CO-OPERATIVE EDUCATION TAX CREDIT (2005)

 

To realize the full potential of BC's emerging knowledge-based economy, the province needs a new generation of highly skilled young workers.  Developing this highly skilled made-in-BC workforce means that employers must be encouraged to provide co-op employer-based workplace training and development opportunities for young workers. 

 

A province wide Co-op infrastructure is already well established with 23 institutions across the province currently offering co-op programs.  These Co-op programs are offered by Universities, University Colleges and Community Colleges.

 

Co-op is a process of education that formally integrates a student’s post-secondary academic career studies on campus with relevant and productive work experiences in industry, business and government. As part of their academic program, students enter coop work-terms that vary from 10 to 16 weeks, and the student and employer are typically canvassed before, during and after the work-term to help evaluate the program’s effectiveness.

 

A co-op term not only allows the student a direct look at a particular employer and career, but also gives the employer a chance to consider a potential employee for its business. In fact, statistics from various BC educational institutions have shown that up to 80 per cent of co-op terms lead to post-graduation employment with the same employer. Currently, four universities and 19 other post-secondary institutions around BC provide co-op placements as part of programs in several different disciplines. In some BC degree programs, completion of up to three co-op terms is mandatory for graduation.

 

A number of chambers have noted that many of their members, particularly small businesses, find the cost of co-op work placements prohibitive as such targeted incentives in the form of tax credits make this program more accessible to employers of all sizes and sectors.  This has been born out by the fact that in 2000-1, private employers created approximately 5,600 co-op placements in BC for BC post-secondary students (based on a 16-week term); in 2004, that number had declined more than 25 per cent to approximately 4,100. 

 

During that same period, the provinces of Quebec, Ontario, and Manitoba have recognized the need to stimulate the employment/economy cycle by initiating co-op tax credits to private employers to employ and train students.

 

Stimulating co-op placements through a co-op tax credit program would help achieve this objective. A Co-op tax credit encourages private businesses to hire students they might not otherwise be able to afford to hire. A thriving co-op program increases the chances that a co-op hire turns into a long-term job placement. Co-op students help bring new ideas, research and technology from our educational institutions to business employers. Research suggests new graduates are more likely to settle in regions where they have completed successful work experiences. This would benefit all regions of BC

 

THE CHAMBER RECOMMENDS

 

That the provincial government introduce a co-op tax credit to BC business employers equal to 15% of wages paid to qualified co-op students for work placements.  The terms of the tax credit should ensure that:

 

a. it be capped at $1,500 per student, for each co-op work placement;

 

b. the co-op work term applies towards completion of a post-secondary co-op education program at a qualifying BC university, college or institution;

 

c. it be applied against outstanding BC tax liabilities;

 

d. it be applicable to all eligible public and private sector employers including corporations, partnerships or proprietorships; and

 

e. as a demonstration of leadership the BC public service commission increasing the number of co-op placements across all the ministries, and ensure that these co-op placements are spread across all regions of BC.