Canada Training Credit

For 2019 and subsequent taxation years, the budget proposes a new refundable tax credit called the Canada training credit, which may be used for eligible tuition and fees paid for courses taken in 2020 and subsequent taxation years. 



1. What is the Canada training credit?

The budget proposes a new refundable tax credit called the Canada training credit available for eligible tuition and other fees paid for courses taken in 2020 and subsequent taxation years. The credit will be the lesser of the individual’s Canada training credit limit for the taxation year, and half of the eligible tuition and fees paid to an eligible educational institution in respect of the year.

2. What is a Canada training credit limit?

Starting in 2019, an eligible individual will be able to accumulate $250 in each year (provided the individual satisfies all the conditions stated in Q10), up to a maximum of $5,000 in a lifetime. The Canada training credit limit for a year is equal to their Canada training credit limit for the previous year minus any Canada training credit claimed in the previous year plus the annual accumulation of $250 in the previous year. See Q10 to Q16 for more information on the Canada training credit limit.

3. How is the Canada training credit calculated?

The amount of the Canada training credit will be the lesser of:

  • half of the eligible tuition and fees paid in respect of the year, and
  • the individual’s Canada training credit limit for the taxation year.
4. How will I receive my refundable Canada training credit?

The Canada training credit claimed on your income tax and benefit return will reduce your tax owing. If the credit is more than your tax owing, you will get a refund for the difference.

5. When can I start claiming the Canada training credit?

Provided you satisfy all the conditions (see Q6), you may be able to claim the Canada training credit starting with your 2020 income tax and benefit return, for eligible tuition and fees paid for courses taken in 2020.

6. Who is eligible to claim the Canada training credit?

You can claim the Canada training credit for a taxation year if you satisfy all the following conditions:

  • you file an income tax and benefit return for the year;
  • your Canada training credit limit for the year is greater than zero;
  • you are resident in Canada throughout the year;
  • tuition or fees are paid to an eligible educational institution in respect of the year; and
  • the tuition and fees are otherwise eligible for the existing tuition tax credit.

Note that individuals under the age of 26 or over the age of 65 at the end of a year have a Canada training credit limit of zero and thus cannot claim the Canada training credit for tuition and fees incurred in respect of that year.

7. What is an eligible educational institution?

An eligible educational institution for the purpose of calculating the Canada training credit, will be:

  • a university, college or other educational institution in Canada providing courses at a post-secondary level; or
  • an institution in Canada providing occupational-skills courses that is certified by the Minister of Employment and Social Development.
8. What tuition and fees are eligible for the Canada training credit?

Eligible tuition and fees for the Canada training credit will be the same as under the existing rules for the tuition tax credit. In particular, eligible tuition and fees will include:

  • tuition fees
  • ancillary fees and charges (e.g., admission fees, exemption fees and charges for a certificate, diploma or degree); and
  • examination fees.
9. Can I claim both the Canada training credit and the existing tuition tax credit in the same year?

You may be able to claim both the Canada training credit and the tuition tax credit in the same year. However, in calculating your tuition tax credit, your eligible tuition and fees paid for the year will be reduced by the Canada training credit you claim in that year.

Example

In 2023, Michelle enrols in a training course and pays $1,500 in eligible tuition fees. She has not claimed any Canada training credit in previous years. Assuming Michelle satisfies all the conditions to be eligible for the annual $250 accumulation in each of the years from 2019 to 2022, her Canada training credit limit for 2023 will be $1,000.

Michelle can claim a Canada training credit of $750 (being the lesser of 50% of eligible tuition fees paid and her 2023 Canada training credit limit) for the 2023 taxation year.

In calculating Michelle’s tuition fees eligible for the tuition tax credit for the 2023 taxation year, she will have to subtract her claim for the Canada training credit of $750 from her total eligible tuition fees of $1,500.

10. Who is eligible for the annual accumulation of $250?

In 2019 and subsequent tax years, an individual who is at least 25 years old and less than 65 years old at the end of the year can accumulate $250 towards the individual’s Canada training credit limit (for the next year), provided they satisfy all of the following conditions with respect to the year:

  • file a tax return for the year;
  • be resident in Canada throughout the year;
  • have a total of $10,000 Footnote * or more of income from:
    • maternity and parental benefits, and
    • working income (income from an office or employment, business income, the taxable part of scholarship income and research grants, the tax-exempt part of earnings of status Indians and emergency service volunteers, and income under the Wage Earner Protection Program Act).
  • have individual net income for the year that does not exceed the top of the third tax bracket in that year ($147,667 in 2019) Footnote * .
11. How is an individual’s Canada training credit limit, used in calculating the Canada training credit for a year, calculated?

The individual’s Canada training credit limit, used in calculating the Canada training credit for a taxation year, is given by the formula:

A + B - C

where:

A is the individual’s Canada training credit limit for the previous taxation year,

B is the annual accumulation of $250 (provided the individual satisfies all the conditions stated in Q10 with respect to the previous taxation year, if not, B will be zero), and

C is the Canada training credit claimed in the previous year.

See See example in Q12..

Note that individuals under the age of 26 or over the age of 65 at the end of a year have a Canada training credit limit for the year of zero.

12. Is there any limit to how much I can accumulate towards my Canada training credit limit?

Beginning in 2019, you may be able to accumulate $250 in each year that you are eligible, for use in calculating your Canada training credit for a future year, up to a maximum of $5,000. Once the total of the annual accumulations has reached $5,000, or you have reached the age of 65 years or die by the end of a year, whichever happens earlier, no further amount will be accumulated, even if you have used some or all your Canada training credit limit to claim the Canada training credit.

Example

In 2023, Michelle enrols in a training program and pays $1,500 in eligible tuition fees to an eligible educational institution in Canada. Assuming Michelle is eligible to accumulate $250 in each of the years from 2019 to 2022 inclusive, her Canada training credit limit for 2023 is $1,000.

Further, assuming Michelle satisfies all the conditions to claim the Canada training credit in 2023, she can claim an amount of $750 (being the lesser of 50% of eligible tuition fees paid and her Canada training credit limit for the year), as a Canada training credit for the 2023 taxation year.

Her unused balance for 2023 is $250 ($1,000 - $750). If Michelle satisfies all the conditions listed in Q10 in 2023, she will accumulate an additional $250 for 2024. Her Canada training credit limit for 2024 will be $500 ($1,000 + 250 - $750). This amount will be indicated on Michelle's 2023 Notice of Assessment (NOA), as her Canada training credit limit for 2024 that she could use in 2024 or later years.

Therefore, over her lifetime, until the end of the year that she turns 64, Michelle will be able to accumulate up to an additional $3,750 ($5,000-$1,250) in her notional account.

13. What happens when I turn 65?

At the end of the year that you turn 65, your unused Canada training credit limit will expire, and no additional amounts will accumulate for use in subsequent years.

14. How will I know my Canada training credit limit for any taxation year?

Your Canada training credit limit will be communicated to you each year on your Notice of Assessment (NOA) and will be available through the CRA’s My Account portal. Your 2019 NOA will indicate your Canada training credit limit for 2020 that may be used if you pay eligible tuition and fees for courses taken in 2020 and you wish to claim the Canada training credit on your 2020 income tax and benefit return in respect of those fees.

15. Can I accrue $250 towards my Canada training credit limit and also claim the Canada training credit in the same year?

Yes. Entitlement to the annual accumulation towards your Canada training credit limit in a year is not affected by a claim for the Canada training credit for that year.

See the example in Q12.

16. Can I transfer my unused Canada training credit limit to another individual?

No, you cannot transfer any unused Canada training credit limit to another individual. Any balance at the end of the year you turn 65 will expire. Therefore, no determination of your Canada training credit limit will be made for any year following the year you turn 65.

You can however, where applicable, carry forward unused eligible tuition fees and expenses paid in respect of the year (net of the Canada training credit claimed that year), or transfer them to your spouse or common-law partner, parent or grandparent, for the purpose of the Tuition Tax Credit.

17. Where can I get more information?

The CRA provides the latest information on the proposed changes on Canada.ca. Taxpayers should check online regularly for updated forms, policies, guidelines, questions and answers, and guidance.

In the meantime, please consult the Department of Finance Canada’s Budget 2019 documents for details.

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: