Ottawa’s budget gives nod to training, innovation

A good start but more needed, say pundits

Although this year’s federal budget was modest in scope and ambition, it nevertheless gave off the right signals that the government is paying attention to the learning and training agenda, say industry observers.

There was a little bit of something for everyone on the skills and innovation front. For individuals and their families, the budget introduced incentives to save for post-secondary education and to spend on work-related learning; for businesses, bigger tax write-offs for computer equipment and better access to scientific research and experimental development tax credits; and for industrial forerunners, more money in research and development, particularly in the commercialization of discoveries.

Michael Bloom, director of education and learning at the Conference Board of Canada, stressed the “little” part. “It’s a step in the right direction, but in both the innovation area and the learning area, the amount of money invested is modest compared with previous budgets.”

For example, $15-million investment in language training to help newcomers enter the labour force is helpful, but probably insufficient relative to the size of the problem, he said. And while it’s a good idea to let workers write off the cost of work-related learning the same way students can write off tuition fees, he’s waiting to see the details as to how education is defined.

But given the fact that employer investment in training has stagnated in recent years, Bloom said, “it’s encouraging to see the government recognize that more needs to be done.”

Referring to the government’s stated intent to consult with employers, workers, industry associations, trainers, provinces and communities to develop a strategic plan for workplace skills, Bloom said this round of consultation looks like it has evolved from the consultations two years ago at the National Summit on Innovation and Learning.

“I think this isn’t just repeating what was done a few years ago. I think this is a step forward because they’ve figured out some of the key levers, and they are now looking at taking things to the next level.”

And if Ottawa needs another year to fine-tune its workplace skills strategy, he’s willing to wait until next year’s budget. “I’m pleased that they’re waiting until they have a strategy. I think we can reasonably expect the strategy to be in place this year, in which case we should be looking to the next budget for more significant spending. But I don’t want to wait forever.”

At TD Bank, chief economist and senior vice-president Don Drummond said he was encouraged to see $90 million go into research and development, as well as the $80 million going to the commercialization of research.

Canadian researchers have generally been weak in their ability to find commercial applications for their discoveries, noted Drummond. The United States, which does 14 times more university research than Canada, surpasses Canada’s level of commercialization by 40 times, he said. An injection to boost the commercialization of research doesn’t have to be substantial, he added.

“I would not be surprised if a fairly small measure would double the amount of commercialization. I don’t think it needs that much of a push,” said Drummond.

He also said he was impressed with the Canada Learning Bond, one of the few new programs introduced by the budget. This $85-million program, which will grant low-income families $500 at the birth of a child and $100 each year until the child reaches 15, is one of the first initiatives aimed at building a learning culture among low-income Canadians, said Drummond. While acknowledging that the amount isn’t much, Drummond added that the intent of the program is not to provide for a full tuition.

“We have never had a culture of saving for education. We have a culture — often preached but not always practised — of saving for retirement. But it has never been on the mindset of Canadians to save for their children’s post-secondary education. So I think the Canada Learning Bond and the first-year student grants are very important to help students of lower-income or modest-income families to attend post-secondary education.”

As for the absence of tax incentives for businesses to invest in training, Drummond said he was never one to place much importance on such programs.

“I think the problem with training at companies is they’ve never really sat down and figured out why it’s so beneficial for them. It’s an awareness issue. I really don’t think it’s a financial issue.”

Ted Mallett, vice-president of research and chief economist at Canadian Federation of Independent Business, welcomed changes to the capital cost allowance system to enable businesses to write off a larger percentage of computer equipment purchases. It’s a change that the CFIB has repeatedly called for, he said. “People can now write off their computers faster than they had before, which is a good thing. It also encourages more investment in that type of technology,” said Mallett.

Robert Blakely, director of Canadian Affairs of the Building and Construction Trades Department at the American Federation of Labour-Congress of Industrial Organizations, commended the budget for the investment of $15 million over two years for upgrading training equipment and machinery at union training centres. This three-year pilot project will allow certain sectors to train the next crop of tradespeople with state-of-the-art equipment, said Blakely. The funding is important because the skilled trades are facing a labour shortage, particularly as older workers retire.

“We’re grateful that they are throwing money at this issue. It’ll help us meet the challenge of an aging population.”

Andrew Jackson, chief economist at the Canadian Labour of Congress, is similarly appreciative of the money going to union training centres. But he added that the scale of funding for each piece of the training agenda is just too small to have a real impact.

“We’re disappointed that to date the government hasn’t picked up or acted upon our proposal for a training leave benefit under the Employment Insurance system.” Using EI funds to guarantee income for workers who need to take time off work to upgrade their skills, said Jackson, could help the Canadian economy respond to skills shortages.

As for the tuition supports for students, such as the Canada Learning Bond or the first-year grant for post-secondary students from low-income families, the initiatives “are modestly useful,” but Ottawa should work with the provinces to make sure that these programs aren’t undone by rising tuition fees.

“The scale of assistance really falls far short of what’s meaningful. When you have students graduating with average debts of $20,000 plus, a saving of $2,000 or $3,000 over 18 years isn’t going to make much difference.

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