Federal budget focuses on students and training

Finance Minister Jim Flaherty at the 2013 budget announcement. (Courtesy Jane Lytvynenko / Canadian University Press)

Finance Minister Jim Flaherty at the 2013 budget announcement. (Courtesy Jane Lytvynenko / Canadian University Press)

By Jane Lytvynenko – Canadian University Press

In a bid to foster job creation, the Conservative budget, presented on Feb. 11, took a student and training focus. Aiming to ease debt loads and address a “skills mismatch,” the Economic Action Plan introduced new programs and changes in funding to existing government initiatives like apprenticeships, internships and research funding.

“Creating jobs and opportunities remains our government’s top priority,” said Finance Minister Jim Flaherty in his budget speech to the House of Commons. “We’re making sure that opportunities are there for everyone.”

In an initiative to train new workers for available jobs, the Economic Action Plan 2014 announced changes to the Canada Job Grant program, which was created with the last year’s budget. The new program will be launched this year and direct up to $15,000 per trainee in funding from the government and employer.

Since its introduction the program was met with pushback by the provinces, who were originally asked to provide $5,000 of the $15,000 funding.

Liberal Leader Justin Trudeau said the Conservatives promised the grant a year ago and were not able to deliver. Although the program is set to begin April 1, Leader of the Opposition Tom Mulcair is also skeptical.

“This cannot be done without the provinces,” he said to journalists on Parliament Hill.

While employers are still responsible for providing a third of the grant, the budget says if provinces refuse to negotiate an agreement, the remainder of the funding will be provided directly through Service Canada. Employers will also be able to provide their share of the grant through wages, reducing the burden of coming up with $5,000 up front.

The new budget also created the Canada Apprentice Loan as a part of the Canada Student Loans Program. The loan will “provide apprentices registered in Red Seal trades with access to over $100 million in interest-free loans each year.”

An apprentice will be eligible for up to $4,000 in loans per period of training. The budget says, “at least 26,000 apprentices are expected to apply.”

“Anytime interest-free loans are made available to students it’s a positive step,” said Jon Champagne, Canadian Alliance of Student Associations (CASA) national director.

CASA chair Amanda Neilsen agreed and said the budget — and loan program — are “a step in the right direction.”

Canadian Federation of Students (CFS) national chairperson Jessica McCormick was not as happy with the new loans program. She said rather than adding to the constantly growing student debt in the country, the government needs to allocate funds to grants and non-repayable assistance.

Graph of Canada: Unemployment, youth total (% of total labor force ages 15-24)

Another project, the Flexibility and Innovation in Apprenticeship and Technical Training, is aimed at encouraging innovative training techniques for technical apprentice training.

While only a pilot project, the FIATT will have the ability to support 12 multi-year programs implementing training techniques such as simulators, video conferencing and online learning. FIATT will see $13 million in funding over four years, starting this year.

The Youth Employment Strategy overseen by the government annually receives $300 million for skills and experience acquisition. The government will review the program to “align it with the evolving realities of the job market.” According to the budget the program will likely focus on science, technology, engineering, math and skilled trade sectors.

Also as a part of the Youth Employment Strategy, the federal government announced a reallocation of $15 million per year for 1,000 internships in small and medium-sized businesses. McCormick said there are 400,000 young people seeking jobs in Canada and “the investment would only affect about 1 per cent.”

To help with the job search the government will also make changes to the National Job Bank, modernizing it and making it easy to use.

The federal government acknowledged that the vehicle assessment for the Canada Student Loans program has not been adjusted since 1995. The Conservatives say they will eliminate the current $5,000 exemption for vehicles, meaning students who own them can increase their loan amount.

Nielsen said lobbying against the vehicle exemption is a long-time goal for CASA. She is happy the government decided to tackle the problem, saying “that’s going to give students $8 million in financial aid that didn’t exist and improve access.”

However McCormick said eliminating the vehicle exemption barely scratches the surface.

“The vehicle exemption will help some students who have cars but the vast majority of people that are accessing the Canada Student Loans program could benefit from non-repayable assistance.”

Flaherty said the government is on track to balancing the budget next year as projected.

“We don’t want to pass on our debts to future generations,” he said.

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