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What the Canada Training Benefit could mean for the future of workers in Canada

Published on 28/03/2019

The 2019 federal budget introduced the Canada Training Benefit (CTB) to help support Canadians with the cost of training and re-training over the course of their working-age years. Even with its unassuming name, the CTB has the potential to be transformative.

The CTB has two parts. The first, the Canada Training Credit (CTC), will help Canadians with the cost of training fees. Canadian workers would accumulate a credit balance at a rate of $250 per year, up to a lifetime limit of $5,000. Eligible workers would start receiving the credit at age 25 and up until retirement (age 64); and they could use it to refund up to half the costs of taking a course or training program. The second part, the Employment Insurance Training Support Benefit (EITSB), would provide workers with up to four weeks of income support every four years through the Employment Insurance (EI) system.

What makes the CTB full of potential? It recognizes that our changing labour market will impact employment opportunities for Canadians. It also starts to re-conceptualize how income security benefits can be administered to be more reflective of today’s (and hopefully tomorrow’s) economy and labour market.

An increasing number of Canadians are facing challenges to find decent work in today’s labour market. About one-third of employees are in “non-standard” employment (e.g., temporary employment, part-time, on-call work), and as many as one-quarter of Canadian workers are considered to be precariously employed with low wages, low rates of unionization, and few workplace benefits.

Globalization, automation, and technological change have meant that workers with jobs that can be automated or moved to different jurisdictions are at risk of under- or unemployment. At the same time, there is demand for certain types of skills and jobs. These opportunities, however, are not replacing exactly the types of jobs lost (and the security associated with them).

For example, the recent announcement by GM to close its manufacturing plant in Oshawa — at the cost of over 2,900 jobs — while also hiring up to 1,000 technical engineers for their technology centre in Markham, is a microcosm of what is generally happening in our labour market.

At a macro level, there is a risk that growing skills inequality will reflect increasing income inequality.

This is where serious policy discussion about future income security, training and education, and employment legislation is needed, and where the CTB can chart some of the path forward. The CTB is an acknowledgement of the life-long learning that an increasing number of workers will require in the changing labour market, and that supports are needed for people to do so.

For example, the CTB provides workers with support if they decide to take up additional education or training while they are working. Unlike current employment assistance programs that generally wait for people to become unemployed before they can access such programming, there is potential for the CTB to support workers before they become unemployed. Further acknowledging that working-age Canadians will require flexibility for there to be any meaningful take-up of the program, benefits will be made available through EI so that workers can receive some wage replacement during time taken off for training. As both parts of the CTB allow workers to accumulate credit over time, it ideally enables people to take up the benefit when it works best for them.

However, to help ensure the benefit’s success, employers will also need to understand what the CTB means for them. While the federal government announced that they will be working with provinces to ensure workers who take up the EITSB are not penalized for doing so (i.e., lose their jobs), the value proposition for employers, and the economy writ large, will need to be explained.

As the program matures, initial program parameters can change so that it better reflects the needs of those who really need the support.

For example, even though the CTC amount is small to begin with, a person earning $30,000 gets the same support as somebody earning $120,000. Given that precariously employed workers have low incomes and face job instability, they may need more intensive and/or frequent support than others (e.g., higher income earners are more likely to receive employer-funded training). Further, to ensure that precariously employed workers can adequately access the EITSB, ensuring that EI provides adequate support to those workers is also required.

The CTB is not just another program, but rather a reflection of what we imagine our labour market and economy may look like, and how we can ensure that we develop supports proactively, and not reactively.

Most importantly, however, the CTB’s promise lies in trying to safeguard the economic rights of Canadians in the future. It’s trying to ensure that Canadians who are at risk of falling behind can access the types of supports they may need to prevent that from happening. It can keep them part of an economy and labour market that is often ready to leave them behind.

Summary

Introduced in the 2019 federal budget, the Canada Training Benefit has the potential to be transformative.

Topic(s)

Education and skills, Employment and labour, Income security