Better Pay and Benefits

CLC Presents to House of Commons Committee on the Renewal of Labour Market Development Agreements (LMDAs)

May 13, 2014

Barbara Byers—Secretary-Treasurer of the Canadian Labour Congress—presented four recommendations today which would improve the quality, equity, accessibility, and funding of training in Canada.

Introduction

On behalf of the 3.3 million members of the Canadian Labour Congress (CLC) we appreciate this opportunity to comment on the renewal of the Labour Market Development Agreements (LMDAs).

We would like to make four recommendations.
1. Collect Better Labour Market Information

First, we need to collect better labour market information.

Public policy must be based on solid evidence, not anecdotal claims of a general labour and skills shortage. Indeed, a growing number of studies suggest these claims are seriously exaggerated.

Moreover, the latest Statistics Canada Job Vacancy Survey shows there were 6.7 unemployed Canadians for every job vacancy. That ratio more than doubles when you include under-employed Canadians.

Clearly, the big challenge we face is a shortage of jobs, not a shortage of workers.

That being said, it is widely noted that there are some shortages in specific regions and occupations. However, getting detailed information on these vacant jobs is a tough task.

The Statistics Canada Job Vacancy Survey is a good start, but it does not provide data by specific occupation and it lacks regional and local detail.

We recommend the federal government increase funding to Statistics Canada so it can develop more detailed labour market data.

2. Create Labour Market Partners Forums

Second, we need to adopt a partnership approach.

The introduction of the Canada Job Grant demonstrates that unilateral action results in confusion, conflict and poorly designed programs.

In contrast, studies show that labour market programs are more effective and equitable when developed in partnership with key stakeholders.

The labour movement plays a critical role in training through collective bargaining, sectoral training funds and delivering apprenticeship programs in a variety of skilled trades.

Training programs must match skills with jobs. But workers want more than just firm specific skills. They want broadly based training that provides a wide range of skills, including better literacy and essential skills upgrading.

They also want those skills recognized with a certificate or credential so they are portable in the broader labour market.

We recommend that under a renewed set of LMDAs, the federal government, and each province and territory, should be required to establish a Labour Market Partners Forum with representation from key stakeholders including government, labour, employers, education and community organizations.

3. Expand Access to LMDA Programs

Third, we need to expand access to LMDA programs.

The last two EI Monitoring and Assessment Reports provide details about recent net impact evaluations of LMDA programs.

The evaluations show that the Skills Development programs are very effective. These involve the longer term training interventions which often lead to a credential.

According to the evaluations, Skills Development programs increased the incidence and duration of employment, and increased earnings, for people over both the short and medium term.

This is good news. The goal of LMDA programs must not be to simply push everyone back into the labour market as fast as possible into any job.

The goal must be to help workers get the skills they need to improve their long term employability and land good jobs with decent wages.

More than 1.3 million Canadians are unemployed today. However, less than 40% of them are eligible for EI. Too many Canadians are being left out in the cold when it comes to LMDA programs.

We recommend the federal government expand eligibility for LMDA programs by establishing a national eligibility requirement of 360 hours for unemployed and underemployed workers to access training.

In addition, we recommend that EI Part I Income Benefits be extended for the full duration of LMDA training programs. People need to be able to pay their bills and put food on the table while participating in a longer term training program.

4. Increase LMDA Funding

Fourth, we need to invest more in training.

The OECD has repeatedly noted that Canada is near the bottom of the industrialized world when it comes to public expenditures on active labour market measures.

We need more investment in training and not just shifting money from one pocket to another like the federal government is doing with the Canada Job Grant.

Expanding eligibility and funding for LMDA programs would not add any new costs to the government’s budget.

The funding would come from the EI Operating Account which is made up of contributions from workers and employers.

The EI fund is currently not using the full amount that may be spent on LMDA programs. According to the EI Act, up to $4.4 billion can be spent on LMDA programs this year. However, only $2 billion is being transferred.

Furthermore, the EI account is forecast to have a $3.8 billion surplus this year and large surpluses in the years ahead.

It does not make sense to have unspent LMDA training dollars when the EI account is in surplus and unemployed Canadians need to upgrade their skills.

We recommend that instead of using surpluses to freeze or reduce EI premiums, part of the surplus should be used to expand eligibility for LMDA training programs.

Conclusion
Once again, thank you for this opportunity and I look forward to your questions and comments about our recommendations.

Thank you.

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