February 18, 2005

Canada West Foundation study

Review training incentives to maximize effectiveness

By Grant Cameron

staff writer

Provincial governments, trade associations, industries and vocational institutions must work together to change perceptions about careers in the trades, a new study by the Canada West Foundation concludes.

Skills development opportunities for Aboriginal people should also be increased and tax credits should be used to encourage companies to do more direct on-the-job training and skills development, the study says.

The study was authored by Todd Hirsch, chief economist at the foundation, and is based on a series of focus groups that were conducted last fall across Western Canada with policy-makers and stakeholders.

The study, called Toward a Bright Future, is the third and final installment in a one-year research and public education project aimed at exploring how governments can improve their skills training policies.

The results suggest that although large companies are doing many innovative things with regards to recruiting and skills training, some serious gaps remain.

“The problems posed by a lack of appropriate skills may be hampering economic growth and expansion in some sectors and some parts of western Canada,” the study concludes.

“Addressing this problem is complex and cannot be carried out by any single government, post-secondary education institution, or industry in isolation. It will require a co-ordinated effort of all three sectors.”

The study suggests 10 ways to address the skill shortages in Western Canada. For starters, it recommends that the provinces and stakeholders must work collaboratively to change perceptions about careers in the skilled trades because shortages are expected to get worse.

“There are many factors contributing to the skills shortages in the trades including a cultural bias that has dissuaded young adults from pursuing careers in the trades. The perceptions are that trade occupations are low-skill, low-paying, dangerous and second tier in terms of social prestige . . . These perceptions should be changed.”

A good example of an effort to change these perceptions is a recent federal government initiative to promote jobs in the trades through a series of TV and movie advertisements, coupled with a Web resource developed by the Canadian Apprenticeship Forum, the study says.

“Much more could be done through a collaborative effort on the part of the provinces, industry, vocational education institutions and trade associations.”

The study also recommends there needs to be more training available to Aboriginals because the group represents a significant pool of young, capable workers that could potentially alleviate skill shortages.

“Most of the provinces in Western Canada have some support and training for Aboriginal peoples, but much more could be done. Much also needs to be done in terms of training and educating businesses wanting to tap into this segment of the labour force.”

According to the study, tax credits should also be used to encourage companies to do more direct on-the-job training.

“Many companies already provide on-the-job training to develop their own specialized skilled labour,” the study says. “Nonetheless, much more could be done by employers in this regard. It is not, after all, a lack of labour that is the problem, but a lack of skilled labour.

“Companies would likely have no problem attracting available workers to their payrolls in return for the appropriate training.”

The study notes that training new employees, retraining existing ones, or establishing co-op programs can be costly and may result in lower productivity in the early stages, so the provincial and federal governments should consider a system of tax credits to offset the cost for companies.

A review of existing training incentives should be done to determine a model that will maximize effectiveness, the study says.

The study also recommends that:

• More funding should be provided for post-secondary education to ensure appropriate program and facility capacity to meet the growing need for education and skills training.

• The federal government’s Sector Council Program should place a more regional focus on its activities, while maintaining national standards.

• Labour market development agreements need to break the link between federal funding for training and EI eligibility.

• The quality and timeliness of shared information on labour demand should be improved.

• Targeted immigration through provincial nominee programs should be increased.

• The flexibility of post-secondary institutions in regard to the establishment and delivery of programs should be increased.

• The transferability of credits among post-secondary institutions should be improved.

‘Addressing this problem is complex . . . it will require a co-ordinated effort of all three sectors’

Canada West Foundation

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