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Provincial finance ministers Charles Sousa of Ontario, Mike de Jong of B.C. and Nicolas Marceau of Quebec expressed doubts about the federal goverment’s Canada Job Grant. (Peter Power, Chad Hipolito and Jacques Boissinot/The Globe and Mail, Special to The Globe and Mail and The Canadian Press)
Provincial finance ministers Charles Sousa of Ontario, Mike de Jong of B.C. and Nicolas Marceau of Quebec expressed doubts about the federal goverment’s Canada Job Grant. (Peter Power, Chad Hipolito and Jacques Boissinot/The Globe and Mail, Special to The Globe and Mail and The Canadian Press)

Some provinces chafing at cost implications of Ottawa’s job-training plan Add to ...

The Canada Job Grant training program unveiled in the federal budget is under fire from provinces, with many saying Prime Minister Stephen Harper’s government is adding costs to their bottom lines in its bid to address a skilled worker shortage.

Reaction from provinces after the budget’s tabling Thursday was mixed, with provinces saying they have more questions than answers, but it’s the training program that drew the strongest reaction. The program is meant to use grants to lure Canadians into trades and skills training to “ensure Canadians are getting the skills employers are seeking,” but the grant costs are split between employers, provinces and the federal government.

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It means provinces will no longer fully control the money Ottawa spends on skills training, while also leaving them on the hook for their share of the new program.

Quebec was most vocal, with Finance Minister Nicolas Marceau saying the federal budget threatens to sabotage Quebec’s economy. Mr. Marceau said he never expected the budget would undermine the very foundation of Quebec’s economy by eliminating the federal tax credit on labour sponsored investment funds and redirecting funds for skills training programs.

‘Our worst fears have become reality … In fact, it is much worse than we expected,” Mr. Marceau in a news conference on Thursday. “It is a direct attack against Quebec and it is nothing less than economic sabotage.”

Other provinces were more measured in their responses, but still said the Canada Job Grant program will affect provincial services.

“Any time a portion of the budget that was formerly available evolves to something different, that could present challenges,” B.C. Finance Minister Mike de Jong said, adding that he was “concerned” and worried the Canada Job Grant might be a “further draw” on his province. “The fact that the funding remains in the dedicated envelope is good news. The terms around which one achieves access to it is something I hope will be the subject of further conversation,” he said, adding B.C. has done well in such talks with Ottawa.

Ontario Finance Minister Charles Sousa said the federal government is tying provinces’ hands with changes to skills training. The Canada Job Grant program “could force the province to divert existing resources that serve under-represented groups,” Mr. Sousa said in a written statement, concluding the “budget suggests that the federal government thinks it is better placed to design programs that meet the needs of Ontario’s workers. We believe Ontario has the best understanding of the labour market requirements in this province, and how best to meet them.”

A range of other changes in the budget tabled by Finance Minister Jim Flaherty left provinces, most notably Quebec, accusing Mr. Harper of overstepping his bounds by imposing decisions on provinces. This includes the federal government’s warning that it may impose a national securities regulator, which many provinces will continue to fight.

Other provinces were non-committal, signaling the devil’s in the details. Nova Scotia Finance Minister Maureen MacDonald noted there are no deep cuts that affect her province, but also little detail on new programs. “It’s kind of an in-between budget,” she said.

The budget was praised by conservative western governments in Alberta and Saskatchewan, where ministers treaded lightly around the Canada Job Grant program – the labour-starved provinces back the notion of supporting training, but aren’t yet sure how to pay for it.

“We don’t have any new money for these types of programs, so we’ll assess where that’s going to impact us,” Alberta Finance Minister Doug Horner said. He congratulated Mr. Flaherty “for the priorities he has put forward in this budget.” In particular, he praised the budget as one that “avoids placing a heavy burden on taxpayers” by not introducing or hiking taxes, while investing in infrastructure through the extension of the Building Canada program. “This will be a great benefit to municipalities, especially Alberta’s fast-growing communities,” said Mr. Horner, whose Progressive Conservative government’s budget was tabled earlier this month, emphasizing – like the federal budget – slowed spending growth and infrastructure programs. Both Alberta and the federal government have turned to public-private partnerships in hopes of spurring infrastructure programs.

Saskatchewan Finance Minister and Deputy Premier Ken Krawetz, of the right-leaning Saskatchewan Party, said reaction in the provincial capital, from government and business, has been “overall extremely positive.”

“People in business understand you have to stay within a balanced budget, and while they would have loved to see a continuation of corporate income tax reduction, they’re pleased with the majority of the budget,” Mr. Krawetz said. He struck a conciliatory tone on changes to job-training programs, that will see Saskatchewan pay more.

“We want to have partnerships with the federal government. And, you know, if we can have additional pressures by the federal government to provide dollars directly to businesses with an outcome that’s going to mean we’re going to have more skilled people to meet that job shortage here in the province of Saskatchewan, I think that’s going to be a good thing. Whether or not there are excessive restrictions, I can’t tell ya because we haven’t been able to [study] all the minute details of the plan,” he said.

In Manitoba, the budget drew mixed emotions. Stan Struthers, Finance Minister in the NDP government, said the province is “concerned” about the costs that will come with the job-training program. They welcome federal contributions, but were “a bit surprised” that changes come with a demand for more provincial cash.

The budget also fails to reverse the federal government’s declining share of provincial health costs, which are rising.

“We are glad that they’ve identified priorities such as skills development, such as infrastructure. We want to underscore that Manitoba is willing to work in a co-operative fashion to achieve those goals, but let’s be very clear – these will be additional pressures on our budget here in Manitoba,” Mr. Struthers said.

The budget left Nova Scotia’s Ms. MacDonald on the fence, saying her NDP government agrees with the federal government on the broader goals of wanting to align people with jobs. But she cautions that, so far, her office had little information about the Canada Job Grant. “We are going to have to negotiate the details,” she told reporters in a scrum. “That is often where you get down to difficulties – or not – I’m optimistic.”

The budget has too many unknowns, she said. For example, she mentioned the Building Canada plan, in which the Harper government has committed to invest in infrastructure for the next 10 years. “We don’t know what the impact financially on the province will be with respect to our share,” she said.

However, while other provinces warned about the higher costs they’ll incur, Ms. MacDonald the federal budget doesn’t change her government’s plans to table a balanced budget, which is due April 4.

Ontario’s Mr. Sousa said he was pleased by continued investment in affordable housing, as well changes to tax loopholes, but stressed that the job isn’t yet done. “We need to continue to work together to continue to enhance the integrity and fairness of our tax system,” he said.

B.C.’s Mr. de Jong may end up getting an opportunity – before his fellow finance ministers – to communicate his concerns to Mr. Flaherty. The federal Finance Minister is scheduled to speak Friday to the Vancouver Board of Trade, across the street from the cabinet offices where Mr. de Jong met with reporters Thursday. Mr. de Jong said his office is talking to Mr. Flaherty’s office about a meeting, “but we’re not sure how long he’s here for.”

Manitoba, Saskatchewan and Alberta all reject the possibility of the federal government imposing a national securities regulator, which the three provinces saying they prefer a collaborative approach. They all pledged to work together, but Alberta’s Mr. Horner warned that “the sovereign ability of the provinces to make those securities decisions is something we still protect.”

With a report from Adrian Morrow in Ottawa

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