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.
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Thanks for the fascinating summary and analysis. The first thing that occurred to me when reading that there was a proposed loan for apprentices was that this may be an attempt to increase party popularity by utilizing the persistent (but not well supported by the evidence as you have pointed out in the past) meme that Canada needs more apprentices and related memes about unaffordability of higher education.
Hi, I’m wondering how do I find more information on how to apply for this loan. I’ve recently become an apprentice but the E.I. won’t come in until week 7. This money would really help to pay for my cost of living and food. It seems like a great opportunity to have some money to use before those cheques start coming in. Any additional information on this would be great.
Thanks.
Hi there. This isn’t going to be rolled out for a few months yet – no dates announced, but I;d be very surprised if it were available before mid-2015.
I was just wondering the same thing. I’m going in for 2nd year training in March and this sure would help out as my EI money isn’t coming in yet. I hope Alex might be wrong and that it becomes available very soon!
I found an application website Ty:
http://www.esdc.gc.ca/en/esdc/initiatives/apprenticeship/index.page?utm_source=canada.caFapprentice0-0TVC0Radio&utm_medium=Offline&utm_content=Jan_26_2015_ENG&utm_campaign=Canada0Apprentice0Loan
I, being an apprentice can fully understand the need for extra money during schooling. Considering there are all sorts of hand outs for drug addicts and homeless people, I can only wonder what kind of inactivity occurs in the minds of people who think we don’t need money. Cost of living is ridiculous in cities that provide employment for tradespeople, tools are very expensive and a necessity to maintain a job, some students/apprentices have dependents, relocation costs, vehicle maintenance and not to mention food costs. I have recieved a student loan and am in the process of paying it back; which will take approximately ten years! EI is a joke at best, typical government agenda that assumes students have savings enough to survive the four weeks it takes to process an application. I can understand this procedure for those that lose their job unexpectedly, but when an apprentice knows the last day he will work, why can they not apply for EI four weeks early, ensuring money is available when they start school? Those that do earn a decent wage now have to adjust their living costs to accomodate 500 dollars a week which is not enough considering the amount people pay into it. I say to hell with assisting the people that choose to not participate in creating a prosperous society, and yes to supporting those that choose to better their lives in any way possible.
The whole point of the loan is to entice young Canadians to enter in to the apprenticeship program. In the next twenty years the skilled labour force will be smaller than ever in Canadian history. To stem the flow of foreign workers and encourage a new generation of tradespeople the government must provide incentives to illustrate the appeals of the trades as opposed to the university / college. Fuelled labour force of today.
This loan program is a joke, government should be subsidizing business so that they can produce qualified journeyman at the end of the day. not charging young people loans to learn a trade.
I am an apprentice and i think its a good thing. I live in a town where technical training is not available. My wife is a stay at home mom. So yes it will cost more then 1000$ a month to run my home and family while also renting in a city and feeding myself. Obviously any smart person has saved for this. But i would say there are some large possible costs and making it easy for apprwntices to access extra funds might mean the difference between completion or failure and a waste of money.
Also this has already been posted but could we not be given the oppurtunity to apply for EI so that it would actually help us in school and act as employment insurance rather then return to work money. Our current system needs work i agree and propably would have been a good idea before a half thought out loan structure. But atleast they are trying.