HUMA Committee Report

Introduction

The Government of Canada would like to thank HUMA for their recommendations concerning the Summer Career Placements (SCP) initiative, tabled on May 31, 2006, and acknowledges the significance of their work.   (Appendix A to this Response contains a full list of the recommendations.)  In September 2006, the former Minister of HRSD wrote to the Chair of HUMA to assure members that the Government was reviewing the recommendations in HUMA’s First Report to ensure that in moving forward, the SCP initiative would be effective, transparent and aligned with labour market realities.

Since HUMA’s First Report, the Government launched a new initiative, Canada Summer Jobs (CSJ), which focuses on helping students acquire career-related skills and supporting them in financing and furthering their education.  The new CSJ initiative is part of Summer Work Experience, one of three components of the Government of Canada Youth Employment Strategy (YES).  The YES has two other program streams: Skills Link, which helps youth-at-risk develop the skills they need to find employment or foster their return to school, and Career Focus, a program that provides post-secondary graduates with work terms in their areas of specialization.

The HUMA recommendations formed an integral part of the development of the new CSJ initiative along with an analysis of program data, current labour market information and service delivery experience.  This Response describes the new initiative and explains how the recommendations are reflected in its design.  Responses to individual recommendations are grouped into five themes based on the new initiative’s core objectives and on modifications in its design: creating jobs that would not otherwise be created; helping students who face barriers to employment; creating high-quality, career-related jobs; improving efficiency; and increasing transparency and accountability.

With the new CSJ, the Government launched a refocused initiative to create quality summer jobs for students.  The CSJ initiative advances the Government’s commitment in Advantage Canada to create the best-educated, most-skilled and most flexible workforce in the world.  It provides students with skills and work experience to help them make an effective transition to the labour market.  The CSJ initiative is also designed to achieve results, provide value for money and ensure accountability.

The CSJ initiative is specifically aimed at encouraging not-for-profit (NFP) organizations, the public sector and smaller private sector employers (50 or fewer employees) to create high quality, career-related summer jobs for those students most in need.  Funding under the initiative is awarded based on criteria that are designed to achieve results, focusing on three key objectives:

• Creating jobs that would not otherwise be created;
• Helping students who would not otherwise find work as a result of where they live or other barriers to employment; and,
• Providing high-quality, career related job experiences.

An objective and rigorous assessment process has been established to guide funding decisions with the three objectives in mind.  Specifically, applications are assessed using 12 criteria outlined in a National Assessment grid summarized below.

12 National Assessment Criteria Job is being created in a geographic area with high youth unemployment rate (as determined by Labour Force Survey statistics) Job is being created in a small urban, rural or remote area Project activities are directed toward members of and support the vitality of an Official Language Minority Community Employer is committed to hiring priority students Jobs are in high crime areas Employer focuses on the provision of services to the following: Persons with disabilities Recent immigrants Aboriginal people Members of visible minorities Persons who are homeless or street-involve/li> Other groups with social or employment barriers Children or seniors Environmental protection or other priority Job provides career-related experience or early work experience Job provides employability skills Employer provides supervision and mentoring Duration of the job contributes to the student’s experience and income Salary offered contributes to the student’s income Job is associated with a special event and is a unique work experience.

The assessment criteria are designed to ensure that the jobs created by the new initiative meet the key objectives.  The criteria aim to ensure that the initiative creates jobs that would not otherwise be created, such as those in smaller communities and in geographic areas where jobs are hardest to find.  Priority will also be given to employers who hire students (those with disabilities or who are Aboriginal) who may not otherwise find a summer job due to barriers they face.  Employers involved in key special service areas providing high-quality, career-related jobs will also be given priority through this assessment process.  For example, employers who offer longer work terms, a higher wage and provide for strong skills or career development activities will be rated higher than others.  This rigorous and objective assessment process is designed to ensure that all eligible applicants are treated fairly and decisions are transparent.  In designing the new approach to assessment, the Government recognizes the challenge of achieving an appropriate balance among twelve criteria, to ensure that the initiative continues to support students and the organizations that create the opportunities for them.

Several additional key features of the program are designed to ensure that the initiative’s objectives will be respected. The wage subsidy structure ensures that additional incentives are in place for employers in the Not for Profit (NFP) sector who face more challenges in creating summer jobs.  For the private sector, eligibility is limited to smaller employers (50 or fewer employees), ensuring that funds do not go to firms who would have hired students anyway.  Measures have also been taken within Service Canada to improve service delivery for the new CSJ initiative (e.g. web-based applications).

In 2007–2008, the Government of Canada budgeted $85.9M in program funds for the CSJ initiative.  Of that budget, $77.3M was budgeted for NFP organizations, while $8.6M was budgeted for public sector employers and private sector employers with 50 or fewer employees.  Separate budget envelopes were established for NFP employers in each province and territory.  A national envelope was established for the private and public sectors.    

The following sections of this response outline how the HUMA recommendations are reflected in the new key objectives and features of the CSJ initiative.

The Standing Committee Recommendations The Standing Committee recommends that two variables – a rurality factor and a measure of economic disadvantage – be included in the allocation formula. The rurality factor, based on the percentage of the population in a federal electoral district that is defined by Statistics Canada as rural, is intended to offset the perceived underestimation problem related to the student population in rural federal electoral districts. The measure of economic disadvantage (e.g., the ratio of average household income in Canada to average household income in a given federal electoral district) is intended to assist federal electoral districts with the least capacity to provide summer employment opportunities to students. (Recommendation 12) The Standing Committee recommends that the allocation of funding under the Summer Career Placements Program to federal electoral districts with similar demographic characteristics be more equitable. Changes should include, but not be limited to, replacing the current two-step allocation formula with a single-step formula that distributes the program’s national budget across federal electoral districts. (Recommendation 11) The Standing Committee recommends that transitional program funding be made available to help federal electoral districts adjust to the Committee’s recommendations and, whenever necessary, to help offset the adverse impact of major events (e.g., a plant shutdown). (Recommendation 10)

HUMA made a recommendation to use a rurality factor and a measure of economic disadvantage in the budget allocation formula.  The Government agrees in principle that its student summer employment initiative should give priority to creating jobs in communities where jobs are harder to find.  Despite an overall strong economy and summer labour market in 2006, students in many regions had difficulty in finding a summer job because of where they lived. While the overall national student summer unemployment rate in 2006 was 13.7%, the rate was higher in 5 out of 10 provinces.  In rural and remote areas, such as the Territories and Northern Manitoba, the overall unemployment rate can be 25% or higher, making it very difficult for students to find jobs.

The assessment criteria specifically give priority to those applications from areas of high youth unemployment; small urban, rural and remote regions and areas of high crime.  By giving priority to applications from employers in these areas, CSJ assists those with the least capacity to create summer jobs.  This approach aims to ensure that the initiative provides value for money as the funds go to employers who would not otherwise create summer jobs.

HUMA also recommended that the allocation of funding should be more equitable among federal electoral districts with similar characteristics.  The Government also agrees in principle with the critical importance of ensuring that the distribution of resources reflects accurately the socio-economic factors affecting job creation for students.  The new CSJ assessment criteria favour applications from areas of high youth unemployment; small urban, rural and remote areas; and, those with high crime while ensuring that applicants from areas with similar socio-economic characteristics are assessed in the same way.

HUMA also recommended that the budget for the initiative include transitional funding to help federal electoral districts adjust to HUMA recommendations and help offset the impact of major events.  The Government agrees in principle with the need to ensure that funding goes to employers in areas facing economic difficulties.  In the new CSJ initiative, applications from areas facing high unemployment get priority.  The initiative is designed to respond to economic downturn and the impact of major events, such as plant closures, by using the most current labour market data (which will reflect such events) from the monthly Labour Force Survey (LFS).  This rich and high quality source of labour force data will help ensure that CSJ assessment criteria reflect the impacts of major events such as plant closures. 

The Government will review CSJ results to ensure the initiative achieves results for Canadians and remains responsive to organizations that provide important community services and create jobs that would not otherwise be created.

The Standing Committee Recommendations – The Standing Committee recommends that program administrators permit, under special circumstances, full-time students to participate in the Summer Career Placements Program, with the consequent effect of accommodating placements that provide part-time employment. Special circumstances would include, for example, students who rely heavily on distance education or who are required to be enrolled as a full-time student for a 12-month period. (Recommendation 4) The Standing Committee recommends that program administrators allow, under special circumstances, full-time students over the age of 30 to participate in the Summer Career Placements Program. Special circumstances would include, for example, single parents who have very limited work experience and need help securing career-oriented summer employment and earnings to continue school. (Recommendation 3)

HUMA noted that some students face special circumstances by recommending that full-time students be permitted to participate in SCP via part-time placements.  The Government agrees on the need to support students who may not be able to undertake a full-time placement.  Students with a physical disability and others with barriers to full-time employment, such as single parents, can be accommodated in the new CSJ with a part-time placement.  The initiative also provides a further subsidy to employers who incur costs in order to accommodate a student with a disability in the workplace.  In addition, the CSJ initiative does not provide restrictions on students who may choose to study and work full-time.

The needs of mature students were examined as HUMA recommended that full-time students over the age of 30 participate in SCP.  After examination, the Government does not agree that the age eligibility for this initiative needs to be changed.  CSJ is part of the Youth Employment Strategy, and the Government believes the CSJ initiative should remain targeted on students between the ages of 15 and 30.  Analysis indicates that the majority of mature students already have full-time labour market experience.  At the same time, there is evidence that despite a strong labour market, youth in Canada still face difficulty in obtaining initial job experience which could help them eventually secure a full-time job after graduation.  The Government will review CSJ results to ensure the initiative achieves results for Canadians and remains responsive to organizations that provide important community services and create jobs for students who face barriers to employment.

The Standing Committee Recommendations - The Standing Committee recommends that, given an increase in the budget for the Summer Career Placements Program, a higher wage subsidy be paid on behalf of program participants who are pursuing a post-secondary education. This would strengthen the program’s objective to help finance students’ return to school. Additional wage subsidies would be paid on the condition that sponsors share in the cost (e.g., for every $1 paid in excess of the minimum wage rate in each province/territory, the federal contribution would be 50% in the case of not-for-profit and public sector employers and 25% in the case of private sector employers, subject to some maximum overall additional wage subsidy payment). (Recommendation 7) The Standing Committee recommends that, given an increase in the budget for the Summer Career Placements Program, job placements involving post-secondary students last for a period of between 10 and 16 weeks and between 6 and 10 weeks in the case of high school students. (Recommendation 5) The Standing Committee recommends that public sector employers participating in the Summer Career Placements Program be entitled to a wage subsidy up to 100% of the provincial/territorial minimum wage rate. (Recommendation 6)

HUMA recommended that a higher wage subsidy be provided to those in post-secondary school than those in high school.  The Government agrees in principle with the recommendation in that it recognizes the importance of providing good wages to students to help them finance their education.  Rather than focusing on larger wage subsidies for one group of students, the Government believes that it is better to encourage all employers to “top up” the wage to a level higher than the provincial or territorial minimum wage.  Through the assessment criteria, more points are allotted to applications from employers offering higher wages, ultimately providing more help to students in financing their education. 

HUMA recommended that there be longer placements for post-secondary students (10 -16 weeks) than for those in secondary school (6-10 weeks).  The Government agrees in principle with the recommendation and shares HUMA’s concern for creating work terms of sufficient duration so as to significantly contribute to a student’s work experience and income.  The Government believes that it is better to have a flexible approach for employers and also for students who may not want to work the entire summer.  The CSJ initiative provides for work terms of a minimum of six weeks and gives an incentive to employers to create longer work terms by awarding them more points for doing so.

The Government also recognizes the importance of developing employability skills (eg - communication, problem-solving) and awards points to employers providing work terms which can help a student develop these skills.  Employers offering a good plan for the supervision and mentoring of students will also receive priority, contributing to an overall positive, high-quality work experience.  To further stimulate the creation of high-quality, career-related jobs, the assessment criteria for the CSJ initiative provide points to employers offering career-related experience with a link to a student’s career choice.  Similarly, points are awarded to those offering early, first-time work-experience.  This is important in helping youth break the “no experience, no job” cycle. 

HUMA recommended that public sector employers receive a 100% wage subsidy.  Respectfully, the Government does not agree. While the Government acknowledges the contribution of the public and private sector to student summer employment, it also recognizes that these organizations have access to other funds.  The Government believes that a 50% wage subsidy to these two sectors is adequate. In addition, providing a higher level of support to public employers than those in the private sector has the potential of creating adverse labour market implications, particularly in those local labour markets in which private sector employers are having difficulty filling vacant positions.

After a careful analysis of the wage subsidy structure in the former initiative, the Government decided that employers in the NFP sector would receive a wage subsidy of up to 100% of the provincial/territorial minimum hourly wage and be reimbursed for Mandatory Employment Related Costs (MERCs), such as employer premiums for CPP, EI and vacation pay.  The CSJ initiative recognizes that the NFP sector is not in the same position as the other two sectors as it has less capacity to respond to changing labour market circumstances and therefore, less capacity to create summer jobs.  In addition, evidence has demonstrated that the NFP sector creates high quality, career-related jobs that would not otherwise be created.  For this reason, NFP employers receive a higher subsidy than public and private sector employers who receive a wage subsidy of up to 50% of the provincial/territorial minimum wage and are not reimbursed for the MERCs.

The Government will review CSJ results to ensure the initiative achieves results for Canadians and remains responsive to organizations that provide important community services and create high-quality, career-related jobs for students.

The Standing Committee Recommendations - The Standing Committee recommends that the project approval deadline for the Summer Career Placements Program be set at the end of March and all other deadlines be adjusted accordingly. Project sponsors should be in a position to interview and hire applicants by the end of April. (Recommendation 1) The Standing Committee recommends that Service Canada move quickly to develop and implement a plan for automating the application process for the Summer Career Placements Program. This plan should entail a user-friendly Web-based application process and a database for keeping applicants fully informed about program requirements, applications, deadlines and outcomes. (Recommendation 2)

HUMA recommended that the project approval deadline be set at the end of March.  TheGovernment recognizes that early completion of approval process allows students to begin employment earlier, allowing them to acquire more work experience and more funds for their education.  The new CSJ is being implemented with many administrative improvements and as communicated to applicants, Service Canada advised clients of results beginning April 30. The Government will review CSJ results to ensure that the initiative achieves results for Canadians and that agreements are in place for students to begin work when employers need them.

HUMA also recommended that Service Canada move quickly to develop and implement a plan for automating the application process.  The Government agrees and it has already implemented the recommendation.  Starting in 2007, employers were able to forward their applications via the Internet, by fax, by mail or in-person.  By the end of the four week long application period, over 32,000 applications had been received by Service Canada, with approximately 43% submitted via the online system.  Overall, comments received from employers about the online system have been favourable.  Internal feedback on the new online system has indicated that there have been positive gains in the efficiency of the assessment process due to the increased automation.

For the 2007 CSJ campaign, the Government also implemented HUMA’s proposal to include a database for keeping applicants fully informed about program requirements, applications, deadlines and outcomes, as this information is now available, along with the National Assessment Grid, on the Service Canada website (www.servicecanada.gc.ca).

The Standing Committee Recommendations - The Standing Committee recommends that the age-related census data used to allocate funds under the Summer Career Placements Program pertain to full-time students aged 15 to 30 and not 15 to 24. (Recommendation 14) The Standing Committee recommends that intercensal estimates for the variables in the allocation formula be used to allocate program funding each year between the censuses. (Recommendation 13) The Standing Committee recommends that the national budget for the Summer Career Placements Program be adjusted each year to reflect changes in the full-time student population aged 15 to 30, the level of unemployment among this group during the summer months, minimum wage rates and the cost of living. (Recommendation 8) The Standing Committee recommends that the national budget for the Summer Career Placements Program for the current year and a forecast budget for the following year be announced at the beginning of each calendar year.  For greater certainty among program sponsors, participants and administrators, year-over-year changes, especially in terms of a decrease, in the program’s budget in any given federal electoral district should be gradual. (Recommendation 9)

HUMA made three recommendations related to ensuring that the national budget for SCP includes annual adjustments and changes to the variables in the budget allocation model. The overall objective of the HUMA recommendations was to ensure a stable source of funding at the local level. 

In designing the new CSJ, the Government decided not to use the approach to budget allocation recommended by HUMA.  Under CSJ, the assessment criteria, which are based on the most current labour market information from the LFS and statistics on factors such as population and crime rates, are designed to help ensure that budget resources are targeted to areas which need the most help in creating summer jobs for students.  Data from Statistics Canada provides a rich, up-to-date and high-quality source of information ensuring that funding decisions are made in a transparent manner and that the right students are helped.

HUMA recommended that the national budget for the current and subsequent year be announced at the beginning of each calendar year.  TheGovernment does not agree as implementing this recommendation would run contrary to the need to ensure that the CSJ initiative remains flexible and responsive to Canada’s labour market realities, as well as effectively targeted to creating jobs which would not otherwise be created.  The approach used in the initiative aims to ensure that budget resources are targeted to high unemployment areas which may change over time.  It is also difficult to see how implementing such a recommendation would provide certainty to employers as a rigorous and transparent process to assess and approve projects will be used each year, and employers are required to participate in this competitive process each year. 

Overall, transparency and accountability in the application process and other aspects of the CSJ initiative are very important.  Rigorous criteria are designed to ensure jobs being created contribute to the three objectives of the new initiative.  Clear assessment criteria and information related to the scoring of applications have been developed and are available on the Internet and through Service Canada offices.  This helps employers prepare their applications and also helps them to understand the funding decisions that are made as a result of the completed assessment process.

The Government will review CSJ results to ensure the initiative achieves results for Canadians and create high-quality jobs for students.

By helping match enthusiastic young workers with not-for-profit organizations, public sector employers and smaller private sector employers, the CSJ initiative provides students with a stepping stone to relevant, career-related work experiences, and helps create the best-educated and most flexible workforce in the world.