A.    Employer participation in developing training programs

During his appearance before the Committee, the Hon. Jason Kenney emphasized the need for employers to be more involved in training and skills development.

As a government, we are trying to go through all of the programs we have that deal with job training or skills development to try to get a better bang for the taxpayer's buck, better outcomes in terms of real jobs. Some of the principles that we think are useful include a greater participation of employers in the training process, trying to leverage increased employer investment in skills development and job training.[134]

The Hon. Jason Kenney
ESDC

He also explained the reasoning behind this approach:

I think the question you asked is why should market forces be involved in helping people get the appropriate skills? It's because it's employers who, by definition, create the jobs and who know what skill level people need for those jobs, and because we see better labour market outcomes in countries with a higher level of employer involvement and investment in training...[135]

The Hon. Jason Kenney
ESDC

Several witnesses mentioned that employers are aware of actual labour market needs and they must be involved in developing training from the outset.

[F]uture LMDA funding should be directed towards programs that incorporate strong employer engagement to ensure that federal training dollars lead to real results. We believe that having employers and employer groups actively participate in the process will lead to more targeted skills training and better matching of talent to tasks.

...

Our view is to be more proactive and deliberate … in terms of bringing in employers who are at the front end to identify what the skills needs are so that the training is directly coherent with the need.[136]

Sean Reid
Progressive Contractors Association of Canada

[I]f we want to make sure that when the training is completed, it's relevant to the jobs at hand, we need the employers to be engaged.

We work with colleges, both private and public, with unions, and some of the best training programs we see are the ones that engage the local employment base and they ask what they are looking for and what skills are missing in the graduates that we have. We do the same thing at the federal level.[137]

Craig Martin
Canadian Welding Bureau

I think that really getting employers engaged early to make sure that there are jobs available at the back end is absolutely critical.[138]

Kevin Lee
Canadian Home Builders' Association

Now is the time for employers to provide more information to universities, colleges, and provincial and territorial governments about what they need from their employees. In recent conversations I've had with an employer, they indicate that they need engineers who have not only technical competencies and analytical skills, but also better writing and stakeholder management skills. This kind of information is invaluable.[139]

Kim Allen
Engineers Canada

B.    Employer participation in labour market partners’ forums

To develop training programs that reflect employers’ knowledge of labour market needs, many witnesses suggested that forums be established to bring together the various labour market partners. These forums were proposed as a way to increase the accountability of LMDAs, an issue raised in Chapter 2 of this report. Several witnesses described the forums as a promising way to increase employer participation in skills development and training. They stated that it was necessary to create provincial and territorial forums, as well as a pan-Canadian labour market partners’ forum.

We recommend establishing permanent federal, provincial, and territorial labour market partners forums, and these forums would bring together the stakeholders, which are employers, labour, government, and educators, to shape and guide the LMDA program and a Canadian job strategy towards improving our workforce's skills and the quality of their employment opportunities.[140]

Cammie Peirce
Unifor

We recommend that the federal government, provinces, and territories establish a network of labour market partners fora or workforce development boards, similar to the Quebec model or the workforce investment boards in the U.S., with multipartite governance overseeing design and delivery of programs that are locally appropriate and responsive to the needs of industry and community. Then all skills training and upgrading would be done through a workforce development lens, integrated into local initiatives as part of a pan-Canadian labour market strategy, giving employers incentive to invest in training for their incumbent and potential workers. Strategic workforce development combines economic development with social development, creating greater prosperity for employers, workers, and their communities.[141]

Karen Lior
Toronto Workforce Innovation Group

The Canadian Labour Congress also highlighted the important role of labour market partners’ forums in engaging employers as well as unions, other levels of government and community agencies. The representative from the Congress emphasized the need for all stakeholders to meet regularly and discuss labour requirements.[142]

RECOMMENDATION 14

The Committee recommends that the renewed Labour Market Development Agreements (LMDAs) with the provinces and territories require regular employer engagement on LMDA programming as to better involve employers and their knowledge of actual labour market needs.

C.    Current provincial best practices

According to an ESDC representative, “a little less than half of the provinces and territories have a system, a mechanism whereby they engage employers up front, figure out where the best place is to spend money.”[143] The system introduced by British Columbia, for example, is considered a best practice for involving employers at the planning stage.[144]

The example given most often as a best practice for employer participation is that of Quebec’s Commission des partenaires du marché du travail and its sectoral labour committees.

Quebec has a system of engaging both employers and labour in a way that is quite unique. What they try to do is bring the partners together so that they can figure out at a high level where the areas of demand are, where support is needed, what kind of training, and to whom. That's their Commission des partenaires du marché du travail.[145]

Frank Vermaeten
ESDC

During his appearance before the Committee, the representative from the Coalition des organismes communautaires pour le développement de la main-d'œuvre explained how the Commission operates:

For over 15 years, Quebec has had a unique structure in Canada: The Commission des partenaires du marché du travail. This forum for consensus is made up of representatives of employers, employees, education as well as government and community organizations. The commission plays a determinant and meaningful role in the orientation and implementation of public employment services in the labour market.[146]

Companies that do not contribute enough to labour market training will contribute to a fund that is used to finance these measures. We know that for small-and-medium-sized companies, it is particularly difficult for employees to have access to training. A specific attempt is made to fund measures that will target these categories of workers.

…

Being an entrepreneur is not easy. If in addition to that, we tell them that they are required to look after labour market training, it is often too much for them. In other words, the labour market training fund is there to provide assistance that is often required.[147]

Frédéric Lalande
Coalition des organismes communautaires
pour le développement de la main-d'œuvre

An industry representative confirmed that employers are very supportive of the Quebec model:

Quebec has a law requiring employers with a total payroll of $1 million or more to invest 1% of that amount in training. Many of our members who are subject to the condition use that funding.

If the money isn't used, it goes to an organization charged with allocating it to where it is needed. And that could mean another industry. There are groups responsible for doing that. Quebec has a labour sector committee … called the Comité sectoriel de la main-d'oeuvre. Flexibility is the key to the formula. In a particular year, training may not be necessary because no new technologies were introduced, but two years later, extra training may be needed.

The entire country would benefit from such a model. It works quite well in Quebec. I can tell you it has really helped our industry since it was put in place.[148]

Marc Brazeau
Automotive Industries Association of Canada

RECOMMENDATION 15

The Committee recommends that Employment and Social Development Canada encourage the provinces and territories to study the employer participation models operating in other provinces and territories.

D.    International models for employer involvement

Commenting on initiatives in other countries, the Hon. Jason Kenney stated that Germany stands out for its approach to involving employers in training.

[W]e see better labour market outcomes in countries with a higher level of employer involvement and investment in training, like in Germany, a country to which I recently led a study mission.[149]

The Hon. Jason Kenney
ESDC

He described the German system to the Committee:

Their conception of apprenticeships is much broader than ours. We have about 150 apprenticeable occupations. In Germany they have about 350. It includes things like retail and banking, as well as construction trades.

Over 60% of young Germans, roughly at the age of 16, go into these apprenticeship programs where typically they are at an employer location for about three and a half days a week and at a vocational college for one and a half days a week. The learning they're getting, the theory they're getting in the college, is perfectly integrated with the experience they're getting at the work site, and they're getting a modest stipend. These apprenticeship programs on average last three years, which means that most young Germans are graduating with a certificate at the age of 19 on average. They're already with an employer. Over 90% of them go on to be employed in the field for which they were trained, and they're unencumbered by debt.[150]

The Hon. Jason Kenney
ESDC

Minister Kenney explained that, for a system like this to function, employers must feel a sense of responsibility toward training and be closely involved in the education system. In Germany, employers are responsible for maintaining the equipment, compensating the trainers and paying modest salaries to apprentices. “In fact, in Germany employers collectively invest the equivalent of $47 billion Canadian a year on apprenticeship programs alone,” stated the Hon. Jason Kenney.[151]

Industry representatives who participated in the study mission with Minister Kenney also praised the German system, using it as a basis for their recommendations on how Canada could change employer participation in training:

Looking at the German training system and the way they engage employers and tie employers into the education system was a real eye-opener to me. Canadian employers basically are not allowed to be part of any part of the education system. Except for the polytechnics and a few colleges and universities, employers aren't really part of the education system. In Germany they start in high school having employers directly involved.[152]

Mathew Wilson
Canadian Manufacturers and Exporters

A witness representing the National Association of Career Colleges, shared the same view:

I've had the opportunity to participate in the mission to Europe on skills training. … It was an eye-opening experience that showed how employers in Germany and the U.K. are intrinsically involved in training. … [W]e would strongly suggest that the federal government start discussions with the provinces on how to open apprenticeships to other educational groups. Too often our career colleges are excluded from being able to offer apprenticeship programs, especially in the trades. That's a provincial decision.[153]

Serge Buy
National Association of Career Colleges

RECOMMENDATION 16

The Committee recommends that the federal government continue discussions with the provinces and territories on how to establish apprenticeship programs in more fields and encourage young people to participate.

E.    Current employer initiatives and future challenges in Canada

The Commissioner for Employers, Canada Employment Insurance Commission, emphasized that Canadian employers already make a significant contribution to training:

Here I would like to emphasize that employers foot the bill for some $1.2 billion of EI part II training and related programming in Canada, which together with employee contributions of $0.8 billion adds up to what is said to be the Government of Canada's largest labour market investment.

Regrettably instead of being credited for their lion's share contribution to EI part II labour market development programming, employers take criticism from policy-makers and others who suggest that Canadian employers are not doing enough training compared to employers elsewhere. On this I would note that comparison studies on training effort very much depend on what training is included and how it is measured. Certainly on-the-job training that is done by Canada's small and medium-sized enterprises is not included, and that massive contribution is discounted.[154]

Judith Andrew
Canada Employment Insurance Commission

Other witnesses told the Committee that the on-the-job training offered by employers should be taken into account:

Our third recommendation to the committee is to recognize the value of on-the-job training in program agreements. The provincially funded programs are often too focused on formal third party training and ignore the investment businesses make, particularly restaurant businesses, in on-the-job training, where managers and supervisors work one on one with employees, many who are first-time entrants to the workforce.[155]

Joyce Reynolds
Restaurants Canada

Ensure that any funds administered through LMDAs recognize the informal, on-the-job training that SMEs conduct across the country. Employers are already involved in the development and training of employees, but government funding needs to recognize this type of training.[156]

Monique Moreau
Canadian Federation of Independent Business

Discussions also focused on other training initiatives introduced by employers. The British Columbia Construction Association, for example, described its model of matching unemployed workers with job opportunities:

We have a team … with a staff of some 57 field workers in 14 different communities across the province.… They make some 6,000 points of contact with employers on annual basis, and the purpose for that contact is to find out where the jobs are … that is, to align people up with employment opportunities, and then provide them with sufficient training to make them either more employable or to make them successful in achieving employment. … Our results last year were some 2,800 people in the Province of British Columbia that we were able to connect with jobs in the industry.[157]

Manley McLachlan
British Columbia Construction Association

[W]hat we have is the demand side support model versus a supply side service model. There's a significant distinction to be made there. We literally have a mantra that all of our field workers live by and that's that we don't start the training machine until the job offer is made.… We travel around, meeting with employers, talking about their needs. Once we identify the needs, then we go back to the unemployed. We know where they are.[158]

Paul Mitchell
British Columbia Construction Association

The representative from the National Association of Career Colleges highlighted a training program developed by a private-sector company and an educational institution:

The company operating the nickel mine in Voisey's Bay approached one of our members at Academy Canada to provide training in local Aboriginal communities. They needed a workforce and couldn't get one with the proper skills. The training was done within the community by Academy Canada. Their results skyrocketed, with participants going from a 7% completion rate to a 76% completion rate. The employer was pleased and the local community leaders were also extremely satisfied.[159]

Serge Buy
National Association of Career Colleges

A member company of the Automotive Industries Association of Canada has also been involved in employee training:

For instance, Kal Tire, a company in Vernon, B.C., has 250 stores in western Canada and Ontario. Underlying its approach is the desire to hire and train young people so they pursue a career in the field and work in a number of jobs. … [I]t invests in employee training. It has a training facility in Vernon where it trains young people and invests in their careers.

That's why I think the private sector offers us some examples we could model our approach on. … I think we should promote these practices and parlay them into an overall success story.[160]

Marc Brazeau
Automotive Industries Association of Canada

However, obstacles make it difficult for some employers to get involved in training. For example, employers’ lack of knowledge of programs may hamper training opportunities:

Business groups typically have little direct knowledge of and engagement with LMDA-funded programs or provincial or territorial training programs generally—except unknowingly, I suspect—such as where their apprentices receive part II apprenticeship support.[161]

Judith Andrew
Canada Employment Insurance Commission

One of the greatest challenges around the use of the current LMDAs remains awareness. Many employers don't know about the program or the eligibility requirements, and the application process can be both arduous and restrictive.[162]

Robert Pitt
Automotive Industries Association of Canada

It is also a challenge for businesses to stay competitive and obtain contracts while training new employees:

I think there's a sense of it being on the one hand and then on the other. It's about how they actually get and win the job and be competitive and carry out the business, and yet they also feel that responsibility of bringing along the young people and putting it in there.[163]

Kim Allen
Engineers Canada

In addition, the training ratios imposed by some provinces make it difficult for certain companies to offer apprenticeships:

Certainly, in Ontario and in the east, the training ratios, which are governed provincially, are a block to small and medium-sized business training for their needs. If you have to have three journeyperson electricians to train one in your business, that's not very easy.[164]

Judith Andrew
Canada Employment Insurance Commission

Employers may also be concerned that they could “lose their investment” if a new employee switched to another company after being trained:

There's a keen interest in developing them and putting them on. Some of the employers are concerned that there's a fair bit of mobility among engineers and that people move firm to firm, so if they invest in that and then the next firm ends up hiring them and so on.[165]

Kim Allen
Engineers Canada

Some witnesses suggested ways to address the problems facing businesses:

What can government do to help small businesses continue to train and then hire individuals? We asked our members, and overwhelmingly respondents indicated that training tax credits, a reduced tax burden, and a break from EI payments during the training period were deemed to be the most useful.[166]

Monique Moreau
Canadian Federation of Independent Business

Witnesses also asked that the red tape associated with training programs be reduced, since small- and medium-sized businesses often do not have the necessary resources, such as a human resources branch, to handle the programs’ complicated requirements.[167] Committee members also heard that employers need to be made aware of the programs in order to increase their participation.

RECOMMENDATION 17

The Committee recommends that the federal government continue to raise awareness, particularly among employers, of the training programs and activities offered through the Labour Market Development Agreements.

Witnesses told the Committee that a grant program targeting the internship stage and the initial years of employment would be beneficial in some occupations:

Employers would welcome any type of program that actually assists them so that they are not at a competitive disadvantage in doing that. … I think if it's done on that kind of subsidized basis through some type of assistance in helping people through that internship period, of getting them in for the first couple of years…[168]

Kim Allen
Engineers Canada

Some stakeholders recommended that employers be more directly involved in training:

[E]mployers mostly argue that prompting business direct action through tax incentives … or a basic EI exemption … or a training credit … would do more to help young people than sending them off on government training programs funded by LMDAs.[169]

I think the key is to engage employers more directly. … [T]he model … whereby individual employers undertake to hire someone and train them for their needs, is the kind of thing that works best.[170]

Judith Andrew
Canada Employment Insurance Commission

Witnesses praised On-Site, a program from the 1990s, as a good example of how to involve employers directly in training. According to the representative from Canadian Manufacturers and Exporters, On-Site made good use of funding, took into account employers’ needs and produced demonstrable results for the economy:

The program placed EI recipients at manufacturer facilities for up to 26 weeks, focusing on training and particular skill sets, including occupational health and safety, production, or environmental management. While on placement, the recipients continued to receive their EI benefits, but they got actual work experience while receiving it.

The companies got to see how these workers fit in, many of which were hired at the end of the project.…

Those are the types of things that we'd like to see more of going forward for sure.[171]

Mathew Wilson
Canadian Manufacturers and Exporters

The Canadian Labour Congress also supports greater employer involvement in training but warns against gearing an approach to the specific needs of individual businesses:

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 a credential so they are portable in the broader labour market.[172]

What we need to do is make very clear that the training employers are putting into this is not to then basically keep people only in their workplace, because what people want as well are portable skills.[173]

Barbara Byers
Canadian Labour Congress

RECOMMENDATION 18

The Committee recommends that Employment and Social Development Canada assess opportunities to involve employers more directly in training delivery, for example, by considering a workplace internship program for Employment Insurance recipients and/or tax or financial incentives for businesses that offer on-the-job training which meets certain requirements, such as the ability to transfer skills and knowledge from one business to another.

In summary, the Committee was told that greater employer participation in workforce training may help EI recipients acquire the right skills to secure available jobs in Canada’s labour market, since employers are the ones who create the jobs and know the type of skills needed. Some witnesses stated that recent federal initiatives, such as the Canada Job Grant, represent a move in this direction.

RECOMMENDATION 19

The Committee recommends that the Government continue lowering Employment Insurance premiums for all premium payers to create more jobs, growth and long-term prosperity.