The Current Status of Apprenticeship Credits for Ontario Employers
In November of 2017, the Apprenticeship Training Tax Credit—a refundable provincial tax credit based on salaries and wages paid to apprentices—was eliminated for any apprenticeship contract registered after November 14, 2017. At the time, it was announced that this credit would be replaced by the Graduated Apprenticeship Grant for Employers (GAGE). However, the Ontario Government recently advised that the GAGE program is no longer an active apprenticeship funding program. So where does this leave Ontario employers?
Apprenticeships Registered Prior to November 15, 2017
Ontario businesses are still entitled to claim the Apprenticeship Training Tax Credit on eligible expenses associated with apprenticeship contracts registered prior to November 15, 2017. The chart below illustrates the available credit based on when the apprenticeship contract was registered, and the size of the employer business:
| The Current Status of Apprenticeship Credits for Ontario Employers Rates and maximums of the Ontario Apprenticeship Training Tax Credit for which the training agreement or contract of apprenticeship was registered before November 15, 2017 |
|||||
| Start of qualifying apprenticeship |
General rate on eligible salaries and wages |
Small business rate* on eligible salaries and wages |
Maximum yearly credit per apprentice |
Maximum # of months |
Maximum lifetime credit per apprentice |
| After April 23, 2015 | 25% | 30% | $5,000 | 36 | $15,000 |
| Before April 24, 2015 | 35% | 45% | $10,000 | 48 | $40,000 |
*businesses with salaries or wages of $400,000 or less per year
Apprenticeships Registered After November 14, 2017
Currently, the only provincial credit available to businesses for apprenticeship contracts registered after November 14, 2017 is the Apprenticeship Completion Employer Bonus. Eligible businesses can apply for a $1,000 taxable cash grant once an apprentice has completed all required classroom and on-the-job training and received their final certification. Qualifying businesses will receive an application once they become eligible.
Federal Tax Credit
Businesses can continue to claim the federal Apprenticeship Job Creation Tax Credit (AJCTC)—a non-refundable tax credit equal to 10% of the eligible salaries and wages payable to eligible apprentices employed after May 1, 2006. The maximum credit an employer can claim under the AJCTC is $2,000 per year for each eligible apprentice.
Moving Forward
The government of Ontario is currently reviewing funding incentives for apprentices and employer sponsors and we expect further announcements later in 2019.
The tax team at S+C Partners would be happy to answer any questions you have regarding apprenticeship tax credits.
Looking for more information on tax planning? Explore our comprehensive tax services. We also specialize in accounting, advisory and Information Technology. Explore our complete service offering.
Read our most recent Insights.
S+C Partners is a full-service firm of Chartered Professional Accountants, tax specialists, and business advisors with in-house expertise that extends well beyond traditional CPA services. In addition to audit, accounting, and Canadian tax services, we also offer business advisory services, comprehensive IT solutions, Human Resource consulting, and in-house expertise within highly focused areas such as US taxation, business valuations, and estate planning. We provide all the technical expertise of a large CPA firm, but with the personal touch and partner-level attention of a boutique accounting and advisory firm.