Provincial Training Tax Credit proposal: Better ways to invest $90 million

When she presented her February 2006 provincial budget, Finance Minster Carole Taylor set aside $90 million for a proposed training tax credit program. Her idea was to provide employers with tax credit incentives that would hopefully increase the level of training across the province.

There is no question that BC needs to invest more in post-secondary education and training. Both the BC Business Council and the BC Chamber of Commerce have noted that BC already has a skills gap. While 59% of the workforce has some form of post-secondary education (a degree, diploma, certificate or completed apprenticeship), 73% of all new jobs require some form of post-secondary education. Add in the demographic changes in our population (e.g., an aging baby-boom generation set to retire) and it's clear that the current skills shortage will likely get worse unless the provincial government makes substantial new investments in post-secondary education and training.

On paper, the training tax credit was supposed to be a step in the right direction. However, it's hard to see the merits of this proposal when you consider the details. Why should taxpayers put more public dollars into the hands of employers who have already received substantial benefits from the public purse?

In September, 2005, for example, Minister Taylor announced a corporate tax cut for BC companies. The change will cost approximately $150 million per year.

The employer community also has virtual control of the Industry Training Authority's $80 million annual budget. Employer appointees on the ITA Board are completely re-shaping how trades training and apprenticeships are delivered under their so-called ‘new model'.

It's worth pointing out that their ‘new model' has been a dismal failure. Completion rates for various apprenticeships and trade qualifications have dropped by close to 45% since their ‘new model' was put in place.

Does it make sense for taxpayers to effectively double the amount of money we give employers for training when their track record is so poor? Why propose a new funding initiative that would be tantamount to rewarding bad behavior?

We applaud Carole Taylor's interest in addressing the skills shortage; however, if she wants to make a real difference she should re-consider her proposal for a training tax credit program. Our submission to the Minster itemizes a broad range of funding and policy changes that we think represent a much better way to invest public dollars. Our recommendations for change also ensure sustainable benefits are extended to all. Hopefully, the Minster is prepared to listen.

Click here for the text of FPSE's submission on the training tax credit.

About FPSE

The Federation of Post-Secondary Educators of BC is the provincial voice for faculty and staff in BC teaching universities, colleges and institutes, and in private sector institutions. FPSE member locals, represented by Presidents' Council and the Executive, represent over 10,000 faculty and staff at 18 public and 12 private sector institutions.