The Canada Job Grant…
The new Canada Job Grant was one of the main items promoted in the Federal 2013 Budget.
This will provide up to $15,000 per person for short-duration training, with up to $5,000 provided by the federal government to be matched by similar amounts from provinces and territories and employers, starting in March 2014. The budget estimates 130,000 will benefit from this upon full implementation.
Applications are to be made by businesses to train underemployed and unemployed workers to get an existing job or to improve their skills for an “in-demand” better job. Training can include that provided by community colleges, trade union training centres and private career colleges. While not mentioned in the budget, the Canada Job Grant is also likely to be used to subsidize training provided directly by employers.
The specific terms and details will be determined through negotiations with provinces and territories of individual Labour Market Agreements in consultation with employer associations, educational institutions and labour organizations. These may exclude public sector employers and employees from the program. CUPE members may want to lobby their provincial governments so their workplaces are not excluded from eligibility for this program.
What is clear is that these funds will go to specific training priorities as determined by employers (who apply for the grant) rather than by workers, by provinces or by the community and educational organizations that deliver programs currently supported with these funds. Federal and provincial funding through this grant could simply subsidize training already provided or planned by businesses instead of levering additional training. They could also become an indirect wage subsidy for businesses.
This program also represents a significant shift in focus for these federal training funds: away from broad-based workplace skills development, literacy and essential skills to assist workers with lower levels of skills and lower rates of participation in the workforce and towards short-duration training for position-specific occupations, or funding to subsidize specific higher skills.
…Means Cuts to Federal Funding for Literacy and Essential Skills Training
The new Canada Job Grant will be funded with $300 million taken from current transfers for workplace literacy and essential skills training provided to provinces and territories through Labour Market Agreements (LMAs). The federal government has provided $500 million annually through the LMAs since 2008/9 which replaced Labour Market Partnership Agreements with provinces and territories which also provided funding for literacy, essential skills and workplace skills development. In the first two years of these programs they reached 550,000 Canadians.
The Labour Market Agreements funded programs designed to enhance the skills of low-skilled workers and to increase the labour force participation of under-represented groups, including immigrants and Aboriginal People. The programs targeted unemployed workers not eligible for EI and employed workers with lower skill levels. The 2013 Budget stated the federal government would like to also focus the remaining $200 million in the new LMAs also on training for “in-demand” jobs—a very significant change from the current program.
Under the current LMAs, funds transferred to the provinces and territories have either augmented funding for existing programs or supported the creation of new programs, such as Workplace Essential Skills New Brunswick, the Second Career program in Ontario, the Labour Education Centre and the Workplace Essential Skills Training Centres in Manitoba. CUPE members and locals have been involved in and used these programs in different provinces.
According to the budget, the federal government will continue to provide the remaining $200 million to the provinces (allotted on a per capita basis) through renegotiated LMAs to support the delivery of “critical employment services, such as counselling and job search assistance and administration,” but this will be a 60% cut from the federal government in funding for these services. Provinces that participate in the Canada Job Grant will also need to match the federal funding for it, so to maintain funding for current services at existing levels will require a $600 million increase in spending by provinces.
It is not clear whether these existing programs will continue to be funded by provincial governments or where they will get other funding if not. A new scheme being heavily promoted by the federal minister of Human Resources and Skills Development and highlighted in Budget 2013 is “Social Finance”. This involves private financing and private profit from programs delivered by community and non-profit organizations, but ultimately funded by the government: a sort of P3 for social programs.
The 2013 Budget indicated the federal government also intends to renegotiate the Labour Market Development Agreements (LMDAs) with the provinces, with their $1.95 billion of funding from Employment Insurance, to increase focus on programs to provide qualifications for “in-demand” jobs.
… and Provides a Subsidy to Business but is Unlikely to Address Broader Priorities
The Canada Job Grant shifts decision-making for training priorities from workers and collective organizations to businesses. Canadian businesses have one of the worst records for training among major industrialized countries and tend to favour training for higher skilled workers, often men.
The program will shift federal funds away from the most vulnerable groups that have the most challenges entering and advancing in the labour force to subsidizing the short-term training priorities of business: presumably whatever provides the most immediate returns for business.
Quebec has already asked that the province be excluded from the new federal program, with representatives of the province’s Commission des partenaires du marché du travaildenouncing Ottawa’s takeover of this program. Other provinces are concerned about the increased spending this subsidy will involve. Instead of subsidizing business training costs, Quebec requires that employers spend 1% of their payroll on training.
CUPE opposes federal cuts to funding for literacy and essential skills: new federal programs should be provided with new funds instead of taking money away from programs for the most vulnerable. Many employers have been involved in and benefited from the existing literacy and essential skills programs, understanding that all workers need these important foundational skills in communication—and that good training is not a quick fix but takes time.
CUPE and the CLC have called for the federal government to launch a national skills development strategy developed in collaboration with provinces, employers, labour and government to respond to a growing skills gap, an ageing workforce, and the need for greater educational opportunities for marginalized workers.
While Canada has skills shortage in some areas, this pales beside the jobs shortage. There are almost six times as many unemployed people looking for work in Canada as there are job vacancies. While Conservatives have justified their new approach saying there are “too many kids getting BAs and not enough welders,” the unemployed/job vacancy ratio is highest in construction and manufacturing: industries with similar skills as appear to be targeted by this program.
A recent report by the Certified General Accountants Association of Canada, Labour Shortages in Skilled Trades—The Best Guestimate? shows there are few generalized skills shortages in the trades. Differences between unemployment rates for skilled trades and the general population have not been significant, even in Alberta and Saskatchewan. Specific skilled labour shortages they were able to identify were sporadic, spread geographically and did not persist for more than a year at a time. Apprenticeship programs to address these typically require many more years to complete. The CGA report calls for better labour market information and also makes the point, that tighter labour markets present opportunities for businesses to invest more and to better align wage increases with growth in productivity for employees (e.g., provide increase wages).
Specific skills mismatches are often very regional and aggravated by economic policies that encourage economic development of the more volatile boom-bust resource and construction industries, instead of better planned and diversified sustainable economic growth. Few people want to leave their families and communities for the insecurity of a job in Fort McMurray, especially if it comes with an average $750,000 price tag for a single family home.
Wage, benefit and compensation increases can be the best way to respond to short-term skills shortages in the labour markets, as in other types of markets. Unfortunately, the Conservatives recent labour market policies—including its interference in free collective bargaining, undermining of labour unions, increased exploitation of temporary foreign workers at lower wage rates, and weakening of the Employment Insurance program—have focused on suppressing, rather than increasing wages. These and short-duration training through the Canada Jobs Grant are short-term measures that won’t help address longer term problems.
Addressing longer term labour and skills shortages requires longer term investments and strategies.
Canada needs better labour market information to respond to skills shortages: this has been diminished by cuts to Statistics Canada, and the elimination of national collaborative bodies, such as the Canadian Labour-Business Centre, the Canadian Council on Learning and cuts to funding for Sector Councils.
The longer-term unemployed, vulnerable workers and those with low rates of labour participation need increased support for literacy and essential skills as is provided under literacy and essential skills training programs.
Labour shortages can also be addressed by establishing a public pan-Canadian affordable quality early learning and childcare program. This would allow parents to rejoin the workforce, pursue education and training, lower high-school drop-out rates, and provide the next generation with the best possible start in life: increasing labour force participation both immediately and over the long-term. These programs can more than pay for themselves, as has been found in Quebec.
Post-secondary education at the university and college level also plays a key role in skills development and increased labour force participation: it should be made more accessible by increasing federal transfers for post-secondary education.
Public funding for work-related skills training should be used to meet the needs and to strengthen the capacity and incomes of workers, particularly the most vulnerable, and be integrated with other programs to increase skill and education levels and to reduce unemployment—and not be used for subsidizing private business.