Business and Operations
Employee funding grants
By Bonny Koabel CGA CPA
Grants can ease bakery employment costs
By Bonny Koabel CGA CPA
For most companies, employee salaries are their largest expense. The costs associated with finding, training and retaining employees is high. Investing in new employees is often seen as a gamble, as the new employee might not be a good fit.
When employees quit, energy invested in training goes to waste. In addition, investing in training existing employees is often overlooked due to cash flow constraints. For most companies, discovering there is easy access to Government funding to offset the costs of training is a welcomed relief.
funding for bakeries?
There are a number of Government employee funding programs available to bakeries, including:
- Apprentice Salary Refunds: Up to $12k per apprentice per year
- Hiring Grants: Up to $10k per new hire
- Training Grants: Up to $10k per hire
A company may use all of these funding programs as long as they meet the funding criteria. There is no upper limit to how much a company may receive and they may be used yearly.
Apprentice Salary Refunds
Apprentice Salary Refunds have been available since 2004 and are incentives given to businesses to hire and train apprentices. Since it takes years of training for an apprentice to become a master in their trade most companies are reluctant to hire apprentices and invest valuable time and money in training them. By making the apprenticeship salary refunds available to employers the Government is setting the stage to encourage more employers to take on apprentices.
How much funding is available?
Employee incentives for training apprentices are very generous. Ontario offers the largest amount of funding with up to $1ok per apprentice per year, retroactive 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 a week or four years.
How do my apprentices qualify for funding?
For apprentices to qualify for funding they must be: On staff, receive a regular paycheque and be registered as an apprentice in a qualifying trade in the province where your company operates.
The funding available for bakers and chefs yields up to $2k per year for two years. You will not qualify for funding if your staff are not registered. If you are hiring an employee who is already a registered apprentice you need to call your Government Apprentice Training Representative and make sure that the new employee receives a transfer of apprenticeship to your company. Your company will miss out on funding without it.
Two of the biggest reasons companies do not receive apprentice salary refunds are because they have not registered their apprentices with the Government or they did not receive transfers of apprenticeships for new employees who were registered apprentices elsewhere.
The Apprenticeship Salary Refund program applies to foreign owned companies, and even divisions of companies that 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 are a redirection of Employment Insurance. Why does the government provide hiring grants to businesses? The Government makes hiring grants available to businesses, as they would prefer to compensate a business to train new employees than have unemployed people collecting Employment Insurance. Working for a business allows a new employee to gains new skills and knowledge that will allow them to be employed for years to come.
Hiring grants have longevity because they benefit all parties involved. The new employee receives a job, the business is subsidized while the new employee gets 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 far exceeds the cost of the hiring grant.
How can new employees qualify for funding?
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 staff for administrative, customer service, general labour, production and sales. To qualify for funding, potential employees must be unemployed. Also, the new employee cannot leave a current 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 a company, women re-entering the workforce after raising a family, and anyone else that is currently unemployed that requires on-the-job training.
The position must be a paid hourly or salary position. Commission jobs do not qualify. Also, the job must be a full-time position with a minimum of 20 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.
Businesses may apply for hiring grant funding as often as required, with no upper funding limit. Businesses may also apply for funding every year. As long as the new employee being hired qualifies, the business is entitled to receive a hiring grant.
How Do I get Funding?
Hiring grant funding works very differently than apprenticeship salary refunds. In order to qualify for funding, your company needs to apply for funding before the new hire starts their first day of work. Once you know you would like to hire a new employee, submit a hiring grant application to the government.
The government will get back to your company within two days, and if the new employee qualifies for funding, a meeting will be set up to meet the new employee to determine the grant funding amount for your company to train the new employee and prepare the Hiring Grant Agreement. It can take up to seven business days to get a Hiring Grant Agreement in place.
How Much Funding is there?
Hiring Grants vary depending on the province and are up to 50 per cent of an employee’s wage to a maximum of $10k 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. The Government understand the employment relationship don’t always work out, and since it was the company’s intention to hire the employee on a full-time permanent basis, they cannot be held responsible if the employment relationship does not work out.
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 training, customer service training and quality system training (HACCP,BRC and SQF). The Canada Job Grant Program was introduced in 2014 with funding committed to 2020. Routine training such as WHMIS, Health and Safety, Forklift recertification 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 employees, the reimbursement rate will be 50 per cent.
How Does Funding Work?
Training Grant Funding works similar to Hiring Grant funding. In order to qualify, your company needs to apply for funding at least one to six weeks 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 clerk who will review your application and let you know if the application is approved. Once approved, the employees are now able to take the training. The Government will send out the refund cheque four to six weeks after receiving the invoice.
Bonny Koabel CPA, CGA is the President of AKR Consulting Canada, a firm specializing in Government Grants, Subsidies, Tax Credits, Refunds and Rebates since 2003. Bonny has specialized in assisting businesses with obtaining Government funding for the past 15 years. Her expertise is working with companies and developing strategies to utilize Government funding. Bonny can be reached at firstname.lastname@example.org or 905-678-6368.