Evaluation of the Canada Apprentice Loan - Phase 1

Main findings

Early observations

Given that Phase 2 of the evaluation will provide additional evidence on many of the key issues, formal recommendations will be made at the conclusion of the evaluation in December 2019. However, the following two observations can be made at this time to build on the demonstrated need of apprentices for the CAL:

1. Recognizing that different types of technical training (for example online training) are highly relevant for apprentices, it will be important to consider opportunities for the CAL to respond to innovation in the delivery of technical training as the program matures.
2. Future awareness campaigns and communications to key program stakeholders may benefit from detailed information on loan repayment terms, as many apprentices indicated not applying for a loan out of concern of not being able to repay the loan in the future. This suggests a lack of understanding of the repayment assistance that is available to apprentices.

1.1 Methodology and limitations

An evaluation methodology for the Evaluation of the Canada Apprentice Loan (CAL): Phase 1 was developed and defines the scope of the overall evaluation of this new program. The methodology also provides details of the evaluation questions and lines of evidence used to address them (see Appendix 2). It should be noted that since the evaluation started before the new Policy on Results came into effect, the structure of the evaluation questions is based on the April 2009 Treasury Board Secretariat Policy on Evaluation. ^{Footnote 6}  

Furthermore, an Evaluation Strategy report for the Evaluation of the Canada Apprentice Loan (CAL): Phase 1 was also developed to ensure that the evaluation questions could be answered with the proposed methodology. The Evaluation Strategy noted a few key considerations that are more pertinent to Phase 2 of the evaluation. ^{Footnote 7} 

The main limitation for Phase 1 of the evaluation is a lack of annual information on the number of eligible apprentices who go on block release training (in other words a method by which apprentices are released by their employers to attend in-class technical training for a specified period (block) each year, usually 6 to 8 weeks). As a result, the calculation of the take-up rate of the CAL (that is the share of the eligible population who receive a loan) had to use the number of apprentices collecting Employment Insurance (EI) benefits as a proxy. The reason this was used as a proxy is because the vast majority of apprentices who go on block release training apply for and receive EI benefits.

A further limitation for Phase 1 is that there is a limited amount of program data from which to draw early conclusions. For this reason, analysis of loan repayment and program outcomes has been deferred to Phase 2 of the evaluation.

2.1 Overview of apprenticeship

Apprenticeship offers a training system that combines practical on-the-job experience and technical training (that is, in the classroom), with practical experience accounting for most of the training. Technical training can occur at a college, a union training centre, a private trainer or online. Once an apprentice has completed the required hours and/or modules for the trade, the apprentice can write a certification exam. A typical apprenticeship program ranges from two to five years in duration. Usually, an apprentice works for 40 to 46 weeks a year and goes to school for a 6- to 12-week “block” of training for the remainder of the year (with 8 weeks being the most common duration of the training).

As part of an apprenticeship program, there is an agreement between an apprentice seeking to learn a skill and an employer who assumes responsibility for training and developing a skilled worker. Provincial/territorial apprenticeship authorities have the responsibility to register the agreement, to administer and monitor the apprentice’s apprenticeship training, and to ensure compliance with the provincial/territorial Apprenticeship and Certification Act and the regulations under the Act. Apprentices are considered as employees, whose wages can increase as they progress through each year (level/block) of an apprenticeship program, rising to full journeyperson rates upon successful completion of the program. Upon completion, apprentices receive a Certificate of Qualification that confers journeyperson status.

Apprenticeship training falls within the purview of provincial/territorial departments responsible for education, training and labour programs – resulting in 13 systems. The federal government plays a role in apprenticeship training through the Interprovincial Standards Red Seal Program, which was established to increase the mobility of skilled workers across Canada. “The program is a partnership between the federal, provincial and territorial governments and is administered in each province and territory under the guidance of the Canadian Council of Directors of Apprenticeship. The Red Seal endorsement provides evidence that a tradesperson has met the Canadian standard of skills and knowledge required in his/her trade. The Red Seal examinations are used to determine whether apprentices and tradespersons meet the Canadian standard in 57 trades.”

As of 2015, more than 650,132 tradespeople in Canada had attained a Red Seal endorsement.” ^{Footnote 9}  Overall, there are 359 trades in Canada and tradespeople play an important role in the Canadian economy and represent 1 in 5 employed Canadians. In 2015, four million Canadians worked in skilled trades, representing 22.1% of employed Canadians. ^{Footnote 10} 

Despite the fact that the apprenticeship system is not a federal responsibility, the Government of Canada has recognized the need to support the transition of young workers into the trades. In order to encourage young people apprenticing in Red Seal trades, the federal government has implemented financial supports such as the CAL, Apprenticeship Grants, EI benefits and tax measures.

2.2 Canada Apprentice Loan Program

As noted in Section 1, to help registered apprentices cope with apprenticeship-related costs, on February 11, 2014 the government announced the creation of the CAL, “which will offer interest-free loans to help registered apprentices with the cost of their training. The Canada Apprentice Loan will assist more apprentices in completing their training and encourage more Canadians to consider a career in the skilled trades.” ^{Footnote 11}   Apprentices have been able to apply for the CAL since January 2, 2015.

Most apprentices are eligible to apply for interest-free loans of up to $4,000 per period of technical training (minimum request of $500). ^{Footnote 12}   The lifetime maximum loan amount is $20,000 (or for five periods of technical training). ^{Footnote 13}  To be eligible for the CAL, technical training must be block release or the equivalent full-time technical training as defined by the applicable provincial/territorial apprenticeship authority. ^{Footnote 14}  An applicant taking part-time technical training is not eligible for the CAL, as well as those taking foundational/pre-apprenticeship training, day release training, evenings/weekends training and online/distance courses. An apprentice who was not successful in completing previous technical training may still apply for the CAL as long as the apprentice has not reached the lifetime maximum of five technical training periods.

There is no financial needs assessment to request a CAL, but applicants need to pass a credit check when applying for the first time (to require a financial need assessment similar to that of the Canada Student Loans model would result in many apprentices being ineligible for the CAL due to their income levels immediately prior to entering technical training). With the objective of providing financial assistance to apprentices in short-duration periods of technical training, the Government of Canada determined that CAL applicants would not be subject to a needs- or income-based assessment as part of the eligibility criteria.
First-time applicants will be denied funding if, in the 36 months before applying, the applicant missed payments on at least three debts which were each higher than $1,000 and more than 90 days overdue.

The earliest that an apprentice can apply for a loan is 90 days before the technical training starts, while the latest date to apply is the last day of the technical training. When the government announced the program, it was indicated that “applicants that submit all the necessary information can expect to receive their loan within 7 to 10 business days from the time the application is received”. ^{Footnote 15}  Online information indicates that application processing time from application through disbursement of funding depends on a number of variables. Generally, after an application is submitted, it will go through a Social Insurance Number validation for first-time applicants (24 hours), a credit check for first time-applicants (24 hours), and confirmation of enrolment by the applicant’s technical training provider before the disbursement is processed. ^{Footnote 16}  Once confirmation of enrolment is received by the CAL Service Centre, applicants will receive their funding within 3 to 5 business days, as early as their technical training start date.

CAL loans are interest-free until loan recipients complete or stop their apprenticeship training program, up to a maximum of six years. ^{Footnote 17}   Repayment of a loan starts when the apprentice:

• Has completed a Red Seal trade apprenticeship program;
• Is no longer registered in a Red Seal trade apprenticeship program;
• Did not confirm registration by the apprenticeship end date; or
• Has reached the lifetime maximum of six years of interest-free status.

Interest begins to accrue on the loan the day after the apprenticeship end date. Although no payments are required for the first six months after the apprenticeship end date, interest accrues on the outstanding loan balance. At the end of the six-month non-repayment period, the CAL borrower is required to start making regular loan payments. Apprentices have to choose between a variable (prime + 2.5%) or fixed (prime + 5%) interest rate. The standard amortization period is nine-and-a-half years or a lesser period of time as is required to support a minimum monthly loan payment amount of $25. CAL borrowers are eligible for the Repayment Assistance Plan. ^{Footnote 18} 

2.3 Other apprenticeship-related assistance

The CAL builds on other federal government measures that aim to financially support individual apprentices: ^{Footnote 19} 

1. Apprenticeship Grants ^{Footnote 20} : Apprentices can receive up to $4,000 in lifetime grants to help pay for tuition, travel, tools, or other expenses via the:

1. Apprenticeship Incentive Grant: Taxable cash grant of $1,000, up to a maximum of $2,000, available to registered apprentices once they have successfully finished their first and second year/level of an apprenticeship in a designated Red Seal trade. This grant helps registered apprentices in designated Red Seal trades progress through their apprenticeship.
2. Apprenticeship Completion Grant: A one-time taxable cash grant of $2,000 available to registered apprentices who have successfully completed their apprenticeship training and obtained their journeyperson certification in a designated Red Seal trade.

2. EI benefits: if an individual has been referred by their province or territory to attend full-time technical training (sometimes referred to as block-release training), he/she may be eligible to receive EI benefits while unemployed and attending the course. ^{Footnote 21} 

3. Tax deductions and credits for apprentices and tradespersons including the Tradesperson’s Tools deduction, the Tuition Tax Credit ^{Footnote 22},  the Education Tax Credit and the Textbook Tax Credit. ^{Footnote 23} 

In addition, the provincial/territorial governments also provide financial support for apprentices through various programs. ^{Footnote 24}  In Ontario for instance, programs available for apprentices include:

• Apprenticeship completion bonus in Non-Red Seal trades (grant of $2,000);
• Apprenticeship Scholarship ($1,000);
• Co-Op Diploma Apprenticeship Programs, loans for tools;
• Ontario Youth Apprenticeship Program, Pre-Apprenticeship Training Program;
• Support to Non-EI Eligible Apprentices During In-School Training; and,
• Apprenticeship Training Tax Credit. ^{Footnote 25} 

Further, the Skills Development-Apprenticeship program (administered under the Labour Market Development Agreements in the provinces and territories) provides EI-eligible apprentices with financial support to help them offset the costs of their in-class training. ^{Footnote 26}  Supports under this program cover expenses incurred by apprentices while in training including costs related to:

• Transportation/travel;
• Childcare and/or dependent care;
• Living away from home allowance/second home;
• Living allowance;
• Tuition (provided either directly to the institution or to the individual);
• Disability support;
• Books;
• Essential skills support, academic upgrading, tutoring, learning strategist salaries;
• Supplies, tools and equipment; and
• Assistance for exceptional circumstances.

Funding under this program is generally granted based on fixed rates. The rules determining the allocations and the level of funding vary among the provinces and territories.

3.1 Need for the Canada Apprentice Loan

There was a consensus among key informants (with federal officials from the CSLP Directorate and the Trades and Apprenticeship Division, employees at the CAL Service Centre, provincial/territorial apprenticeship authorities, approved technical training providers, and national apprenticeship stakeholders) that there is a need for the CAL. It was noted by some key informants and focus group participants that many apprentices have a large financial burden (such as, equipment, tools, work vehicles, etc. in addition to everyday expenses such as housing costs, dependent care costs, etc.) which necessitated the program. Further, due to EI ineligibility among some apprentices (particularly first-year apprentices), and a lag in the receipt of EI benefits among other apprentices (based on focus group findings), the CAL program can help those with large financial commitments bridge some of the gap due to its perceived timeliness. ^{Footnote 27} 

Estimates based on findings from the focus groups suggest that financial needs and supports vary considerably by jurisdiction, age, family circumstances and trade. However, when costs were compared to existing supports, it is estimated that in the absence of the CAL, on average, apprentices can conservatively expect to have a shortfall of over $2,000 per eight-week period of technical training, with the shortfall being higher (over $3,000 – in other words more than three-quarters of the maximum amount of a CAL loan per technical training period) in the absence of support from employers and unions. More details on the specific costs and available apprentice supports are provided below.

3.2 Alignment with Federal Government priorities

The Government of Canada made a commitment to assist apprentices with the cost of their technical training in the 2013 Speech from the Throne. The CAL program was subsequently announced in Budget 2014 to assist apprentices with "significant costs to complete these periods of technical training required by their program, including educational fees, tools and equipment, living expenses and forgone wages.” The goal of the program is to "assist more apprentices in completing their training and encourage more Canadians to consider a career in the skilled trades".

In Budget 2016, the government reiterated the importance of apprenticeship by indicating that “a skilled, mobile and certified skilled trade workforce is built upon high quality apprenticeship training systems.” Thus, the objective of the CAL clearly aligns with current federal government priorities, as well as with the second departmental Strategic Outcome (a skilled, adaptable and inclusive labour force and an efficient labour market).

3.3 Delivering the Canada Apprentice Loan

The federal government role in delivering financial support to apprentices extends to three key areas – the CAL, Apprenticeship Grants and EI support for apprentices. The CAL is delivered by a third party via the CAL Service Centre.^{Footnote 34}  The CAL is a statutory measure that was established as an extension of the Canada Student Loans Program (CSLP).^{Footnote 35}  Therefore, the program is administered on behalf of the CSLP by its service provider in collaboration with key delivery partners such as the provinces/territories, Public Services and Procurement Canada, and the Canada Revenue Agency. Technical training providers confirm enrolment status in technical training periods before CAL disbursements are made. The provinces and territories must also confirm the registration status of apprentices in an apprenticeship training program to maintain interest-free and payment deferral status. Public Services and Procurement Canada is responsible for disbursing loans via direct deposit or cheque, while the CSLP is responsible for providing administrative and policy direction. Finally, the Canada Revenue Agency undertakes collections when CAL loans are in default.

Applicants can visit the Canada Apprentice Loan Service Centre  in order to register for a Canada Apprentice Loan online service account which allows individuals to start an application, resume a saved application, review and edit a submitted application, provide banking information to expedite the loan disbursement, update contact information, and review their loan status and history. In addition, the website also offers information on CAL eligibility; how to apply for, manage and repay a CAL loan; and a link to other support for apprentices.

4.1 CAL applications

Between January 1, 2015 and September 30, 2016, more than 34,000 applications were submitted for CAL loans by more than 26,000 apprentices. Among the more than 26,000 apprentices submitting an application, almost three-in-four applied for one CAL loan, about 20% applied for two CAL loans and the remaining 5% applied for three or more CAL loans. ^{Footnote 36}  Almost all loan applications were submitted online, with only 1.3% submitting a paper-based application.

In terms of the start of the technical training period, slightly less than half of all loan applications took place prior to its commencement. Administrative data analysis showed that 20.3% occurred 5 weeks or more before its start, while a further 26.9% were within 5 weeks of the start of the technical training period. Another 27.2% were within 3 weeks after the start of the training period, while the remaining 24.6% occurred at least 3 weeks after its start.

4.2 CAL participation

CAL participation expectations were outlined in Budget 2014, which noted that 26,000 apprentices were expected to apply for a CAL loan each year with total annual loan disbursements of $100 million. This corresponds to an average CAL loan amount of $3,850. In terms of take-up, no expectations were outlined in foundation documents or made in public statements.

In 2015, a total of 20,236 CAL applications were submitted and 75.6% (15,289) were approved (see Exhibit 1 in Section 4.4), leading to disbursements totaling $58,791,983. ^{Footnote 37}  The average disbursement amount was $3,845, suggesting that most applicants applied for the maximum loan amount of $4,000 per technical training period. ^{Footnote 38} 

4.3 CAL take-up

To calculate the take-up rate of the CAL, the number of CAL loan recipients (15,289 in 2015) must be divided by the number of apprentices who are eligible to receive a CAL loan (that is those enrolled in block release training or the equivalent full-time technical training with an approved technical training provider). ^{Footnote 39}  In addition, an applicant must meet each of the criteria below.

• Be a Canadian Citizen, Permanent Resident, or Protected Person; ^{Footnote 40} 
• Be registered in a Red Seal trade apprenticeship program that is designated by the province or territory where the person is registered as an apprentice; ^{Footnote 41} 
• Pass a credit check (required if applying for the first time). ^{Footnote 42} 

The number of apprentices on block release training can be estimated by using figures for the number of apprentices who receive EI benefits, as “…the Employment Insurance program offers temporary income support to those who stop working for the sole purpose of attending full-time technical training (sometimes referred to as block-release training)…”. ^{Footnote 43}  According to EI data analyzed by Evaluation, 38,943 apprentices (both Red Seal and non-Red Seal) established new claims for EI benefits in 2015. ^{Footnote 44} 

Assuming that 80% of all apprentices apply for and receive EI benefits while on block release training (an estimate based on focus group findings), 48,679 apprentices went on block release training in 2015. ^{Footnote 45}  Accounting for only Red Seals and those who would pass a credit check, 37,317 apprentices were eligible for a CAL loan in 2015. ^{Footnote 46} 

Therefore, the take-up rate for the CAL is equal to the number of loan recipients in 2015 (that is 15,289) divided by 37,317 – or 41.0%. As noted in the focus group and key informant interview findings, many apprentices did not apply for a loan because they were unaware of the program. Further, among those who are aware of the CAL, many feel they don’t need a loan or expressed being financially risk averse to taking out a loan. These factors may help explain why the CAL take-up rate is not higher than 41.0%. ^{Footnote 47} 

4.4 Participation by socio-economic characteristics

According to Statistics Canada data, female apprentices accounted for 10.3% of all Red Seal trade apprenticeship certificates in 2014, ^{Footnote 48}  but only 5.2% of CAL loans went to women (see Exhibit 1). ^{Footnote 49}  Note that due to a lack of socio-economic data on Red Seal apprentices, statistics collected on registered apprenticeship certificates in Red Seal trades is used as a proxy for apprentices in training.

Exhibit 1: Distribution of Red Seal Trade Apprenticeship certificates, Apprenticeship Grant Recipients, CAL Loan applications submitted and CAL Loans disbursed

Sources: (1) Statistics Canada. Table 477-0055 – Registered apprenticeship or trade qualifier certificates, by age groups, sex, major trade groups and Red Seal or non-Red seal indicator, annual (number), CANSIM (database), for Red Seal apprentices data; (2) Apprenticeship Incentive Grant and Apprenticeship Completion Grant data supplied by Skills and Employment Branch for Apprenticeship Incentive Grant and Apprenticeship Completion Grant data; and (3) MicroStrategy D&H tool for CAL data. Note: Quebec is excluded, as Quebec’s student financial aid system provides support. Values may not sum to 100% due to rounding.

One plausible reason for the above difference is the fact that female apprentices tend to be enrolled in short-duration Red Seal trades (for example, cook, baker or hairstylist). ^{Footnote 50}  The shorter the program duration, the fewer periods of block release training they will be enrolled in and the faster they will complete their apprenticeship program. It should be noted that female apprentices accounted for 30.4% of all apprentices in non-Red Seal trades in 2014. ^{Footnote 51} 

Roughly half (50.6%) of all CAL loan recipients in 2015 were apprentices in the 25 to 34 year-old age group, which when combined with the under-25 age group represents more than 80% of the total number of recipients.

By province/territory, although Alberta accounted for 31.2% of all registered Red Seal apprenticeship certificates in 2014, Alberta comprised 45.2% of all CAL recipients in 2015. ^{Footnote 52}  Conversely, Ontario accounted for 33.1% of all registered Red Seal trade apprenticeship certificates in 2014, but only 14.6% of CAL recipients were from Ontario. There was a fairly wide variance in CAL application approval rates, as 84.4% of all applications submitted in Manitoba were approved compared to only 59.3% in Prince Edward Island and 67.1% in Ontario.

The three apprenticeship trades accounting for the most CAL recipients were construction electricians (25.1%), plumbers/steamfitters/pipefitters (17.1%) and welders (9.7%) – see Exhibit 2 below. ^{Footnote 53}  Out of the 56 Red Seal trades, the bottom 47 apprenticeship trades together accounted for 22.8% of all CAL recipients. CAL application approval rates by apprenticeship trade didn’t vary as much as for province/territory, although hairstylists had a much lower approval rate (51%) compared to other trades (which ranged from 71.1% to 78.5%).

Almost 60% of all CAL recipients underwent an 8-week period of technical training. Applications for 8 weeks of technical training were also the most likely to be approved (88.1% approval rate).

4.5 Comparison to Apprenticeship Grant participation

Exhibit 1 shows that the sex distribution of Apprenticeship Incentive Grant and Apprenticeship Completion Grant recipients was similar to that of Red Seal trade apprenticeship certificates.

By age, Apprenticeship Incentive Grant recipients were far more likely to be under 25 years of age (40.6%) than either Apprenticeship Completion Grant recipients (22.8%) or CAL recipients (30.0%).

In general, the distribution of Apprenticeship Incentive Grant recipients was comparable to that of Apprenticeship Completion Grant recipients when considering jurisdiction. Compared to CAL loan recipients, more Apprenticeship Grant recipients were from Ontario (about 27 to 28% versus 14.6%), while more CAL loan recipients were from Alberta (45.2% versus about 35%). ^{Footnote 54} 

By apprenticeship trade, the distribution of Apprenticeship Incentive Grant and Apprenticeship Completion Grant recipients more closely resembled the distribution of Red Seal trade apprenticeship certificates than CAL applicants and recipients, with some exceptions (for example automotive service technicians).

4.6 How CAL Loans are used

Focus group participants noted that they used the funding from their CAL loans to fill in the gaps left by EI and personal savings. Many mentioned that they would not have been able to attend block training without this support. The CAL loan funding went to direct training-related costs such as books, to trade-specific expenses such as tools, and for living expenses such as food and rent. Many used the CAL directly to pay off higher interest debt related to apprenticeship including credit cards. As a result of the CAL, use of other loans by recipients was limited, except for the continued use of credit cards. Although most mentioned that the CAL paid for expenses during block training, some used the CAL to “make ends meet” after the block period while awaiting the next job.

4.7 Use of other apprentice support measures

Most CAL recipients in the focus groups reported EI benefits as an income source during their block release training period. Almost two-fifths reported having received the Apprenticeship Incentive Grant, while few indicated receiving provincial/territorial financial assistance. Almost half identified EI benefits as their primary income source, while about one in five indicated that the CAL was their primary income source. None of the CAL recipients listed either Apprenticeship Grants or provincial/territorial financial assistance as their primary source of financial support, perhaps a reflection of their size in comparison to CAL loans and EI benefits. ^{Footnote 55} 

5.1. CAL administrative costs

Since the CAL, CSLP, Canada Student Grants Program and Canada Education Saving Program administrative costs are grouped together under ‘Learning’, it is not possible to determine the precise cost of each program. ^{Footnote 56}  However, one previously used methodology for coming up with an estimate is to allocate costs based on the expenditures of each program. ^{Footnote 57} 

To estimate total CAL administrative costs over time, it is necessary to examine the statutory ^{Footnote 58}  administrative cost, the operating cost, and costs related to the delivery of the CAL (that is service provider costs, which represent the cost associated with contracted services with third-party service providers that the CSLP uses to administer CAL origination, in-training loan management, post-training repayment activities and repayment assistance).

The service delivery costs during the first fiscal year of the CAL (2014 to 2015) were $2.5 million while costs during 2015 to 2016 were $1.6 million (see Exhibit 3). Although costs during 2014 to 2015 only included those from January 2015 to March 2015, the majority of these were related to implementation as the program was being developed by the service provider. Implementation costs are expected to decline significantly following the final implementation phase in October 2016. ^{Footnote 59} 

To identify the CAL operating costs within the Department, the Treasury Board Main Estimates (Part II) were used. These estimates indicate the planned expenditures of the Department but do not show the detailed operating expenses of the CAL. Nevertheless, the Main Estimates provide information on operating expenses based on the departmental strategic outcome of ‘Learning’.

Exhibit 3 (column A) shows the Learning operating budget, with operating costs of $134.6 million for fiscal year 2015 to 2016. Column B shows the amount of CAL disbursements ($62.8 million in 2015 to 2016 – based on CAL administrative data) and Column C shows the amount of Learning Transfer payments made (almost $3.3 billion in 2015 to 2016). ^{Footnote 60}  Column D shows what CAL disbursements are as a share of total Learning Transfer payments (1.9% in 2015 to 2016).

Assuming that the same level of dollar effort is needed to operate all of the Learning programs, the estimated operating budget for the CAL (column E) is calculated based on the share of total Learning transfer payments that CAL disbursements comprise. ^{Footnote 61}  Multiplying 1.9% by $134.6 million leads to an estimated CAL operating budget of $2.6 million for 2015 to 2016 which, when coupled with the service delivery cost of $1.6 million in 2015 to 2016, implies total administrative costs of $4.2 million for 2015 to 2016. Note that Phase 2 of the evaluation will attempt to develop a more in-depth methodology for estimating CAL administrative costs, as it is likely incorrect to assume that the same level of dollar effort is needed to operate all of the Learning programs.

Exhibit 3: Estimated Operating Budget for the Canada Apprentice Loan ($ millions) from 2013 to 2016

In terms of administrative costs per CAL recipient, there were 16,270 CAL recipients between April 2015 and March 2016. Thus, the estimated administrative cost per CAL recipient was $258 (or $160 if considering only the estimated CAL operating budget – in other words excluding the service delivery cost).

5.2 Administrative Costs of Other ESDC Programs

Since service delivery models for each program can vary significantly, making comparisons across programs challenging. For example, program delivery for the Canada Education Savings Program is a collaborative effort between the federal government and numerous Registered Education Savings Plan promoters (financial institutions, banks, scholarship foundations, etc. who receive no remuneration from ESDC), whereas programs such as EI are delivered solely by the federal government.

The Apprenticeship Grants program, which is delivered by Service Canada, had $114.5 million in grant funds available to apprentices in 2013 to 2014 and $97.3 million in funds were dispersed. ^{Footnote 62}  In understanding the operational costs to implement the program, one must account for the administrative costs of Service Canada and other parts of the program within ESDC, along with the costs of supporting communication campaigns. Service Canada provides support to the program in processing applications, communicating with applicants to correct information on applications, answering questions from front-line staff, and interpreting policy. Service Canada expenditures for this program were estimated at $5.2 million for 2013 to 2014. ^{Footnote 63}  ESDC policy and program areas support the program with further policy development and by fielding policy questions that Service Canada cannot answer. The ESDC policy team operates on a budget of approximately $300,000 per year. ^{Footnote 64} 

The 2013 to 2014 administrative costs, excluding the costs of the awareness campaigns, were therefore around $5.5 million for a program with a grants budget of $97.3 million. In terms of administrative costs per Apprenticeship Grant recipient, there were 74,624 recipients between April 2013 and March 2014. Thus, the total administrative cost per recipient was $74 ($5.5 million divided by 74,624). This operating budget per recipient is significantly lower than that reported for the CAL ($160). However, this is comparing a non-repayable grant to a repayable loan – it is likely that operational processes or other variables may explain the difference.

6.1 Implementation issues

Focus group participants indicated that few (if any) implementation issues were experienced – the application process appeared to run smoothly and the eventual delivery of the funds was considered timely. However, recipients noted that they could have been better supported with improved access to information. For instance, most recipients reported that they had not received a clear communication from the Program apart from how to receive the funds (there was not even a receipt) – rather, the loan just appeared. ^{Footnote 65}   There was also some dissatisfaction about not being updated on the amount owing on a loan or being adequately informed about the terms of repayment. ^{Footnote 66} 

The vast majority of key informants felt that the implementation of the Program went well and, overall, the timely provision of CAL was seen as a success. The mechanism used to disburse loans was built on a pre-existing program (that is the CSLP), which was seen to be helpful in preventing glitches. However, some concerns were identified:

• Improve the notice of approval and reminder notifications so that the reminder occurs at a later date, as it was noted that the approval and reminder notifications were sometimes going out at the same time. Further, there were sometimes delays in apprentices receiving approval notifications on time to make decisions.
• During the early implementation of the CAL program, some technical training providers that offered both longer term courses and block release technical training had uncertainty regarding the CAL eligibility for some programs. However, in instances where this happened, the CSLP was available to assess the situation and provide necessary direction to technical training providers.

Lastly, some key informants mentioned that Information Sharing Agreements were not in place until July 2016, which made it difficult for some provinces and territories to get the data they needed from a program delivery standpoint. ^{Footnote 67}  Developing and approving these agreements was seen to be a challenging and time consuming task by some.

6.2 Program delivery

CAL recipients who participated in the focus groups were pleased with the delivery of the CAL program. Almost all found the application process to be simple, whether it was completed online or in a Service Canada office. Most recipients had visited the website and found it to be streamlined and easy to use. They liked that they could log onto the Government of Canada website to get the information about their loan. Many were pleased that their imperfect credit history did not exclude them from receiving the loan.

Further, the CAL was considered timely by both focus group participants and key informants, especially when considered against other supports, such as the Apprenticeship Grants or EI. For most, the CAL was received before their first day of class and, as a result, recipients were able to pay for education expenses immediately.

In terms of barriers that might have prevented some apprentices from applying for and receiving loans, some CAL-eligible non-recipients in the focus groups identified being unaware of the program. Even among those who were aware of the program, many lacked a basic understanding of repayment terms which was cited as a barrier to feeling comfortable applying for the CAL (although information on repayment terms is available on the CAL website).

While not necessarily barriers, a number of other reasons were put forward by non-participants to explain why they did not apply for or receive a CAL loan, with the main reasons including a lack of need; a lack of comfort with loans and accumulating additional debt; and a lack of job security and fear about their ability to repay the loan (again, lack of understanding of repayment assistance was likely a factor).

Regarding improving program delivery, some key informants made the suggestion to integrate the CAL with the Apprenticeship Grant program in order to: improve messaging from the message centre; make the application process mobile friendly; and continue allowing in-person applications.

6.3 Awareness

Approximately half of the focus group participants not in receipt of a CAL loan had heard of the CAL. Even those that were aware knew little regarding the loan terms – their awareness was frequently limited to recognizing the name of the program or simply that the federal government had a loan for apprentices. By comparison, awareness of the Apprenticeship Grants was higher – likely due to this program being in existence for a longer time period (since 2007). ^{Footnote 68}  Awareness of the CAL had been developed largely through the efforts of participants’ schools. In particular, many mentioned that someone visited their class on the first day and gave a brief introduction on various supports available to them. These presentations appear to have been short and light on details.
Many non-recipients reported that they found the information provided in-class to be confusing. Often the main message was limited to referring apprentices to relevant websites. As these discussions often only occurred on the first day of the first training block, many apprentices in their later years were unaware of the CAL simply because their first block occurred before the CAL was available. Other non-recipients mentioned that they had learned about the CAL though online searches, television or radio ads, or word-of-mouth.

Awareness of the CAL was understandably higher among recipients themselves, although many were unaware of the repayment terms. Many recipients knew to turn to the website to find answers about repayment, but opinions were mixed about whether the website readily provided the needed information. Recipients became aware of the CAL through a wider variety of sources than non-recipients. Although in-class discussions were common among recipients, they appeared to have been more likely to have heard about the CAL through a welcome package sent to them through the mail, through their union representatives, from their mentor on the job, or their peers in the program.

Even CAL recipients reported that they were apprehensive at first about taking a loan. But as they learned more about the features of the CAL, they became more comfortable with it. Thus, increasing awareness of the CAL should go beyond mere recognition of the program and comprehensively detail its benefits. Many participants indicated that the government could do more to promote the CAL. They suggested that unions and employers be made more aware so they can pass information on to eligible apprentices. Further, some expressed that awareness of the program should be increased among those that are considering apprenticeship. Moreover, they added that learning about the loan on the first day of class was too late to encourage people into the trades.

7.1. Early observations

1. Recognizing that different types of technical training (for example online training) are highly relevant for apprentices, it will be important to consider opportunities for the CAL to respond to innovation in the delivery of technical training as the program matures.

2. Future awareness campaigns and communications to key program stakeholders may benefit from detailed information on loan repayment terms, as many apprentices indicated not applying for a loan out of concern of not being able to repay the loan in the future. This suggests a lack of understanding of the repayment assistance that is available to apprentices.

7.2. Future work

Given that Phase 2 of the evaluation is still forthcoming, recommendations on future work will be withheld until its completion.