Budget 2013 promises to reduce skills shortages and unemployment by overhauling our training system and making it much more employer driven. Details are lacking, but the plan as announced raises some serious concerns.
The government proposes to overhaul the two programs through which it supports provincial training initiatives, starting with the $500-million-per-year Labour Market Agreement (LMA), which is set to expire next year. This program is directed to training of unemployed workers not eligible for Employment Insurance (EI), as opposed to the $2-billion-per-year Labour Market Development Agreement (LMDA), which assists current and recent EI recipients.
The government plans to overhaul the LMA starting in 2014-15, based on negotiations with the provinces, to be followed by similar changes to the LMDA.
The core proposal is to convert federal funds into a contribution to a fund that would support training proposals from employers. Funding would be to a maximum of $15,000 per trainee, with one-third coming from the employer and one-third coming from each of the federal and provincial governments.
In effect, this puts employers, rather than governments, in the driver's seat when it comes to spending $2.5-billion in federal tax dollars.
The budget makes it clear that employers could apply for funds to raise the skills of underemployed current workers in current jobs, as opposed to hiring and training new workers.
While there is certainly a strong case for investing in the skills of low-skilled workers trapped in low-paid jobs, the reality is that that the government proposes to invest no new funds in training. Accordingly, there is a clear danger that those most needing help to get into the job market, such as social-assistance recipients, will lose out in the new system.
And there is a clear risk that employers might get funding for training their current work force – which they would have paid for in any case.
The federal government is reportedly unhappy that the provinces are spending very little of their training funds on actual skills training that leads people to good jobs. That is fair comment, but the reality is also that activities such as counselling, and support for travel to search for new jobs, are also needed to help people move from unemployment into paid work.
The budget makes reference to using training institutions such as community colleges, but it seems that employers will be able to obtain government support for workplace-based training, which will not lead to certified and portable qualifications.
Concern also has to be expressed over the clear focus on very short-term, low-cost training.
This meshes badly with the fact that documented skills shortages exist mainly in the skilled trades, professional health care occupations, information technology occupations and the like, all of which require much more than a few weeks of skills training.
The budget, somewhat unusually for this government, promises consultations with the provinces, employers and unions before major changes are made.
Let's hope we can reach a consensus on what changes really work best.
Andrew Jackson is the Packer Professor of Social Justice at York University and senior policy adviser to the Broadbent Institute.