Jason Kenney gives provinces break on job grant matching funds

Canada's provinces and territories will no longer be required to match the federal government's contribution toward the Canada Job Grant plan, under a revised proposal sent to them by Employment and Social Development Minister Jason Kenney.

"We're pleased that the matching requirement has been removed," Brad Duguid, Ontario's minister responsible for overseeing the plan, told CBC News on Wednesday.

The original Canada Job Grant plan, as it was introduced in last year's federal budget, would have provided up to $15,000 per worker toward skills training to find a new or better job, with the provinces and employers matching the government's contribution of $5,000.

Under the revised plan, Ottawa will fund up to $10,000 of the job grant with employers kicking in the other $5,000.

Kenney, who was in New Brunswick for a separate announcement on Wednesday, said he heard the provinces loud and clear, and they will no longer be required to match the government's share of the funds.

"Provinces have said to us that they, understandably in very tough fiscal circumstances, don't have a lot of new money for new projects and so they have made clear that they would not be in a position to match the federal contribution towards that.

"I completely understand that and I have accepted that in our revised offer," Kenney said.

But having the federal government increase its contribution to the program will mean fewer grants will be available overall.

Provinces 'not there yet'

Provincial and territorial ministers responsible for overseeing the controversial Canada Job Grant program will hold a teleconference call late Wednesday to discuss the federal government's revised plan scheduled to come into force on April 1, CBC News has learned.

The revised proposal landed on their desks at 3 p.m. on Christmas Eve after much back and forth since their last face-to-face meeting in Toronto.

I think there are still some issues that need to be discussed, but I am glad we are seeing some movement.- Kathleen Wynne, Ontario premier

While Ontario welcomed the revised offer, Duguid expressed some reservations about the negative financial impact the federal program will still have on the province.

The revised offer doesn't compromise on one of the provinces main sticking points, which is a reduction in federal transfers.

The provinces currently receive $500 million a year in funding from Ottawa, for training underrepresented groups, under existing Labour Market Agreements that are set to expire on March 31.

The revised plan would still see the provinces lose $300 million or nearly 60 per cent of Ottawa's contribution to the agreement.

"I'm still very concerned.… That's just not good economics," Duguid said.

We're not there yet — but there has been positive dialogue taking place that is very encouraging for the long-term.- David Alward, New Brunswick premier

Ontario Premier Kathleen Wynne, who has been leading the charge on behalf of the provinces as chair of the Council of the Federation, told reporters in Toronto on Wednesday, "I think there are still some issues that need to be discussed, but I am glad we are seeing some movement."

And with a few weeks left before the current agreements expire and a new grant plan comes into effect, not to mention a federal budget which could come in February, there is a sense of urgency to the negotiations.​

Wynne appointed B.C. Premier Christy Clark and New Brunswick Premier David Alward to study the proposed jobs training plan and report back to her.

Alward said on Wednesday there was no doubt negotiations had moved along, but there was still more work to do.

"We're not there yet — but there has been positive dialogue taking place that is very encouraging for the long-term," Alward told reporters in Fredericton on Wednesday.

Duguid told CBC News that today's call will only include the provinces that have been tasked with leading the work nationally. All the ministers responsible for overseeing the Canada Job Grant plan will be invited to take part in a separate call on Friday.

Flexibility, but no new money

Ministers like Ontario's Duguid have said they were hoping to see the government find another source of funding for the grant plan.

But CBC News has learned that when Kenney went to cabinet before Christmas to alter the Canada Job Grant, he did not seek approval for new federal funds.

Despite the lack of new funding, Ottawa feels it has made headway with the provinces.

"We have had very constructive discussions with the provincial governments on the creation of the Canada Job Grant and have made a lot of progress," a senior federal government official told CBC News on Tuesday.

Theresa Oswald, Manitoba's minister of jobs and the economy, told CBC News in an email Tuesday they are reviewing the potential impact of the revised proposal on Manitoba’s job market and economy.

Other provinces contacted by CBC News early in the week were also in the process of costing out what the new proposal will mean for them but were tight-lipped on the details.

Ottawa has also conceded some flexibility to the provinces in the way existing federal funds can be used to train unemployed Canadians.

The plan proposes the provinces use federal money they receive to train unemployed Canadians who are eligible for employment insurance and use it to train low-skilled workers looking to enter the workforce.

But diverting federal funds from one pot of money, the Labour Market Development Agreements to the Labour Market Agreements, will still leave the provinces on the hook for the balance.

Each province and territory will have to decide whether that's an amount they can live without.

Quebec, which has publicly said it wants to opt out of the Canada Job Grant with full compensation, was not aware of the government's new proposal when contacted by CBC News on Monday.

A spokesperson for Quebec's Labour Minister Agnès Maltais said in an email the province is only interested in renewing the existing labour market agreements. "Discussions between Quebec and the federal government continue," the spokesperson said.

Alberta, which has forecast a skills shortage of 114,000 workers by 2021, will be updating its numbers on Wednesday.

Those numbers are part of the reason why Alberta Premier Alison Redford shuffled her cabinet in December and in the process created a new ministry of Jobs, Skills, Training and Labour headed by Thomas Lukaszuk.