A few readers indicated they had trouble accessing my submission so I’ve included the full text here:
Year Two Review – Canada Job Grant Submission to the FLMM
Brigid Hayes, Brigid Hayes Consulting
August 19, 2016
My consultancy work is in the area of adult literacy, essential skills, and training. I have been tracking the implementation of the Labour Market Agreements (LMA) since their beginning. I viewed the LMAs as an opportunity for the unemployed and those without a high school credential and/or low literacy and essential skills to receive training to improve their employment status.
My estimation of the LMAs was that they were achieving positive results in funding/supporting training for those with low literacy skills. This group, along with other non-EI eligible individuals, were a key target of the LMAs. I saw no reason to abandon the LMAs. The decision to do so was made unilaterally without reference to the program’s evaluation.
The Year Two Review
I agree with the findings of the Year Two Review document prepared by Goss Gilroy. It is clear the Canada Job Grants (CJG) are benefiting employers. However, they do not meet the needs of a diverse workforce, job seekers, or those with low literacy skills or levels of education.
According to Goss Gilroy, some 37,000 participants were funded by over 5,000 employers through the Canada Job Grant. This compares to 360,000 unemployed and underemployed individuals funded each year through the LMAs. Clearly, a number of people are no longer being served.
What is the policy problem?
It has never been clear to me what policy problem the Canada Job Grant was attempting to address. The Minister of the day indicated, without supporting evidence, employers were the best positioned to make decisions about training and so the CJG favours employers. No documentation was ever released outlining the reasoning behind the CJG or examining alternatives such as the payroll tax used in Quebec or a tax credit.
From a public policy perspective, providing public funds directly to private industry to train the employed does not make sense.
The CJG requires employers to pay cash for training. This privileges employed workers, 85% – 100 % of the CJGs granted have gone to train the employed. Few employers are willing or able to pay for training those who do not work for them. In fact, according to the Goss Gilroy report, the CJG has trained employed men, between 30 and 49 years of age, who have a least some post-secondary education.
While employers do know what skills they need, they are not always in a good position to conduct training assessments or choose appropriate trainers. The CJG is not designed to assist employers to make these choices although some provinces, notably BC and Ontario, have contracted third party groups to assist employers.
What about the unemployed and those with low literacy skills?
Nothing in the CJG provides an incentive to employers to train the unemployed, those with low levels of skills or those facing challenges in obtaining and retaining employment. Goss Gilroy reports that 12% of those trained had less than a grade 12 education. This finding is consistent with other evidence that adult education and training goes to those who already have higher levels of education. The CJG has not changed that dynamic and rather has reinforced it.
The Canada Job Fund allows for one stream, the Employment Services and Supports (ESS) stream, which resembles the LMAs. ESS provides funding for the unemployed and those with low literacy and essential skills. British Columbia has been especially creative in allocating and promoting funding for ESS activities.
However, the ESS budget is only a fraction of what it was under the LMA. The conditions of the CJF force provinces and territories to spend less on ESS in order to meet the quotas for employer-determined training. This requirement means that the ESS stream will have little money remaining towards the end of the six-year agreement cycle. Several jurisdictions have called for more flexibility in using ESS funding while calling for the end of the funding targets.
The federal government announced in Budget 2016 an additional $50 million for the Canada Job Fund agreements. Allocating these funds to the ESS stream specifically for the unemployed and/or low skilled population would be a step in the right direction.
Changing how training is delivered
The CJG focuses on formal training or education preferably leading to a credential. As a result, training led by community-based agencies or individual trainers is not permitted. Indeed, Goss Gilroy indicates that private trainers or product vendors provided the most training. Providing public dollars to have Microsoft deliver training is not good public policy. Goss Gilroy found no evidence that the training provided would be transferable to other workplaces making the employer the main beneficiary of these public funds.
Even though all the guidelines issued by the provinces and territories indicate that CJG funds should not replace existing training funds, there is no evidence that this is the case.
In many cases, the funds flow through to the training sector, which has leveraged the CJG by creating $15,000 courses, exactly the same amount as a single CJG.
Provinces and territories do not publish list of CJGs, the names of the recipient companies, or the outcomes of the grants. Nor do they post performance measurement data. Although each jurisdiction carried out a Year Two Review, these reviews are not publicly available.
Employment and Social Development Canada also does not provide detailed information about CJGs and many of the links on its website are broken.
For years, the non-profit sector and the public sector have been required to document publicly their spending. This is the least that should be required for the CJGs.
Determining labour market training needs
The role of government is to encourage the private sector. Direct grants do not appear to change behaviour and might actually replace what would have already been spent. Here I would challenge the premise of the CJG – that employers are best suited to be the sole decision makers. Public funds should be targeted to those with the most need. These are not the employed but rather the unemployed, those with low skill levels, workers in precarious situations, women, indigenous peoples, internationally trained immigrants and persons with disabilities. Alternative government incentives to encourage increased employer training do exist and should be explored.
The private sector along with labour does have a role to play as a partner with governments. Canada lacks a forum where these interests can come together to plan and respond to changing labour market conditions. The Canadian Labour and Business Centre, where I was the Director, Labour, filled this role, one that later would be taken on by the Centre for Workplace Learning. A multi-party forum (employers, labour, federal, provincial and territorial governments) would help address emerging issues and needs in a collaborative fashion.
- The Goss Gilroy report provides an excellent outline of what needs to be done to improve the current CJG and its recommendations should be implemented.
- The Nova Scotia recommendation to de-couple the CJG from the Canada Job Fund and reinstitute the Labour Market Agreement should be implemented.
- Provinces and territories along with the federal government should post performance results along with evaluation and other documentation on their websites.
- Alternatives to direct grants to employers should be explored to encourage employers to provide training. Alternatives include tax credits or the payroll tax model used in Quebec.
- A concerted effort should be made to make up for lost ground for the unemployed, especially those with low literacy skills or low education. Training for this group has stalled over the past two and half years. The $50 million allocated in Budget 2016 should be used for this effort.
- A national forum should be established with all the labour market partners to provide a balanced and evidence-based approach to labour market planning and training.
 Contact: Brigid Hayes, firstname.lastname@example.org, https://brigidhayes.wordpress.com/