Budget should include more for training: critics

By David Brown
|Canadian HR Reporter|Last Updated: 03/11/2003

In a budget that had something for almost everybody, federal Finance Minister John Manley didn’t forget the HR needs of Canada’s employers.

Proposed changes will affect Canadian workplaces in a number of areas from pensions and benefits to recruitment, training and development and health-care spending.

While there was nothing to directly spur new workplace training, $100 million was committed to the creation of the Canadian Learning Institute, which, it is expected, will promote best practices in workplace training.

For more than two years, the federal government has been pledging action to increase the number of skilled workers in the Canadian workforce. At a series of roundtables held last year, the government gathered feedback on its so-called innovation strategy. At the final session in Toronto, in November, Prime Minister Jean Chretien called on employers to invest more in training. “Business must invest in learning for their workers if they want to compete. Canada is not doing enough here. I challenge business and labour to jump on this imperative — for the sake of your workers, for the sake of your competitiveness,” he said.

And while the budget was notable for the largest increases in spending in decades, some critics were disappointed the government didn’t include tax breaks to encourage employers to increase training.

“The government can not believably promote an innovation agenda at a time of skills shortage without an effective training strategy,” stated a Canadian Labour Congress (CLC) response to the budget.

The CLC says every workplace in the country should give employees five days off each year for training and skills upgrading. Rather than being paid for the days away, employees would collect Employment Insurance benefits.

Instead of cutting premiums, the federal government should be using some of the EI surplus to encourage more training, said Kevin Hayes, an economist with the CLC.

“At the end of the day the only tool the federal government really does have is the EI system,” he said. They should use it as an income support system for Canadians to do skills upgrading. Each time an apprentice is out of the workplace and in class, they get Employment Insurance benefits, he said. “What we are saying is we should look to build on that kind of a model and extend it to the entire labour force.”

The CLC also called for more incentives to get employers to train more. The government could establish certain targets. “There would be an EI premium reduction for employers that meet certain criteria,” he said.

It’s been suggested that in knowledge-based economy where workers need to be highly skilled, every employee should get 40 hours of training per year during normal working hours. “We think that is essential,” he said.

The CLC has proposed a pilot project for health-care sector covering 500,000 workers.

The Certified Management Accountants of Canada also called for the government to offer small businesses a 50-per-cent tax credit for investments in training.

The spending for innovation and learning were all good. Helping bring more skilled immigrants into the country and creating new scholarships are good ideas, said Richard Monk, managing director of Welch Consulting Group, and spokesperson for the CMA.

“You can’t argue with any of that I just wish they had gone a little further,” he said. “There was nothing from a training point of view.”

Rather than spending $100 million on the Canadian Learning Institute, the money could have been used to provide incentives for training which would have an immediate impact.

“What we don’t need is more studying,” he said of the nascent institute.

Jane Stewart, Minister of Human Resources Development Canada, told Canadian HR Reporter that she is not convinced tax breaks are the way to go.

“Tax credits come up from time to time but I have yet to be convinced that it is a panacea or a real solution,” she said.

Employers have to appreciate the value of investing in training before being given tax breaks and many employers still do not understand why they should be spending money on training, she said.

Helping employers understand the value of training could be part of the Canadian Learning Institute’s mandate, she added.

Manley also announced new spending for initiatives to increase the supply of skilled labour from other countries.

“We will invest $41 million over the next two years to help new Canadians to integrate quickly into our economy, whether it is second language skills, or faster recognition of foreign credentials, or pilot projects to attract skilled immigrants to smaller communities across the country,” said Manley.

Michael Bloom, director of education and learning for the Conference Board of Canada, said new funding to speed up the immigration and integration of skilled workers was “a good start,” though a lot more would have to be done. “$41 million dollars is obviously not enough to address all the issues,” he said.

Exploring ways to settle more immigrants outside of Toronto, Vancouver and Montreal is a good idea and $10 million in seed money to expand language training is helpful because language barriers are one of the biggest barriers for highly skilled professionals looking to apply their skills, said Bloom.

One of the biggest challenges to getting skilled immigrants is getting the provinces and professional regulatory bodies to recognize foreign credentials, said Bloom. The federal government will spend $13 million over two years to work with those stakeholders to facilitate foreign credential recognition.

There was also good news in the budget for pension plan members as limits on pension benefits and RRSP contributions were raised. The changes could in some cases increase costs for plan sponsors and will almost certainly raise important administration issues.

Employment Insurance premiums will also go down by 12 cents in 2004, and Manley said Ottawa would consider more fundamental reductions.

As well, the current EI program is being expanded to allow for compassionate care leave. “Too often family members must make difficult choices between work and being able to provide compassionate care,” said Manley.

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