As Kenney agrees to province's demands, Canada Job Grant deal inches closer

OTTAWA – The federal government has agreed to two key demands from the provinces and territories on its contentious Canada Job Grant, a development that could pave the way for a deal on the national job-training program, The Canadian Press has learned.

Federal Employment Minister Jason Kenney sent what he called a final counter-proposal to his provincial and territorial counterparts on Friday that addresses the primary obstacles to an agreement.

The offer, obtained by The Canadian Press, states that the federal government “agrees with the main request by provinces and territories in their most recent offer and will allow maximum flexibility in the source of funding for the program.”

That means, essentially, that the provinces and territories can commit $300 million to the job grant from whatever federal funds they choose — or from their own coffers. They had railed against being forced to use money from so-called labour-market agreements, the federal cash the provinces insist successfully provides job training to their most marginalized citizens.

Ottawa, meantime, will continue to transfer $2.1 billion a year in training-related funds to the provinces.

The counter-proposal also reiterates that the provinces are not required to match Ottawa’s contribution to the program. As well, the provinces now have until July 1 to start delivering the Canada Job Grant, instead of the original April 1 deadline.

“The enclosed revised federal proposal should be considered final,” Kenney writes in a letter accompanying the offer.

“I will require a response to the government of Canada’s offer no later than the end of this month. Otherwise, as I have stated previously, the government of Canada will deliver the Canada Job Grant on its own as of April 1, 2014.”

The provinces and territories received the counter-proposal on Friday. Some provincial officials sounded upbeat.

“After receiving the federal government’s response, I look forward to reviewing and discussing it with my provincial and territorial colleagues, as well as with our respective premiers,” said P.E.I. Innovation Minister Allen Roach, one of three provincial officials leading the negotiations with Ottawa.

“I want to thank minister Kenney for his ongoing engagement and collaboration on this file. I’d also like to thank my colleagues across the country for their leadership on this file, which has helped bring us to this point.”

Shirley Bond, B.C.’s labour minister, said she was “cautiously optimistic” that a deal was possible, but noted it would require a thorough review by the provinces.

“We need to do the analysis,” she said.

Ontario’s minister of training, Brad Duguid, said he would thoroughly review the offer before commenting.

Jean-Thomas Grantham, spokesman for Quebec Employment Minister Agnes Maltais, said his province is still talking to Kenney. Quebec has been among the most vocal critics of the program, saying it wants to opt out, and didn’t get the offer from Kenney because of the ongoing dialogue with the feds.

“We still have the same stand: either we withdraw from the program with full compensation or we renew the (labour market agreements) purely and simply, with the criteria we had before,” Grantham said.

If a deal is imminent, it would represent a significant feather in Kenney’s cap. The prospects of an agreement were bleak just a few months ago, when the provinces were united in opposition.

But provincial officials conceded that Kenney, known as a Mr. Fix-It in Prime Minister Stephen Harper’s cabinet, was conciliatory and respectful in subsequent negotiations, while he also managed to persuade the Conservative government to agree to concessions.

Kenney’s cabinet colleague, Jim Flaherty, lacked a similar diplomatic touch last week when he slammed the provinces for complaining about the job program.

“Job training in Canada is not provincial tax money, it’s federal tax money,” Flaherty said.

“And it’s not for a provincial government to tell the federal government how to spend federal tax money. … The provincial governments have taxation powers; they can raise their own taxes.”

The Conservatives have been consumed with addressing a skills shortage in the country’s labour force that the Conference Board of Canada has called the biggest barrier to Canadian competitiveness.

The original Canada Job Grant proposal aimed to provide $15,000 per eligible worker, divided equally among Ottawa, the provinces and employers. In the face of the hue and cry from the provinces, Kenney then offered to cover the provincial portion of the grant, upping the federal share to $10,000.

Ottawa has been pushing employers to participate in training, as they did relatively robustly in the early 1990s. Since then, employer investment in training programs has decreased significantly.

“I encourage all provinces and territories … to make their training programs more employer-driven and more attuned to the realities of local labour markets,” Kenney wrote in his letter.

Follow Lee-Anne Goodman on Twitter at @leeanne25