Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: When is the 24-month period starting for the purposes of the definition of "eligible apprentice" in subsection 127(9) of the Income Tax Act with respect to apprentices registered with the Saskatchewan Apprenticeship and Trade Certification Commission or with the Commission de la Construction du Québec.
Position: See response.
Reasons: See response.
2009-031382
XXXXXXXXXX André Gallant
(613) 957-8961
July 16, 2009
Dear XXXXXXXXXX :
Re: Eligible apprentice
This is in response to your letter of March 12, 2009, and is further to a telephone conversation on June 24, 2009 with your authorized representative (Gallant/XXXXXXXXXX ), regarding the definition of "eligible apprentice" in subsection 127(9) of the Income Tax Act (Canada) (the "Definition"). In particular, you are asking when the 24-month period would start with respect to apprentices registered with the Saskatchewan Apprenticeship and Trade Certification Commission ("Certification Commission") or with the Commission de la construction du Québec ("CCQ").
The Definition reads as follows:
" "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 twenty-four months of the individual's apprenticeship contract registered with he province or Canada, as the case maybe, under an apprenticeship program designed to certify or license individuals in the trade;"
Quebec - the CCQ
In Quebec, apprentices in the construction trades are required to be registered as apprentices with the CCQ. Generally, upon registration with the CCQ, an apprentice receives a competency certificate-apprentice (or "certificat de compétence-apprenti"). This first competency certificate-apprentice is normally valid for one year. A competency certificate-apprentice is then reissued each year for another year. Once the first competency certificate-apprentice is delivered to an apprentice, the CCQ must supervise several aspects of the apprentice's work (e.g., keep track of the hours worked).
In most cases, an apprentice will automatically be issued the first competency certificate-apprentice if he or she can provide a guarantee of employment from an employer registered with the CCQ for at least 150 hours within a period of not more than three consecutive months (the "150 hours/3 months period"). Apprentices with no diploma can only be issued this first competency certificate-apprentice where there is a manpower shortage for the given trade in the given region.
In your letter, you referred to this 150 hours/3 months period as a "temporary card", and in your view, an apprentice can only get the "regular card" or its first competency certificate-apprentice once the 150 hours/3 months period has been met. With this understanding in mind, you are asking whether the 24-month period mentioned in the Definition starts at the beginning of that 150 hours/3 months period or only once this 150 hours/3 months period has successfully been completed.
Saskatchewan - the Certification Commission
In Saskatchewan, an apprentice may enter into a contract of apprenticeship with one of the following person or group according to subsection 24(1) of the Saskatchewan's Apprenticeship and Trade Certification Act, S.S. 1999, c. A-22.2 (the "Apprentice Act"):
- the apprentice's employer;
- a joint training committee (a non-governmental entity formed under subsection 23(3) of the Apprentice Act which represents employers in the designated trade and on-the-job training to apprentices) (the "Committee");
- the Certification Commission; or
- any other person or group authorized in writing by the Certification Commission.
Your question concerns a contract of apprenticeship with a Committee. This contract is the Certification Commission's Form B, entitled "Contract Between Apprentice and Joint Training Committee".
Form B provides for different dates:
a) On top of page 1 of Form B, there is an indication that the contract is between the apprentice and the Committee, as follows:
"This contract dated __________(date), ___________(year) made between __________".
You noted that based on the forms that you have received from the Committee, the date is usually not filled in.
b) On page 2 of Form B, there is an area where the Committee certifies the date of commencement of work by the apprentice, which reads as follows:
"The Committee hereby certifies that the Apprentice commenced work in the trade under the direction of the Committee on the ____ day of ____, 20__. Dated at _____, Saskatchewan this ___ day of ____, 20__."
You pointed out that the second date in this area is often not filled in.
c) On page 2 of Form B, there is also an area for "Office Use Only [by the Certification Commission]" for the date of registration by the Certification Commission of the contract (Form B), which provides the following:
"Registered at the office of the Saskatchewan Apprenticeship and Trade Certification Commission, this ____ day of ________, 20__. ________________ [to be signed by the] Director [of the Certification Commission]".
Based on your discussion with the Committee and based on a review of several contracts (Forms B) you received from the Committee, the certification date referred to in (b) above that is provided by the Committee tends to be three to six months before the registration date referred to in (c) above that is provided by the Certification Commission. The several months interval relates to the Committee initiating training for the apprentice at an employer and deciding in that period of time whether the individual is suitable to be trained as an apprentice over several years. After the decision is made, the completed Form B is sent to the Certification Commission for registration.
With respect to the different dates mentioned in (a) to (c) above of Form B, you are asking us which of these dates constitutes the start date of the 24-month period.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office (the "TSO"). We are, however, prepared to offer the following general comments, which may be of assistance.
The determination of the start date for the 24-month period in the Definition is a question of fact that can only be determined after a review of all of the relevant circumstances. We are however prepared to offer the following comments.
Quebec - the CCQ
As already discussed by telephone with your authorized representative (Gallant/XXXXXXXXXX ), for apprentices with the CCQ, the delivery date of the first competency certificate-apprentice by the CCQ is generally an indication of the start date of the 24-month period. Once the first competency certificate-apprentice is delivered to an apprentice, the CCQ must supervise several aspects of the apprentice's work (e.g., keep track of the hours worked). This position is consistent with the position taken in previous CRA documents discussed with your representative.
Apprentices first applying to the CCQ do not receive a temporary card, but their first competency certificate-apprentice which is valid for one year. If the CCQ determines that an apprentice has not worked 150 hours within the first three months of apprenticeship, the CCQ would then cancel the competency certificate-apprentice. If, on the other, the apprentice does actually work that 150 hours/3 months period, the apprentice may keep the first competency certificate-apprentice. In other words, once an apprentice has provided a guarantee of employment from an employer registered with the CCQ for at least 150 hours within a period of not more than three consecutive months, and met all other requirements under the Quebec legislation, the CCQ must issue the first competency certificate-apprentice to that apprentice. Our understanding in this regard was confirmed by a senior official of the CCQ, and is based on our reading of Regulation respecting the issuance of competency certificates, R.Q. c. R-20, r. 5.2, sections 2, 2.1, 3, 3.1, 3.2, 14, 15.5, 20 and 21.
Saskatchewan - the Certification Commission
In our view, the registration date of the apprenticeship contract with the Certification Commission (date (c) above in Form B) is the start date of the 24-month period. This conclusion is based on our analysis of the provincial legislation.
Pursuant to paragraph 10(f) of the Apprentice Act, the Certification Commission has been given as one of its mandates the "registration of apprentices". Under paragraph 26(i) of the Apprentice Act, the Certification Commission has also been given the authority to make regulations respecting "registration of contracts of apprenticeship", which are made with the Saskatchewan's Apprenticeship and Trade Certification Commission Regulations, R.R.S. c. A-22.2 Reg. 4 (the "Apprentice Regulations").
Under subsection 12(3) of the Apprentice Regulations, the Certification Commission does not have the authority to "register" the contract of apprenticeship "until the applicant has been accepted into the apprenticeship program." Subsection 12(4) of the Apprentice Regulations further clarifies that the Certification Commission "must" register the contract of apprenticeship if:
a) the Certification Commission is satisfied that all the requirements in the Apprentice Regulations have been met by the parties to a contract of apprenticeship (in this case, the apprentice and the given Committee); and
b) the Certification Commission has received the application fee.
Paragraph 26(f) of the Apprentice Act also allows the Certification Commission to make regulations respecting "the requirements for and the terms and conditions of contracts of apprenticeships..." According to subsection 12(1) of the Apprentice Regulations, every contract of apprenticeship "must" be in a form provided by the Certification Commission.
In this regard, we note that clause 4(a) of Form B does state that the apprenticeship contract commences on the date of registration and that a registration date is provided by the Certification Commission at the end of the second page of Form B. Clause 4(a) of the Certification Commission's Form B reads as follows:
"The term of this contract is the period, commencing on the date on which this contract is registered, required by the Apprentice to complete the apprenticeship program in the trade".
Based on the provisions of the Apprentice Act and Apprentice Regulations and the wording of the apprenticeship contract (i.e., Form B), in our view, the start of the 24-month period is the date of registration by the Certification Commission.
The fact that some of the hours accumulated before Form B is registered may count towards certification does not change the fact that an individual's apprenticeship contract is only registered with the province on the registration date of Form B. Our understanding in this regard was confirmed by an official of the office of the Certification Commission.
We trust that these comments will be of assistance.
Yours truly,
S. Parnanzone
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
XXXXXXXXXX
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2009
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2009
Email this Content