Canadians could soon be putting $250 a year towards better skills while getting federal help to pay the bills.
One of the showpieces in Tuesday’s federal Liberal budget, part of more than $1.7 billion in planned new spending over five years, aims to help workers prepare for tectonic digital shifts in Canada’s labour market—although it appears to fall short of what experts have told the government would be needed to help workers chart a new career path.
The Liberal proposal would provide a $250 refundable tax credit, accumulating over time, to allow workers to offset the costs of learning new job skills. The plan, to cost $710 million over the next five years, would be available to Canadian workers earning between $10,000 and about $150,000 a year.
The budget document says the credit is expected to launch in late 2020—a year after this fall’s federal election—and will apply against the cost of programs at eligible universities, colleges and institutions.
“We will be able to make an enormous difference for people in terms of the worry that they have the skills for tomorrow,” Finance Minister Bill Morneau told a news conference Tuesday prior to the tabling of the budget, the Liberal government’s last before voters head to the polls in October.
“The Canada Training Benefit will allow people to have more time, have the ability in that more time to continue to provide for their family and also to pay for training courses.”
The government also plans to create a new employment insurance benefit for those who take time off from work to attend a training program, up to a maximum of 55 percent of earnings. That program carries a price tag of $1.04 billion over five years.
Only those who qualify for employment insurance would be eligible for the four weeks of leave, redeemable within a four-year period. It would also require the federal government to negotiate labour code changes with provinces whose jurisdictions cover approximately 90 percent of Canadian workers.
The measure means workers have a right to training before they lose their job, but several details still need to be worked out, said Hassan Yussuff, president of the Canadian Labour Congress.
“The federal government is going to have to really listen to what people are going to have to tell them about how they envision impediments in terms of a good program that could prevent them from even getting access to it,” said Yussuff.
In particular, he said, it could be a hard sell to convince those living paycheque to paycheque of the importance of paying up front for future job training.
There is a chance the benefit could result in higher EI premiums —the Liberals are promising a break to some small businesses to offset the “upward pressure” on premiums as a result—but the actual costs won’t be known until EI rates are set later this year.
Since Morneau’s first budget three years ago, job creation has outpaced expectations and the unemployment rate has fallen to its lowest level in nearly four decades.
Still, there appears to be a disconnect between the jobs that need to be filled, and the skills of workers looking for employment, which is where the new training benefit could act as an incentive to re-skill, said Mathieu Laberge, an expert with Deloitte.
“We have a very low unemployment rate, we have job vacancies and that all points towards maybe a misalignment between current skills offered and current skills needed,” said Laberge, a former policy adviser to Social Development Minister Jean-Yves Duclos. The 2019 budget measure could “at least start something in terms of re-skilling (and) upskilling.”
Past Liberal budgets have put billions into job-training programs that are largely the domain of provincial governments, hoping to cut poverty rates and get more people into the labour force. The new spending unveiled Tuesday is part of a group of measures that include lower interest rates for student loans, a revamped youth employment strategy and new parental leave options for student researchers and postdoctoral fellows who receive money from a granting council.
Government officials have worked behind the scenes for years on ways to help Canadians prepare for shifts in the so-called “gig” economy, marked by fewer lifelong careers and more short-term jobs. There are also concerns that automation will eliminate between 42 percent to nine percent of workers in the next two decades, and federal officials aren’t sure the disruption will create enough jobs to offset losses.
A new federally backed centre to test new training programs and help workers navigate career choices opened earlier this year, and is expected to work in tandem with the additional spending the Liberals unveiled in the 2019 budget.
“The knowledge economy requires us to think about talent and I’m glad that the federal government is focusing on the tools and ways to help Canadians really overcome challenges,” said Mohamed Lachemi, president of Ryerson University where the Future Skills Centre is housed.
“We have to adapt to new realities.”
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