Canada Job Grant program is ‘deeply flawed,’ report says

TheGlobeandMail.com – ROB/Economy Lab
June 17, 2013.   Barrie McKenna, Ottawa

Ottawa’s $900-million job grant scheme is a windfall for companies that already train workers, opens few new opportunities for the unskilled and saps funds from existing government efforts, according to a new report.

The program is “deeply flawed public policy” and should be scrapped, say the authors of a report to be released Monday by the Mowat Centre at the University of Toronto and the Caledon Institute of Social Policy.

“A government incentive program to do something governments are already doing doesn’t seem to make much sense,” Mowat director Matthew Mendelsohn said in an interview.

Last week, Ontario threatened to boycott the program unless Ottawa reverses its plan to cut money from existing programs to pay for it. Quebec has already said it won’t participate and several other provinces have voiced strong objections.

“I think the momentum is sufficient that they can’t move forward with this now,” Mr. Mendelsohn said.

He suggested Ottawa may instead seek to renegotiate existing labour market agreements they have with some provinces. Ontario, for example, uses the roughly $200-million a year it gets now to train youth, First Nations, people with disabilities and other disadvantaged groups.

Under the proposed Canada Job Grant, unveiled in this year’s federal budget, Ottawa, the provinces and employers would share equally the cost of $15,000 per worker.

Ottawa is already under fire for spending hundreds of thousands of dollars advertising the program, which doesn’t yet exist.

The Mowat and Caledon study applauded the goal of helping Canadians acquire skills, but said the Canada Job Grant is “not well designed.”

The authors – Michael Mendelson of the Caledon Institute and Noah Zon of the Mowat Centre – said much of the money will have no impact on the amount of training done in Canada. For example, they said Ottawa has provided no evidence that Canadian companies will put up their $300-million share of the scheme, beyond those that already offer extensive training.

That will make it tough for Ottawa to meet its promise of training 130,000 workers a year, according to the report.

The authors point out that badly needed skilled workers and professionals can’t be trained with a “short duration” job grant.

And they warn that the provinces will be saddled with the costly job of overseeing the program to make sure there is no abuse.

“The Canada Job Grant has all the signs of a proposal picked out of thin air,” the report concluded. “There is no pilot program, no study and no documentation . . . to support the expenditure of $600-million annually of public money.”

The Mowat Centre’s Mr. Mendelsohn said Ottawa would typically consult experts, find allies and inform stakeholders. But the government has done none of that, he said.

< https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20130617/RBJOBSMOWATMCKENNAATL >

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The Training Wheels Are Off: A Closer Look at the Canada Job Grant
Michael Mendelson and Noah Zon, June 2013

In its March 2013 Budget, the federal government proposed a new skills training program called the Canada Job Grant.  The program would provide up to $15,000 per trainee for employer-sponsored training, of which the federal government would pay one third – if each of the sponsoring employer and the province or territory contribute matching funds.  This report assesses the Canada Job Grant proposal and finds it to be deeply flawed.  The proposal imposes an additional cost of up to $600 million plus administrative expenses on the provinces and territories while intervening with a unilateral federal initiative in a field recognized as within provincial jurisdiction.  But aside from cost and jurisdictional issues, the Canada Job Grant is likely to deliver inferior results at higher costs, while remaining out of reach to many of the unemployed and underemployed Canadians it is intended to serve.

< http://www.caledoninst.org/Publications/PDF/1013ENG.pdf >

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