Federal budget measures aimed at tackling youth unemployment risk upsetting sensitive negotiations over the Canada Job Grant, as some provinces fear Ottawa is pulling a bait and switch.
Finance Minister Jim Flaherty is indicating that Tuesday's budget will include policies to boost training for youth and the disabled, but those areas are at the heart of the current tension between Ottawa and the provinces.
British Columbia, Ontario and Quebec all weighed in with concern Monday over the possibility that Tuesday's budget won't help provinces deliver training programs that currently exist.
The recent widening of the gap between adult and youth unemployment is a particularly thorny issue for governments.
January's job numbers showed youth unemployment stood at 13.9 per cent, well above the national unemployment rate of 7 per cent. Studies have also raised concern over youth underemployment, where university graduates end up working in jobs that do not require a degree.
Last year's budget announced the job grant – a proposed training subsidy – that caught the provinces by surprise and is still under negotiation. It has run into stiff resistance because Ottawa said it would pay for it by cutting 60 per cent of a $500-million a year transfer to the provinces used specifically to fund training programs for "under-represented" groups, including immigrants, persons with disabilities, aboriginal people, youth and older workers.
"It strikes me as being a little bizarre," said Ontario Training Minister Brad Duguid. "If providing training programs for our most vulnerable populations is a priority in their budget, why would they be fixated on cutting funding that provides training programs that are proven by their own numbers to work?"
Quebec's Finance Minister Nicolas Marceau and Intergovernmental Affairs Minister Alexandre Cloutier issued a joint statement Monday warning not to include "ugly surprises" in this year's budget, as they say Ottawa did last year with the job grant.
"All federal funds spent on training Quebec's youth, older workers and the disabled should be transferred to Quebec," according to the ministers.
Shirley Bond, B.C.'s Minister of Jobs, Tourism, Skills and Training, issued a statement to The Globe expressing hope that the budget will put more money into the proposed job grant.
"We hope to see appropriate levels of funding for the Canada Job Grant and will be very disappointed if that is not the case," she said.
Increased funding for the proposed job grant is considered unlikely, however, in light of recent signals from federal Conservatives that Ottawa will fund more training on its own.
In addition to roughly $2.5-billion in annual transfers to the provinces for training-related programs, Ottawa also funds its own training programs worth more than $560-million for aboriginals, the disabled, older workers and youth.
Nobina Robinson, who has advised Ottawa on innovation issues, recommends better labour market information and a tax credit for employers who help apprentices get certified. Ms. Robinson is the chief executive officer of Polytechnics Canada, which represents degree-granting colleges.
Ms. Robinson said Ottawa is legitimately trying to gear training money toward employment results.
"Currently we have very old-fashioned logic," she said. "You pay for the bum in the seats. Everybody's chasing enrolment for higher education and that's still not getting us young people entering the labour force, so something's going wrong."
In an interview with CTV's Question Period that aired Sunday, Mr. Flaherty specifically mentioned training for youth and the disabled as an area the budget would address.
"We've looked at hundreds of issues, and some of the most important ones are relating to jobs, relating to young people, relating to apprenticeships, relating to internships, relating to getting people that first job even though they're well educated," he said.