Labour Market Agreements and the Canada Jobs Grant: Implications for CED

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Funding for CED groups may be at risk with the proposed Canada Jobs Grant.

Since 2008, the federal government has provided funding to the provinces and territories through Labour Market Agreements (LMA) to provide employment training programs and services to individuals underrepresented in the Canadian economy. This includes persons with disabilities, Aboriginal peoples, and recent immigrants.

The programs have been a resounding success. A (leaked) report from the Department of Employment and Social Development found that 86% of participants were employed two years after completing job training programs (compared to 44% before), and participants’ earnings on average increased by $323 per week.

These LMAs are set to expire in April 2014 and as part of the program's renewal, the federal government has proposed to cut the $500 million per year provided through the current agreement to $300 million, and divert this money to the Canada Jobs Grant (CJG).

The CJG would require the federal government, provinces, and the participating employer to match up to $5,000 each to train individuals for particular jobs. Businesses will be eligible for fund-matching only if the training is for an existing or better job, and eligible training providers are limited to colleges and union training centres.

The federal government’s primary argument for diverting LMA funds to the CJG is a belief that Canada has a “skills mismatch” problem, with the private sector being in the best position to decide who gets trained and to ensure training is targeted to an available job. Minister Kenney also stated that the CJG will deal with the inefficiency of “a government bureaucracy [administering] a program which just brings people in as clients, often churning them through training, many of them welfare recipients, just so they can continue to enroll in welfare.”

Numerous organizations have voiced opposition to the changes, including provincial leaders, CED organizations, and the private sector.

The Provincial leaders have unanimously opposed the changes to the LMAs, as it will cut funding to successful programming currently targeted to those in greatest need and eliminate the ability for provinces and territories to tailor programs and funding priorities to their unique contexts, realities, and priorities.

CED organizations who focus on creating training and employment opportunities for people with multiple barriers to employment risk losing their funding as most do not fit the category of “private sector employer,” are not an accredited training institute, and do not have the resources available to provide the matching funds or administrative requirements.

The private sector is concerned about the administrative burden this model creates for a relatively small amount of resources. There is also concern that small to medium enterprises won’t have access to the funds due to their limited capacity to match funding.

Lastly, individuals accessing these programs face a limitation of once-in-a-lifetime usage, which is a significant obstacle for those who have multiple barriers to employment and may need a series of training opportunities to fully enter the labour market.

For more information on the LMAs and CJG, check out some of these links:

Updated January 23, 2014:

Updated January 27, 2014

Updated February 28, 2014