Federal budget outlines training benefit and support

Avatar for Ken PoleBy Ken Pole | March 20, 2019

Estimated reading time 3 minutes, 50 seconds.

The flight training community has been lobbying the federal government for years to give aspiring pilots a break on the cost of getting a commercial ticket, which can exceed $40,000, but there isn’t much relief in the government’s March 19 budget.

Flight training
As outlined in the federal government’s March 19 budget, the government will give working Canadians $250 each year to put toward the cost of future flight training. Mike Reyno Photo

Instead, Finance Minister Bill Morneau used the budget, which is a key element in the Liberal Party’s bid for re-election in October, to outline a broad-ranging non-taxable Canada Training Benefit.

“It’s a personalized, portable benefit . . . that will give working Canadians $250 every year to put toward the cost of future training–a credit that can add up to as much as $5,000 over a career,” Morneau told the House of Commons.

“It also includes a training support benefit, operated through the Employment Insurance program. With this support, workers won’t have to choose between their training needs and their family’s needs. They can take the time they need to learn new skills, knowing they’ve got help to cover their living expenses.”

Budget background documents provided in a news media lockup show that the benefit, available in the 2019-2020 fiscal year which begins April 1, is available only to workers aged at least 25, a point by which most student pilots have already gone heavily into debt to acquire a basic commercial pilot’s licence (CPL).

The government projects the cost of the benefit in the first five years at more than $1.7 billion and $586.5 million annually thereafter.

With the training industry still lobbying the House transport committee even as the budget was being tabled, the government did announce that it was lowering the interest rates on Canada Student Loans and Canada Apprentice Loans.

“For the 99 per cent of student borrowers who have a floating interest rate on their Canada Student Loans, the interest they pay will be lowered to the prime lending rate,” Morneau said in his speech.

A Finance Department official in the lockup told Skies that the minister meant the commercial lenders’ prime rates, which the Finance Department currently aggregates at 3.95 per cent.

Meanwhile, the International Civil Aviation Organization (ICAO) says preliminary market analysis indicates that 620,000 pilots will be needed to fly the growing global fleet of aircraft with at least 100-seat capacity by 2036.

“Even more important than this figure is the fact that no less than 80 per cent of these future aviators will be new pilots . . .” ICAO Secretary General Fang Liu told the Montreal-based organization’s Journal.

“Promoting excitement and passion for aviation is not enough,” Liu said. “We also need to facilitate access to aviation training and education programs which lead to dependable recruitment opportunities. . . . We also need to broaden our scope and begin instilling greater aviation awareness in high school and younger students . . .”

It’s a message the Canadian training community has delivered repeatedly to the transport committee and the government, particularly the fact that the cost of repaying loans is usually problematic for newly-licensed pilots because of the limited deductibility permitted by the Canada Revenue Agency (CRA).

When Skies put that to the Finance team in the lockup, another official seemed to acknowledge with a carefully small nod that there is room for improvement in how the CRA treats flight training costs.

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