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Canada-Ontario Labour Market Agreement

Canada-Ontario Omnibus Amending Agreement
2010-11 Annual Plan

Preamble

This document fulfills the 2010-11 planning commitments associated with the Canada-Ontario Labour Market Agreement (LMA) and the Canada-Ontario Omnibus Amending Agreement, as it amended the LMA.

1.0 Overview

Ontario's investments to foster a well-educated, highly-skilled workforce provide the context for spending under these Canada-Ontario labour market agreements.

Since 2003, Ontario has recognized the skills training imperative for economic restructuring in the face of global competition and has strengthened investments in postsecondary education (through a significant $6.2 billion Reaching Higher strategy) and in employment and training programs (under the Skills to Jobs Action plan) to help Ontarians, including newcomers to the province, acquire skills, obtain credentials and find work in the knowledge economy.

In the labour market arena specifically, Ontario assists more than one million Ontarians annually through Employment Ontario, including laid-off workers, employers, employees, apprentices, and youth, who benefit from publicly-funded training and employment supports. Assistance with finding work and accessing job training is provided to Ontarians through the Ministry of Training, Colleges and Universities, with additional employment and training services for targeted clients administered by a number of ministries, including the Ministry of Citizenship and Immigration, Ministry of Community and Social Services, and Ministry of Health and Long-Term Care.

In addition to serving clients, Ontario's main labour market focus, prior to the recession, was on integrating the transferred federal programs (under the Canada-Ontario Labour Market Development Agreement) with those designed by the province, and launching a transformation of employment and skills programs and services under the Employment Ontario brand to create a single integrated system that helps people get the services they need quickly and efficiently.

In response to the recent economic downturn and significant structural changes in the Ontario economy, the Ontario government committed to increase Employment Ontario spending on jobs and skills training to about $1.6 billion in each of 2009-10 and 2010-11, with a special focus on workers affected by the economic recession and the knowledge economy.

For those laid-off workers, Ontario launched in 2008 a Second Career strategy to help with retraining in skills for careers in growing areas of the economy. The 2010 Budget announced continued investment in this program, with plans to fund training for an additional 30,000 unemployed workers over two years – bringing the total number of participants to nearly 60,000 since the program began.

Starting in 2010-11, the government is also making a new investment of $45 million over three years for a new project-based skills training program to help Aboriginal Peoples and northern Ontarians benefit from new economic opportunities in Northern Ontario.

Canada-Ontario Labour Market Agreements

Under the LMA, Ontario receives approximately $194 million annually over a six-year period (2008-09 to 2013-14) to increase the labour force participation of under-represented groups such as newcomers and youth by providing skills and employment programming to unemployed individuals who are not eligible for EI and employed individuals who are low skilled, in particular, those who do not have a high school diploma or a recognized certification or who have low levels of literacy and essential skills.

For 2009-10 and 2010-11, the federal government announced an increase to the LMA as part of federal stimulus spending announced in Canada's Economic Action Plan.Ontario's allocation was confirmed in the Canada-Ontario Omnibus Amending Agreement (signed in 2009), referred to as the Strategic Training and Transition Fund (STTF).

The STTF provides approximately $207 million in additional support over the two-year period ($103 million in 2009-10 and $104 million in 2010-11), and is intended to support the particular needs of individuals affected by the recession, irrespective of their EI status.

Ontario recognizes the role of the federal government as a key partner in leveraging provincial investments in skills and training, including the allocation of temporary stimulus funds.However, Ontario will continue to press the federal government to maintain current levels of federal funding for skills and training as a tool for increasing Ontario's – and therefore Canada's – economic growth and prosperity.

2.0 Environmental Scan

Economic Indicators and Labour Market Challenges

Ontario's economy experienced a sharp downturn during the latter half of 2008 and the first half of 2009 and Ontario families and businesses are still feeling the effects of this global financial and economic crisis.In 2009, Ontario's real GDP declined 3.0 percent after decreasing 0.6 per cent in 2008.Although Ontario represents about 40 per cent of Canadian GDP, it accounted for almost 50 per cent of the decline in Canada's output.This reflected, in part, the relative size of Ontario's auto sector which represented 2.6 per cent of Ontario's GDP in 2009, compared to 0.2 per cent in the rest of Canada.All major economic indicators in Ontario have improved from lows posted during the recession and there are clear signs that a recovery is now taking shape.

The economic outlook is heavily influenced by global economic and financial conditions, particularly U.S. demand, oil prices, the Canadian dollar exchange rate and interest rates. Numerous economists have voiced concern that weakness in the U.S. economy, along with the persistent strength of the Canadian dollar, may act as a drag on economic growth.Private-sector forecasters are now calling, on average, for Ontario real GDP to grow by 3.6 per cent in 2010, 2.5 per cent in 2011, 2.6 per cent in 2012 and 2.8 per cent in 2013.

Ontario's export-oriented manufacturing sector suffered a sharp decline in activity during the recession.Although output in this sector is increasing, as of August 2010, manufacturing sales remain 15 per cent below the pre-recession levels (July 2008).

Employment and Workforce Indicators

Despite the rebound in overall jobs since May 2009, as of March 2010 employment in Ontario was still down by 147,700 from its pre-recession level.   On a fiscal year basis, employment in Ontario in 2009-10 was down by 124,800 (1.9 per cent) relative to 2008-09. The pace of employment losses over this period in Ontario was over two and a half times that experienced in the rest of Canada.

Ontario's labour market has continued to recover since the end of the fiscal year. As of September 2010, employment in Ontario was 0.9 per cent or 60,800 jobs below the pre-recession peak in September 2008. Ontario employment has increased by 188,900 net jobs (+2.9 per cent) since May 2009, regaining about 76 per cent of the jobs lost from September 2008 to May 2009.

Relative to the level recorded in fiscal year 2008-09, Ontario unemployment in 2009-10 was substantially higher – rising by 28.4 per cent (144,900 people). This increase was slightly above the rate experienced in the rest of Canada during this period (25.7 per cent).In a more recent timeframe, the level of unemployment has stabilized; in March 2010, unemployment stood at 636,700 compared to 636,100 in March 2009 (seasonally adjusted data).   The number of regular Employment Insurance (EI) beneficiaries increased sharply in Ontario between 2008 and 2009 – rising by 72.9 per cent from 142,598 to 246,597. This was a much more rapid increase than that occurring in the rest of Canada, where the number of regular beneficiaries increased by 41.7 per cent between 2008 and 2009. Despite this increase, the share of unemployed Ontarians who received EI, at 38.0 per cent in 2009, was still well below the share for the rest of Canada (55.6 per cent).

The unemployment rate in Ontario has followed a similar path – rising substantially between 2008-09 and 2009-10 fiscal years (from 7.1 per cent to 9.1 per cent) – while recent data suggest the labour market has stopped deteriorating.Monthly seasonally adjusted data show that the unemployment rate has remained fairly stable over the past year (falling from 8.9 per cent in March 2009 to 8.8 per cent in March 2010). However, in a reversal of long term patterns, Ontario's unemployment rate has continuously exceeded the national average since January 2007; in March 2010 it was 8.8 per cent, the third highest in Canada, only lower than that of Newfoundland and Labrador and Prince Edward Island.

Long-term unemployment (27 weeks or more) in Ontario has risen fairly substantially over the past year, increasing from 13.6 per cent of total unemployment in fiscal year 2008-09 to 21.2 per cent in 2009-10.In 2009-10, an average of 139,300 individuals faced long-term unemployment, compared to 69,300 a year prior.Ontario's share of long-term unemployment was relatively high; in 2009-10, about half (50.1 per cent) of the long-term unemployed were located in Ontario.The number of permanent layoffs also rose moderately over the past-year; in fiscal year 2009-10, about 286,700 unemployed Ontarians reported permanent layoffs as the reason why their previous job had ended, up substantially compared to 204,300 a year prior.

3.0 Programming Priorities

Our employment and skills training priorities are based on the following assumptions for changing labour market conditions in Ontario:

• Unemployment is high and could remain a challenge for the next few years as significant structural changes take place in the Ontario economy
• An aging population and growing outflow from the labour force (e.g. retirees from the baby-boom cohort) will result in labour force growth that is increasingly dependent on immigration
• Newcomers with international qualifications facing delays and barriers to speedy credential recognition
• A growing number of Aboriginal youth (First Nations, Métis and Inuit) that are working age population
• Below average labour force participation rates of specific groups (e.g. newcomers, Aboriginal peoples, persons with disabilities, youth and older workers)
• Growing labour market demand in high-skilled sectors as the economy adjusts (e.g. finance, clean technology) with low-skill employment remaining stagnant or falling – Ontario has committed to a 70 per cent postsecondary education attainment rate
• Potential skills shortages in new areas of the economy (e.g. health technology, green energy)

In this context, Ontario has invested to preserve and create jobs, including positioning for the next generation of jobs and growth. The range of investments focuses on initiatives in support of skills training (e.g. initiatives to increase the number of apprentices) and initiatives to help unemployed workers access the kind of longer-term skills training needed to transition from areas of shrinking employment to emerging and in-demand occupations (e.g. the Second Career program).

Ontario has also increased investments in literacy and foundation skills to prepare the province's current and emerging workforce for the new, more skills-dependent, economy. Ontario's new investments include enhanced assistance for adults with low literacy rates, and piloting workplace-based literacy training to help workers, including newcomers, work safely and productively.

Ontario has provided more opportunities for young people through Summer Jobs programming, including targeted resources in high-need neighbourhoods. In 2010, Ontario Summer Jobs is expected to have supported over 110,000 jobs and services for students.

With the recession over, and looking ahead to ongoing recovery, Ontario is continuing to build the foundations for sustainable future job creation and economic growth. In 2010-11, in addition to broad-based provincial investments in employment and skills training, Ontario will allocate the LMA stimulus increase (i.e. the STTF) entirely to Second Career. Meanwhile, the core LMA funds will:

• help laid off workers retrain for quality in-demand jobs;
• provide enhanced employment services such as job search, job matching, job retention support, information and referral, and client service planning and coordination;
• increase access and opportunity to enable internationally-trained professionals to speedily acquire the necessary qualifications and credentials to work in Ontario;
• assist vulnerable or low skilled individuals or individuals without the qualifications needed to move out of low-skilled jobs;
• improve literacy levels for adults seeking further skills training or employment; and encourage increased employer involvement in literacy training for the workplace;
• increase access to training in the skilled trades by further enhancing apprenticeship programs and providing incentives to increase the number of those completing their training through mechanisms such as bonuses and tax credits; and,
• help youth afford further education and training by supporting summer jobs and self-employment opportunities.

4.0 Eligible Clients

As agreed under Part I of the LMA, Ontario programs will target the following clients:

• unemployed individuals who are not EI Clients, including but not limited to:

(i) social assistance recipients;
(ii) immigrants;
(iii) persons with disabilities;
(iv) older workers;
(v) youth;
(vi) Aboriginal peoples;
(vii) new entrants and re-entrants to the labour market; and
(viii) unemployed individuals previously self-employed;

and,

• employed individuals who are low skilled, in particular, employed individuals who do not have a high school diploma or a recognized certification or who have low levels of literacy and essential skills.

As agreed under the Omnibus Amending Agreement, increased LMA funding will assist Ontario in serving individuals affected by the economic downturn and in particular those seeking to retrain or upgrade their skills to get or keep employment.

Programs outlined in the attached 2010-11 activity plan will serve unemployed and low-skilled individuals, including those with multiple barriers to entering the workforce even when the economy is thriving, such as immigrants, youth, Aboriginal peoples, and persons with disabilities. Starting in 2010, the ‘older workers' target group, while continuing to be eligible for LMA-funded programming, will also be served under a temporary federal-provincial cost-shared agreement “Targeted Initiative for Older Workers”.

The following provides an overview of key groups who are under-represented in Ontario's labour market.

Immigrants

Ontario receives a high proportion of individuals immigrating to Canada. In 2008, Ontario welcomed about 45 per cent of individuals immigrating to Canada on a permanent basis and in many other years the figure has been higher.Recent immigrants have fared poorly in the labour market.For example, according to Statistics Canada's Labour Force Survey (LFS) data, immigrants who came to Ontario “very recently” (i.e., within 5 years between their landing date and their LFS interview date) registered an unemployment rate of 15.7 per cent in 2009, nearly double the rate of Ontarians who were born in Canada (8.4 per cent).The 15.7 per cent unemployment rate recorded in 2009 was also high relative to “very recent” immigrants in the rest of Canada (14.4 per cent) and relative to immigrants residing in Ontario for longer periods (the 2009 unemployment rate of immigrants in Canada who had landed in Ontario more than five years ago was 10.0 per cent).

A significant issue facing immigrants is the underutilization of their skills and educational credentials.Data from the 2006 Census indicate that 30 per cent of university-educated male immigrants arriving in Ontario between 2001 and 2006 and 41 per cent of university-educated immigrant females were employed in jobs requiring, at most, a high-school education.(For Canadian-born Ontario males, 11 per cent of university graduates were employed in “high-school” jobs in 2006, while for females, the figure was 13 per cent.)

Youth

Mirroring broader labour market trends in Ontario, youth (aged 15-24) have faced challenging labour market conditions.While not as dramatic as the deterioration that occurred over the 2008-09 fiscal year, the youth unemployment rate rose mildly in 2009-10, from 17.2 per cent in March 2009 to 17.7 per cent in March 2010. On a year-over-year basis, the rise was more pronounced – increasing from 14.5 per cent in 2008-09 to 17.9 per cent in 2009-10.In 2009-10, Ontario's youth unemployment rate exceeded that in the rest of Canada by 3.9 percentage points (the unemployment rate in the rest of Canada was 14.0 per cent).In 2009-10, there was an average of 194,800 unemployed youth in Ontario representing 44.1 per cent of the national total, well in excess of Ontario's share of Canada's youth population (39.7 per cent in 2009).

Aboriginal

According to census data, Ontario's Aboriginal population is a fast-growing segment of Ontario's total population, increasing by 68 per cent between 1996 and 2006.In 2006, Ontario's Aboriginal population was 242,495 representing slightly over 20 per cent of Canada's total Aboriginal population.The Aboriginal working-age population (ages 15 and over) in Ontario is relatively young with youth (ages 15-24) accounting for 23.5 per cent of the total.In comparison, only 16.3 per cent of Ontario's non-Aboriginal working-age population are youth.

2009 Labour Force Survey data indicate that Aboriginal people living off-reserve in Ontario fared less well than the overall population.For example, while the overall unemployment rate in Ontario was 9.0 per cent in 2009, the unemployment rate faced by Aboriginal people was substantially higher at 13.2 per cent.Similarly, the Aboriginal labour force participation rate was lower than that of non-Aboriginals (64.7 per cent compared to 67.4 per cent).In 2008, Aboriginal workers in Ontario earned an average hourly wage of $20.20 compared to non-Aboriginal workers who earned $22.18.

Persons with Disabilities

Disabilities have a serious impact on employment, education and earnings.The employment situation of persons with disabilities lags behind persons without disabilities.The latest data show that in 2007, the share of Ontario's persons with disabilities, between 16 and 64 years of age, who were either unemployed or not in the labour force for the entire year was 34.2 per cent, nearly three times the comparable number for persons without disabilities (12.0 per cent).

Educational attainment of persons with disabilities is lower than persons without disabilities.In 2007, 18.9 per cent of persons with disabilities did not have a high school diploma compared to 12.6 per cent for those without disabilities.

A disproportionately high number of people with disabilities in Ontario, as in the rest of the country, have no employment earnings.In 2007, 63 per cent of people aged 16 to 64 with disabilities reported employment earnings, compared to 88 per cent without disabilities.

For those who do work, average earnings are lower among people with disabilities as compared to the rest of the population.In 2007, the average earnings of people with disabilities in Ontario who were employed was $35,100, while people without disabilities earned, on average, $44,100.

5.0 Stakeholder Engagement

Immigrants, youth, Aboriginal people and persons with disabilities, along with people on social assistance, are amongst the under-represented and under-utilized groups at the margins of the Ontario labour market. To serve these target groups, Ontario is working in collaboration with key partners, including the federal government, the Province's third-party service provider network, employers, labour groups, community agencies and representatives of those with particular barriers.

Given the timing of the 2010 Provincial Budget, Ontario had preliminary high-level discussions with its key service delivery partners through its Service Delivery Advisory Group (SDAG), prior to the Budget being tabled.

Following the release of the Budget (March 25, 2010), Ontario has continued to have discussions with SDAG, literacy organizations, employer groups and francophone organizations.

6.0 Ontario Labour Market Agreement / Activity Plan 2010-11

In 2010-11, the Ontario government committed to spending approximately $1.6 billion on employment and skills training through Employment Ontario, and is augmented by spending in a number of other ministries on employment and training for targeted clients. Of the total investment, $193.7 million is from the federal LMA allocation and $103.9 million is from the federal increase to the LMA under the Strategic Training and Transition Fund (STTF) allocation.This Activity Plan reports Ontario's estimated incremental expenditures of federal LMA and STTF funding by Ontario's multi-year priorities: Labour Market Integration of Immigrants; Foundation Skills Training and Supports and Labour Market Supports for Persons with Disabilities; and Technical Skills Training.

Ontario Labour Market Agreement / Activity Plan 2010-11

• Ontario Labour Market Agreement: 2010-11 Activity Plan and Estimated Incremental Expenditures (PDF, 37 KB)