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Canada Training Benefit- Budgets are Plans

By WENDY TERRY - April 8 2020

(then there is what really happens) Part 2

In the Summer 2019 issue of Learning Curves, I had written about a proposed federal Canada Training Benefit,  as described in the March 2019 federal budget. The title of the article was Budgets are Plans (then there is what really happens) See Summer 2019 issue page 4. So given tax filing is coming up for the 2019 year I set out to find what happened to this proposed Benefit. April 30, 2020 is the deadline for filing your 2019 tax return. 

As we had a Canadian federal election coming up at the time I wrote that Summer 2019 article, I noted that actually getting this Canada Training Benefit could depend on who won the election. The federal election was held on October 21, 2019 and we have the same government, Liberal, albeit a minority, that had proposed the Canada Training Benefit. So I was confident the proposed Benefit would still be in policy proposals and maybe even transitioned to practice. So I started to search on the Web to see if the Canada Training Benefit had been put in place. 

In this Canada Training Benefit workers would be given a $250 credit every year up to a lifetime limit of $5000. Your credit balance would be shown on the information the Canada Revenue Agency would send you each year. You can use this credit to refund the costs of taking a course. This Canada Training Credit is part one of the proposed Canada Training Benefit. Part two is an Employment Insurance Training Support Benefit which would provide workers with up to four weeks of income support through the Employment Insurance (EI) support system. 

So it is now 2020 and I will be filing my income tax return for the year 2019 by April 30 2020, will I see a $250 credit? Probably not as in the 2019 budget, they did not expect to launch until 2020. So I would not see it until 2021. So I started with a Google search putting in Canada Training Benefit. 

The first entry that came up was from BDO Canada but dated June 5, 2019. BDO is large accounting organization.  They used the term Canada Training Credit CTC, part one of the Canada Training Benefit. In the list of information this caught my eye Who Qualifies for CTC.  You must be at least 26 years of age and not older than 65 years of age at the end of the year like December 31, 2020. Being 72, I sighed. Then it noted you must have a working income of $10,000 or more in the preceding year and have a net income for the preceding year that does not exceed the top of the third tax bracket ($147,667 in 2019). Okay. You also had to have filed a tax return for the preceding year and have been a resident in Canada throughout the preceding year. Okay.

Then I noticed the sentence: “Draft legislation to implement the CTC has been tabled but not passed, and legislative changes have not been introduced for the EI Training Support Benefit. Okay this was posted in June 5, 2019 and the budget that presented the Canada Training Benefit was passed in March 2019. So where is this proposal now in March 2020. 

So I go to the horse’s mouth as we would say, the Canada Revenue Agency and put Canada Tax Credit in their search engine. The first listing dated May 3, 2019 notes that the Canada Training Credit has been given Royal Assent. So the proposed Credit has been approved but when will it be implemented.  It says for 2019 and subsequent years but in the second listing, it says you can only claim tuition paid in 2020. What does this mean you get a credit for 2019 but can not claim any tuition paid in 2019? 

Note the website for BDO posted June 5, 2019 said legislation had not been passed but the Canada Revenue Agency posted May 3, 2019 said it has passed. This is typical of web searches, finding contradictions. 

Then I looked through my 2019 Income Tax Package mailed to me as I fill out my income tax myself and mail it in.  I could find no information about a Canadian Tax Credit in this booklet and I did look at every page. So this reinforced my idea that the CTC will not be effective till 2020. 

But I did find under Federal non-refundable tax credits in the Income Tax and Benefit Return, Line 32,300 Your tuition, education and text book amounts. (Complete Schedule 11). Is the CTC in Schedule 11? I could not tell by reading Schedule 11 but on rereading the BDO Canada  Training Benefit section. I found related information. 

One “Annual accumulation of the training amount limit will begin in 2020. This means an eligible individual can start to claim the CTC on eligible training fees incurred in 2020 and receive money back when they file their tax return in 2021. “ Okay the 2020 tax year, forget the 2019 tax year. 

Two “An individual can apply their training amount limit against up to half the costs of eligible training fees. If I take a course for $600 in 2020, half of that is $300 and given my $250 limit for training credit starting in the year 2020 I would have a $250 credit. So that is what I would get, $50 less than half the fee.“

Three “The portion of fees refunded through the CTC will not qualify for the “tuition tax credit.” 

So what I get a Canada Training Credit for, I cannot get a tuition tax credit. No double dipping. So am I better off with the Canada Tax Credit or the tuition tax credit as before? 

Please a reader who is an accountant or financial assistance officer help us out here!

Four, BDO notes the EI Training Support Benefit will start in late 2020. Remember this Benefit would provide workers with up to four weeks of income support through the Employment Insurance (EI) support system. However in the BDO report it notes 4 weeks every four years. 

So as the title of our article in the Spring 2019 issue of Learning Curves said: Budgets are Plans. In March 2019 you got excited about a $250 tax credit and four weeks off with EI but really not until you do your filing in 2021 for the 2020 tax year will you get this and the time off with EI Benefits not until late 2020 So the subheading (then there is what really happens) for the Spring 2019 article holds true. 

Learning Curves stands by our standard advice, talk to the financial aid office at your educational provider, they know what is available. And there is more available for adult students than you might think.

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