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Ontario Premier Kathleen Wynne, right, meets with British Columbia Premier Christy Clark to discuss the co-operative securities regulator agreement and skills training related to the Canada job grant at Queen's Park in Toronto on Tuesday, Oct. 1, 2013.Nathan Denette/The Canadian Press

The provinces are threatening to boycott a proposed skills training program unless the federal government overhauls it, jeopardizing a key part of Ottawa's jobs plan just six months before it is scheduled to be implemented.

British Columbia Premier Christy Clark and her New Brunswick counterpart, David Alward, delivered this stark warning on Wednesday in Toronto, where they met with business groups to develop an alternative proposal to the Canada Jobs Grant. They argued the grant would divert funds from current training programs and freeze out small businesses.

With a mismatch of available jobs to skills contributing to unemployment, the stakes could not be higher in the showdown between Ottawa and the provinces. The federal government wants the grant in place by April, 2014, so the two sides must find a resolution quickly, or risk damaging the program.

"All premiers agreed that the program as it stands will not go ahead in any province in the country," Ms. Clark said. "It needs to be changed or that 2014 date isn't going to be met."

The proposed grant would allow companies that have vacancies to train workers to fill those jobs. The employer would pay one-third of the cost of the training, with the other two-thirds funded equally by the provincial and federal governments.

The aim of the program is to better match training to the needs of the job market and to link unemployed and underemployed people with positions that need to be filled. Ottawa says that it was developed because employers asked to be part of the training process.

Employment and Social Development Minister Jason Kenney will oversee the grant's implementation. His office said the minister will sit down with the provinces this fall.

"Despite what the premiers said today, Minister Kenney has reached out to all of his provincial and territorial counterparts to open a dialogue on the Canada Job Grant and other labour market issues, and he looks forward to discussing these issues in the upcoming weeks," his spokeswoman wrote in an e-mail.

The premiers formed a united front on the issue at their annual gathering in the summer. They say the grant would drain federal cash from training programs that help specific groups, such as people with disabilities and recent immigrants. They also say small businesses would find it hard to get the cash to take part. The other premiers tasked Ms. Clark and Mr. Alward with finding an alternative proposal.

"If the federal government is hell-bent on moving forward without dialogue, the provinces have said we will not be participating. That is clear," Mr. Alward said.

If the provinces refuse to take part, the federal government could theoretically go it alone. But Ottawa would not have access to provincial offices and agencies, or funds to help pay.

At the centre of the tussle is one of the country's most pressing problems: its skills gap. Many jobs are going unfilled even as the national unemployment rate sits at 7.1 per cent, because those looking for work do not have the training for them.

"In the next decade and a half, if all of our projects come together, we're going to need 100,000 tradespeople," Mr. Alward said of his province's economic plans, including a pipeline that would create oil-refining jobs. "How do we prepare people to be ready for prosperity? … We need to get it right if it's going to have a benefit."

Ontario Training, Colleges and Universities Minister Brad Duguid said the provinces are making some headway with the federal government. When he spoke with Mr. Kenney last month, he said, the minister was "willing to listen."

"We're hoping the federal government recognizes this program, while there are some positive elements to it, it's doomed to failure the way it's structured now," he said. "My expectation is they're taking a rethink."