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Industry reacts as details emerge about job grant agreement

Richard Gilbert

The premiers of Canada’s provinces and territories have reached an agreement in principle with the federal government on the Canada Job Grant, despite serious concerns about the design of the program.

“Having the provincial and federal governments co-operate with one another is already better than having them fight each other,” said Philip Hochstein, president of the Independent Contractors and Businesses Association. “It is good that both sides have found a way to come together, which is good for the country, industry and employees. They are both to be commended for being flexible and finding the common ground to reach an agreement.”

Canada’s premiers and the federal government have negotiated several changes to the Canada Job Grant, which aim to minimize the negative impact of the initial federal proposal.

In particular, the federal government agreed to the following changes to the program:

  • The elimination of the cost-matching requirement for provinces and territories;
  • The allocation of a greater proportion of the Labour Market Agreement for existing programming for vulnerable workers; and
  • To review the program by the end of 2015, which is a critical step to ensure it is meeting the needs of Canadians and employers.

As a result of this compromise, the provinces and territories will start the process of finalizing the renewal of bilateral Labour Market Agreements.

“We are more than happy that they reached an agreement in principle and that both levels of government are respecting the urgency of the timelines for providing services to them under current agreements,” said Manley McLachlan, president of the B.C. Construction Association.

“However, there are still some significant outstanding issues that remain to be resolved.”

For example, there will be less federal funding available for existing, successful skills and training programs for the vulnerable and unemployed than under the current program. In addition, the proposed program may not be flexible enough to allow some employers, especially small and medium-sized businesses, to participate.

Premiers are concerned that if businesses are not able to use the Canada Job Grant, funding that would otherwise be going to organizations that provide employment supports to vulnerable Canadians would be lost.

Given the federal approach of negotiating a Canada-wide program through a series of bilateral agreements, Canada’s premiers expect a betterment clause to be included in the agreements to ensure all provinces are able to offer similar programming in the implementation of the job grant.

Québec has already indicated that it intends to opt out of the Canada Job Grant initiative with full compensation.

Finance Minister Jim Flaherty presented the 2014 federal budget in Ottawa on Feb. 11, which included the Canada Job Grant. The federal program is designed to encourage greater employer participation in skills training decisions and ensure that training is better aligned with job opportunities, particularly in sectors facing skills mismatches and labour shortages.

The Canada Job Grant will provide up to $15,000 per person for training costs, including tuition and training materials. This includes up to $10,000 in federal contributions.

When the Job Grant was first announced in the 2013 federal budget, the provinces and territories were expected to contribute on average one-third of the total costs of training or $5,000 each.

Small businesses will benefit from greater flexibility in their cost-matching arrangements, such as counting wages as part of the employer contribution.

Businesses with a plan to train unemployed and underemployed Canadians for a new or a better job will be eligible to apply for a Canada Job Grant.

The grant will be for short-duration training provided by an eligible third-party trainer, such as community colleges, career colleges, trade union centres and private trainers.

Training can be provided in a classroom, on site at a workplace or online.

The Canada Job Grant will be introduced as part of the renewal of the Labour Market Agreements in 2014-15. The 2013 federal budget announced the government’s plan to renegotiate the $1.95-billion-per-year Labour Market Development Agreements to reorient training toward labour market demand.

The detailed design of the grant is being negotiated with provinces and territories, in consultation with employer associations, educational institutions and labour organizations.

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