Tuesday, August 14, 2018

New labour market training agreements announced

In late June, the federal government announced it had signed new labour market training agreements with Alberta worth $1.7 billion over the next six years. There are two main funding streams:

The Labour Market Development Agreements (LMDA) address Type 2 Employment Insurance (EI) training benefits. EI claimants as well as some EI premium payers can receive training under this program. It looks like Alberta gets about $154m per year to provide thee benefits to Albertans.

The Workforce Development Agreements (WDAs) replace the Canada Jobs Grant Fund (CJGF) as well as the Labour Market Agreements for Persons with Disabilities and the Trageted Initiatives for Older Workers (both of which re now defunct and subsumed by the WDA). The WDA funds training that is not eligible to be covered under LMDA and Alberta gets about $91m per year under WDAs.

Interestingly, it appears that Alberta will continue to operate the Canada-Alberta Job Grant. This grant was the brain child of Jason Kenney when he was the federal employment minister. Kenney promised that the grant would see employers select unemployed people, offer then training and then hire them. Specifically, Kenney said
The whole point of the job grant is it will involve employers in selecting employees who they believe will have the propensity to work, getting them specific training, and the employers offer them a job at the end of it.
The mechanics of the CJG were that employers could spend up to $5000 for training and seek matching funds at a 1:2 ratio (i.e., up to $10,000) from the government to offset training costs. In effect, the CJG transferred the power to determine what kind of labour market training would by funded to employers.

Even a few years into the grant, it was apparent that things were going poorly. British Columbia reported that, after two years of operating the Canada-BC Job Grant, 99% of participants were drawn from the ranks of the already employed. This finding reveals that the CJG is not meeting its goal of increasing labour-market attachment among unemployed British Columbians.

Additionally, the majority of participants already had some PSE and most saw no wage-increase following the training. Less than 4% of employer applications identified participants as a youth, a person with a disability, Indigenous, or a new immigrant. Only 30% of participants were women. Finally, only a minority of employers used the CJG to pay for new or additional training. Most employers used CJG funding to offset existing training costs.

Alberta reported a very similar experience, noting that the Canada-Alberta Job Grant is being used to mostly train employed men with PSE in skilled management and non-management occupations. Manitoba concluded:
No evidence was found the Grant increased the supply of skilled labour, increased participation of underrepresented groups, or developed the long term human resource capacity of employers. Over the short term, training did not increase labour market attachment, as very few participants obtained or retained jobs as a direct result of the training. The vast majority of training participants were employed before receiving training (99%). (p.51)
The Northwest Territories was particularly critical of the impact of the CJG on existing labour-market training programs:
The cost sharing element of the Job Grant also negatively impacted funding for existing employment and training programs, particularly those targeted for unemployed, and under-employed individuals who do not have a job offer, and for individuals entering or re-entering the labour force. These impacts will increase as the Job Grant is fully phased in to reach 60% of the Job Fund. (pp. 65-66).
While there are exceptions to this general pattern (as well as data gaps in the evaluations), the CJG appeared to redirect federal training dollars towards already employed men in high-status and high-wage occupations. The CJG funding model also shifts federal funding away from assisting unemployed workers to become job-ready. In these ways, the CJG replicates existing patterns of advantage (and disadvantage).

In terms of access, control and benefit, the CJG privileged the interests of employers. Employers determined which employees received what kind of training under the CJG because employers made applications for the funding. Employers were the main beneficiaries of the CJG, receiving taxpayer-subsidized training for their employees.

Workers may benefit from this training, if it leads to more satisfying or remunerative work, either with their current employer or another employer in the future. The workers who received the most benefit from CJG were largely well-educated men who were already employed in skilled occupations and who didn't identify as Indigenous, immigrant, or disabled. Further, the CJG focuses training dollars on workers who are essentially job-ready, thereby disadvantaging Canadians with little prospect of labour-force attachment.

Basically, the Canada Job Grant was a terrible, terrible idea (which is what most practitioners said when Kenney proposed it). Why any province would retain a training program that yields such inequitable results is beyond me.

-- Bob Barnetson

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