O. Reg. 61/06: CO-OPERATIVE EDUCATION TAX CREDIT

 

Corporations Tax Act
Loi sur l’imposition des sociétés

ONTARIO REGULATION 61/06

No Amendments

Co-operative Education Tax Credit

Historical version for the period March 6, 2006 to July 3, 2007.

Disclaimer: This consolidation is not an official copy of the law because it is affected by one or more retroactive provisions which have not been incorporated into it. For information about the retroactive provisions, see O. Reg. 306/07, section 3.

This Regulation is made in English only.

Definitions

1. (1) In this Regulation,

“approved field of study” means, in respect of a qualifying leading edge technology education program, a field of study that, in the opinion of the Minister of Finance, leads to a knowledge-based, high value-added activity that contributes to economic growth by improving Ontario’s competitive position in the global economy or by creating new jobs or export activities and,

(a) that involves applied or theoretical research for the advancement of scientific knowledge, but does not include,

(i) market research or sales promotion,

(ii) quality control or routine testing of materials, devices, products or processes,

(iii) research in the social sciences or humanities,

(iv) prospecting, exploring or drilling for or producing minerals, petroleum or natural gas,

(v) style changes, or

(vi) routine data collection, or

(b) requires the development or application of technology and technological processes and,

(i) promotes continuous innovation, improvement or advancement with the goal of leading to new or improved products or services, or

(ii) develops more efficient and effective use of time and resources to improve the way things are done;

“qualifying co-operative education program” means an educational program or course of study that meets the following requirements:

1. The program or course of study formally integrates students’ academic studies with work placements.

2. The program or course of study,

i. includes work placements, each of which is at least 10 consecutive weeks and at least half of which are mandatory, that total not more than 75 per cent of the time spent in required academic study and that include mandatory work placements totalling at least 30 per cent of the time spent in required academic study, or

ii. includes one optional work placement of at least eight consecutive months and not more than 16 consecutive months that totals at least 30 per cent and not more than 75 per cent of the time spent in required academic study.

3. All optional work placements taken under the program or course of study must be completed before the start of the final academic term.

4. The program or course of study provides credit towards a post-secondary degree, diploma or certificate granted by an eligible educational institution in respect of qualifying co-operative education programs.

5. All optional qualifying co-op work placements taken by a student under the program or course of study are recorded on the student’s academic transcripts.

6. The Senate, board of governors or other governing body of the eligible educational institution, through its authorized delegate, has given to the Director of the Corporations Tax Branch of the Ministry of Finance, or to his or her delegate, a document stating that the program or course of study meets the requirements of paragraphs 1 to 5;

“qualifying leading edge technology education program” means an educational program, course of study or apprenticeship program that meets the following requirements:

1. The program or course of study is, in the opinion of the Minister of Training, Colleges and Universities or a person or persons designated by that Minister, in an approved field of study.

2. The program or course of study, if it is not an apprenticeship program, provides credit towards a post-secondary degree, diploma or certificate granted by an eligible educational institution in respect of qualifying leading edge technology education programs.

3. The program, if it is an apprenticeship program, is approved by the Director of Apprenticeship under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act and, on completion, qualifies the student to receive the appropriate certificate under that Act.

4. If the program or course of study is a general arts and science or business program or course of study, the eligible educational institution has advised the Ministry of Training, Colleges and Universities that it has reviewed the courses taken by the student and determined that the student,

i. is meeting the requirements for a degree with a principal or joint concentration in a program that, in the opinion of the Minister of Training, Colleges and Universities or a person or persons designated by the Minister, is in an approved field of study for the student’s year of study, and

ii. has completed at least two full-year courses or equivalents in programs that were in approved fields of study.  O. Reg. 61/06, s. 1 (1).

(2) In subsection 43.4 (4) of the Act,

“qualified educational program” means a qualifying co-operative education program or a qualifying leading edge technology program.  O. Reg. 61/06, s. 1 (2).

Eligible educational institutions

2. (1) The following institutions are eligible educational institutions in respect of qualifying co-operative education programs for the purposes of section 43.4 of the Act:

1. A university or college of applied arts and technology in Ontario, whose enrolment is counted for the purposes of calculating annual operating grants entitlements from the Government of Ontario.

2. The Michener Institute of Applied Health Sciences.

3. The Ontario College of Art and Design.  O. Reg. 61/06, s. 2 (1).

(2) For the purposes of section 43.4 of the Act, the institutions referred to in paragraphs 1 and 2 of subsection (1) and private career colleges registered under the Private Career Colleges Act are eligible educational institutions in respect of qualifying leading edge technology education programs.  O. Reg. 61/06, s. 2 (2).

(3) For the purposes of section 43.4 of the Act, the Ministry of Training, Colleges and Universities is an eligible educational institution in respect of an apprenticeship program that is a qualifying leading edge technology education program.  O. Reg. 61/06, s. 2 (3).

Qualifying work placement

3. A work placement is a qualifying work placement for the purposes of section 43.4 of the Act if,

(a) the work placement is a qualifying co-op work placement or a qualifying leading edge technology work placement; and

(b) the work placement is certified as a qualifying work placement in accordance with subsection 43.4 (4) of the Act.  O. Reg. 61/06, s. 3.

Qualifying co-op work placement

4. (1) A work placement is a qualifying co-op work placement if,

(a) it is a work placement in which a student of an eligible educational institution in respect of qualifying co-operative education programs performs employment duties for a corporation under a qualifying co-operative education program offered by the institution; and

(b) it satisfies the conditions set out in subsection (2).  O. Reg. 61/06, s. 4 (1).

(2) The following are the conditions referred to in clause (1) (b):

1. The work placement has been developed or approved by the institution as a suitable learning situation.

2. The terms of the work placement require the student to engage in productive work during the placement, not just to observe the work of others.

3. The work placement is for a period of,

i. not less than 10 consecutive weeks, if the placement is under a qualifying co-operative education program that is a program referred to in subparagraph 2 i of the definition of “qualifying co-operative education program” in subsection 1 (1), or

ii. not less than eight consecutive months and not more than 16 consecutive months, if the placement is under an internship program described in subparagraph 2 ii of the definition of “qualifying co-operative education program” in subsection 1 (1).

4. The student is entitled to receive remuneration for work performed during the work placement.

5. The terms of the work placement require the corporation to supervise and evaluate the job performance of the student during the placement.

6. The institution monitors the student’s progress in the work placement.  O. Reg. 61/06, s. 4 (2).

Qualifying leading edge technology work placement

5. (1) A work placement is a qualifying leading edge technology work placement if,

(a) it is a work placement in which a student enrolled in a qualifying leading edge technology education program of an eligible educational institution in respect of qualifying leading edge technology education programs performs employment duties for a corporation; and

(b) it satisfies the conditions set out in subsection (2).  O. Reg. 61/06, s. 5 (1).

(2) The following are the conditions referred to in clause (1) (b):

1. In the case of a work placement that is not under an apprenticeship program,

i. the work placement is completed before the student’s final academic term of the program,

ii. the corporation gives the Minister and the institution in the manner required by the Minister a detailed job description of the work to be performed and the responsibilities to be assumed by the student during the work placement,

iii. the majority of the job functions to be performed by the student during the work placement provide training or work experience that is directly related to and reinforces the learning experience of the student in the program in which the student is enrolled, and the institution certifies this in the manner required by the Minister, and

iv. the student certifies in the manner required by the Minister that he or she is enrolled in the program and employed by the corporation.

2. In the case of a work placement that is under an apprenticeship program, the corporation and student are participating in a program approved by the Director of Apprenticeship under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act.

3. The terms of the work placement require the student to engage in productive work during the placement, not just to observe the work of others.

4. The student is entitled to receive remuneration for work performed during the work placement and has actually performed the work and assumed the responsibilities required under the terms of the work placement.

5. Subject to subsections (3) and (5) and 6 (3), the work placement is for a period of not less than 10 consecutive weeks, with an average of 24 hours of employment each week.  O. Reg. 61/06, s. 5 (2).

(3) Despite subsection 9 (1), if the term of a qualifying leading edge technology work placement and the term of all previous qualifying leading edge technology work placements of the student that are with the same corporation, or that are deemed under subsection 9 (2) to be with the same corporation, exceed the number of months specified by subsection (4), only the portion, if any, of the work placement that brings the total time to that number of months, even if less than 10 consecutive weeks, will be considered to be a qualifying leading edge technology work placement.  O. Reg. 61/06, s. 5 (3).

(4) The number of months referred to in subsection (3) is,

(a) 24 months, if,

(i) the work placement is under an apprenticeship program, and

(ii) the work placement and all previous qualifying leading edge technology work placements that the student had or is deemed under subsection 9 (2) to have had with the same corporation commenced after May 4, 1999; or

(b) 16 months, in any other case.  O. Reg. 61/06, s. 5 (4).

(5) A qualifying leading edge technology work placement that is under an apprenticeship program ends on the earlier of,

(a) the date on which it would otherwise end; and

(b) the date on which the student receives the appropriate certificate under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act.  O. Reg. 61/06, s. 5 (5).

Exception, certain work placements ending after May 18, 2004

6. (1) This section applies to a work placement that would otherwise be a qualifying leading edge technology work placement under section 5 if,

(a) the work placement ended after May 18, 2004;

(b) the work placement was under an apprenticeship program; and

(c) on May 19, 2004, the student employed in the work placement was in the first 36 months of a qualifying leading edge technology education program.  O. Reg. 61/06, s. 6 (1).

(2) No portion of the work placement that was after May 18, 2004 shall be a qualifying work placement.  O. Reg. 61/06, s. 6 (2).

(3) Despite paragraph 5 of subsection 5 (2), if the initial work placement commenced after March 10, 2004, the portion of the work placement before May 19, 2004 shall be deemed to be a qualifying leading edge technology work placement, despite the number of weeks in that portion of the work placement, if the student was employed in that portion of the work placement for an average of at least 24 hours a week.  O. Reg. 61/06, s. 6 (3).

Exception, certain work placements commencing after May 18, 2004

7. (1) A work placement that would otherwise be a qualifying leading edge technology work placement under section 5 is not a qualifying leading edge technology work placement if,

(a) the initial work placement of the student with the corporation commenced after May 18, 2004; and

(b) the work placement was under an apprenticeship program.  O. Reg. 61/06, s. 7 (1).

(2) Subsection (1) does not apply in respect of a work placement of a student who was in an apprenticeship program on May 19, 2004 if the student was not in the first 36 months of a qualifying leading edge technology education program.  O. Reg. 61/06, s. 7 (2).

Exception, certain work placements commencing after October 25, 2004

8. A work placement that would otherwise be a qualifying leading edge technology work placement under section 5 is not a qualifying leading edge technology work placement if the student was first employed with the corporation after October 25, 2004 and,

(a) the work placement was not under an apprenticeship program; or

(b) the work placement was under an apprenticeship program but, on May 19, 2004, the student employed in the work placement was not in the first 36 months of a qualifying leading edge technology education program.  O. Reg. 61/06, s. 8.

Division of work placement into consecutive work placements

9. (1) If a qualifying work placement would otherwise exceed four consecutive months, the following rules apply:

1. The work placement shall be divided into periods of four consecutive months, starting at the beginning of the placement, and each full period of four consecutive months shall be deemed to be a separate qualifying work placement.

2. If the work placement includes a period of 10 or more consecutive weeks that is not included in a period deemed by paragraph 1 to be a separate qualifying work placement, the period of 10 or more consecutive weeks shall be deemed to be a separate qualifying work placement.

3. If the work placement includes a period of less than 10 consecutive weeks that is not included in a period deemed by paragraph 1 to be a separate qualifying work placement, the period of less than 10 consecutive weeks shall be deemed to form part of the immediately preceding period that is deemed by paragraph 1 to be a separate qualifying work placement.  O. Reg. 61/06, s. 9 (1).

(2) Consecutive work placements with two or more associated corporations shall be deemed to be with only one of the corporations, as designated by the corporations.  O. Reg. 61/06, s. 9 (2).

Eligible expenditures

10. (1) For the purposes of section 43.4 of the Act and subject to subsection (2), the following amounts paid or payable by a corporation in respect of a qualifying work placement are eligible expenditures for a taxation year:

1. Amounts paid or payable to the student in the qualifying work placement as salary or wages that,

i. would be considered for the purposes of Part III of Regulation 183 of the Revised Regulations of Ontario, 1990 (General) made under the Act to be included in the amount of salary or wages paid to employees of a permanent establishment of the corporation in Ontario, and

ii. are required by Subdivision a of Division B of Part I of the Income Tax Act (Canada) to be included, when paid, in the income from employment of the student in respect of the qualifying work placement.

2. Fees paid or payable to an employment agency in consideration for the provision of the services carried out by the student in the qualifying work placement, if the services are carried out by the student primarily at a permanent establishment of the corporation in Ontario.  O. Reg. 61/06, s. 10 (1).

(2) The following amounts are not eligible expenditures for the purposes of section 43.4 of the Act:

1. An amount paid or payable in respect of services performed after December 31, 2004 by a student who was first employed in a qualifying leading edge technology work placement before October 26, 2004 if,

i. the work placement was not under an apprenticeship program, or

ii. the work placement was under an apprenticeship program but, on May 19, 2004, the student employed in the work placement was not in the first 36 months of a qualifying leading edge technology education program.

2. An amount paid or payable in respect of services performed after May 18, 2004 by a student who was in a qualifying leading edge technology education program on May 18, 2004 if,

i. the work placement was under an apprenticeship program, and

ii. on May 19, 2004, the student was in the first 36 months of a qualifying leading edge technology education program.  O. Reg. 61/06, s. 10 (2).

(3) The total of all eligible expenditures made by a corporation in respect of a qualifying work placement is the amount otherwise determined less the amount of all government assistance, if any, in respect of the eligible expenditures that, at the time the corporation’s return is required to be delivered under section 75 of the Act for the taxation year for which the tax credit is claimed, the corporation has received, is entitled to receive or may reasonably be expected to be entitled to receive.  O. Reg. 61/06, s. 10 (3).

(4) Despite subsection (1), an expenditure made by a corporation in respect of a work placement is not an eligible expenditure for the purposes of section 43.4 of the Act,

(a) to the extent that the amount of the expenditure would not be considered to be reasonable in the circumstances by persons dealing with each other at arm’s length; or

(b) if the work placement is with a person other than the corporation.  O. Reg. 61/06, s. 10 (4).

(5) If a qualifying work placement is deemed by subsection 9 (2) to be a work placement with only one of two or more corporations,

(a) the corporation designated under that subsection shall be deemed to have paid all amounts referred to in paragraphs 1 and 2 of subsection (1) that were paid or payable by the corporations, and those amounts shall be deemed not to have been paid or payable by the other corporations; and

(b) the corporation designated under that subsection shall be deemed to have received or be entitled to receive all government assistance in respect of the work placement that any of the other corporations has received, is entitled to receive or may reasonably be expected to be entitled to receive, and the other corporations shall be deemed not to have received or be entitled to receive that government assistance.  O. Reg. 61/06, s. 10 (5).

(6) The amount of salaries and wages deemed to have been paid by a corporation in a previous taxation year for the purposes of subsection 43.4 (3.1) of the Act is the amount that would otherwise be determined for that year if,

(a) the rules set out in subsection 87 (1.2) of the Income Tax Act (Canada) and subsection 87 (1.4) of that Act applied; and

(b) no amount is included in respect of salaries and wages paid by any partnership of which the corporation was a member.  O. Reg. 61/06, s. 10 (6).

(7) In this section,

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax or investment allowance, but not including the following:

1. An Ontario innovation tax credit under section 43.3 of the Act.

2. A co-operative education tax credit under section 43.4 of the Act.

3. An Ontario film and television tax credit under section 43.5 of the Act.

4. A Canadian film or video production tax credit under section 125.4 of the Income Tax Act (Canada).

5. An investment tax credit under section 127 of the Income Tax Act (Canada).

6. An Ontario book publishing tax credit under section 43.7 of the Act.

7. An Ontario computer animation and special effects tax credit under section 43.8 of the Act.

8. An Ontario business-research institute tax credit under section 43.9 of the Act.  O. Reg. 61/06, s. 10 (7).

11. Omitted (revokes other Regulations).  O. Reg. 61/06, s. 11.