December 23rd, 2015
One of the toughest things about finding is a job is having the necessary amount of experience. Certain positions require a minimum amount, but how can one go about acquiring that experience if there is no way to obtain a position where you can get it? Apprenticeships are an excellent way for job seekers to get proficiency in the working world and earn a salary while doing it.
A survey by Canadian Manufacturers and Exporters found that 72% of managers felt that direct funds provided the best incentive for a company to back training. As apprenticeship requires an extra financial commitment from the employer, government funding for business programs such as the Apprenticeship Job Creation Tax Credit (AJCTC) are a way for organizations to get back a portion of those wages.
Introduced in 2006, the AJCTC program compensates employers with a non-refundable tax credit equivalent to 10% of the salary drawn by each apprentice the company takes on. This can run to a maximum annual total of $2,000 per year. The employment role must post-date May 1, 2006 and firms can carry any unused credit back three years or forward twenty years.
Under the terms of the program, the new personnel in question must be in the first two years of an apprenticeship contract from a particular set of trades under the Red Seal Program. Among the 57 qualifying trades carrying this designation are positions in the agricultural, automotive, construction, hairstyling, heavy equipment, ironworking, landscaping, plumbing, roofing, and welding industries. These persons must be working towards earning a certificate or license in their chosen trade.
Additional Advantages for Both Parties
The AJCTC option not only benefits established organizations, but can also be a boon to entrepreneurs. There is much financial calculation and risk involved in starting a business and a tax credit of this sort helps to cushion a payroll’s budgetary impact. It is also a way to find and attract enthusiastic candidates interested in learning while they earn.
The educational system provides students with some wonderful tools, but not all of them are applicable to their chosen career path. Some employers have emphasized that a degree alone does not necessarily mean the graduate is ready to assume a position with the firm. Apprenticeships provide the kind of real-world experience that is often not part of the educational one. The two combine well to create a prime candidate who has both the technical know-how and the applied manner in which it benefits the company.
In economically uncertain times, companies need to carefully consider how they spend their money. With some Canadian sectors having trouble attracting and maintaining skilled craftspeople, apprenticeships profit both new workers and the companies providing them with on-the-job training. The Apprenticeship Job Creation Tax Credit helps to make this approach even more attractive by helping to defray a percentage of each apprentice’s salary.
Contact INAC Services today and join the growing number of organizations that have benefitted from their grant preparation services. With more than 25 years’ experience securing government funding for businesses of all types, the professionals at INAC have the knowledge to help you achieve your subsidy goals.