$100 Million Dollars for Apprentices
One in every five job postings in Canada is for skilled trades. With numbers like those, it’s no wonder that apprenticeships are a hot topic in not only the Canadian Federal Budget, but they were also one of the four keys in President Obama’s speech outlining steps to Build a Strong US Economy.
On Jan. 30 – at 1:00 minute in this video President Barack Obama outlined a key step for expanding job opportunities, while visiting a GE plant in Wisconsin.:
“We gotta make sure we are do everything we can to expand apprenticeships. I’m going to call on American companies all across the country, particularly or manufactures set up more apprenticeship programs.” Globe and Mail Video
Finance Minister Jim Flaherty’s unveiled his 10th Canadian Federal Budget which clearly underscores Canada’s need for skilled tradespeople. This years’ budget will dole out over $100 Million dollars in interest free student loans for apprentices, in addition to thousands of already established grants for apprentices themselves and employers to help bolster school completion rates which are currently at only 50%.
Why are program completion rates so low? Why do apprentices need the extra incentive of interest free loans when they already have good incentives and receive EI while attending school? One of the reasons is the cyclical nature of the construction industry, and general dips in the economy. When an apprentice is working, making a healthy wage and earning overtime in the boom years, taking a pay cut and time off to go to school can be an inconvenience to both the apprentice’s wallet, and the employer’s productivity. When the economy slows down (as in 2008), apprentices are laid off which again, severely effects program completion rates. Providing interest free loans is the first step in supporting and growing our skilled tradesperson workforce in Canada.
How it works:
Apprentices registered in their first Red Seal trade apprenticeship will be able to apply for interest-free loans of up to $4,000 per period of technical training. Interest charges and repayment of Canada Apprentice Loans will not begin until after the apprentice completes or terminates their apprenticeship training program. At least 26,000 apprentices per year are expected to apply for over $100 million in loans. The estimated net cost of these loans to the Government would be $25.2 million over two years and $15.2 million per year ongoing.
So the devil is in the details; the Government is investing in students by loaning them money. Hopefully this will not be in attempt to change the current apprenticeship grants into equivalent loans in the future or we will see completion rates drop again!
Expanding and growing existing apprenticeship programs across Canada creates lifelong value for both apprentices and employers. Past apprentices will often become Supervisors, Managers, and even Teachers at the colleges they themselves trained at. Investing in apprentice programs is a smart, long-term plan to keep the economy strong and unemployment rates low, and we are happy to see that Mr. Flaherty and President Obama recognize the importance of skilled trades.