The Canadian government offers many different grants, subsidies, and credits to employers that plan to hire new staff. The general purpose of these funding programs is to help Canadian businesses create new jobs and incentivize them to give those jobs to the citizens who are most in need of them such as new grads. When a company makes a pre-approved hire, the government reimburses a percentage of the employee’s wages for their first 3 to 12 months. This often allows the company to supplement their budget to hire a greater number of workers, or to offer a more competitive salary to attract higher quality candidates. Although the subsidy is temporary and does not extend the first year of employment, the government hopes that by then the candidate will have proved his/her value to the employer and be kept on permanently. Therefore, both the employer and the employee benefit.

But these subsidies are only available for very specific types of hiring. Each program has its own set of criteria as to what kinds of jobs and workers are being targeted by an employer. The majority follow a theme: hiring young people in STEM fields. Why is this the case?

Available For Download: Provincial and Federal Hiring Grants. Download a detailed list of all wage subsidy grant programs available across Canada.

Youth Unemployment and the Brain Drain

Many employers are hesitant to identify the right grant. Similarly, they are hesitant to take a chance on a candidate with little to no real-world work experience, while older, more seasoned workers are available. As a result, students and recent graduates have a difficult time breaking into the job market for the first time. The youth employment rate in Canada is 11.7%, which is significantly higher than the overall unemployment rate of 6%. With minimum wage rates rising across the country, the problem is only worsening. 60% of minimum wage workers are youth aged 15-24, making them more vulnerable to job cuts and lack of opportunities. And since minimum-wage and entry-level jobs are typically stepping stones for youth toward higher-paying jobs, many new workers are being hampered right out of the gate before they can begin their careers.

This is contributing to a “brain drain” that plagues many Canadian industries – young talent leaving Canada for opportunities in the United States and elsewhere, where jobs are more abundant with better pay. This is especially prevalent in the high-tech sector like computer science/software engineering. Developers in the tech sector are being drawn in droves to tech hubs like Silicon Valley. A study recently conducted at the University of Toronto surveyed over 3000 graduates from Canada’s top STEM programs in 2015 and 2016 and found that one in four work outside of Canada.

This is why the federal government created the Youth Employment Strategy, which commits $385 million per year toward helping young people facing barriers to employment. This framework introduced a number of different wage subsidies across the country, designed to incentivize employers to hire current students or recent graduates with little work experience (i.e. grants for hiring students in Ontario). Under this framework, employers are encouraged to offer full-time permanent jobs or internships to candidates aged 30 or under. Additional incentives may be given to employers who target underrepresented groups such as women, Indigenous peoples, visible minorities, and disabled workers.

– Available For Download: Provincial and Federal Hiring Grants. Download a detailed list of all wage subsidy grant programs available across Canada.

How to Screen Candidates without Discriminating

At first glance, the above priorities may appear to conflict with workplace anti-discrimination policies. So the question arises as to how to rely on a wage subsidy for youth hiring when you cannot ask a candidate his/her age? How do you avoid HR complaints when you select a young candidate over a more qualified older candidate? Don’t worry, the government has thought of these issues. The Human Rights Act specifically makes allowances for employers who are “implementing a special program designed to relieve hardship or economic disadvantage or to assist disadvantaged persons or groups…” Interviewers are permitted to ask questions to assess an applicant’s eligibility for a special program, without being in violation of the candidate’s rights. To avoid any misunderstandings, it’s recommended to follow the procedure below:

  • Identify the youth employment grant you’ll be using before you start interviewing candidates. Carefully review the guidelines and make a list of eligibility criteria.
  • Where possible, include information about the grant program in your job posting. Include the name of the program and its eligibility criteria, and state that the job opening is being supported by that program, so that only eligible candidates are encouraged to apply.
  • Prepare a printout of the program criteria and bring it to each candidate’s first interview. Inform them that you are hiring within a special government program, present the program name and information to them, and ask them to confirm whether they meet all of the written criteria with a simple yes or no answer. This way the candidate is screened without providing any specific personal info to the interviewer.
  • File all funding paperwork well in advance of the new employee’s start date. As part of the application or claim process, the candidate will be required to provide certain personal details directly to the government (such as date of birth and SIN number) to verify their eligibility. Confirming approval in advance ensures you don’t lose out on funding by accidentally hiring someone who misrepresented his/her eligibility in the interview.

– Available For Download: Provincial and Federal Hiring Grants. Download a detailed list of all wage subsidy grant programs available across Canada.