As stated in Chapter 1 of this report, employment benefits offered under LMDAs are available to individuals who qualify for EI benefits and some former claimants, and are funded through EI premiums paid by employees and employers. Complementarily, individuals who do not qualify for EI benefits can access programs through LMAs.

A. Who should qualify for LMDA-funded employment benefits?

Several witnesses told the Committee that LMDA program eligibility should be expanded, particularly to individuals who lose their jobs before being able to accumulate the hours of work required to qualify for EI. The required number of hours of insurable employment to be eligible for EI benefits is currently between 420 and 700 hours, depending on the unemployment rate in various regions across Canada.

The most commonly cited example of individuals in this situation is young workers. The Hon. Jason Kenney raised this issue during his appearance before the Committee:

[We need] to ensure that eligibility is responsive to the evolving labour market.…

We have the problem of last hired, first fired. A lot of the young people who are at the margins of the labour market get into an employer and if there’s a downturn or whatnot, they’re the first to go. That often means they are not qualifying for EI, based on the criteria that have long existed. We need to recognize the evolving nature of the labour market, I think, in the EI eligibility criteria. We’re open to a discussion about that….

Should we expand eligibility [criteria under the terms of the LMDAs] for youth and other workers with insufficient hours to qualify?[95]

Hon. Jason Kenney
ESDC

ESDC senior officials also raised this issue with the Committee, adding that individuals who frequently have to look for new jobs are indeed paying EI premiums, hence the need to consider giving them access to training funded through these premiums.[96]

Several witnesses stated that less than 40% of unemployed individuals qualified for EI, and they recommended that the number of hours required to qualify be reduced to 360 hours, which would be 12 weeks at 30 hours per week.[97]

These organizations believe that providing training through LMDAs to individuals currently unable to access it would help address the constant cycle of precarious employment and periods of unemployment experienced by some.

Representatives of employers’ groups told the Committee that they too would like to see more flexible eligibility criteria for LMDA-funded programs.

An official from the British Columbia Construction Association (BCCA) said that the eligibility criteria could be “a very big problem”; in the past when the organization held training activities, over half the people interested in taking part had to be turned away because they did not qualify for EI.[98]

It was the British Columbia government that rectified the problem, according to the BCCA, by supplementing the LMDA funding, investing “some of their dollars in allowing us the opportunity to deal with the full spectrum, … that allows us now to deal with 100% of the people that literally come through the door.”[99]

The Enbridge official referred to the gap between people who qualify under LMDAs and those who qualify under LMAs:

From my perspective, the LMA funding is really critical, the funding for individuals who are not labour market attached, but there’s also a gap. There are some individuals who wouldn’t qualify for EI benefits or EI reach back and therefore aren’t really ready for that LMDA program or don’t qualify. They’re not [eligible under an] LMA either.

Yet, that group in the middle has the best outcome of success statistically. The widening of programs is really important to be more inclusive.[100]

Catherine Pennington
Enbridge Inc.

The Automotive Industries Association of Canada described their difficulties with the LMDA eligibility criteria:

Attracting the best and the brightest is our focus as an industry, like a lot of the other industries. So if the best and the brightest don’t fit the definition that’s currently established for the LMDAs, then it’s a challenge for us. Like my colleague here, we promote flexibility and we want to see a program where certain individuals are not discriminated against just because of their current situation. We simply want to find the best employees and match them up with the best jobs and the best skill sets they can bring to us.[101]

Marc Brazeau
Automotive Industries Association of Canada

Social policy researchers also called for expanded LMDA criteria and even the consolidation of different funds in order to reach all workers who require training.

[M]y concern is about the investment in skills for everyone, not just simply for the unemployed. It’s very important that however we look at which mechanism we want to use, whether it’s EI or not—and I certainly would prefer to begin to break down some of the barriers among the funds that we have available for people who are qualified and not qualified for EI—I think the question is simply how we invest in skills. Do we make that available through a learning account? Do we make that available through funds that are set aside for an individual worker? Do we look at incentives to make the employer invest?

I think, personally, the evidence would suggest it’s probably better that the money follow the person.[102]

Tyler Meredith
Institute for Research on Public Policy

Currently, workers in more traditional jobs benefit from the social contract and social programs, but an increasing number of part-time workers and those without job security do not derive those benefits. We advocate a human capital … [training] strategy that puts all those dollars on the table and addresses all workers in need of further training.[103]

Matthew Mendelsohn
Mowat Centre

RECOMMENDATION 9

The Committee recommends that the federal government in collaboration with provincial and territorial governments review the eligibility criteria for employment benefits provided under Labour Market Development Agreements.

B. Length of entitlement to Employment Insurance benefits

The issue of entitlement to income benefits while taking training under an LMDA-funded program was raised by a number of witnesses over the course of the study.

Some witnesses expressed the view that EI benefits need to be provided throughout a training program attended by a claimant as part of an LMDA-funded program.

[W]e recommend that EI part I income benefits be extended for the full duration of LMDA training programs. People need to be able to pay their bills and put food on the table when participating in a longer-term training program.[104]

Barbara Byers
Canadian Labour Congress

Unifor wants to emphasize the related need to extend EI part I benefits when a worker is in an approved EI part II program. Since it is a burden on the LMDA budgets, provinces provide only a small living allowance, if they provide anything at all.

EI provides income replacement for individuals, so family-income testing is not appropriate.… During the 1980s, workers were able to get EI—it was UI at that time—income benefits for up to two years if they were in approved training.[105]

Cammie Peirce
Unifor

As well, we are recommending that the EI part I benefits be extended to the full duration of the LMDA training program.[106]

Mary-Lou Donnelly
Canada Employment Insurance Commission

C. Types of eligible training

Witnesses called for the types of eligible training under LMDAs to be expanded. For instance, one witness described how  difficult it is for someone who lost their job to complete their secondary education with EI program support:

What I would say is that our general thrust is that the EI system needs more flexibility. One of the things we recommended in a major report a few years ago was that people could go back to finish their high school while on EI. Right now, if you’re just trying to get your basic high school and you have lost your job after several years, you can’t do that.[107]

Matthew Mendelsohn
Mowat Centre

Another organization made similar remarks:

[W]e would like you to consider opening up the EI Act to allow for flexibility beyond the narrow prescription of EBSMs. People need programming that ranges from literacy and numeracy to sector-specific language training. Canadians deserve a continuum of services to support their labour force entry or re-entry.[108]

Karen Lior
Toronto Workforce Innovation Group

D. Costs of enhancing Labour Market Development Agreements

Organizations calling for expanded eligibility criteria or extending benefits to cover the length of training argued that such decisions would not increase costs for the government since EI benefits are funded by premiums and the EI fund has been in surplus year after year. They also pointed out that the Employment Insurance Act allows the amount currently being spent on LMDAs to be more than doubled.

However, other witnesses pointed out that the government had pledged to balance the employment insurance fund by 2017, which would involve the use of the surplus.

Judith Andrew, Commissioner for Employers, Canada Employment Insurance Commission, presented what she saw as the overall view of employers:

The one possible idea employers generally wouldn’t support is the idea of reaching more people, if that means a change in eligibility.… I want to alert the committee to what I am not hearing on the topic. Regarding the over $2 billion LMDA transfer envelope, I have not heard any call from employers to enlarge that sum. Employers remain concerned about the level of the EI payroll taxes and about keeping all funds segregated and dedicated to EI purposes. They are looking forward to rate relief being delivered on schedule in 2017, based on the budget 2014 forecast, coincident with the move to a seven-year, break-even, rate-setting methodology.[109]

Judith Andrew
Canada Employment Insurance Commission

E. Eligibility determined by the provinces: the issue of interprovincial mobility

The Hon. Jason Kenney, ESDC Minister, and departmental senior officials said that the provinces are generally reluctant to train people for out-of-province employment opportunities.

Of course we have, generally speaking, labour mobility in the Red Seal trades, 55 trades which have reciprocal standards across the country, but we don’t for the training years that lead up to a Red Seal certificate. We’re trying to get greater mobility for people during the training period. In this area, training requests are generally not approved currently if the job is in another jurisdiction, which limits labour mobility. One of the things we may want to do is put mechanisms in place to ensure training is linked to a job offer and that it’s prioritized regardless of where the job is.[110]

The Hon. Jason Kenney
ESDC

We want an individual to be able to go to a provincial office and say they’d like to take this training that will help them get a job that could be in a region far away or in a province far away. I think that’s one of the challenges right now, the way the incentive structure is built. Maybe a province would be reluctant to train somebody for an out-of-province job. We want to be sure an individual has that choice.[111]

Frank Vermaeten
ESDC

Several witnesses who appeared before the Committee also believe that enabling and facilitating interprovincial mobility is critical if training is to be able to match human resources with labour market requirements across the country.

We need the same [a labour mobility agreement within provinces and territories that enabled teachers to be qualified to teach across Canada, regardless of where their training occurred] in a broader trades occupation, not just those within the Red Seal program. Currently, as I understand it, the Atlantic provinces and the western provinces have an apprenticeship harmonization agreement that does enable mobility for tradesworkers if they choose to relocate. But this needs to be a national harmonization so that our labour market is ready and able to respond to labour market needs across the country, not just locally or regionally.[112]

Mary-Lou Donnelly
Employment Insurance Commission

One of the things around mobility that is important is to recognize that people may start their training in one province and finish in another. They may be halfway through a program and they need to move because they need to become an apprentice, and the agreement should recognize that. Right now, there is a tendency that you have to do everything in the province that you started in, your training, your apprenticeship, and your first job. If we could figure out ways to engage industry, the training institutions, and the unions to figure out how to best make that work, I think that’s critical to seeing more success and more value for the dollars that are invested in these programs.[113]

Craig Martin
Canadian Welding Bureau

[W]e agree with national standards, because people have to have some portability. They have to know that if they got some training in Ontario, it applies in Saskatchewan, and that if they got it in Saskatchewan, it applies in Nova Scotia.[114]

Barbara Byers
Canadian Labour Congress

While these witnesses recommended some sort of training harmonization among the provinces and territories to facilitate apprentice and worker mobility, they did point out that this had to be balanced with the provinces’ need to provide training on specific skills in order to address local needs.

There is a need, and I mentioned it in my opening statement, to have a national approach for training. That’s a base approach, so that you have some basic skills which are repeatable and transferable right across the country. But we also have to recognize that flexibility. Based on the industry that the person is working in, and it sometimes varies by province, there should be the ability for provinces to upgrade specific skills related to what they need. I think it’s a combination of both, but we can avoid and prevent some of the mobility issues if we have a core bit of training.[115]

Craig Martin
Canadian Welding Bureau

I spoke of a national harmonization program, so I’m not sure if I’m the one to say the curriculum should be the same all across the country. As an educator, we know that different areas have specific things that they want to relay, that they want to teach, and that they want to educate their people on. I think that the two can be bridged. I think that there can be a real balance there.[116]

Mary-Lou Donnelly
Employment Insurance Commission

RECOMMENDATION 10

The Committee recommends that Employment and Social Development Canada continue to encourage the provinces and territories to harmonize their training programs in order to facilitate interprovincial mobility for apprentices and workers.

Some witnesses came forth with concrete suggestions to assist individuals interested in moving temporarily or permanently to another province or territory to fill available jobs.

[W]e have some ideas for how labour mobility can be better facilitated by the government. One solution we believe the federal government should take a closer look at is the creation of a work travel grant or a lump-sum training and mobility grant, which would be accessible through the EI system.

Mobility grants allow a person who is unemployed in one area of the country to utilize future unemployment insurance benefits in the form of a lump sum payment in order to relocate to another area of the country where workers are needed. The funds advanced from EI payments would then be used to fund job search, training, and/or relocation costs.… The worker would reach forward into his EI benefits, take a lump sum, and use that to either move for that first venture out west, for example, or to get the training they require, whatever it might be. Again, it could be a permanent relocation or it could be temporary.[117]

Sean Reid
Progressive Contractors Association of Canada

I really like the idea of providing mobility funding so that we can help workers move across the country in a more seamless and appropriate fashion to fill jobs.[118]

Catherine Pennington
Enbridge Inc.

RECOMMENDATION 11

The Committee recommends that the federal government, particularly Employment and Social Development Canada and Finance Canada, study the benefits and costs of establishing financial supports for individuals interested in moving or have workers come from out of province or territory to fill available jobs, taking into account the existing tax measures already in place to support these types of moves.