Economic Action Plan 2014 proposes to create the Canada Apprentice Loan by expanding the Canada Student Loans Program to provide apprentices registered in Red Seal trades with access to over $100 million in interest-free loans each year.
Apprentices in skilled trades do most (80 to 85 per cent) of their learning during on-the-job paid employment. They are also required to participate in technical training for short periods of time ranging from six to eight weeks each year. Apprentices can face significant costs to complete these periods of technical training required by their program, including educational fees, tools and equipment, living expenses and forgone wages. These costs can be particularly acute for apprentices who intend to complete their training after a number of years on the job, while supporting their families.
Economic Action Plan 2014 proposes to create the Canada Apprentice Loan, which will offer interest-free loans to help registered apprentices with the cost of their training. The Canada Apprentice Loan will assist more apprentices in completing their training and encourage more Canadians to consider a career in the skilled trades.
Apprentices registered in a Red Seal trade apprenticeship will be able to apply for interest-free loans of up to $4,000 per period of technical training. Interest charges and repayment of the Canada Apprentice Loan will not begin until after loan recipients complete or terminate their apprenticeship training program. At least 26,000 apprentices per year are expected to apply for over $100 million in loans. The estimated net cost of these loans to the Government would be $25.2 million over two years and $15.2 million per year ongoing.
Further details will be announced by the Minister of Employment and Social Development in the coming months.