A highly educated and skilled workforce is a key determinant of healthy and sustainable long-term economic growth. With the rise of the knowledge economy and rapid technological change, there is growing demand for highly skilled, adaptable workers. The government plays an important role in helping meet this demand. Studies have demonstrated the need for, and benefits from, government investment in education and training. For example, Riddell argues that government intervention in human capital development is justified on both equity and efficiency grounds.1 Equity arguments for government intervention include the promotion of equal opportunity, social mobility and more equal distribution of economic rewards.
Efficiency arguments for government intervention are based on three tenets:
Ontario’s aging population, slower labour-force growth and increasing global competition, among other forces, have made skills development, workplace training and lifelong learning more important. For example, literacy needs have evolved and increased over time as a result of fundamental changes in the economy. In addition to reading and writing, many people today require analytical skills, numeracy, and technological and computer literacy to do increasingly complex work.
Employment and training programs are important tools to ensure that workers have skills that are relevant for available jobs and to facilitate job matching. Effective government training programs help reduce the skills gap for many of these displaced workers and can increase their re-employment earnings.
Ontario was particularly hard hit by the recent global recession, accounting for 60 per cent of Canada’s job losses in 2009. Even before the onset of the recent recession, Ontario’s economy faced challenges that continue to stifle job creation, including a sharp appreciation of the Canadian dollar, historically high energy prices, rising competition from emerging countries and a weakening U.S. economy. For example, the manufacturing industry lost jobs for six consecutive years, bringing manufacturing employment in 2010 to its lowest level since 1976. This trend in manufacturing and job losses in resource sectors such as forestry have contributed to increasing unemployment for long-tenured workers. Many of these workers face significant challenges to re-employment.
While employment in Ontario is growing again and has already recovered all the jobs lost during the recession, young people, recent immigrants and Aboriginals continue to underperform. The recession worsened their employment outcomes, but they struggled in the job market well before that. Groups facing such labour-market challenges include:
The persistent lack of employment opportunities for these groups, as well as media reports of skill mismatches and unfilled vacancies, shows that the existing program delivery structure needs significant improvement.
Ontario offers a range of employment and training services through the Ministry of Training, Colleges and Universities (MTCU) as well as other ministries, including Citizenship and Immigration, and Community and Social Services.
The MTCU administers the bulk of these services through its employment and training network, Employment Ontario (EO). Employment Ontario was created through the integration of a variety of federal and provincial programs when the Canada–Ontario Labour Market Development Agreement (LMDA) of 2007 transferred control of a broad range of labour-market and training programs to the province. With a budget of about $1 billion annually, EO currently serves more than one million people including employers, laid-off workers, apprentices, older workers, newcomers and youth.
The Ministry of Community and Social Services (MCSS) provides employment supports to social assistance clients through the Ontario Disability Support Program (ODSP) and Ontario Works (OW). In 2010, MCSS spent over $200 million on employment supports for social assistance recipients. The ODSP provides income and employment support to enable people with disabilities and their families to live independently. Through OW Employment Assistance, recipients receive practical assistance preparing for and finding jobs.
The Ministry of Citizenship and Immigration (MCI) offers programs to facilitate labour-market integration of immigrants, including bridge training programs to provide newcomers with the occupation-specific training that gives them the skills, language capabilities and Canadian work experience to obtain employment in their field. Language programs for newcomers are provided through Ontario’s school boards, as well as Specialized Language Training Pilot Projects.
A number of other provincial ministries also provide employment and training supports, including the OPS internship for professional immigrants, delivered by the Ministry of Government Services, and Youth Opportunities Strategy, delivered through the Ministry of Children and Youth Services.
In addition to funding programs directly, Ontario provides indirect support for training through tax credits such as the Apprenticeship Training Tax Credit (ATTC) and Co-operative Education Tax Credit (CETC). In 2010, the ATTC provided an estimated $120 million and the CETC provided an estimated $25 million to businesses to support hiring and training. See Chapter 11, Business Support, for a further discussion.
The large number of programs and services provided by multiple ministries suggests there are clear opportunities to improve the efficiency of their delivery, quality of service and rigour of program evaluations.
Ontario has taken some steps towards integrating employment and skills training. As part of the plan to transform EO, MTCU launched the Employment Service (ES) model in 2010, a new program that streamlines many functions that were formerly offered in an unco-ordinated manner (e.g., former federal Employment Assistance Services and Targeted Wage Subsidy programs, as well as Ontario’s Job Connect). The new ES model provides Ontarians with a client-centred, “one-stop shop” where they can find a full range of employment support services to help them acquire and retain a job.
The EO’s clientele needs varying degrees of assistance. The majority of unemployed Ontarians whom EO serves require minimal intervention. Interactions with these clients should be made as efficient as possible through the use of low-cost, self-serve tools (e.g., online resources) to allow staff to focus on more intensive cases.
Recommendation 9-1: Focus the efforts of Employment Ontario on clients who need complex interventions. Streamline clients requiring modest intervention to low-cost, self-serve resources as efficiently as possible.
While Ontario has begun integrating employment and training services in recent years, the fact that so many ministries are still in this line of business highlights that opportunities exist to do more. Particular consideration should be given to the provision of employment services for social assistance recipients and new immigrants. Examples of these services include job search supports, work experience programs, skills training, supports for self-employment, and the screening and matching of participants to employers. Integrating these types of programs with EO would result in gains in administrative efficiency, improved client access to services, clearer jurisdictional alignment and reduced program costs.
Challenges are associated with pursuing further integration. First, EO is still in its relative infancy and so integrating additional employment and training initiatives all at once may not be feasible. Second, while it is beneficial in other ways, integrating the employment and training component of locally delivered programs like OW presents its own hurdles. Careful sequencing will be necessary to integrate these and other employment and training expediently but without diminishing service quality during the transition.
Recommendation 9-2: Streamline and integrate other employment and training services with Employment Ontario, including the bulk of the employment and training service component of social assistance and integration and settlement services for newcomers, in a carefully sequenced manner.
Ontario–Federal Arrangements for Employment and Training Programs
The federal government provides a significant amount of annual funding to Ontario through a number of federal-provincial labour market agreements, including the Labour Market Development Agreement (LMDA) and Labour Market Agreement (LMA). Each agreement has its own client eligibility, program design, and reporting and accountability requirements. The following table summarizes the major categories of programs covered by bilateral agreements, eligibility requirements and magnitude of funding.
|Labour Market Development Agreement
|Labour Market Agreement
|Targeted Initiative for Older Workers
|Labour Market Agreement for Persons with Disabilities
|Source: Ontario Ministry of Training, Colleges and Universities.|
The patchwork of federal-provincial labour-market agreements that targets various groups of clients not only creates challenges for Ontario’s “one-stop shop” vision of employment and training service delivery, but also leads to fragmented and distorted policy-making, based on federal notions of labour-market priorities as opposed to responsiveness to local conditions.
The differing program and client eligibility requirements contained in these agreements limit Ontario’s ability to maximize the benefits from providing an integrated suite of labour-market programs and services. For example, under the LMDA, Ontario can only fund programs and services that are “similar” to those originally designed and delivered by the federal government in the early 1990s. This unnecessarily restricts Ontario’s capacity to meet its fluid labour-market requirements.
Ontario received only 31 per cent of the funding allocation for EI training in 2010 although Ontarians accounted for 42 per cent of Canada’s unemployed population. This shortfall restricts access to training and employment supports because most of these initiatives are available only to active and former EI recipients. Removing the EI eligibility condition from LMDA programs would enable Ontario to fund programs most relevant to its current labour-market challenges.
The Strategic Training and Transition Fund (STTF) provided an additional $207 million over two years for programming to support both unemployed and employed individuals affected by the economic downturn regardless of their EI eligibility. The STTF allowed Ontario to introduce innovative approaches to target those who need it most before it expired at the end of March 2011, exemplifying the benefits of having flexibility in program design and scope.
There are also federally funded and delivered employment and training programs for youth, persons with disabilities and Aboriginals who are not part of existing bilateral agreements:
This arrangement creates administrative inefficiencies, complexity for stakeholders and service providers, and confusion for potential clients.
Recommendation 9-3: Advocate for a comprehensive training agreement to replace the patchwork of federal-provincial employment and training funding agreements currently in place, many of which are about to expire, with a single arrangement.
This new arrangement should:
A recurring theme in this report is the need to base policies and programs on a defensible evidence base. Employment and training programs are currently not strategically organized nor consistently evaluated against labour-market success factors, clear targets or performance measures linked to outcomes. Labour-market information must be improved in two respects.
First, Ontario must improve how it tracks outcomes. Most program measures focus on service indicators (e.g., clients served, satisfaction) as opposed to outcomes. While client satisfaction and throughput are important, they are no substitute for measures of success such as employment duration, wage level and growth, and so forth. Key success indicators should be chosen based on best practices in other jurisdictions and from current literature. Indicators will likely vary by training program but every effort should be made to avoid minor differences to minimize administrative costs and allow for comparisons across programs. Regular evaluation of program performance using the collected data should be undertaken to inform future changes that will continually improve effectiveness.
Second, data gaps limit Ontario’s ability to effectively target investments in labour-market programming at a strategic level. While the Labour Force Survey reports monthly on those currently working, there was until very recently no equivalent survey about jobs that need to be filled. A better understanding of employment gaps could shed light on how to make employment and training services more effective.
Building on previous work,2 Statistics Canada released job vacancy data on Jan. 24, 2012, which included Canadian, provincial and territorial estimates of the number and rate of job vacancies by industry and enterprise size. This is a positive first step. However, given regional variations in labour requirements, Ontario should advocate for the collection of sub-provincial data to enable more effective program decision-making and policy development.
Recommendation 9-4: Tie employment and training programs more explicitly to measured outcomes. Data collection must in turn be improved.
Recommendation 9-5: Advocate for the collection of sub-provincial data in all future federal surveys on labour vacancies. Leverage labour vacancy data to inform employment and training program design and delivery.
In 1994, 25 Workforce Planning Boards were established across Ontario through a joint funding arrangement between Canada and Ontario to plan and lead labour-market activities at the community level. Today, the boards receive about $6 million annually from MTCU to help improve labour-market conditions in Ontario’s communities by:
Despite the existence of the ministry’s regional offices, the oversight of the boards has remained centralized. Maintaining an additional degree of separation is incongruent with the local focus of the boards. The ministry is now planning to decentralize the management of the boards by transferring the oversight function to the ministry’s regional offices as of Apr. 1, 2012. This is a positive first step to expand regional autonomy, promote stronger local linkages, and broaden community and regional planning for economic development.
The boards can also serve as a vehicle to encourage greater support for workplace-based training among employers. Various studies show that, compared to international competitors, Canadian employers invest less in training on a per capita basis and that Canadian workers have a lower participation rate in training. According to a recent Conference Board of Canada report,3 Canada’s capacity for innovation is decreasing. One of the key drivers for this decline might be the relatively low priority placed on learning and development within Canadian organizations. From 2006 to 2010, Canadian organizations spent on average only 64 cents for every dollar spent by American organizations on these types of initiatives. The boards play a role in improving these fortunes.
Recommendation 9-6: Transfer responsibility for Workforce Planning Boards to the Ministry of Training, Colleges and Universities’ regional offices to develop stronger local linkages and broaden community and regional planning for economic development.
Recommendation 9-7: Direct Workforce Planning Boards to encourage employers to increase investments in workplace-based training.
A number of ministries currently administer economic development programs that include a training component. Some examples include:
Although MTCU fosters links with these ministries, a labour-market planning framework would facilitate broader program co-ordination. One major drawback of current practice is that economic development programs largely function separately from EO. While this may in part be a result of rigid employment and training services funding rules, it is crucial that services be more strongly linked to strategic economic development initiatives such as the Ring of Fire once sufficient flexibility under those arrangements is achieved.
Recommendation 9-8: Develop a labour-market policy framework to link planning for employment and training services more strongly to economic development initiatives led by ministries such as Economic Development and Innovation; Agriculture, Food and Rural Affairs; and Northern Development and Mines.
Ontario’s apprenticeship system provides programs for more than 150 trades and occupations in four sectors: industrial/manufacturing, motive power, service and construction.
In 2010, Ontario established the College of Trades, a self-funding regulatory college that will help modernize the province’s apprenticeship and skilled trades system. Once operational, the College of Trades will be responsible for establishing the scope of practice and for setting out policies and procedures for the trades. The College of Trades will also tackle a variety of issues facing the apprenticeship system, including apprenticeship ratios and compulsory certification.
Too many administrative functions remain centralized in the ministry when they could be shifted to parties that are better positioned to carry out these tasks. For example, the College of Trades could undertake administrative responsibilities for apprenticeships once it is up and running. As a self-funding institution, the College can assume responsibilities that are now under the auspices of the ministry; this will reduce costs to government. In addition, colleges and union training centres that provide classroom training for apprentices could take on the administrative responsibilities related to that function.
Recommendation 9-9: Shift the responsibility for all apprenticeship administration to other actors in the sector. Functions related to the administration of apprenticeship classroom training should be given to colleges and union training centres. All other administrative responsibilities for apprenticeships should be transferred to the College of Trades over time.
1. W.C. Riddell, “Investing in Human Capital: Policy Priorities for Canada,” in J. Leonard, C. Ragan and F. St-Hilaire (eds.), A Canadian Priorities Agenda: Policy Choices to Improve Economic and Social Well-Being,2008,Institute for Research on Public Policy, pp. 13–55.
2. “Working Together to Build a Better Labour Market Information System for Canada,” 2009, Advisory Panel on Labour Market Information.
3. C. Lavis, “Learning and Development Outlook 2011: Are Organizations Ready for Learning 2.0?” 2011, The Conference Board of Canada.