More government investment in skills training has long been on the wish list for employers grappling with the ever-widening skills gap — and it appears Ottawa has gotten the message.
Strategic investment in skills development is a major theme of the 2014 federal budget, and February saw the unveiling of two innovative skills training initiatives that are set to receive funding.
Canada Apprentice Loan helps redirect unemployed
One was the newly created Canada Apprentice Loan, an interest-free student loan for apprenticeship training in Red Seal trades. That announcement came just a few days after Jason Kenney, minister of employment and social development and minister for multiculturalism, announced federal funding for the Alternative Pathways for Newcomers project through the National Association of Career Colleges (NACC).
Despite their different focuses, both initiatives are designed to help redirect unemployed or underemployed workers toward “high-opportunity” careers — which is a key issue in addressing the skills gap, according to Sean Reid, federal director of the Progressive Contractors Association, based in Hamilton.
“One of the big challenges in this skills shortage is moving people from low-opportunity career paths to high-opportunity career paths. The economic landscape is changing... and so a lot of people are having to transition,” he said.
“The beauty of the apprentice loan is that we believe it’s going to remove one more barrier for people who have been considering making that change, but for various financial reasons — as well as other reasons — have been reluctant to do so.”
The Canada Apprentice Loan will provide more than $100 million in interest-free loans each year to apprentices in Red Seal trades. An expansion of the Canada Student Loans Program, the apprentice loan will provide apprentices with up to $4,000 per period of technical training.
Until this point, there had been no comparable vehicle for apprentices to receive federal student loans, said Sarah Watts-Rynard, executive director of the Canadian Apprenticeship Forum in Ottawa.
“It was a gap that existed. Apprentices weren’t eligible for Canada Student Loans, mostly because they aren’t considered students first — they’re considered employees,” she said.
But even though much of their training takes place during paid on-the-job employment, many apprentices face significant financial barriers during the technical training periods where they’re not being paid, said Watts-Rynard.
“Apprentices do find that there’s some financial hardship involved with going back to school. And because they are employed full-time when they’re not in school, they are used to getting a paycheque and obviously have all of the responsibilities that come with that,” she said.
“We also find that apprentices are usually in their mid to late 20s. So they do have financial obligations… It’s important for them to be able to go back to school and obviously still be able to get some kind of support.”
And it’s not just 20-something apprentices who will benefit — the loan will also provide support for those who are considering a career change or facing unemployment relatively late in their careers, said Reid.
“Maybe they’re working in the manufacturing sector in southern Ontario and they’ve just been given notice that six months from now their shop is going to be winding down. It can be quite difficult for somebody who’s a little bit older, maybe they’ve got a family, to go back into the classroom at that point. There’s a lot of hidden costs associated with that,” he said.
“This loan can actually subsidize that and... make it just a little bit easier for people to make that decision to get into high-opportunity skilled trades.”
Hopefully, the loan will be a positive push for employers, whether hiring apprentices or not, said Watts-Rynard.
“From the point of view of employers who are already hiring and training apprentices, I hope that it will encourage them to see the benefit of letting their apprentices go back to school,” she said.
“In terms of how it affects employers that maybe aren’t hiring and training, but are talking about the skills shortage, I would hope it encouraged more apprentices to complete their certification and perhaps go back to school… If you have more certified people in the job market, then that’s good for people who say that they have skills shortages.”
The loan won’t be a cure-all, said Watts-Rynard — but at least it’s starting the right conversations.
“Probably the most positive thing when it comes to apprenticeships and the skilled trades is that it is being talked about. It’s not a specific announcement that I would say, ‘Oh, that’s going to make the difference,’” she said.
“It’s a matter of continuing to try and see how we can impact the number of apprentices. By talking about it, you encourage young people and their parents, educators to see those as viable career options, and I think that’s the first step.”
Reid agreed the loan is just one more piece of the puzzle.
“The main thing is the government is rightly focused on removing barriers for people to move into high-opportunity professions like the skilled trades. We think the Canada Apprentice Loan will help do that and it’s just another piece of the puzzle that’s going to help us solve the skills shortage.”
Alternative Pathways for Newcomers project
A different piece of the skills shortage puzzle has to do with skilled newcomers to Canada who are unemployed or underemployed, and struggling to improve their situations.
“I call it the Canadian experience paradox. The employer says to you ‘I’m sorry, you can’t apply unless you have Canadian experience.’ And you say to them ‘Well, how do I get Canadian experience if I can’t get a Canadian job?’” said Kenney, while announcing funding for the new Alternative Pathways for Newcomers project.
“Too many of our new Canadians end up feeling and being excluded from their potential in our economy. And that’s a waste for them, it’s a waste for us.”
So the federal government is providing $800,000 in funding for the project through the National Association of Career Colleges (NACC).
Many newcomers who already have training in critical sectors like health care are working in underpaid jobs that have little to do with their backgrounds, said Serge Buy, CEO of NACC in Ottawa.
“As soon as they arrive in Canada, their experience and their credentials are not recognized. And that’s extremely frustrating for them because they have a passion which got them to study in a specific field,” he said.
“Often what happens then is they are completely taken out of the system, and they end up getting jobs that pay much less and are absolutely unrelated to their passion and their education.”
The Alternative Pathways for Newcomers project aims to educate these skilled newcomers about alternative career options and connect them with training that will get them working in their fields in a short period of time.
“So the question is the following: Can we take a lawyer from Pakistan, as an example, and get him to become a paralegal in Ontario or an immigration consultant? Can we take the engineer and get them to become an AutoCAD drafter? Can we take the doctor and get them to become a nurse? Can we get the nurse and get them to become a personal support worker?” said Buy.
“Yes, we can — and probably in much less time than would be required in their initial professions. So that’s what we’re looking at.”
Some career colleges have already been doing this successfully and the government funding for the new project will allow NACC to formalize and broaden the scope.
“What we’re trying to do is increase to scope and create bridges between immigrant-serving organizations and career colleges, to get more information to the newcomers,” he said.
“So instead of them getting discouraged and dropping all of their education and going in a dead-end job, maybe we can get really quickly to something that leads to better employment that will end up benefiting Canada — and them as well.”
Budget highlights for HR
Canada Job Grant: Proposed last year but ran into opposition from provinces. Gives $15,000 grant to cover job training, with $5,000 each coming from Ottawa, the provinces and businesses.
Public servants: Retired government employees will be asked to pay 50 per cent of the cost of their health benefits, up from 25 per cent. This will save Ottawa $7.4 billion over six years and increase the cost of annual contributions from retirees from $261 to $550. The government also wants to negotiate changes to disability and sick leave provisions for public servants, and ensure compensation is “fair and reasonable.”
Foreign workers: Ottawa will ban employers from paying temporary foreign workers less than what they would normally pay domestic workers, and the use of temporary foreign workers would be restricted in areas of high unemployment.
Deficit: A deficit of $2.9 billion is being projected but that includes a $3-billion contingency reserve, so the budget is essentially balanced. The surplus for 2015-16 is expected to hit $6.4 billion.
MP, senator pensions: Senators and MPs who have been suspended will no longer accrue pension benefits. It’s not clear if the legislation will be enforced retroactively once it has passed.
•employment insurance benefits for apprentices
•a “Made in Canada” branding campaign.
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