To provide information on the Canada Job Grant, as referred to Human Services through Council Resolution

fi Region d Peel lvtjliittq ltjll qtjil REPORT Meeting Date: March 27, 2014 Regional Council For Information DATE: March 3, 2014 REPORT TITLE: FROM: Janet Menard, Commissioner of Human Services OBJECTIVE To provide information on the Canada Job Grant, as referred to Human Services through Council Resolution 2014-57. REPORT HIGHLIGHTS In its 2013 Budget, the Canadian government announced the Canada Job Grant, as part of the renewal of Labour Market Agreements (LMAs), set to expire in March 2014. Through LMAs, which were introduced in 2007, the federal government has provided $500 million annually (in total) to provinces in support of employment and training programs. Through these funds, the Province of Ontario, in collaboration with municipalities and a network of agencies, delivers a range of programs that target different clients (e.g., unemployed, underemployed, job seekers, and employers). Initially, the federal government announced to fund the Canada Job Grant largely ($300 million per annum) from the annual $500 million LMA funding distributed to the provinces. If funded through the Labour Market Agreements, the Canada Job Grant will redirect $116 million from funding currently supporting Ontarians who are not eligible for Employment Insurance. Ontario and other provinces and territories raised concerns that transferring LMA funds largely to the Canada Job Grant will significantly impact existing employment and training programs and the network serving the community. The federal government has announced flexibility in the way the grant is funded and delayed the start date by three months to July 1, 2014. DISCUSSION 1. Background In 2007, the federal government introduced Labour Market Agreements (LMAs). These agreements have allowed funds to flow from the federal government to the provinces to address local labour market needs through the provision of appropriate programs and services. Based on these funding supports, the Ontario government and other provinces deliver employment and training programs designed to address diverse labour market needs. V-01-002 2013/09

March 3, 2014 In its 2013 Budget, the federal government announced the Canada Job Grant, as part of the renewal of LMAs, set to expire in March 2014. The initial announcement of the Grant indicated a shift in the way LMA funds are controlled and distributed in relation to employment and training supports. The federal government announced to fund the Canada Job Grant largely ($300 million per annum) from the annual $500 million LMA funding distributed to the provinces. Although the Canada Job Grant aims to address labour market needs by upgrading skills of employees, provinces and territories across Canada expressed that this "one size fits all" approach would undermine their ability to deliver programs which address varying local needs. Also, transferring the LMA funds largely to the Canada Job Grant would impact employment services and programs serving the most vulnerable population groups. Provinces and territories have held on-going discussions regarding the impact of the Canada Job Grant and identified their concerns to the federal government (Appendix 1). Modifications to the Canada Job Grant have been made following subsequent negotiations. Most recently, the federal government announced flexibility in the way the grant is funded, making it open to the provinces to select which funds can be used to support the grant. All provinces and territories, except for Quebec, have "agreed in principle" to the latest offer from the federal government. 2. Labour Market Agreements (LMA) and Outcomes a) Overview of LMAs Through LMAs, the federal government made an investment of $3 billion over six years to assist Canadians (who are low-skilled or not eligible for Employment Insurance (EI) benefits) with training and employment supports. Through the last Canada-Ontario LMA, the federal government made a commitment to provide Ontario with $1.2 billion over six years. The Ontario government allocated these funds in four priority areas: technical skills training; labour market integration of immigrants; foundation skills training and supports; and labour market supports for persons with disabilities. Since 2008, the Province of Ontario, in collaboration with municipalities and a network of agencies, has developed new programs and integrated services in support of these four priority areas. For example, Employment Ontario (EO) provides basic literacy and skills training, education programs, placements, training for working in trade or new highdemand career, labour market needs assessments for employers, and more. b) Outcomes of LMAs in Canada and Peel Employment initiatives funded by LMAs have helped tens of thousands of unemployed Canadians find employment. According to a joint evaluation by the federal and provincial governments, clients who participated in such programs doubled their chances of obtaining and keeping employment. To better understand the local impacts of LMA programs, a recent Peei-Halton Labour Market report identified that in the 2012-2013 fiscal year, over 18,000 clients participated in employment services/programs in Peel and Halton regions. Training and education programs offered through employment services include: Second Career, English/French as a Second Language (ESL!FSL), post-secondary education, literacy training, Ministry of Citizenship and Immigration (MCI) Bridge Training program, and Apprenticeship programs. V.01-002 2013/11

March 3, 2014 It should be noted that 64 per cent of employment services clients secured employment in 2012-2013 and 59 per cent of these individuals obtained full-time jobs. 3. The Canada Job Grant and its Implications a) Overview The Canada Job Grant targets individuals who are seeking training, and businesses that have a plan to train unemployed and underemployed Canadians for an existing job or a better job. The initial announcement of the Grant identified a $5,000 contribution from each of the following partners: the federal government, provincial and territorial governments, and employers. Provinces and territories unanimously raised concerns and the federal government subsequently waived the requirement for provinces and territories to match the funds and raised the federal contribution to $10,000, without changing the overall budget for this grant. As such, the Canada Job Grant would provide $15,000 per worker towards training, with up to a maximum $10,000 federal contribution and the rest from employers. Initially, the federal government announced an April 1, 2014 start date. This commitment was reiterated in the 2014 federal budget. Following recent negotiations with the provinces and territories, the federal government agreed to delay the start date to July 1, 2014. b) Response from Canadian Provinces and Territories Since the announcement of the Grant, provinces and territories have held discussions regarding the impact of the Canada Job Grant, highlighting the following key concerns: The Canada Job Grant, if funded ($300 million per annum) from the annual $500 million Labour Market Agreement funding, will directly impact existing employment and training programs that serve vulnerable workers. The great majority of small and medium-sized businesses would be unable to participate because of the need for them to make a financial contribution. The flexibility to tailor programs within each province and territory, a key strength of current LMAs, will be lost. The grant will not result in new investments in training; rather the federal funding will offset current employer contributions to funding. There is no evidence to show that the Canada Job Grant will result in intended outcomes. c) Recent Developments Outlining the above noted key concerns with the Canada Job Grant, the provinces and territories held discussions with the federal government and provided a counter proposal to the initial grant. Recent negotiations between the federal and the provincial and territorial governments have yielded the following developments: Grant Funding: In the counter proposal, the provinces recommended local flexibility around where the grant is funded, including Labour Market Agreements, Labour Market Development Agreements (LMDAs), and other sources of revenue, including their own. The federal government has agreed with this request by allowing that the $300 million transfer of funds could come from other V-01-002 2013/11

March 3, 2014 H-~- A\- 4- sources, such as a larger $1.95 billion annual training funds through LMDAs or other sources of revenues. Timeline and Phasing: The provinces requested the start date for the Canada Job Grant should be pushed back to Oct. 1, instead of April 1, and should be gradually phased in over a period of six years instead of four. The federal government agreed to move the implementation date for the Grant from April 1 to July 1, 2014, while declared to keep the phasing-in of the Grant to four years. An "agreement in principle" on the Canada Job Grant was reached between the federal government and the provinces (except Quebec) and territories, and announced on February 28, 2014. The timing of this announcement is important because it comes ahead of labour market negotiations. d) Implications of the Canada Job Grant for Ontario and Peel While the federal government has agreed to a number of changes to the proposed grant, there remain some outstanding issues. Although the recent developments appear promising in terms of more flexibility to the provinces, the potential changes to funding shifts, depending on how the Ontario government chooses to fund the grant, could still impact the continuation of provincial programs and supports, funded either through LMAs, LMDAs, and other sources. The total Canada Job Grant for Ontario is $116 million. Existing federal funding for the LMA and LMDA is $193 million and $680 million respectively, totalling $873 million. Overall, there will be $116 million less in federal funding available for existing skills and training programs for the most vulnerable and unemployed. The grant may not be flexible enough to allow some employers, especially small and medium sized businesses, to participate. If businesses are not able to use the Canada Job Grant, funding that would otherwise be going to organizations that provide employment supports to vulnerable Canadians would be lost. The Region of Peel, as part of a network of service providers, has implemented a variety of programs through the funds from the previous Canada-Ontario LMA. Ontario Works in Peel provides clients with short-term financial assistance, along with a variety of services and programs to assist them in obtaining employment and increasing independence. These programs and Peel's role in supporting such programs are under review and will be the subject of a future discussion at Council. In the meantime, the impacts of this program are significant when one considers the local economic context. In 2013, the unemployment rate in Peel was 9.1 per cent. For youth (aged 15-24 years), the unemployment rate was even higher at 20 per cent. High youth unemployment indicates that rigorous efforts from all levels of government are needed to ensure that youth have the foundational skills to build their future and contribute to the economic growth of our region and country. V..Q1-o02 2013[11

March 3, 2014 FINANCIAL IMPLICATIONS The Canada Job Grant will affect the funding for LMAs and LMDAs as discussed. As such, there will be impacts on the overall funding allocation the Province receives as transfers from the federal government, including funds for employment and training programs. This could subsequently impact the funding for such programs delivered in Peel Region. CONCLUSION The Region of Peel, as one of several service providers, has implemented a variety of programs through the funds from the previous Canada-Ontario LMA. Although the recent developments and "agreement in principle" appear promising, these changes could still impact the continuation of provincial programs and supports, funded through LMAs and LMDAs. The renegotiation of LMAs must preserve the provinces' and local municipalities' ability to deliver a wide range of employment and training programs, to meet local labour market needs. Staff will continue to monitor the development of the renewal of Canada-Ontario LMA and report back to Council, as appropriate. Janet Menard Commissioner of Human Services Approved for Submission: D. Szwarc, Chief Administrative Officer For further information regarding this report, please contact Juliet Jackson at extension 6741 or via email at juliet.jackson@peelregion.ca. Authored By: Archana Vyas and Junior Higgins c. Legislative Services V-QHl02 2013/11

APPENDIX I March 3, 2014 Ministry of Training, Colleges and Universities Minister Mowat Block Queen's Park Toronto ON M7A 1L2 Mlnistere de Ia Fonnation et des Colleges et Universites Ministra Edifice Mowat Queen's Park Toronto ON M7A 1 1.2 ~ Ontario December 9, 2013 Mr. Emil Kolb Chair Peel Region 10 Peel Centre Drive Suite A, Room 504 Brampton ON L6T 4B9 Dear Chair Kolb, ;.J - ~.. ' :~. ~ a.~,,. ' U!~15tA1iW &ERVIC!S COI'YTO; 1'011: oov. i'i'!'l ~ ' CCimrroittM CAI:l -.~~~. - Courdl "lhr.!' ~1 ~ \u... 2.~ Em;l~Mend~ Se."'Y)GM 2.-C)~ ~':11!~ Fila - Hnl'nllnSfn'lceo ": PeofUIIIng I am writing to update you on Ontario's dealings with the federal government on a renewed Labour Market Agreement. The federal government is preparing to renegotiate the Labour Market Agreements with each province, and has proposed a Canada Job Grant to direct future skills training in Canada. In September, I discussed our approach to these negotiations with municipal leaders at a standing meeting with the Association of Municipalities of Ontario. I also met with my provincial and territorial colleagues at the Forum of Labour Market Ministers. Based on our shared views, all ofcanada's provinces and territories have released a report, "Building SkillS" Together," which outlines our success-helping people facing barriers to work. Municipalities have an important role to play in delivering employment and training programming and are critical to supporting the employment success outlined in this report. A copy of this report is included with this letter. It is also available online at http://www.tcu.gov.on.cajeng!labounnarket/buijdskills.html. I encourage you to share the report with your council members and residents. On November 8, 2013, my provincial-territorial counterparts and I met with Jason Kenney, Canada's Minister of Employment and Social Development. Much of our conversation focused on the renegotiation of the Labour Market Agreements and the proposed Canada Job Grant. Provinces and territories stood together advocating for new Labour Market Agreements that meet the needs of our jobseekers and employers. Ensuring that au of Ontario s job seekers have the opportunit;y to participate in the labour force remains a priority for me and Premier Wynne. This is why I made it very clear to Minister Kenney that any renegotiation of a Labour Market Agreement must preserve and broaden our ability to deliver a wide range of employment and training programs, particularly those that link training to labour market demand..../2 DIRECTIUl\ Pit:OUH~ED ------ RECEIP'1 HECOMM ENDED-~~---

APPENDIX I March 3, 2014 \-\S- A\-\ -2- We need our training programs to continue to meet the unique needs of our province s regions, businesses and people- including youth. newcomers, Aboriginal people, long-tenn unemployed and people with disabilities. Throughout the meeting, my counterparts and I remained steadfast in agreement that we cannot support any program that is funded on the backs of our most vulnerable workers, such as the current Canada Job Grant proposal. Simply put, this grant will place the Employment Ontario network and the province's successful employment services and training programs at risk. Canada's premiers reaffirmed this message when they met for the Council of the Federation on November 15 in Toronto and discussed these important negotiations. Every premier agreed that provinces and territories cannot move forward with the Canada Job Grant as proposed. They have asked provincial-territorial ministers to develop an alternative proposal to present to Minister Kenney. This work is moving very quickly. This ajtemate proposal is going to be based on the feedback we have received from stakeholders, including municipalities. As we continue to talk with the federal government, I need your help to spread the message about the impact that the federal proposal could have on our ability to help vulnerable workers. If you have not already done so, I also urge you to write to your federal Member of Parliament and your Member of Provincial Parliament to tell them how the federal government's proposals would impact you and your communities. Your input can help us negotiate a workable agreement for Ontario. Included with this letter is a fact sheet on Ontario Employment and Training Programs to show how we allocate funding-and how programs could be affected by the federal government's proposal. You can also share your thoughts on these proposed changes at with us directly jobtraining@ontario.ca. Sincerely, R-Pp_ Brad Duguid Minister

APPENDIX I March 3, 2014 ONTARIO EMPLOYMENT AND TRAINING PROGRAMS AND FEDERAL-PROVINCIAL FUNDING ARRANGEMENTS Ontario delivers employment and training programs designed to address the diverse labour market needs of the province. This includes programs delivered through Employment Ontario such as Second Career, Literacy and Basic Skills, and the Employment Service that help unemployed workers upgrade their skills and find jobs. It also includes specialized services funded by various Ontario ministries for vulnerable workers such as immigrants, Aboriginal peoples, social assistance recipients, persons with disabilities, and others who need additional support. Some of these programs are currently paid for, in whole or in part, through the following federal funding agreements: Labour Market Agreement (LMA) for clients not eligible for Employment Insurance; Labour Market Development Agreement (LMDA) primarily for clients eligible for Employment Insurance; Labour Market Agreement for Persons with Disabilities (LMAPD); and Targeted Initiative for Older Workers (TIOW). TheLMA. LMAPD, and TIOW are set to expire on March 31, 2014 Based on statements in the 2013 Federal Budget, a Canada Job Grant would largely replace the LMA and cut $232M annually from existing programs. Current Source of Funding for Ontario Labour Market Programs~ 2012~13 Potential Impact of Proposed Canada Job Grant $232M OfrtHida lob Grrmt lmpoct L \~TIOW LMAP0$9.3M $76.4M \ >~TIOW lmapd $9.3M $76.4M

APPENDIX I March 3, 2014 If LMA funds are redirected to the Canada Job Grant, the following programs are most at risk of seeing cuts: Employment Benefits for Persons with Disabilities through the Ontario Disability Support Program Employment Assistance and Employment & Participation Benefits through Ontario Works Apprenticeship Training Second Career Employment Services offered through Employment Ontario, such as free personalized counselling to find work, advice on further training and education, and incentives for employers to hire and train workers Literacy and Basic Skills Programs for immigrants, including Bridge Training and Language Training Summer job programming for youth THE 2013 FEDERAL BUDGET ALSO ANNOUNCED PlANS TO RESHAPE THE LMAPD AND lmda OTHER PROGRAMS AT RISK: Labour Market Agreement for Persons with Disabilities (LMAPD) supports: Employment and Income Supports through the Ontario Disability Support Program Addiction supports that help prepare individuals for employment through Ontario Works Community Participation Supports Community mental health programming Accessibility supports for postsecondary education students with disabilities Labour Market Development Agreement (LMDA) provides funding primarily for clients who are eligible for Employment Insurance: Employment Services offered through Employment Ontario, such as free personalized help to find work, advice on further training and education, and incentives for employers to hire and train clients Second Career Apprenticeship Programming Other programs, including Job Creation Partnerships, Self-Employment Benefit, and Labou r Market Partnerships THE PROPOSED CANADA JOB GRANT WOULD NOT HELP UNEMPLOYED WORKERS People must either be working or would have to find an employer to be. eligible for support through a Canada Job Grant. This would leave many unemployed Ontarians without access to training. IMPACTS OF ON WORKERS AND BUSINESSES IN ONTARIO Employers would be required to contribute cash to cost-match the Grant (in-kind contributions would not be eligible). Some small businesses would be able to claim a portion of their trainee wage costs as a part of their contribution. No other in-kind contributions would be eligible. The grant would primarily support direct costs of training. Only Employment Insurance-eligible clients could receive additional financial supports. This would not provide the daycare, transportation or other indirect training supports that help many vulnerable workers access training. Training would have to be provided by community colleges, career colleges, or a union training centre (not employers). Ontario would not be able to use the funding to design programs that address its own labour market needs.