A $1.7B plan to retrain Canadians

Program would begin early next year

The federal government is taking another crack at sending Canadian workers back to school for mid-career training, spending $1.7 billion over five years to launch a skills training program.

A new tax credit will allow workers to claim half of the cost of a course or training program; they will also be eligible to take up to four weeks off and receive employment insurance coverage for 55 per cent of their average weekly income.

None of this is slated to start in any meaningful way until next year, after the next federal election, and the government says it will embark on consultations to nail down the specifics.

“Canadians at all stages of in their working lives should have the opportunity to learn new skills to take control of their future,” Finance Minister Bill Morneau said in his speech to the House of Commons.

The government proposes to provide workers with a $250 annual tax credit that will accrue with the Canada Revenue Agency starting this year; the credit will grow each year to a lifetime maximum of $5,000.

So in a couple years if employees wanted to do a training course that cost $1,000 they could claim it on their taxes and get a $500 refund. They could also have a portion of their income covered through EI while enrolled in the course.

For the training tax credit, the federal government is budgeting $710 million over five years, and $256 million per year after that. The EI changes will cost $1.04 billion over five years, and $321.5 million each year after that.

While applauding the government’s move to address the growing skills gap in Canada, Dan Kelly, president of the Canadian Federation of Independent Business said he was concerned that the program doesn’t link training more directly to the needs of business. “Will small business be required to hold open a position if an employee has always wanted to take a paid leave from work in order to study Latin or interpretive dance?” Kelly said.

Craig Alexander, chief economist for Deloitte Canada, said he interpreted the added skills training as a response to the changing economy, with technology and global market forces creating more volatility in the labour market.

“I don’t think it’s a reflection of the success of the prior programs, it’s just that there’s been steady recognition over time about how important this is, and so we’ve had a steady increase in the amount of resources being dedicated,” Alexander said.

The government also announced in its budget the Global Talent Stream pilot will be made permanent, allowing work permits for highly skilled foreign workers to be processed in two weeks.