On May 29, Human Capital Centre Director Janet Lane gave the following testimony to the Senate Committee on National Finance, in Ottawa, Ontario.
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Mr. Chairman, Members of the Committee, fellow panelists, good evening and thank you for the opportunity to provide my thoughts on the Canada Training Credit. For those of you who do not know us, Canada West Foundation is a non-partisan, independent think tank, based in Calgary. We work on issues of interest to the West and by extension all of Canada. My work in the Human Capital Centre is devoted lately to skills and the competency-based approach to workforce development and deployment.
I believe that the Canada Training Credit is a good idea, in principle. As technology, work processes and global influences cause jobs to change, people who are already in the workforce will be under increasing pressure to upgrade their skills, or reskill altogether, if they wish to remain employed. The Credit is a terrific incentive for people to do so.
However, I am not convinced that the Credit, as described in Budget 2019, will achieve the goal of helping Canadian workers be better prepared for the changing workforce. I have four reasons for saying this:
Reason 1. The amount is too small.
The Credit is $250 per year to offset up to half of eligible tuition expenses. Yet, tuition for both credit and non-credit courses at eligible post-secondary institutions run in the range of $400 – $800 per course. At $250 per year, it could take 20 years in the workforce to be eligible for coverage of half of the cost of some diplomas. Reskilling and upskilling are likely to be required sooner than that.
The very people who will need to reskill the most – those in lower-skilled, lower-paid jobs that are most likely to disappear or be disrupted by technological change – will be least able to afford to reskill through this Credit.
Budget documents indicate that the government expects that this program will be used by only a small percentage of the population. While the truth is that technological change is disrupting work processes and as much as 50 per cent of the workforce may need to upgrade their skills or reskill altogether in the next few years.
Reason 2. The Credit is for tuition paid to eligible institutions and these providers are not able to offer much of the training needed.
Full programs at eligible institutions are expensive. But more to the point, they may not be what people need. Much as the supply chain has moved to just-in-time delivery of goods, the workforce needs to move to just-in-time delivery of the skills, knowledge and attributes – known as competencies – required to complete the various tasks of ever-changing jobs.
The vast majority of eligible institutions offer, for the most part, courses and programs that are semester-based or offered one time per week over a period of weeks. And, they may not be offered when people who are working full-time can be available for classes.
In many cases, the best solutions to workplace needs are short on-line courses, available 24/7, targeted to filling gaps in specific competencies. They are offered through private, online, training providers. Recognized post-secondary institutions and training providers must quickly find ways to better duplicate this kind of training or these private training providers need to be assessed for their eligibility as providers for the Credit.
For many education and training providers, the problem is getting a handle on exactly what the needed competencies are. Which brings me to Reason 3.
Reason 3. Canada needs better Labour Market Information. To get it:
a. Employers need tools to help them articulate the competencies they require currently and into the future, and,
b. Individuals need better access to information about which competencies they will need to have, which they already have, which competency gaps they need to fill and the fastest, most efficient ways to fill them.
c. Education and training providers need this information – now.
Canada does not yet have these kinds of tools, known as competency frameworks. We need to build them quickly. We need to take the time to work with employers across this country to help them to define the tasks of their jobs – especially the new ones – and the competencies needed to perform those tasks well.
Meanwhile, industry associations, Human Resources professionals and career developers should be encouraged to upgrade their own knowledge about competencies and help the people they serve to dig more deeply into what exactly it is that they need to learn.
My last reason for thinking that the Canada Training Credit may not succeed is that too many people lack the skills to learn.
More than 40 per cent of the workforce has poor literacy and numeracy skills. These skills are at the heart of all learning and good levels of these are needed for efficient building of advanced cognitive and technical skills. People who have been in low-skilled, low-paid jobs for a long time are the most likely to have lost some of their basic cognitive skills since they left school – and are the most in need of learning new technical skills. They should be encouraged to upgrade their learning to learn skills prior to investing in new technical training – and their Canada Training Credit should be eligible for this upgrading too.
That ends my presentation, Mr. Chairman, however, I am more than happy to answer any questions you or the committee may have. Thank you.