EI Training and the Federal Budget

Here’s a perhaps rather obvious thought prompted by reading an outline of the next OECD Employment Outlook. In a period of high and likely prolonged unemployment, governments should increase their investment in training of the unemployed by an amount at least in line with the increase in unemployment.

Budget 2009 fails that test. Spending on training under Part II of the EI Act – which is transferred to the provinces to support training for current and recent EI recipients – was increased by $500 Million per year on top of a base annual budget of $1.95 Billion, or by about 26%.

As of January, 2009, the number of regular EI recipients was already up by 23% from February, 2008. Thus we have already just about reached the stage where the increased training allocation matches the increase in EI recipients … and the recession has just begun.

Based on the TD Bank projection that we will hit a 10% unemployment rate by the end of the year, the number of unemployed workers will be up by about two-thirds from lows in 2008.

From this point on, investment in training per unemployed worker seems set to fall.

7 comments

  • Canada’s record on training has been comparatively dismal and I see no reason why this recession ought to be any different. More to the point, however, is that given training is a gray provincial responsibility and EI is gray federal power and neither level of government, nor industry has any particular interest in developing, let alone paying for, a comprehensive training program increasing money for training would likely fund a black hole.

  • Without leadership a black hole is a probability that one cannot dismiss lightly.

    But when we get a better sense of the desparation, i.e. we vote in a government that actually believes in a role for government at the federal level, we might actually get some results from a national training strategy.

    You are quite correct Travis, we could be lost in a jurisdictional training pass on buck. However that is if the provincials let it be that way, with a worker minded provincial government, your would think that regionally a training program may actually benefit from being provincially focused. It is the money that is the problem.

    Imagine if, if the 50 billion we spent from the EI fund on reducing deficits and such, were actually still in the EI fund, we could have had some highly focused new economy, high waged workforce training programs put in place.

    Or if the feds are feeling like they don’t feel they have the abilities to lead up a a national training strategy then how about a nice large cash injection into the the many sectoral councils, the one federal initiative still barely clinging onto existence, that actually made some serious training inroads.

    There are many useful and proven training approaches from a public perspective, however we are lacking leadership. Instead of infrastructure, shovel ready bridge to no where projects, how about some serious spending on training. It is the one and single biggest contributor to aid in economic transformation.

    You can never go wrong with education and training, a black hole can easily be avoided, we are not in the dotcom days anymore.

    pt

  • If only I believed. But then, if I did, some @³¼½ would show up and accuse me of paternalism. So let us just throw money directly to the people and call it liberation.

    Hey I am starting to dig liberal economic thinking. Who knew the right side of my brain could be so left!?

  • Travis – For what it’s worth my view would be that any allocation of training funds should go through a Scandinavian or for that matter Quebec style tripartitie labour market board, with a strong bias to allocation to training in public educational institutions.

  • Travis,

    If a national training strategy has somehow turned into “throwing money at people”, then you may, as you say, have some serious problems with your brain.

    Training and Education as an institution is clearly not something to be thrown around with such blatant disregard as you mention above.

    wow dude, that is some woeful thinking.

  • Paul,

    Sorry I always forget sarcasm is a poor form of communication.

    What I was trying to get at is what seems to me to be the pitiful state of labour market policy in Canada whether on the EI side of things or on the training side of things. Even going into what was been billed as the worse recession since X, the government did not see fit to increase coverage even on a temporary basis. What are the chances we can get better active labour market policies in such a policy environment?

    And it is not just the government’s fault. The private sector does not seem to be interested in a robust training system. The only time they talk of training is at the top of the cycle when they are pinched for skills and even then they would rather import temporary workers and give them the heave ho at the bottom.

    Andrew,

    I am in full agreement I would like to see a robust Scandinavian system. Although what little I have heard about the tripartite arrangement in Quebec is not very hopeful. I am trying to convince a colleague of mine to put out a paper on it.

  • Yes I was wondering where you were going, I guess sometimes I am a little slow on the sarcasm and too quick on the keyboard. Must be the paint fumes, I am renovating the home office here in south Ottawa.

    But you are quite correct in your sarcasm, the way the institution of training and education for that matter under the current regime is abysmal. I was reading some of the cuts to funding in core research by the universities and if that is not totally in line with the Harper model of private sector cover me in drywall dust and send me to the moon. (wow drywall dust is nasty)

    The one that got me the most recently was the Tory guidelines now being implemented with SSHRC funding. Which states that all SSHRC funding must now carry some notion of business research. (say what?) CAUT did a lot of dissecting on the institutional cut backs to research.

    Quite serious though. Of course this is along the lines that the private sector and market forces should be responsible for training, which as pointed out by Andrew is seriously under funded based upon a back of the envelop measure used above.

    Not sure what people think about training these days, but from a develop economy perspective and the value chain of large multinationals, I would tend to argue that the thicker you cover your workforce with a warm layers of training, the more you are going to move forward your standard of living based upon the tech diffusion and output argument.

    increasing Tech + workforce+ increased layers of training = increased living standards

    Isn’t that like the essential of any economic system, regardless of political stripe.

    the one nugget that we dug out of the Workplace and Employee- training in Canada was quite piecemeal and was highly positively correlated with education. Which from a progressive perspective is out of step. In fatsc the only workplace training that was going on, was for employees were already deemed highly trained. (training those working with the tech to keep up with the latest tech was the conclusion)

    That was from a few years back.

    Take forestry for example. We could transform the industry into new product markets, yet for some reason it is not happening, or at least it is going at a snails pace. Why not take up the challenge and retool the industry and start retraining now for this industry. The training would not be a violation of the softwood lumber caveats.

    Anyway I go on. But we must get the training wagon going again and start hitching our horses up, otherwise all this public cash that is floating into the banks will be gone.

    pt

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