Nearly four years ago, the Federal Government expressed a commitment to investing in the middle class, and creating "real change" for workers and their families. With an election looming in October of this year, the Government released its Budget 2019, on March 19, 2019, titled "Investing in the Middle Class". Budget 2019 proposes, among other items, a number of employment related changes, focussed on supporting and engaging the middle class workforce.
Canada Training Benefit
For Canadian employers and employees, the most significant item in the budget is the announcement of a proposed new Canada Training Benefit. What exactly have they proposed?
- A non-taxable training credit to help cover the cost of training fees for eligible workers between the ages of 25 and 64
- Eligible employees will accrue a credit balance of $250 per year, to a lifetime upper limit of $5,000
- The credits can be used to cover the costs of tuition fees or enrollment in a training program to upgrade skills
This proposed benefit reflects the modernization of Canadian workplaces. The Federal Government indicated its interest in supporting such modernization through the recent appointment of an Expert Panel on Labour Standards.
Employment Insurance Training Support Benefit
In addition to the Canada Training Benefit, Budget 2019 proposes to introduce an Employment Insurance Training Support Benefit. This Benefit, which the Government plans to launch in 2020, would provide workers with income support through the existing EI system. The purpose of the Benefit is to allow workers to take a subsidized leave to engage in training activities, without having to jeopardize their ability to cover living expenses. As currently proposed, the benefit would:
- be paid at 55% of average weekly earnings, for a maximum of four weeks; and
- offer an EI premium rebate to employers to offset additional pressure on small businesses, stemming from the corresponding increase in employer premium rates.
Leaves of Absence for Training
New leaves of absences for worker training have also been proposed. The Government has stated its intention to consult with provinces and territories on all aspects of the Canada Training Benefit, and in particular with respect to developing job-protected leave provisions to protect employees wishing to pursue such training leaves.
Employee Stock Options
Budget 2019 also announced the Government's plans to limit the use of the current employee stock option tax regime. According to the Government, the stock option deductions, as they currently exist, were intended to assist smaller, growing companies, with cash flow challenges in providing adequate remuneration to retain talented employees. Instead, the Government notes that these deductions have disproportionately benefitted high-income individuals.
Although no specific rules have been released, the Government stated that it intends to address this issue by applying a $200,000 annual cap on employee stock option grants (based on the fair market value of the underlying shares) for employees of "large, long-established, mature firms". No caps are expected to be imposed on start-up companies or rapidly growing Canadian businesses.
The Government intends to release additional information this summer, but has noted that any changes to the employee stock option regime would apply on a go-forward basis only and would not apply to employee stock options granted prior to the announcement of legislative proposals to implement any new regime.
In 2017-2018, 59% of discrimination complaints received by the Canadian Human Rights Commission involved allegations of discrimination on the basis of disability. Acknowledging this, the Federal Government is committing to making Canada accessible and supporting people with disabilities. Of course, federally regulated employers continue to await the passing of Bill C-81, which would create a new Accessible Canada Act, although there is no word on when the bill will become law and come into force. The Federal Government aims to be a leader in its eventual implementation and in developing accessibility standards and regulations.
Finally, among other gender equality goals for Canada, the Government has proposed to introduce amendments to the Employment Equity Act and regulations. These would introduce new pay transparency measures for federally regulated employees, in an attempt to continue to reduce the gender wage gap, increasing economic participation and prosperity for women, particularly in underrepresented groups.
It's too early to tell whether any of these proposals will be brought into force before this year's upcoming federal elections, or whether they will be priorities for the next federal government. But you can count on Fasken to keep you updated.