Co-operative education placements are a valuable way for businesses to fill gaps in their workplace with young, talented students who are eager to get some real-world experience. Apart from the increase in productivity output and creative outside perspective that many co-op students offer, there are many financial benefits for hiring students through a co-op or internship.
Co-operative tax credits are available to offset a portion of the costs associated with hiring students who are enrolled in Ontario co-operative education programs.
The Co-operative Education Tax Credit (CETC) is a must-have tax incentive for any Ontario business that hires post-secondary co-op related students. The CETC offers Ontario organizations a valuable incentive for giving relevant work experience to students who participate in official co-op work term placements. In exchange, the businesses may receive a provincial government tax credit to cover a portion of the co-op student’s wages.
Ontario’s Co-operative Education Tax Credit Amount
Eligible businesses that choose to undergo a co-operative placement with a student from an eligible academic institution may obtain this CETC after hiring the student by filling out the required tax forms. Successful applicants may be eligible for the following tax credit amounts:
- Corporations that qualify for the Ontario Co-operative Education Tax Credit may be eligible to claim up to 25% of eligible expenditures, small businesses may receive up to 30%;
- The maximum credit allotment per work placement is $3,000; and
- The minimum length for eligible work placements will be 10 weeks and the maximum work placement may be up to four months.
Eligible Company Applicants
Ontario businesses that hire students who are currently enrolled in a post-secondary co-operative program may be eligible for the Co-operative Education Tax Credit if they hire students via an official co-op work term. Applicants may also be eligible if they meet these requirements:
- Eligible businesses may be in a variety of industries and disciplines;
- Organizations may be either incorporated or unincorporated;
- If two organizations are in a partnership, they may share the CETC for individual placements; and
- Limited partners will not be eligible for this tax credit.
To learn more about eligibility criteria, please refer to the CETC page.
Eligible Co-op Educational Institutes
For a co-operative placement to be covered by the CETC program, the co-op student must be currently enrolled in what is referred to as an eligible educational institution. An education institution may be eligible if it falls under any of the following criteria:
- Is a university of college that is centered in applied arts or technology in Ontario;
- Is the Mitchener Institute of Applied Health Sciences;
- Is the Ontario College of Art and Design; or
- Redeemer University College.
Therefore, it is important for businesses to initiate a co-operative placement with a student from an institution that matches one of these criteria.
Eligible Co-op Work Terms
The Ontario Co-operative Education Tax Credit requires students to be enrolled in an eligible educational institution and the roles they perform throughout their co-op work term must align with the educational program they are enrolled in. Eligible projects may be eligible if they also meet the following criteria:
- The educational institution has either developed the placements or approved the terms;
- Students that are accepted for a placement must be actively engaged in work-related activities and not simply observing;
- The co-operative student must be paid a reasonable income for their work activities;
- The employer must implement a means of supervision and evaluates the student’s job performance during the placement, and
- The educational institution monitors the student’s progress in the work placement.
Learn more about program criteria by reviewing the Co-operative Education Tax Credit (CETC) program page.
The Ontario Co-operative Education Tax Credit (CETC) is currently open and accepting submissions with no current deadline released.Program timelines for the CETC may reflect the following:
- An internship placement must be longer than eight months and shorter than 16 months; and
- All other co-operative programs should exceed 10 weeks; and
- Businesses that receive a letter of certification from the student’s university or college will need to keep the document for at least seven years for verification purposes.
Exploring Government Funding Opportunities
If the Ontario Co-operative Education Tax Credit isn’t right for your business, there are many more funding programs for Ontario businesses to choose from, such as the Canada Summer Jobs (CSJ) program, which help businesses that are eligible receive up to 50-100% of the minimum wage as grants for hiring youth. The CSJ grant is a Canadian government grants program that supports employers who provide supervised career-related work experience to youth employees.
We also recommend that Ontario businesses use this valuable hiring resources directory to learn more about funding programs, resources, and tools that can assist in the hiring process.