Ottawa digging in for Canada Job Grant fight with premiers

Stephen Harper's government is well down the road to redefining its relationship with the provinces, an approach that jettisons co-operative for confrontational federalism.

Premiers meeting Friday in Toronto would do well to take note.

The latest flashpoint is the proposed skills training program introduced in the federal budget that's supposed to equip Canadians for thousands of highly-skilled jobs that now go unfilled.

Called the Canada Job Grant, the program would see Ottawa, the provinces and private employers kick in up to $5,000 each to train individuals for what Employment Minister Jason Kenney says will be a guaranteed job.

Sounds great, except for a couple of niggling details.

The provinces don't want Ottawa's share of the money to come from existing labour market agreements, which were created by the Conservatives back in 2007 and have provided training for young people, members of First Nations, new immigrants and people with disabilities to enter the workforce.

Also, the premiers say they weren't consulted about the plan, just like they were never told before Finance Minister Jim Flaherty announced two years ago that he would cap federal contributions to health-care spending.

• Kenneygets frosty provincial reception to job grant plan

These are points the premiers will almost certainly repeat after their meeting today in Toronto.

Officially, Kenney continues to cajole, negotiate and compromise with provinces in an effort to get them to sign on to the Canada Job Grant program.

But he's really not waiting for an answer, and told CBC News this week that his department is already preparing contingency plans to deliver the training program in any province that doesn't sign on.

"At the end of the day, obviously, the provinces are always going to just demand a blank cheque from the federal government to spend as they please. No shocker there,'' Kenney said in a brief cellphone interview between meetings this week.

"But we have a responsibility, as a federal government, to ensure we get maximum bang for the taxpayers' buck. And to actually create real jobs out of the training money.''

The economy of the future

For their part, the provinces say Kenney is working too hard at twisting the facts.

First, carving out $300 million or nearly 60 per cent of Ottawa's contribution to the labour market agreements will oblige the provinces to fill that gap themselves, and pay up to twice as much for those with limited job skills.

Second, programs funded under the labour market agreements are a huge success, according to a leaked report done this spring by Kenney's own department. It found 86 per cent of those who received training were still working two years later.

"This is the federal government cutting 60 per cent of the funding for a program that helps marginalized workers into the workforce,'' Ontario's Training Minister Brad Duguid said in an interview.

"None of the provinces are spoiling for a fight over this. We'll work with the federal government as long as they come up with another source of funding for the job grant.''

But a fight is what they are getting, and here's why.

The federal government is staking Canada's economic future on exploiting the country's vast natural resources. That means oil, liquefied natural gas and pipelines to take both to market.

It also means mining for metals and diamonds and other minerals, all of which entails jobs in the tens of thousands, too many of them now being filled by temporary foreign workers because employers can't find Canadians with the necessary skills.

For Kenney, the Canada Job Grant solution is a virtuous cycle.

More skilled workers encourage more new projects. That means more jobs. The economy grows. Creating even more jobs.

Of course, this is the same Conservative government that preaches the importance of tending to its own areas of responsibility, such as defence and foreign policy, and leaving the provinces to theirs.

Conservatives would never dream of rejigging their transfer payments for health care to take control over, say, emergency ward operations.

But that's exactly what Kenney is doing with funding for skills training, to further the Conservatives economic agenda.

And he's confident that at least some provinces will sign on, though he won't say which ones.

The flip side

Provincial statistics underscore just what's at stake.

The government of British Columbia estimates projects to develop and export liquefied natural gas alone would create more than 100,000 jobs in the province over 30 years.

Newfoundland and Labrador forecasts the province will need to fill 70,000 new jobs by 2020. And Saskatchewan's growth is already being restrained by a shortage of skilled workers.

But here's the flip side.

In B.C. more than 94,000 people have gone through LMA-funded training programs, and nearly two out of three obtained employment. Ottawa's share of the funding is $40-million and would be reduced substantially under the new plan.

In Saskatchewan, 60 per cent of the people trained under LMA programs are aboriginal, and many of them live in areas where new projects are planned.

In Ontario, the success rate is just as high. But without the federal contributions, provincial officials say it will cost Ontario $232 million to continue funding the programs on its own.

'Tweak' your programs

Kenney's unmoved, and notes that the federal government already earmarks billions of dollars for training aboriginal youth, immigrants, older workers and others under-represented in the workforce.

"If these programs are really important they [the provinces] will find other ways to fund them," he said.

"They've done very well by this federal government, it's not unreasonable to ask them to tweak their training programs so they are more closely aligned to the job market.''

The problem is the provinces aren't being asked. They're being told, with the only right answer being yes sir.