Training Tax Credit Program - Update

Minister Carole Taylor would like to thank all who participated in the consultation process and contributed to putting together British Columbia's Training Tax Credit Program.

Effective Jan. 1, 2007, subject to legislative approval, the B.C. Training Tax Credit Program will provide refundable tax credits for employees and employers engaged in apprenticeship programs administered through the Industry Training Authority.

Budget 2006 committed an additional $400 million over four years towards skills and training, including $90 million for new tax credits to help meet the demand for skilled workers. The tax expenditure for the training tax credit program is estimated at $29 million per year. The program was developed in consultation with business, labour and training institutes as well as groups representing First Nations and persons with disabilities.

The Industry Training Authority oversees B.C.’s industry training and apprenticeship system, providing a skilled workforce for industry and career development opportunities for British Columbians. There are more than 31,000 apprentices currently registered with the ITA.

The ITA administers 47 ‘Red Seal’ training programs and 79 B.C.-recognized (non-Red Seal) training programs. The Red Seal programs follow national standards for content, assessment and achievement in trades such as carpentry, electrical, plumbing, and automotive repair. B.C.-recognized (non-Red Seal) training follows provincial standards and includes trades such as building envelope technician, oil and gas rig technician, and landscape horticulturist.

There are three main elements to the B.C. Training Tax Credit Program: basic credits, completion credits, and enhanced credits for First Nations individuals and persons with disabilities. The tax credits apply to individuals engaged in apprenticeship training and to their employers, including corporations, partnerships and sole proprietors.

Basic Credits

British Columbia ’s basic credits will complement the Government of Canada’s incentives for training. The federal incentives are limited to the first two years’ enrolment in Red Seal apprenticeship programs and consist of a tax credit of 10 per cent of wages up to $2,000 for employers and a $1,000 taxable grant for apprentices . British Columbia’s basic training tax credits will provide similar incentives to the 79 B.C.-recognized (non-Red Seal) apprenticeship programs not currently eligible for the federal incentives.

Employers: The basic credit for employers will be 10 per cent of wages paid up to $2,000 per apprentice in the first 24 months of a non-Red Seal apprenticeship program.

Employees: The basic credit for employees will be $1,000 per year for the first two years of any non-Red Seal apprenticeship program.

Completion Credits

British Columbia ’s completion credits will apply to both Red-Seal and non-Red Seal apprenticeship training programs and provide further benefits tied to the completion of higher training levels.

Employer :

• Lesser of $2,500 or 15 per cent of wages paid to an apprentice that completes level 3 of any apprenticeship program.
• Lesser of $3,000 or 15 per cent of wages paid to an apprentice that completes level 4 or higher of any apprenticeship program.

• $2,000 for completing level 3 of any apprenticeship program.
• $2,500 for completing level 4 or higher of any apprenticeship program.

Enhanced Credits

To encourage greater participation in trades training in respect to First Nations individuals or persons with disabilities, individual and employer tax credits will be 50 per cent higher than they would otherwise receive. Eligible First Nations individuals are those persons who hold Status Indian cards, and persons with disabilities are those eligible for the disability amount credit on their income tax return.

Credits for Employers:

• 15 per cent of wages paid up to $1,000 for each eligible employee in the first two years of any Red Seal program.
• 15 per cent of wages paid up to $3,000 for each eligible employee in the first two years of any non-Red Seal program.
• 22.5 per cent of wages paid up to $3,750 for each eligible employee that completes level 3 of any apprenticeship program (Red Seal or non-Red Seal).
• 22.5 per cent of wages paid up to $4,500 for each eligible employee that completes level 4 of any apprenticeship program (Red Seal or non-Red Seal).

• $500 per year for each eligible employee in the first two years of any Red Seal apprenticeship program.
• $1,500 per year for each eligible employee in the first two years of any non-Red Seal program.
• $3,000 for each eligible employee that completes level 3 of any apprenticeship program.
• $3,750 for each eligible employee that completes level 4 of any apprenticeship program.