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Liberals pledge $5-billion for training, employment in 2017 federal budget

Finance Minister Bill Morneau and Prime Minister Justin Trudeau leave the Prime Minister's office holding copies of the federal budget in Ottawa, Wednesday, March 22, 2017.

Sean Kilpatrick/THE CANADIAN PRESS

The federal government will boost funding for training, expand employment insurance and make it easier for foreigners to get their credentials recognized in Canada, an attempt to fix employment policies and adapt to a rapidly changing workforce.

The government's focus on training in its second federal budget comes as Canada's economy recovers from the devastating energy downturn, which resulted in the loss of thousands of lucrative natural resources jobs. The budget, released Wednesday, commits about $5-billion in extra funds over five years for skills and employment programs.

The oil collapse highlighted problems with the government's training and employment insurance policies, such as not allowing jobless oil workers to collect EI benefits while training for a new career.

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"They are tackling measures on the fringe where they know you are not optimizing on your workforce," said Beata Caranci, chief economist with Toronto-Dominion Bank. "It's good in the sense that hopefully over time you do a better job of skill matching into the workplace," she said.

Even before the energy slump, many Canadians struggled to find employment or keep their jobs amid a decline in long-term, high-paid jobs in the goods-producing sector and an increase in temporary work.

Under the federal budget, unemployed people who want to use government-funded training programs will not have to give up their EI benefits. New loans and grants for adult students are designed to help a wider range of people, such as parents who want to return to the workforce and those who are victims of shrinking industries, such as auto manufacturing.

The EI expansion will also help caregivers and parents. For example, women will be able to claim EI maternity benefits earlier in their pregnancy, starting at 12 weeks before the due date.

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At the same time, the budget tries to address the skills gap in the country by making it easier for qualified foreigners to work in Canada. Foreigners will now be able to start getting their credentials recognized before moving to Canada. Over five years, $27.5-million will be set aside to help foreigners with accreditation costs and allow them to gain Canadian work experience .

The budget also addresses corporate concerns by creating a fast-track system for big companies that want to quickly hire foreigners. The goal is to process visas within two weeks and introduce a new permit for shorter work terms.

The policies to welcome highly skilled foreigners is in sharp contrast to the new U.S. administration, which is clamping down on its borders with threats of protectionist trade policies and a travel ban on certain Muslim-majority countries.

The government is also setting aside $225-million to create a new organization to address gaps in skills and figure out ways to plug those holes.

Last year, the government spent nearly $4-billion on training, more than half of which was from employee and employer contributions to employment insurance.

The EI premium is expected to rise slightly from the current $1.63 per $100 of insurable earnings to $1.68 next year.

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However, it will take years before some of the new policies are expected to have any kind of impact. Some of the new measures, such as the new student loans, will not start until next year.

"There's going to be a lot of patience required," said Ms. Caranci. "What ultimately needs to be done is measurable results. Will they be able to go back in three years and measure exactly what those results are to make tweaks to the policies."

The federal government will soon start talking to provinces and territories about the new training fund agreements. Part of the discussions will include how to evaluate the programs.

Currently, Ottawa has no direct oversight over the funds. Every region and training program is evaluated differently, if at all.

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About the Author
Economics Reporter

Rachelle Younglai is The Globe and Mail's economics reporter. More

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