Hiring help – You can access government dollars for training and hiring
By Bonny Koabel
Governments plan to give away $2 billion in employment funding in 2019
By Bonny Koabel
When most people hear that the government is giving money away their reaction is that it must not be true. Why would the government want to give businesses money and receive nothing in exchange? The reality is governments do receive something in exchange for the money they give away: increased revenues in tax dollars.
For every dollar the government gives out in funding it receives approximately $3 back in tax revenue. It is a win-win situation for businesses and government. Businesses receive funds they need to run, grow and expand and the government receives increased tax revenue from increases in company payrolls, HST, corporate taxes and employer health taxes.
There are a number of funding programs open to the glass Industry. We will focus on employee-related funding programs. These include:
- Apprentice salary refunds – Up to $12,000 per apprentice, per year, retroactive for four years
- Hiring grants – Up to $10,000 per new hire
- Training grants – Up to $10,000 per employee
A company may use all of these funding programs as long as they meet the funding criteria. There is no upper limit to how much a company may receive and these funding programs may be used on a yearly basis.
Apprentice salary refunds
Apprentice salary refunds have been available since 2005 and are incentives given to businesses to hire and train apprentices, as many experienced tradespeople are now retiring. Since it takes years of training for an apprentice to become a master in their trade, most companies are reluctant to hire apprentices and invest valuable time in training them. By making apprenticeship salary refunds available to employers, the government is setting the stage to encourage more employers to take on the task of training apprentices.
Employee incentives for training apprentices are generous. Ontario offers the largest amount of funding, which is up to $10,000 per apprentice per year, retroactive for four years. This applies to the first three years of the employee’s apprenticeship, whether or not the apprentice is still with the company. It does not matter how short a period of time the apprentice was with the company; it could be one week or the last four years.
Apprentice salary refunds apply to both union and non-unionized companies. If your company is not unionized, you need to make sure that the apprentices you have on staff are registered apprentices in a qualifying trade in the province that your company operates in. In most provinces, the trade will be glaziers. If you have had apprentices on staff that are not registered with the province, unfortunately you will miss out on funding. If you are hiring an employee who is already a registered apprentice, you need to call your apprentice training representative with the government and make sure the new employee receives a transfer of apprenticeship to your company. If this does not happen, your company will miss out on funding. Two of the biggest reasons why companies do not receive apprentice salary refunds are because they have not registered their apprentices with the government or they did not receive transfers of apprenticeships for new employees who were already registered apprentices with other companies.
One of the statements we often hear from unionized companies is, “The apprentices we have do not qualify for funding because they are from the union. We bring them in for jobs as required and send them back to the union. And since under the apprentice agreement the employee is registered to the union, the union is entitled to receive the funding, not our company.” This statement could not be further from the truth. While an apprentice may be registered with a union, the union does not pay a salary to the apprentice. Companies that bring in union employees pay their wages and, because the apprentice salary refund is a refund on the wages paid to the apprentice, the company that pays the unionized apprentice and has them on their payroll (even if only for a week) is entitled to the apprentice salary refund, not the union.
If your company has both unionized and non-union apprentices and you have only claimed apprentice salary refunds for your non-union apprentices, you can still file for apprentice salary refunds for the unionized apprentices as long as you are still within the four-year time limit.
The apprenticeship salary refund program applies to foreign-owned companies and even divisions of companies that have had apprentices and are now closed. As long as the company is not dissolved, the company is able to apply retroactively for the last four years of funding.
Lastly, if your company has applied for apprentice salary refunds in the past and was denied due to incomplete or inaccurate information, you may be eligible to get that funding as long as the application is re-filed within the four-year period when you had the apprentices on staff.
Hiring grants are a re-direction of Employment Insurance premiums. The government would prefer to compensate a business to train a new employee rather than to have the person sit at home and collect EI. Hiring grants have been available for decades, regardless of what party is in power, and will almost certainly continue to be available going forward.
Hiring grants are available for any new hire that is not an apprentice. This applies to all potential new hires including pre-apprentices, administrative staff, sales staff, estimators, engineering staff and general labourers. To qualify for funding, the new employee must be currently unemployed. Also, the new employee cannot be leaving a job to take a position with your company. Funding is available to recent graduates, new immigrants and self-employed people taking on a paid position with a company. The new employee’s position must be paid hourly or on salary. Pure commission jobs will not qualify for funding. Also, the job must be a full-time position with a minimum of 25 hours per week. Temporary and part-time positions do not qualify for funding. The goal of the hiring grant program is to create long-term employment. Businesses may apply for hiring grant funding as often as required. As long as the new employee qualifies for funding the company will receive the hiring grant.
Hiring grant funding works very differently than apprenticeship salary refunds. In order to qualify for funding, a company needs to apply for funding before the new employee’s start date. It will take up to seven business days to get a hiring grant in place. After the application is submitted to the government, the new employee will need to attend a brief meeting where the hiring grant amount for the employer will be determined.
Hiring grants vary depending on the province and are up to 50 per cent of an employee’s wage to a maximum of $10,000 for a period of six months. Once an employee qualifies for funding, the company will receive funding for the period of time the new employee worked even if the employee is fired or quits. The government understands the employment relationship does not always work out and it was the company’s intention to hire the employee on a full-time basis.
Training grants are available to existing employees to increase their skill set. Training must be through a Canadian third party including colleges, universities and specialized training providers. This includes sales training, quality system training (for instance, ISO) and ERP system training. The Canada Job Grant program was introduced in 2014 with funding committed to 2020. Routine training such as WHMIS, health and safety, forklift re-certification and fall arrest training do not qualify for funding.
Funding is up to $10,000 per employee. If your company has under 100 employees, you will receive a reimbursement of 80 per cent of the training costs. If your company has over 100, the reimbursement rate will be 50 per cent.
Training grant funding works similar to hiring grant funding. In order to qualify for funding, a company needs to apply for funding at least one month before the employees receive the training. The application is completed and submitted online. It will take up to seven business days to hear back from a government representative who will review your application and let you know if the application is approved. Once the application is approved, the employees are now able to take the training. Once the training is completed and the invoice for training has been paid, the company will need to apply to the government for reimbursement. The government will send out the refund cheque four to six weeks after receiving the invoice.
About the author
Bonny Koabel CPA, CGA is the President of AKR Consulting Canada located in Mississauga, Ont. Bonny can be reached at firstname.lastname@example.org or 905-678-6368. •