works’ upcoming events. Specific hiring and training webinars are coming up!
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