Apprentice Loans Regulations (SOR/2014-255)

Restrictions on Obtaining Financial Assistance

Marginal note:Denial of loan

• 6 (1) An apprentice loan is to be denied to an eligible apprentice who

  • (a) in the 36 months before the day on which they make their application for an apprentice loan, has been in default — in at least three instances — for over 90 days in paying an instalment under at least three loans or other debts each in an amount over $1000; or

  • (b) is in receipt of a student loan for the same technical training period.

• Definition of applicable day

  (2) For the purposes of this section, applicable day means

  • (a) if the Minister is informed that the borrower has failed to make a payment within the two-month period after the day on which the payment is required under their apprentice loan agreement or these Regulations and they do not fulfil the requirements either of section 2, or of section 3 in respect of an interest-free period, the day following the day on which interest starts accruing in accordance with section 3;

  • (b) if the borrower makes an assignment under the Bankruptcy and Insolvency Act that is filed and not cancelled, is deemed under that Act to have made an assignment, or is the subject of a receiving order, the earlier of the day on which a receiving order is made or the assignment is filed with the official receiver;

  • (c) if the borrower makes a proposal under Division I of Part III of the Bankruptcy and Insolvency Act that is approved by a court under that Act, the day on which that proposal is approved;

  • (d) if the borrower makes a consumer proposal under Division II of Part III of the Bankruptcy and Insolvency Act that is approved or deemed approved by a court under that Act, the day on which the consumer proposal is approved or deemed approved;

  • (e) if the borrower applies for a consolidation order under Part X of the Bankruptcy and Insolvency Act that includes an apprentice loan, the day on which that order is issued;

  • (f) if the borrower seeks relief under a provincial law relating to the orderly payment of debts that includes an apprentice loan, the day on which the document seeking relief is filed;

  • (g) if the borrower is, by reason of his or her conduct in obtaining or repaying an apprentice loan, found guilty of an offence under any Act of Parliament, the day of the finding of guilt;

  • (h) if the borrower fails to comply with subsection 11(1) or 13(1), section 15 or subsection 17(3), the 30th day after the last day of the applicable repayment assistance period;

  • (i) if the borrower has been granted repayment assistance under subsection 13(2), the day on which the repayment assistance period begins;

  • (j) if the borrower has been granted interest-free periods for a cumulative period of six years, the day after the last day of that period;

  • (k) if any of paragraphs 15(1)(b) to (i) of the Canada Student Financial Assistance Regulations apply to the borrower, the applicable day set out in the paragraph in question;

  • (l) if a measure is taken in respect of the borrower under subsection 20(1) of the Act or under section 17.1 of the Canada Student Financial Assistance Act, the day after the day on which 60 days’ notice given under subsection 20(2) of the Act or subsection 17.1(3) of the Canada Student Financial Assistance Act expires;

  • (m) if five disbursements have already been made to the borrower under these Regulations, the day after the day on which the borrower received the last disbursement under an apprentice loan agreement; or

  • (n) the day on which the obligations of the borrower are terminated under section 10 of the Act or under section 11 or 11.1 of the Canada Student Financial Assistance Act.

• Marginal note:Denial of loan or termination of interest-free period

  (3) Subject to subsections (5) and (7),

  • (a) if an event described in any of paragraphs (2)(a) to (n) occurs, the Minister may, effective on the applicable day for that event, deny the borrower a new apprentice loan; and

  • (b) if an event described in any of paragraphs (2)(a) to (l) occurs, the Minister may, effective on the applicable day for that event, terminate any interest-free period under all outstanding apprentice loans made to the borrower.

• Marginal note:Termination of repayment assistance

  (4) If an event described in paragraph 2(g) or (h) occurs, the Minister must terminate any repayment assistance granted to the borrower under section 10 or 12 and refuse to grant further repayment assistance.

• Marginal note:Loan received erroneously

  (5) If an event described in paragraph (2)(a) occurs in respect of an apprentice loan made to a borrower and, subsequent to that event, the borrower erroneously receives an apprentice loan,

  • (a) the borrower is entitled to the apprentice loan; and

  • (b) the measure referred to in paragraph (3)(b) takes effect on the last day of the technical training period for which the apprentice loan was made.

• Marginal note:New loan or interest-free period

  (6) If, before the last day of the apprenticeship program in which the borrower is registered at the time the event occurs, an event described in any of paragraphs (2)(b) to (f) occurs in respect of an apprentice loan made to a borrower, the borrower is entitled, if otherwise eligible, to a new apprentice loan or an interest-free period for that apprenticeship program.

• Marginal note:Subsection (3) measures delayed

  (7) If the borrower receives a new apprentice loan or an interest-free period under subsection (6), the measures referred to in subsection (3) take effect on the earlier of

  • (a) the last day of the apprenticeship program, and

  • (b) the day that is three years after the applicable day for the event or, if that day falls during a technical training period, the last day of that period.

Removal of Restrictions

Marginal note:New loan, interest-free period, repayment assistance

• 7 (1) Subject to subsection (6), a borrower who has been subject to a measure taken under subsection 6(3) or (4) because of the occurrence of an event described in paragraph 6(2)(a) or (h), is entitled to a new apprentice loan, another interest-free period and further repayment assistance under section 10 or 12 if

  • (a) an event described in paragraph 6(2)(g) or (i) has not occurred in respect of the borrower’s apprentice loans; and

  • (b) the borrower has, in respect of an apprentice loan agreement for which a judgment has not been obtained, fulfilled the terms of a repayment arrangement entered into with the Minister that is no more onerous to the borrower than six consecutive payments subsequent to a day that are made in accordance with this agreement, and

    • (i) has paid the interest accrued to that day, or

    • (ii) has directed, for the first time under this paragraph, paragraph 10(1)(d) of the Canada Student Loans Regulations or paragraph 16(1)(d) of the Canada Student Financial Assistance Regulations, the addition of the unpaid accrued interest to that day to the outstanding principal.

• Marginal note:Rights in subsection (1) apply

  (2) Subject to subsection (6), a borrower who is subject to a measure taken under subsection 6(3) because of the occurrence of an event described in any of paragraphs 6(2)(b) to (f) has the rights referred to in subsection (1) if

  • (a) an event described in paragraph 6(2)(g) or (i) has not occurred in respect of the borrower’s apprentice loans;

  • (b) the borrower has complied with paragraph (1)(b), if the borrower’s consumer proposal has been annulled or deemed annulled or the borrower is no longer subject to a provincial law relating to the orderly payment of debts for a reason other than full compliance with that law, and none of the events described in paragraph 6(2)(b), (c) and (e) has occurred;

  • (c) the borrower has been released from their apprentice loans for any reason other than one described in paragraph (b); or

  • (d) the borrower is released from their apprentice loans by virtue of an absolute order of discharge that has been granted under the Bankruptcy and Insolvency Act and three years have passed since the date of the order.

• Marginal note:Rights in subsection (1) apply

  (3) Subject to subsection (6), a borrower who is subject to a measure taken under subsection 6(3) or (4) because of the occurrence of the event described in paragraph 6(2)(g) has the rights referred to in subsection (1) if

  • (a) an event described in paragraph 6(2)(i) has not occurred in respect of the borrower’s apprentice loans;

  • (b) the borrower has been released from their apprentice loans that were outstanding on the day of the finding of guilt;

  • (c) in the event that the release referred to in paragraph (b) occurs by operation of an order of absolute discharge granted under the Bankruptcy and Insolvency Act, three years have passed since the date of the order; and

  • (d) five years have passed since the day of the finding of guilt or a pardon has been granted in respect of that finding.

• Marginal note:Rights in subsection (1) apply

  (4) A borrower, who has been the subject of a measure taken under subsection 6(3) or (4), has received an apprentice loan as a minor and has refused to ratify that loan as an adult, has the rights referred to in subsection (1) if

  • (a) the borrower ratifies the loan; and

  • (b) to the extent that they apply, the requirements set out in subsection (1), (2) or (3) are met.

• Marginal note:Rights in subsection (1) apply

  (5) Subject to subsection (6), a borrower who is subject to a measure taken under subsection 6(3) or (4) because of the occurrence of an event described in paragraph 6(2)(i) has the rights referred to in subsection (1) if the borrower has paid in full the outstanding balance of their apprentice loans.

• Marginal note:Judgment

  (6) If a judgment has been obtained against a borrower, the borrower is not entitled to the rights referred to in subsection (1) unless, in addition to fulfilling the requirements set out in subsection (1), (2) or (3), the borrower has been released from that judgment.

Apprentice Loan Limit

Marginal note:Maximum amount

8 The maximum amount of an apprentice loan for one technical training period is $4,000.

Maximum Aggregate Amount of Outstanding Apprentice Loans

Marginal note:Prescribed amount

9 For the purposes of section 11 of the Act, the maximum aggregate amount of apprentice loans outstanding is $1.5 billion.

Repayment Assistance Plan

First Stage

Marginal note:Conditions

• 10 (1) Subject to section 6 of these Regulations and section 15 of the Canada Student Financial Assistance Regulations, the Minister must on application in the form determined by the Minister — including the borrower’s social insurance number — provide the first stage of a repayment assistance plan to a borrower for a period of six months if

  • (a) the borrower resides in Canada;

  • (b) no more than 114 months have passed since the later of the day on which interest most recently started accruing, or would have most recently started accruing but for the interest suspension period, and the day on which a restriction was removed under paragraph 7(1)(b); and

  • (c) the borrower’s monthly affordable payment calculated in accordance with subsection (2) is less than their monthly required payment calculated in accordance with subsection (3).

• Marginal note:Monthly affordable payment

  (2) The monthly affordable payment is equal to

  • (a) $0, if the borrower’s monthly family income is no more than the minimum monthly income threshold for their family size determined in accordance with the table set out in Schedule 2; or

  • (b) otherwise, the borrower’s monthly family income multiplied by the lesser of the amounts determined by the following formulae:

    0.1A

    1.5[((X – Y)) ÷ 100Z+0.01]A

    where

    A

    is, in relation to apprentice loans, student loans, guaranteed student loans and provincial loans, the ratio of the borrower’s outstanding principal for which instalments are due to the sum of that amount and the outstanding principal for which instalments are due for any loan of the same type to a spouse or common-law partner of the borrower,

    X

    is the borrower’s monthly family income,

    Y

    is the monthly income threshold for the borrower’s family size determined in accordance with the table set out in Schedule 2, and

    Z

    is the monthly increment for the borrower’s family size determined in accordance with the table set out in Schedule 2.

• Marginal note:Monthly required payment

  (3) The monthly required payment is equal to the sum of

  • (a) the outstanding principal of the apprentice loans made to the borrower for which instalments are due, amortized over a period of the greater of

    • (i) six months, and

    • (ii) 114 months minus the number of months that have passed since the applicable day referred to in paragraph (1)(b) plus the number of months since that day during which the borrower received repayment assistance under this section; and

  • (b) the monthly required payment calculated under

    • (i) paragraphs 19(3)(a) and (b) of the Canada Student Financial Assistance Regulations, or

    • (ii) paragraphs 20(3)(a) and (b) of those Regulations.

• Marginal note:Maximum number of months of repayment assistance

  (4) A borrower must not receive more than 60 months, in the aggregate, of repayment assistance under this section since the applicable day referred to in paragraph (1)(b).

Marginal note:Payment of federal portion

• 11 (1) A borrower must, no later than the day that is 30 days after a repayment assistance period ends, pay to the Minister the federal portion of the monthly affordable payments calculated in accordance with subsection 10(2) in respect of that period.

• Marginal note:Reduction of interest

  (2) The amount of interest payable by the borrower for a month during a repayment assistance period on the outstanding principal of apprentice loans is to be reduced by the Minister by the difference between the monthly required payment calculated in accordance with paragraph 10(3)(a) and the portion of monthly affordable payment attributed to apprentice loans calculated in accordance with subsection (4). That reduction is to be made only in relation to the months for which the borrower complies with subsection (1).

• Definition of federal portion

  (3) In this section, federal portion means

  • (a) if no instalments are due on account of outstanding principal under provincial loans, 100% of the affordable monthly payment; and

  • (b) otherwise, the ratio of outstanding principal in relation to student loans and guaranteed student loans for which instalments are due to the sum of this amount and the outstanding principal amount of provincial loans for which instalments are due.

• Marginal note:Attribution of payments

  (4) Payments made under this section are to be attributed in proportion to the outstanding principal of each apprentice loan, student loan and guaranteed student loan for which instalments are due.