Taxpayer elected to meet labour requirements and claimed regular tax credit rate?
Has Taxpayer in fact achieved 100% compliance with labour requirements?
Yes
Was Taxpayer‘s compliance deficiency knowingly or in circumstances amounting to gross negligence?
Labour requirements not applicable; Taxpayer limited to reduced tax credit rate
Taxpayer entitled to regular tax credit rate
Taxpayer’s ITC claim limited to reduced tax credit rate; also liable to penalty of 50% of difference between regular and reduced tax credit
Yes
No
No
Yes
No
Apprenticeship compliance deficiency
Labour Requirements Compliance Overview
Taxpayer entitled to regular tax credit rate
Prevailing wage deficiency
Taxpayer must pay additional $50*/deficient hour tax under s.127.46(7)
Taxpayer must pay additional $20*/deficient day per diem tax under s.127.46(6)
Taxpayer must either
(1) pay employees deductible top-up amounts under s.127.46(11); or (2) pay CRA 120% non-deductible penalty under s.127.46(13)
* Indexed for inflation under s.127.46(8)