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Politics Tory budget's job-training measures set stage for turf war with provinces

Finance Minister Jim Flaherty speaks following the delivery of the budget on Parliament Hill in Ottawa on Feb. 11, 2014.

BLAIR GABLE/REUTERS

The Conservative government is inflaming a federal-provincial turf war over jobs with a 2014 budget that expands Ottawa's training role, launching new programs aimed at getting Canadians into apprenticeships and skilled trades.

The budget made clear that Ottawa is prepared to go it alone in launching a Canada Job Grant training subsidy as of April 1, even in provinces where no deal is reached. Finance Minister Jim Flaherty said Ottawa wants to work with the provinces, but the focus must be on employment. "The goal isn't just to train people, it's to train people for jobs," he told reporters. "What happens, unfortunately, in some of the provincial situations is that a lot of federal money – billions of dollars – goes to the provinces and there's no accountability."

Tackling the country's challenging and uneven jobs dynamic – where employers in Western provinces can't find workers while many other provinces struggle with above-average unemployment rates – is at the heart of the dispute.

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Provinces are upset that Ottawa is funding the job grant by cutting $300-million in transfers for training. Rather than scaling back the size of the cut, Tuesday's budget announced new spending on training that falls exclusively under federal jurisdiction. All provinces except Quebec had previously said they'd be willing to participate in the job grant provided that it doesn't start until the fall. Provinces also want more leeway in terms of which transfers they give up.

Nova Scotia's Finance Minister Diana Whalen said Ottawa's push for national employment programs ignores the fact that labour-market problems are unique to specific regions. "Every area is different. We are not all in the oil industry," she said. "We want to make sure that some of these programs will also be there for the people of Nova Scotia."

Ontario Finance Minister Charles Sousa slammed the budget as not doing enough to create employment in a sluggish economy. "There's not much in regards to promoting more jobs," Mr. Sousa said. "There's no vision in this budget."

Quebec Finance Minister Nicolas Marceau said the budget smacks of "predatory federalism," with numerous intrusions in provincial jurisdictions. Quebec estimates it will lose $70-million a year if Ottawa goes it alone on the program. "The federal government is creating an environment where it will have no financial pressures with all of it being placed on us," Mr. Marceau said. "This is the world we are living in now."

B.C. Finance Minister Mike de Jong applauded Ottawa for its progress towards a balanced budget, but said his biggest concern remains the Canada Jobs Grant program. "It's not really a question of arguing the overall objectives, but we can't do this alone. It won't work unless the provinces, the territories and the federal government work together."

Alberta, meanwhile, suggested it was overlooked. Finance Minister Doug Horner noted the budget announced money for bridge projects in Quebec and Ontario. "Hopefully there will be some good positive messaging for oil sands and the infrastructure that Albertans are looking for as well," Mr. Horner said, pointing to Highway 63 – the heavily used, mostly two-lane corridor to the province's oil sands region that is in desperate need of upgrades.

Mr. Horner said he's reserving judgment on Ottawa's strategy as it relates to the Canada Jobs Grant issue and infrastructure. "We're a little curious in some areas," he said. "My curiosity has not turned into concern, as of yet."

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Mr. Flaherty's 2014 budget unveiled several new federal training programs, including expanded student loans for apprenticeships, new internships and the creation of a job matching service. The programs come with relatively small price tags, but Mr. Flaherty signalled Tuesday that they could be expanded in the future given that Ottawa is on the verge of a new era of annual surpluses.

It marked the second budget in a row in which Ottawa expanded its role in training – a 180-degree turn from the Conservatives' 2007 budget, which downloaded hundreds of millions in training cash to the provinces as part of a pledge to solve what was then described as Canada's fiscal imbalance.

Finance Canada released a 54-page "jobs report" along with the budget that is full of charts and graphs illustrating the imbalances and shortages in the labour market, such as the fact that the job vacancy rate for skilled trades in Canada has more than doubled since 2009.

Canada's colleges welcomed the budget's support for apprenticeships and a new job matching service, promising it would make a difference in training Canadians for available jobs.

With reports from Jane Taber in Halifax, Rhéal Séguin in Quebec City, Adrian Morrow in Toronto, Kelly Cryderman in Alberta and Justine Hunter in Victoria

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