Small-business owners are readying for employees to request time off to take training courses as part of a new federal government program that begins on Jan. 1.
The Canada Training Credit, announced in the federal budget in March, allows employees of ages 25 to 64 earning between $10,000 and just under $150,000 a year to accrue a $250 annual credit to put toward the cost of training, with a lifetime limit of $5,000. The credit can be used to refund up to half the cost of fees at colleges, universities and eligible institutions providing occupational skills training.
Workers can take up to four weeks off for the training over four years, either all at once or staggered, while collecting employment insurance (EI), but need 600 hours of insurable employment to qualify. A leave provision ensures their jobs are secure.
Small businesses that pay up to $20,000 in EI premiums annually will receive a rebate to offset the expected higher costs from employees taking short-term leave related to the benefit. (The employer and employee pay EI premiums, but the employer’s portion is 1.4 times higher, to a maximum that increases slightly each year.)
While the $250 annual credit begins next year, the government says it’s still designing the leave and EI components in consultation with provinces and territories and other stakeholders.
The program is aimed at addressing a skills gap and boosting productivity, but some businesses worry about when workers will take it and what courses qualify.
“Employers will lose it if an employee just comes to them and they’re powerless to try to influence the timing of the potential leave,” said Dan Kelly, president of the Canadian Federation of Independent Business.
Mr. Kelly said timing is key. Being off during the busy holiday season would be a problem for most retailers.
He would like the program set up so that the employer and the employee apply together, and the employer has some say over the type of training.
“Employers want to train [employees] on things the employer is also going to benefit from,” he said.
The government suggests four steps for using the benefit: The first is for workers to discuss the course with the employer, “letting them know they’ll need a few weeks of leave.” Workers then register for the course and provide their employers with proof of enrolment. Employees on leave would then apply for the EI Training Support Benefit, and receive up to 55 per cent of their average insurable weekly earnings. The maximum weekly EI benefit rate would be $573 a week in 2020. They would claim the training on their tax return.
The federal budget used the example of an employee who claims $2,000 in tuition fees on his tax return and receives a $1,000 tax credit, drawn from a Canada Training Credit balance built up over four years.
Stephanie Sang, chief executive of Vancouver-based Granted Consulting Inc., said while the benefit appears to favour workers, it can help employers directly or indirectly.
For instance, an employee who takes a social-media course can help the company boost its digital presence. Even if the course doesn’t directly benefit the company, she says, giving staff time off to pursue an interest can help boost morale across the business.
“Employees and employers should have a conversation about how to make it work,” Ms. Sang said.
Granted Consulting has eight employees and Ms. Sang expects some will use the benefit. “We really empower our staff to take any opportunity to engage and learn,” she said.
Erin Bury, CEO of Final Blueprint Inc., a Toronto-based online estate-planning startup operating as Willful, says the training benefit could allow her staff to develop skills that will help her company – or achieve their own career goals.
“Either way, I would be supportive of team members taking time off to skill up,” Ms. Bury said.
She also accepts that the skills could eventually be used to get a job elsewhere. “I’d rather support my team members and their goals, even if those goals mean they move on from working with me,” she said.
Bryan Watson of Flow Ventures, a Toronto-based consulting firm that helps companies file for government incentives, said he’s not sure the Canada Training Benefit is powerful enough compared with other programs, particularly given the competition for labour in many industries.
“In the war for talent we are facing in Canada, programs that help companies offset the risk of hiring unemployed candidates that may have some skill gaps tend to have more impact,” Mr. Watson says.