Principal Issues: [TaxInterpretations translation] Are wages paid for hours worked outside the scope of the decree of the Commission de la construction du Québec eligible wages for the apprenticeship job creation tax credit?
Position:
No
Reasons:
Hours worked outside the scope of the CCQ decree are not counted in the CCQ apprenticeship booklet and do not lead to a certificate of qualification or a licence.
XXXXXXXXXX 2007-022849 Nancy Turgeon, CGA February 18, 2008
Dear Sir,
Subject: Credit for the creation of apprenticeships
This letter is in response to your letter of March 15, 2007, in which you asked whether wages paid for hours worked outside the scope of the CCQ (Commission de la construction du Québec) decree are eligible when determining the credit. We apologize for the delay in responding.
Unless otherwise indicated, all statutory references herein are to provisions of the Income Tax Act (the "Act").
Our Comments
The situation you have indicated in your request appears to relate to an actual situation involving a specific taxpayer. As explained in Information Circular 70-6R5, it is not the Directorate's practice to comment on proposed transactions involving specific taxpayers otherwise than in the form of an advance tax ruling. We are, however, prepared to provide the following general comments, which you may find useful.
The definition of investment tax credit in paragraph 127(9)(a.4) refers to an apprenticeship expenditure in respect of an eligible apprentice.
“apprenticeship expenditure of a taxpayer for a taxation year in respect of an eligible apprentice is the lesser of
(a) $2,000, and
(b) 10% of the eligible salary and wages payable by the taxpayer in the taxation year to the eligible apprentice in respect of the eligible apprentice’s employment, in the taxation year and on or after May 2, 2006, by the taxpayer in a business carried on in Canada by the taxpayer in the taxation year;”
An eligible apprentice means “an individual who is employed in Canada in a trade prescribed in respect of a province or in respect of Canada, during the first two years of the individual’s apprenticeship contract registered with the province or Canada, as the case may be, under an apprenticeship program designed to certify or license individuals in the trade.”
In Quebec, the apprentice must obtain an apprenticeship competency certificate (ACC) from the CCQ. Their standards are based on the establishment of a training plan and are calculated in terms of hours of vocational training, upgrading and hours of work in the trade. Those hours are recorded in an apprenticeship booklet. It is our understanding that hours worked outside the CCQ decree are not included in the apprentice's professional training hours. Thus, those hours have no bearing on obtaining a certificate or licence. It is therefore our view that the wages paid for those hours do not qualify as apprenticeship expenses.
These opinions are not advance decisions and, as stated in paragraph 22 of Information Circular 70-6R5 of 17 May 2002, are not binding.
Best regards,
Randy Hewlett
Manager
Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate.