Help hiring help – Here’s how to access government funding for staff and apprentices
By Bonny Koabel CGA CPA
Window and door companies can get government money for hiring and training.
By Bonny Koabel CGA CPA
Does the government truly give away money?
When people hear that the government gives money away, their first reaction is one of disbelief. Why exactly would the government give businesses money? Well, the reality is the government does receive something in exchange for the money they give away: increased tax revenues.
It is estimated that for every dollar the government gives out to businesses they receive $3 in return in the form of higher tax revenues: HST, payroll taxes or corporate taxes. Government funding has increased over the years because it benefits both businesses and government. Businesses receive the funds they need to operate, grow and expand their operations. The government receives increased tax revenue to implement its mandates.
Types of employee funding available
A few of the employee funding programs available to fenestration companies include apprentice salary refunds, hiring grants and training grants. The amounts can be significant: up to $12,000 per apprentice per year (retroactive for four years), up to $10,000 per new hire or up to $10,000 per new employee.
Companies are not restricted in the amount of funding they can receive over time. As long as a company qualifies for funding it is able to access it. There is no upper limit to how much a company may receive and these funding programs may be used on a yearly basis.
Apprentice salary refunds
Apprentice salary refunds have been around since 2004 and are incentives given to businesses to hire and train apprentices. The governments started these funding initiatives to incentivize businesses to hire and train more apprentices. Since it takes years of training for an apprentice to become a journeyperson, most companies are reluctant to hire apprentices and invest valuable time and money in training them.
Employee incentives for training apprentices are very generous. Ontario offers the largest amount of funding with up to $10,000 per apprentice per year, retroactive for three years. This applies to the first four years of the employee’s apprenticeship, whether or not the apprentice is still with the company. It does not matter how short a period of time the apprentice was with the company – it could be one week or the last four years.
In order for an apprentice to qualify for funding they must be on staff, receiving a regular paycheque and registered as an apprentice in a qualifying trade in the province where your company operates. In the fenestration industry, apprentices will include electricians, glaziers and millwrights. If you have had apprentices on staff and they are not registered with the province, unfortunately you will not qualify for funding. If you are hiring an employee who is already a registered apprentice, you need to call your apprentice training representative with the provincial government and make sure the new employee receives a transfer of apprenticeship to your company. If this does not happen, your company will miss out on funding.
Two of the biggest reasons why companies do not receive apprentice salary refunds are not registering their apprentices with the government or not receiving transfers of apprenticeships for new employees who were already registered apprentices with other companies.
The apprenticeship salary refund program applies to foreign-owned companies and even divisions of companies that have had apprentices and are now closed. As long as the company is not dissolved, it is able to apply retroactively for the last four years for funding.
Hiring grants have been available for the last 30 years, regardless of the government in power. They are in essence a redirection of Employment Insurance funds. The government makes hiring grants available to businesses because they would prefer to compensate a business to train a new employee than to have that person sit at home, not doing anything and collecting EI. Working for a business allows a new employee to gain new skills and knowledge that will allow them to be employed for years to come.
Hiring grants have been around for so many years because they benefit all parties involved. The new employee receives a job, the business is subsidized while the new employee undergoes goes on-the-job training, and the government receives additional payroll tax revenue for the new employee for as long as the employee is with the business. For the government, the return often far exceeds the hiring grant they initially gave the business.
Hiring grants are available for any new employee you plan to hire that is not an apprentice. This applies to all potential new hires including pre-apprentices, administrative staff, sales staff, estimators, engineers and general labourers. To qualify for funding, the new employee must be currently unemployed. Also, the new employee cannot be leaving a job to take a position with your company. Funding is available to a variety of hiring candidates including recent graduates (high school, college and university), new immigrants to Canada, self-employed people taking on a paid position with the company, women re-entering the workforce after raising a family, and anyone else that is currently unemployed that requires on-the-job training. The new employee’s position must be a paid hourly or salary position. Pure commission jobs will not qualify for funding. Also, the job must be a full-time position with a minimum of 25 hours per week. Temporary and part-time positions do not qualify for funding. The goal of the hiring grant program is to create long-term employment.
Hiring grant funding works very differently than apprenticeship salary refunds. In order to qualify for funding, a company needs to apply for funding before the new employee starts their first day of work. Once the business knows they would like to hire a new employee, a hiring grant application is submitted to the government. The government will get back to the business within two days and if the new employee qualifies for funding a meeting will be set up to meet the new employee. This is to determine the hiring grant funding amount for the business to train the new employee and to prepare the hiring grant agreement. It takes up to seven business days to get a hiring grant agreement in place.
Hiring grants vary depending on the province and are up to 50 per cent of an employee’s wage to a maximum of $10,000 for a period of six months. Once an employee qualifies for funding, the company will receive funding for the period of time the new employee worked, even if the employee is fired or quits.
Training grants are available to existing employees to increase their skill set. Training must be through a Canadian third party, including colleges, universities and specialized training providers. This includes sales, customer service and ERP system training. The Canada Job Grant program was introduced in 2014 with funding committed to 2020. Routine training such as WHMIS, health and safety, forklift re-certification and fall arrest do not qualify for funding.
Funding is up to $10,000 per employee. If your company has under 100 employees you will receive a reimbursement of 80 per cent of the training costs. If your company has over 100, the reimbursement rate will be 50 per cent.
Training grant funding works similar to hiring grant funding. In order to qualify for funding, a company needs to apply for funding at least one month before the employees receive training. The application is completed and submitted online. It will take up to seven business days to hear back from a government representative who will review your application and let you know if the application is approved. Once the application is approved, the employees are now able to take the training. Once the training is completed and the invoice for training has been paid, an application will need to be sent to the government for reimbursement. The government will send out the refund cheque four to six weeks after receiving the invoice.
Bonnie Kaobel is CEO of AKR Consulting, a Mississauga, Ont.,-based management consulting firm.