Signed, sealed, and delivered

The Canada Job Grant, crown jewel of the Conservative government’s 2013 federal budget and a program that has caused months of contentious negotiations between the federal and provincial governments, is signed, sealed (“in principle”) and is to be delivered by July 1. It replaces current Labour Market Agreements (LMA) that expire March 31.

The result of numerous counter proposals from both sides, the new program would provide eligible workers access to up to $15,000 made up of federal, provincial and employer contributions for job-specific training.

Federal Employment Minister Jason Kenney announced that the provincial and territorial governments (with the exception of Quebec) had reached a deal in principle on Feb. 28. Quebec intends to opt out with full compensation.

“The whole debate is the result of the federal government ruffling the feathers of the provincial and territorial governments for reasons that essentially boil down to stepping in their sandbox,” says Matthew Wilson, vice-president of national policy at Canadian Manufacturers & Exports (CME), referring to federal claw-backs for existing provincial programs outlined in the initial proposal.

Details are sketchy as the provinces begin one-on-one bilateral negotiations with the federal government to finalize specifics, but Kenney’s final offer is expected to cut $200 million from the existing transfer instead of $300 million.

The other $100 million would come from the $2 billion Labour Market Development Agreement (LMDA) transfer, which is connected to the Employment Insurance program (EI), and eliminates the cost-matching requirement for provinces and territories. This came only after Kenney conceded that the provinces couldn’t afford to commit to dollar-for-dollar matching at a maximum of $5,000 per worker.

The compromise will result in fewer federal grants.

The provinces, no longer crying “foul,” are now singing Kenney’s praises for getting a deal done and addressing concerns related to cuts to provincially managed training programs, which were outlined in the original proposal.

The Council of the Federation, headed by Ontario premier Kathleen Wynne, said the provinces still share concerns about the grant, but are prepared to move ahead with implementation discussions on the basis of the compromise because it minimizes the negative impact of the initial proposal.

One-on-one negotiations will address remaining concerns related to funding cuts to programs the provinces use for vulnerable workers, including youth, immigrants, older workers and the disabled; and to enhance flexibility for employers, especially small and medium-sized businesses that may have trouble participating.

The Harper government has repeatedly stressed the importance of training unemployed Canadians to qualify them for the skilled jobs that are available, and has designed the program to compel employers to provide workers with specific training that will actually result in a job.

Unifor president Jerry Dias says not having to cut existing training programs is a welcome step forward.

“We need more job programs so that our youth can get a start in life, not fewer, and we certainly don’t need one program cannibalizing another,” he says. “Freeing the provinces to decide for themselves how to find the funding to participate in the program was always the way to go.”

Wilson says it’s important for the companies to have a hand in the training.

“We want the training fund to be as flexible as possible to meet the needs of manufacturers and not to be dictated by the government, especially for SMEs who don’t always have access to big funding and the ability to train at the level a big company would have. More shop floor training needs to be available, which will have a huge outcome on productivity.”

Due process
When the Canada Job Grant was first announced in the 2013 budget, it was criticized for requiring provinces to fund their share through previous federal job creation transfers without discussion.

The provinces, which currently have $500 million per year under the existing LMA, would have had their federal funding cut by $300 million, or 60%. That didn’t sit well with the premiers, who declared that a national approach to job creation was impractical because it was impossible for them to commit to their portion of the contribution. The provinces also wanted a say on which transfers were cut under the existing LMA.

The federal government wanted the provinces to pay their portion with $300 million of the existing $500 million LMA used to train vulnerable workers. But the provinces objected and counter-proposed the $300 million come from other sources, such as the larger $2 billion LMDA transfer, or from their own revenues. They criticized the original proposal as a unilateral move into provincial jurisdiction not supported by evidence.

Rob Hattin, president of Ancaster, Ont.-based ProVantage Automation, said the federal government is on the right track with the Canada Job Grant, following a CME symposium headlined by Prime Minister Stephen Harper Feb. 28 at a Martinrea automotive plant in Brampton, Ont.
He suggested Canada’s dilemma is the result of an upside-down education system that has kyboshed trade and technology education programs because they’re “usually the most expensive to run.”

The job grant would alleviate some of the pressure by providing companies with a means to attract workers to train on shop floors, then hire them. Education has grown into a global currency, he says, and managing it shouldn’t fall to the provinces.

“All manufacturers are in the same boat; we’re all facing the same dilemma, the same constraint, and the size of the company has nothing to do with it.”

Comments? E-mail mpowell@plant.ca.

Find this article in the March 2014 issue of PLANT.