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Minister of Employment and Social Development Jason Kenney responds to a question during Question Period in the House of Commons on Parliament Hill in Ottawa on Monday, December 9, 2013.

Sean Kilpatrick/The Canadian Press

Businesses hungry for skilled Canadian workers say they will be intently watching the upcoming federal budget, nervous that the Conservative government will water down its Canada Jobs Grant amid provincial and territorial opposition.

While some dispute the government's insistence that the controversial program is needed to address a serious skills shortage in Canada, those on the front lines beg to differ – and they're fully supportive of the goverment's original proposals to combat the problem.

"They introduced what seemed to us to be a very good program in the last budget," said Serge Buy, head of the National Association of Career Colleges, which represents an array of schools across the country that provide training in sectors with skilled worker shortages.

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"Rumours are that they may give in to the provinces, and I hope those rumours are wrong, because if they do, they won't gain much and the problem will persist."

An official in Employment and Social Development Minister Jason Kenney's office said talks continue between the feds and the provinces in an effort to tackle the skills shortage before the budget, expected in the next few weeks.

In last year's budget, the government said it would slice $300-million – about 60 per cent – from the so-called Labour Market Agreement implemented by the Conservatives in 2007.

That initiative provides funds to train unemployed workers not eligible for employment insurance and is aimed at aboriginals, immigrants, women, youth, older workers, people with disabilities and those with low literacy levels. Ottawa has argued it's ineffective.

Under the original job-grant proposal, the government would issue the grants itself if the provinces and employers match funding. The Conservatives want to compel employers to train their future and current workers, and to encourage provinces to focus on training that will result in actual employment.

Buy said he's hearing that the government might give provinces and territories greater flexibility in how they spend federal funds – including money received through the Labour Market Development Agreement, a separate fund specifically designed to support workers who do qualify for employment insurance.

That makes little sense, he said.

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"I am just completely puzzled and shocked as to why they would bend on this, if in fact the rumours are true," he said.

"How can you say: 'We're taking the money away from programs that we do not believe worked, but now we're going to fund them again through a pot of money that's used to fund programs that actually did work?"' For Buy, it seems an unfortunate bout of wheel-spinning at a time when companies have been turning to his association in dire need of skilled Canadian workers, particularly in the information technology, natural resources and health sectors.

Lynda Leonard, a spokeswoman for the Infomation Technology Assocation of Canada, says the dearth of skilled tech workers are forcing companies to look beyond Canada's borders for talent. Consequently, the government's simultaneous crackdown on temporary foreign workers is hurting the tech sector, she added.

"We're running at about two per cent unemployment, which is virtually full employment," she said.

"We're as concious as anybody about the need to build strong Canadian jobs, but as a relatively small economy, we don't have a monopoly on smart, skilled people. We can't hire who's not there."

Indeed, one California network security company almost pulled up stakes in Ottawa fours years ago due to a lack of skilled tech workers in Canada's capital region.

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Instead, Fortinet partnered with a career college in the city – Willis College of Business, Health and Technology – and invested heavily in the school in order to create a stable of ready-made employees.

"I would have chosen another location, probably in the U.S., for our support centre if we hadn't been able to partner with Willis to train students – that's really the engine that's driven our growth in the Ottawa area," Michael Anderson, Fortinet's vice-president of global sales and support, said in an interview Thursday.

Instead, the firm recently opened a new support centre for its growing local operations, employing more than 100 people.

Kenney recently praised Fortinet's partnership with Willis, calling it a "remarkable" alliance that should become the way of the future for sectors struggling to find skilled workers.

"It is so fantastic to see a private-sector partnership between a cutting-edge employer and a successful private career college solving problems – taking Canadians who are unemployed or under-employed and providing them with relevant skills training in a timely way that leads directly to a first-rate job," he said in an appearance at the college last month.

"That's about as good as it gets."

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