One of the signature pieces in last week’s budget was the Canada Apprentice Loan (CAL). Very few details were given out at the time (see p. 70 in the budget, here), but what details did emerge suggest two things to me: first, that the idea went into the budget less-than-fully-baked; and second, that it could turn out to be a fairly significant political mess.
The proof of this being less-than-fully-baked is the lack of detail surrounding the idea. While the scheme seems to be about putting money into apprentices’ hands during block training periods, it made no mention of how this loan would mesh with the significant amounts of EI money apprentices already receive during those periods (training periods are considered a period “out-of-work” under EI, so apprentices are eligible for EI during this time, and receive payments equivalent to 55% of their normal working income as a result). Does it replace the EI money? It seems unlikely that the Tories would try a bait-and-switch, but the silence about integration suggests the issue hasn’t been thoroughly thought through.
But if it’s additional, what’s the $4,000 for, exactly? Living costs? That would put the amount available to them over 100% of their wage rates. If that happens, all hell will break loose on the Canada Student Loans front. CSLP doesn’t work on a wage-replacement principle, it works on an allowance principle: that is, it assumes that the purpose of student loans is to top-up students to a particular maximum, based on living arrangements, presence of children, and local cost of living. For a single student living away from home, that probably means about $1000/month. But apprentices earning $16/hour in their job already receive about $1600/month in EI funding. If you lend this better-off group more money, what possible excuse do you have to say no when student groups come asking for similar treatment for CSLP?
Another possibility is that the loans are specifically for training costs. But then why make it $4,000? A Canadian Apprenticeship Forum paper from 2007 (see: here) showed that average training costs – including tools and apprenticeship registration fees – were just $1300, and that 50% of apprentices paid less than $800. Nothing’s changed significantly since then, so why the super-high maxima? Again, setting maxima well above actual need is going to set off a clamour for similar treatment in the CSLP.
Here’s my take: the current federal government is very fond of apprenticeships. But the problem is that most of the levers of apprenticeship policy are in the hands of the provinces. The only thing the federal government can really do is pump money into apprentices’ hands in the hope that the extra funding will make more people want to be apprentices. That’s probably about as deep as the thinking went on this file before it went into the budget.
It’s possible it will get better upon implementation (as the recent ruckus on income-splitting shows, at least some of the Tory cabinet seem able to re-evaluate policy in the face of evidence), but as it stands right now, the roll-out of the CAL could be more problematic than the federal government seems to think.