February 27, 2012

Apprenticeship tax credit extension draws mixed reviews

RICHARD GILBERT

staff writer

The extension of apprenticeship training tax credits in the 2012 B.C. Budget is being applauded by a representative of the Christian Labour Association of Canada (CLAC), while the leader of the provincial building trades council is not impressed.

“Extending the Apprenticeship Training Tax Credit for another three years is a positive move that will benefit CLAC apprentices currently employed in the construction industry and will attract new construction workers to meet the growing demand and skills gap,” said CLAC’s B.C. director David Prentice.

Finance Minister Kevin Falcon delivered the budget in Victoria on Feb. 21. It extended training tax credits for an additional three years to the end of 2014.

The tax credit program, which receives about $31 million in funding annually, encourages employers and apprentices to complete apprenticeship programs offered in B.C.

The program provides employers with refundable tax credits for salary and wages paid by employers to eligible apprentices.

Registered apprentices are also eligible for refundable personal income tax credits.

To encourage participation in trades by First Nations people or persons with disabilities, individual and employer tax credits are enhanced by 50 per cent.

Despite the extension of this program, building trades unions are disheartened and disappointed with the lack of new resources in the provincial budget to support trades training and skills development.

“This is not a good budget for workers in British Columbia and it is especially bad for people who want to participate in the provincial economy through trades training and skills development,” said Tom Sigurdson, executive director of the British Columbia and Yukon Territory Building and Construction Trades Council.

“We know there is a lot of work coming up and we need to train new people. But, the government is not going to invest in the training of new people because they want to pay down on the deficit at all costs.”

The budget provides $94 million in core funding for the Industry Training Authority, (ITA) which is roughly the same amount as last year. The authority is a provincial crown agency that is responsible for managing and expanding B.C.’s industry training and apprenticeship system.

“This is not about throwing money around, so students can get a tax break to go to a post-secondary institution,” said Sigurdson.

“The system is broken. The ITA has not been delivering the kind of training B.C. needs in terms of a skilled labour force.”

The Industry Training Apprenticeship Commission was dismantled in 2002.

According to Sigurdson, there was a shift to a self-help service model, which made it more difficult for apprentices to navigate their way through the system, from one employer to the next.

“Many apprentices have simply given up in frustration,” he said.

“We’re still waiting for the government to admit the mistakes of the new model and to provide the support that apprentices need in order to complete their training.”

Sigurdson said there is going to be a severe shortage of skilled trades people in B.C. in the next five years.

For this reason, he said the 2012 budget demonstrates the government’s failure to prepare the next generation of workers for entry into the labour force.

He added that there are significant long-term costs associated with eliminating the deficit at the expense of apprenticeship training.

For example, he said the province will likely have to depend on temporary foreign workers to fill the employment gap and that this approach delivers far less benefits to British Columbians as the economy grows.

The finance minister committed to return to a balanced budget by 2013-2014.

Budget 2012 forecasts a deficit of $968 million in 2012-13, and surpluses of $154 million in 2013-14 and $250 million in 2014-2015.

The latest quarterly figures forecast a deficit of $2.5 billion for 2011-2012.

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