Sunday, April 07, 2013

Closing BC and Canada's Skilled Trades Gap

On March 21st Federal Finance Minister Jim Flaherty delivered a budget that while focused on deficit reduction, also emphasized infrastructure funding and reallocating funding to boost skills training.

The training initiative proposes a new Canada Job Grant that will provide up to $5,000 per person for job training – an amount that must be matched by provinces or territories and employers for a total of $15,000.  The goal is to match unemployed Canadians with more than 220,000 current job vacancies across Canada and provide more job opportunities for disabled people, youth and aboriginals.

The focus on skills training comes from the Conservative government’s consultations with employers and unions, who identified gaps in training as one of the biggest obstacles to economic growth.  However, this new job grant plan requires that the provinces and territories agree to it, there is also no new money involved.

On February 28, I had a breakfast meeting in Victoria with Ted Menzies who is the Minister of State for Finance and one of the issues he brought up was the disconnect between post secondary institutions and the needs of the job market.  One example he provided was where a company had expressed doubts about building an oil refinery in Alberta in part because of a lack of skilled trades people.

As I have been saying for some time now, my suggestion to him was that if money is allocated to individuals rather than given lump sum to colleges and universities it would force those institutions to be less ivory tower and much more attuned to the needs of the business community and the labour market.  The federal government appears to have listened, it will be interesting to see how the provinces respond.

The Industry Training and Apprenticeship Commission (ITAC) was created in November 1997 as a provincial government-sponsored, industry-driven, arms-length strategic policy board. After receiving some bad advice the Campbell government dismantled ITAC just as the skilled labour shortage was really beginning to hit the construction industry.

As it has done more recently with the Tourism BC, the BC Liberal government did an about face and recreated a similar organisation with a slightly different name, the Industry Training Authority or ITA.  The ITA works with employers, employees, industry, labour, training providers and government to issue credentials, manage apprenticeships, set program standards, and increase opportunities in the trades in B.C.

The ITA has struggled to close the gap between the need for skilled trades and the supply.  Some have blamed the lingering effects of dismantling ITAC, others that contractor associations like MCABC and trade unions don't have the same day to day input into ITA as they did ITAC while others blame demographics as the front wave of the baby boom are now becoming senior citizens.

All of these have been factors, but there has also been a disconnect with our public education system which has put far more value on encouraging English lit majors than encouraging future contractors, project managers, electricians, welders and the like.  School boards that must balance their budgets every year have found it expedient not just to cut funding for music classes but also for those kids who want to take woodworking, metal work and mechanics courses.

Also given the socialist dogma that passes for intelligent discourse within the upper echelons of the BCTF, is there little wonder that our kids learn almost nothing at school when it comes to starting a business or even the importance of compounding interest rates.  If our children were taught more in the way of business fundamentals and skilled trades in high school then we would likely have far fewer unemployed youth and I suspect fewer consumers being fleeced by payday lending companies.

Given the latest polls putting the BC NDP at 51% and the governing BC Liberals at 32% it seems extremely likely that the BC NDP will be elected as the next provincial government in May of this year.  That will make their leader Adrian Dix the next Premier of B.C.
Having met in February with both Adrian Dix and his finance critic Bruce Ralston I can tell you that education and skills training is a top priority for a Dix government.  The challenge will be to ensure that dollars just don't go to academia but to effective skills training that meets employers' needs.

The BC NDP plans to instigate a $100 million grant program to help students obtain post-secondary education.  They also plan to pay for this by reinstating a capital tax on banks.  But unless the dollars are allocated in a way that allows students to direct those dollars to those institutions and entities that are doing the most effective skills trade training then those millions of dollars can easily be wasted.

That is why I sincerely hope that British Columbia, even under a BC NDP government, will be willing to listen to the federal government and be part of a more market driven and market responsive skills training system.  Both employer and employee alike will greatly benefit from such an approach.