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In last month's budget, Ottawa signalled its intention to restructure the $2.5-billion in annual federal training grants to provinces to focus on job skills in short supply. "There are too many jobs that go unfilled in Canada because employers can't find workers with the right skills," Finance Minister Jim Flaherty noted. "Training in Canada is not sufficiently aligned with the skills employers need."

John Manley, president of the Canadian Council of Chief Executives, welcomed the news, saying: "What Canada needs is a comprehensive strategy to better align education and training with the skills employers need."

But what would be the components of this "comprehensive strategy"? The first step must be identification of "the skills employers need" through consultations with employers and educators. Then, educational institutions would have to allocate resources to teach those skills.

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Such a strategy may sound obvious. But at Canadian universities, the dominant player in post-secondary education, consulting with business and allocating resources to fields where skilled workers are desperately needed runs counter to the entrenched culture of academic freedom. Faculty unions fiercely defend an insular, professor-centred paradigm that turns away thousands of students applying to skills-short fields, while graduating huge numbers from programs with dismal employment prospects.

As a result, the tax money that universities are spending does little to solve Canada's "jobs without skills" problem, while contributing greatly to the "skills without jobs" problem. While Canada has one of the world's highest rates of university attendance, it ranks second-last in producing graduates able to find "high skill level" employment, according to the Organization for Economic Co-operation and Development.

Fortunately, Canada's 130 community colleges, institutes and polytechnics are trying to fill the gap. In a letter to The Globe and Mail last fall, Association of Canadian Community Colleges president and CEO James Knight noted that the schools are "mandated to meet the demand for highly skilled business, technical, health and trades professionals required by employers." Moreover, the education they provide is "characterized by close ties with industry, exceptional student and employer satisfaction, and high [job] placement rates (85 to 95 per cent within six months of graduation)," he wrote.

This is good news, indeed. But there is also bad news: Our community colleges are seriously short of resources. Thousands of qualified students are turned away because there aren't enough spaces. An increasing number of those applicants are university graduates who discover there is no market for their costly university training.

So how can Canada's shortage of skilled workers be alleviated? The answer is not more taxpayer dollars. Education is primarily a provincial responsibility and most provinces are already running high deficits. Ottawa is tightening spending as it strives to eliminate its deficit. The only place the money can come from is existing education budgets. Universities receive the bulk of that money, which they should shift toward fields where skilled workers are needed. It's past time for provincial education ministers to step up to the plate and make this happen.

As CIBC deputy chief economist Benjamin Tal, author of a report on the mismatch between skills and jobs, recently told Maclean's: "We need to make sure what universities are producing is more relevant to tomorrow's labour markets. If it means reducing subsides for occupations that are not relevant, so be it."

The community colleges association estimates its members need $6-billion for new facilities to expand programs and educate more students. Where could that money come from? One idea would be to dip into some of the $6-billion a year that goes to university research, the bulk of which is for academic interest with little or no chance of yielding useful results.

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That may sound like a radical idea, but the economic future of the country is at stake. So is the ability for Canada's young people to get the education and training they need for a fulfilling and productive career.

Gwyn Morgan is a retired Canadian business leader who has been a director of five global corporations.

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