Based on detailed cost-benefit data provided by employers, it was possible to identify the overall net benefit (or cost) of apprenticeship training for the 15 trades. A summary of the costs, benefits and net benefit (or cost) for each year of the apprenticeship period is included in the analysis.

3.1 Detailed Cost-Benefit Results by Trade

In this section, detailed cost-benefit results are presented for the 15 trade areas:

• Automotive Service Technician (n=45);
  
• Bricklayer (n=21);
  
• Carpenter (n=43);
  
• Construction Electrician (n=52);
  
• Cook (n=21);
  
• Heavy Duty Equipment
• Technician (n=37);
  
• Industrial Mechanic (Millwright) (n=23);
  
• Insulator (n=21);
  
• Machinist (n=33);
  
• Mobile Crane Operator (n=16);
  
• Motor Vehicle Body Repairer (n=21);
  
• Refrigeration and Air
• Conditioning Mechanic (n=40);
  
• Sheet Metal Worker (n=28);
  
• Sprinkler System Installer (n=16); and
  
• Tool and Die Maker (n=16).

As detailed above, the total number of employer responses included in the analysis for 12 of the 15 trades exceeds the minimum sample target of 20. The Mobile Crane Operator, Sprinkler System Installer, and Tool and Die Maker trades, which have relatively small workforces, are represented by fewer than 20 employers.

The cost-benefit results are presented under two scenarios: 1) per apprentice net benefit (or cost) excluding eligible tax credits, and 2) per apprentice net benefit (or cost) including eligible tax credits. The second scenario reflects the case in Ontario, where employers are eligible for the Apprenticeship Training Tax Credit. The tax credit refunds 25% of salaries and wages paid to an eligible apprentice in a qualifying trade, up to a maximum of $5,000 per year over the first three years of the apprenticeship.¹² All trades included in the study, with the exception of Cook, are eligible for the tax credit. Consequently, given the salary information provided by employers, the total per apprentice benefit for the Ontario case increases by $15,000.¹³ However, the tax credit figures were included in the analysis regardless of whether an employer received the tax credit or not.¹⁴ In addition, the same revenue and cost estimates have been used for both scenarios.

3.1.1 Automotive Service Technician
The results of the cost-benefit analysis for the Automotive Service Technician trade are presented in Exhibit 3.1. According to the model, there is a net benefit of $363 during the first year of the apprenticeship or $5,363 for the Ontario case. The net benefit increases each year to $43,438 by the fourth year. The cost in terms of journeyperson time declines considerably from year 1 to year 4, indicating that the apprentice becomes more proficient and requires less training as he/she progresses through the apprenticeship. Cash disbursements and administration costs are relatively small components of the total cost of apprenticeship training, comprising 0.5% and 1.6% of total costs, respectively.

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Exhibit 3.1 Per Apprentice Costs and Benefits by Year of Apprenticeship – Automotive Service Technician (n=45)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.2 Bricklayer
As shown in Exhibit 3.2, there is an overall net benefit of apprenticeship training for employers in the Bricklayer trade. In addition, the net benefit increases considerably from year 1 to year 4, due in part to the higher revenue generated by more experienced apprentices. Costs related to wastage are not significant, as are costs associated with cash disbursements and administration. In addition, the cost in terms of journeyperson time that is spent training an apprentice declines from 31.7% of total costs during the first year to 11.9% during the fourth year.

Exhibit 3.2 Per Apprentice Costs and Benefits by Year of Apprenticeship – Bricklayer (n=21)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.3 Carpenter
Exhibit 3.3 presents the cost-benefit analysis for the Carpenter trade. The revenue generated by first, second, third and fourth year apprentices exceeds the costs incurred by employers. Under the Ontario tax credit scenario, the net benefit increases by $5,000 for each of the first three years of the apprenticeship. The productive contribution of the apprentice in terms of revenue generated increases throughout the apprenticeship, as expected. In addition, the cost associated with journeyperson time declines indicating that the apprentice becomes more proficient throughout the apprenticeship period. Administration costs are a relatively insignificant cost component, comprising 1.7% of total costs.

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Exhibit 3.3 Per Apprentice Costs and Benefits by Year of Apprenticeship – Carpenter (n=43)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.4 Construction Electrician
The cost-benefit results for the Construction Electrician trade are presented in Exhibit 3.4. During the first year of the apprenticeship, employers incur a net cost of $833 or a net benefit of $4,167 if eligible tax credits are included. However, a second year apprentice generates a net benefit of $9,419 that increases to $22,199 by the fifth year. Overall, the total net benefit to employers of apprenticeship training for this trade is $62,616 or $77,616 under the tax credit scenario.

Exhibit 3.4 Per Apprentice Costs and Benefits by Year of Apprenticeship – Construction Electrician (n=52)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.5 Cook
The results for the Cook trade are presented in Exhibit 3.5. Overall, a net benefit accrues to employers who train cook apprentices. However, employers in this trade are not eligible for the Ontario Apprenticeship Training Tax Credit. The average annual wage paid to apprentices in this trade ($19,951) is well below that of the other service trades, such as Automotive Service Technician ($31,078). In addition, the revenue generated by apprentices (assuming a 100% mark-up rate) is low relative to the other trades, totaling $119,703 over the three-year apprenticeship period. However, employers in this trade incur the lowest training costs ($77,601).

Exhibit 3.5 Per Apprentice Costs and Benefits by Year of Apprenticeship – Cook (n=21)

A. Excluding Eligible Tax Credits

1. Based on a 100% mark-up rate.

3.1.6 Heavy Duty Equipment Technician
The cost-benefit results for the Heavy Duty Equipment Technician trade are presented in Exhibit 3.6. During the four-year apprenticeship period, the model estimates that there is a total net benefit of $96,016 (excluding eligible tax credits) or $111,016 (including eligible tax credits). The costs associated with journeyperson time and wastage account for 12.6% and 6.6% of the total costs of apprenticeship training in this trade, respectively.

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Exhibit 3.6 Per Apprentice Costs and Benefits by Year of Apprenticeship – Heavy Duty Equipment Technician (n=37)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.7 Industrial Mechanic (Millwright)
As detailed in Exhibit 3.7, the net benefit of apprenticeship training increases over the course of the apprenticeship, from $2,948 during the first year to $21,409 by the fourth year. Wastage costs in this trade are relatively high, although these account for only 6.3% of the total costs. Overall, the total net benefit of apprenticeship training for this trade is $52,432 or $67,432 if eligible tax credits are included.

Exhibit 3.7 Per Apprentice Costs and Benefits by Year of Apprenticeship – Industrial Mechanic (Millwright) (n=23)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.8 Insulator
The cost-benefit results for the Insulator trade are presented in Exhibit 3.8. A net benefit of apprenticeship training accrues to employers in each year of the apprenticeship period. The cost in terms of journeyperson time is relatively low for this trade, representing 8.4% of the total costs. In addition, costs associated with journeyperson time and wastage decline while revenue increases from year 1 to year 4, indicating that the apprentice becomes more proficient as he/she progresses through the apprenticeship.

Exhibit 3.8 Per Apprentice Costs and Benefits by Year of Apprenticeship – Insulator (n=21)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

3.1.9 Machinist
As illustrated in Exhibit 3.9, the net benefit of apprenticeship training increases over each year of the four-year apprenticeship period for the Machinist trade. The revenue generated by a fourth year apprentice is 28.7% higher relative to a first year apprentice. In addition, costs associated with journeyperson time, wastage, and disbursements decline as the apprentice progresses through the apprenticeship. Overall, the model estimates that the total per apprentice net benefit for this trade is $98,713 or $113,713 if eligible tax credits are included.

Exhibit 3.9 Per Apprentice Costs and Benefits by Year of Apprenticeship – Machinist (n=3)

A. Excluding Eligible Tax Credits

B. Including Eligible Tax Credits (Ontario Case)

12. Source: Ontario Ministry of Training, Colleges and Universities.
    
13. It should be noted that a tax credit is available to employers in Quebec who provide on-the-job training. The tax credit applies to apprenticeship, vocational and post-secondary training programs. Source: Revenu Québec.
    
14. Question 26 of the Apprenticeship Survey asked employers to identify the amount of tax credit or other subsidy received from government for apprenticeship training.

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