Published | Category : Income tax - businesses

Changes to the Tax Credit for On-the-Job Training Periods

To encourage employers to offer more training periods to Aboriginal people and, consequently, increase their participation in the labour market, the rate of the refundable tax credit for on-the-job training periods has been raised in respect of such trainees.

In addition, both the weekly qualified expenditure limit and the maximum hourly rate have been increased for all existing categories of eligible trainees for the purposes of this tax credit.

Lastly, to encourage employers to offer more training periods in resource regions, the rate of the tax credit has been increased for qualified training periods in these regions.

Aboriginal trainees

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who is an Aboriginal person.

In addition, tax legislation will be amended so that an Aboriginal person means a person who is, at any given time during an eligible training period:

  • an Indian registered pursuant to the Indian Act; or
  • an Inuit beneficiary pursuant to the Act respecting Cree, Inuit and Naskapi native persons.

Lastly, tax legislation will be amended to raise the rates as follows, where an eligible employer makes a qualified expenditure in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program:

  • from 32% to 50% for corporations;
  • from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

Increase in the weekly limit and the maximum hourly rate

The weekly limit will be raised to:

  • $875 per week for eligible trainees enrolled in a prescribed program, or disabled eligible trainees who are apprentice trainees or trainees enrolled in an education program;
  • $1,225 per week for disabled eligible trainees enrolled in a prescribed program;
  • $700 per week in the case of all other eligible trainees.

Accordingly, tax legislation will be amended to increase the hourly rates from $18 to $21 for an eligible trainee and from $30 to $35 for an eligible supervisor.

Increase respecting resource regions

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who serves an eligible training period in an establishment, of the eligible employer, located in an eligible region.

Tax legislation will also be amended to raise as follows the rates of the tax credit in respect of an eligible trainee enrolled in an education program or a prescribed program who serves an eligible training period, in an establishment, of an eligible employer, located in an eligible region:

  • from 32% to 50% for corporations;
  • from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

For the purposes of this amendment, the following resource regions are considered eligible regions:

  • the administrative regions described in the Décret concernant la révision des limites des régions administratives du Québec:
    • administrative region 01 Bas-Saint-Laurent,
    • administrative region 02 Saguenay–Lac-Saint-Jean,
    • administrative region 08 Abitibi-Témiscamingue,
    • administrative region 09 Côte-Nord,
    • administrative region 10 Nord-du-Québec,
    • administrative region 11 Gaspésie–Îles-de-la-Madeleine;
  • the following regional county municipalities:
    • Municipalité régionale de comté d'Antoine-Labelle,
    • Municipalité régionale de comté de La Vallée-de-la-Gatineau,
    • Municipalité régionale de comté de Mékinac,
    • Municipalité régionale de comté de Pontiac;
  • the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations.

Application date

These changes will apply to qualified expenditures incurred after March 27, 2018, in respect of eligible training periods beginning after that date.

For more information, see pages A.69 and A.74 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

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