A major theme of Thursday's federal budget was "connecting Canadians with available jobs." And for good reason: Canada faces a major shortage of skilled tradespeople, and if no action is taken, this shortage will only grow in the future as the population ages. Indeed, the budget cited the example of the construction sector, which alone is projecting a need for 319,000 new workers. A shortage of skilled tradespeople limits economic growth across the country.
The federal government's 2013 budget contained two significant initiatives designed to address this issue. The first was the creation of a new training initiative, the Canada Job Grant, and the second was the announcement of a new infrastructure program, the Building Canada Plan.
Merit Canada strongly supports both of these initiatives as they will contribute to economic growth and job creation in Canada's construction sector. However, in order for taxpayers to receive the best value for their money on these initiatives a significant amount of behind the scenes but critical work needs to be done by our provinces and municipalities.
Merit provincial associations spend millions of dollars annually on apprenticeship tuition refunds, scholarships and the delivery of supervisory, safety and pre-employment training. It is also important to note that in Alberta, open shop contractors do the majority of apprenticeship training and about 80% of that is on-the-job training.
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Revenues for 2013-14 forecast at $263.9 billion, spending at $282.6 billion, deficit at $18.7 billion. Deficit projected to drop to $6.6 billion in 2014-15 and become an $800-million surplus in 2015-16. With files from Althia Raj and The Canadian Press.
The Tories plan to create a Canada Job Grant that will provide $15,000 or more per person -- up to $5,000 provided by the federal government, the rest matched by the province/territory and the employer. Nearly 130,000 Canadians are expected to benefit when the new grant is fully implemented in 2017-2018. Essentially, this is the government saying it is taking training out of the hands of provincial governments because it hasn’t worked and placing it in the hands of individuals. The Canada Job Grant will replace the Labour Market Agreements the feds signed with the provinces, which expire in 2014.
Manufacturing and small business get tax-credits introduced in past budgets extended to help spur investment and growth. There will be $1.4 billion in tax relief for manufacturers by extending the temporary accelerated capital cost allowance for new investment in machinery and equipment. And hundreds of millions for small business owners.
The government has pledged more than $53 billion in infrastructure spending, including $47 billion in new funding over 10 years. This includes $32.2 billion over 10 years for a “Community Improvement Fund” to build roads and public transit as well as recreational facilities and other community infrastructure projects. The Fund will consist of an index Gas Tax Fund and the incremental GST Rebate for Municipalities.
Military spending will be re-jigged that it is modeled on the ship building strategy and aimed at creating more jobs in Canada and key domestic capabilities with an eye towards exports.
The budget has cancelled the Canadian International Development Agency, the primary agency responsible for foreign aid. Its duties will be merged into the Department of Foreign Affairs.
The government says it is aggressively going after tax avoiders/and closing tax loopholes. They are launching a “Stop International Tax Evasion Program” where the Canada Revenue Agency will pay individuals with knowledge of “major international tax non-compliance” a percentage of the tax collected as a result of information provided. The CRA will only pay a reward if the information results in total additional assessments exceeding $100,000 in federal tax.
Two departments -- Canada Revenue Agency and the Department of Fisheries and Oceans -- will see big cuts. Departments will see a 5 per cent cut in their travel budgets. The government also says in the budget it intends to work with the public sector unions to “further align overall compensation with other public and private sector employers.”
The federal budget says new projects related to Canada's perimeter security deal with the United States will go ahead as planned, despite budget woes south of the border. The federal budget has given the green light to almost a dozen information-sharing and infrastructure projects related to the Beyond the Border initiative between the two countries. The vaunted deal was announced with fanfare by Prime Minister Stephen Harper and U.S. President Barack Obama in December 2011 at the White House. The plan aims to speed the flow of goods and people across the 49th parallel while protecting the continent from a terrorist attack.
The government wants to reduce import tariffs on a number of goods including baby clothing, skis, snowboards and gold clubs. But it plans to offset the $76-million revenue loss from that by hiking excise taxes on chewing tobacco and other manufactured tobaccos, to bring them in line with cigarette taxes.
Finance Minister Jim Flaherty's spring budget commits Ottawa to five more years of funding through the Investment in Affordable Housing program. The level of commitment is the same as in the past: $253 million a year over five years, which needs to be matched by the provinces and territories and can be spent on new construction, renovation, home ownership assistance, rent supplements, shelters and homes for battered spouses. But there's a new twist to the funding. Home construction in the program will support the use of apprentices so that newcomers to the construction trades can build up crucial experience. The budget also commits $100 million over two years to build 250 more units of affordable housing in Nunavut, where homes are so crowded that illness spreads easily and poverty abounds.
Unfortunately, in many provinces the regulatory environment around apprenticeships is significantly shrinking access to training opportunities. For example many provinces have overly restrictive apprentice-to-journeyman ratios, effectively limiting the space for apprentices to work. The creation of expensive new bureaucracies to administer and monitor training (as opposed to actually providing training) also raises significant barriers to accessing effective training, and finally there is a patchwork quilt of provincial rules regarding apprenticeships across the country, creating needless confusion and paperwork. If we really want to match the training of Canadians to the jobs available, these and other barriers must be eliminated. Thankfully, Budget 2013 committed to working with the provinces to harmonize regulatory requirements.
The budget also makes major infrastructure spending commitments, totalling $53.5-billion over 10 years. Here too governments have work to do in order to ensure taxpayers receive the best value for their money. Specifically provincial and municipal governments must eliminate inefficient and unfair closed tendering practices which exclude non-unionized workers from undertaking work on projects funded by the infrastructure programs.
All Canadians, regardless of whether they are union members or not, should have the right to work on projects funded by their own tax dollars. In many jurisdictions, access to bidding on such projects is restricted to unionized contractors, meaning that some 70% of construction workers are automatically excluded from employment on these projects. Policies that limit tendering for public works projects not only drive up costs for taxpayers, they effectively create a regulated wage floor for construction workers, which disproportionately impacts employment opportunities for young workers with little experience -- precisely the types of people the government's other initiatives are designed to help.
The blatant self-interest of those in closed union shops cannot be allowed to trump the rights and interests of the wider Canadian public. A move to open tendering on publicly-funded projects would ensure both better value for money for taxpayers, and more opportunities for young workers.
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