The Devolution of Canada’s Public Employment Service 1995-2015: Part 2

by Donna E. Wood

My June 18 blog post provided a brief overview of my recently released book Federalism in Action: the Devolution of Canada’s Public Employment Service 1995-2015. It also commented on the first two questions addressed in the book:

1. What governance choices did each province make in taking on the federal programming?

2. How do the devolved public employment services (PES) compare to federal delivery?

This blog posting deals with the last two questions:

3. How is the Government of Canada managing its role post-devolution?

4. How does Canada’s PES work together as a whole? What challenges remain?

To assess the third question, I needed to reflect on the federal role in a post-devolution world. In my view, there are four important dimensions. Ottawa still controls the money (most of it coming from the Employment Insurance or EI account) and sets the legislative, policy and accountability framework under which the provincial and territorial PES programming operates. There are ‘pan-Canadian’ programs to be managed. Determining how PES programming is coordinated across the country, securing stakeholder input, and ensuring that comparative research is available to improve the programs on offer requires federal leadership. Finally, not all employment services were devolved: Ottawa deliberately kept direct responsibility for key target groups: Aboriginal persons, youth and persons with disabilities.

The Government of Canada’s performance in all of these areas between 1995 and 2015 was weak. The federal-provincial and federal-Aboriginal accountability arrangements were inadequate, confusing, controlling, and non-transparent. Given that 87 per cent of PES programming is now devolved, there is no good reason for the federal government to still be involved in the direct management of programs for youth and persons with disabilities. Pan-Canadian programming declined significantly during the Harper Conservative years after 2006 when spending was reduced and all the research institutions and coordinating bodies put in place by the Liberals were defunded.

The Forum of Labour Market Ministers ─ the intergovernmental body responsible for pan-Canadian coordination ─ rarely met at the Ministers’ level until it was revitalized by the provinces and territories in 2013 following the Harper Conservatives unilateral decision to replace the Labour Market Agreements with the Canada Job Fund.  With the demise of the Canadian Labour Force Development Board in 1998, the only formal way stakeholder’s views were heard was when Ottawa decided to hold a consultation or seek input.

On the fourth question, Canada’s public employment service in 2015 did not work well together as a whole, as it was highly fragmented and complex. With 52 bilateral federal-provincial-territorial labour market transfer agreements, 85 federal-Aboriginal agreements, as well as direct federal youth, disability and pan-Canadian programming, it was very hard for Canadians to figure out who did what and who was responsible for what.

These problems can be rectified without diminishing the positive value of devolution. In my paper Strengthening Canada’s Public Employment Service Post-Devolution, released by the Caledon Institute for Social Policy in September 2016, I outlined the challenges facing Canada’s public employment service and suggested the following changes:

  • Develop a pan-Canadian multilateral labour market framework agreement
  • Consolidate the four agreements into one agreement
  • Devolve responsibility for federal youth and disability programming
  • Re-affirm the federal stewardship and coordination roles
  • Restore the National Aboriginal Labour Market Management Board
  • Develop a National Labour Market Partner’s Council
  • Include comparative research in the mandate of the Labour Market Information Council

Since the completion of the book manuscript in 2017, federal-provincial-territorial governments have made progress on many of these suggestions. They have agreed that the four labour market transfer agreements will be consolidated into two: a Labour Market Development Agreement or LMDA (focusing primarily on those with an Employment Insurance attachment) and a Workforce Development Agreement or WDA (covering everyone else). This should significantly reduce complexity, especially with respect to accountability. These new bilateral agreements started to roll out in May 2018, with Ontario and British Columbia first off the mark.

After a very long gestation period the Labour Market Information Council under the Forum of Labour Market Ministers was finally launched in May 2018. Its scope was clarified as focusing strictly on labour market information, not research. Pan-Canadian research will be undertaken by a new federal entity yet to be established, the Future Skills Centre. Stakeholder input will be secured through a Future Skills Council. This all seems to be good news but only time will tell.

However, the Government of Canada has demonstrated no intent to devolve youth or disability employment programming. Given its confirmation of the ‘distinctions’ based approach to Aboriginal employment services, there will be no pan-Aboriginal labour market management board. As a result, some complexity and fragmentation in Canada’s PES will remain.

In 2018 we celebrate 100 years of Canada’s public employment service.  Devolution to the provinces, territories, and Aboriginal organizations started more than 20 years ago. Phase one under the Chrétien/Martin Liberals involved the initial offer in 1995 and the acceptance of federal staff, assets, contracts and programming responsibilities by eight provinces and territories. It also involved the establishment of Aboriginal labour market entities and pan-Canadian institutions.

Phase two under the Harper Conservatives moved the other five jurisdictions to similar devolved arrangements and increased funding for non EI clients. However, the Conservatives reduced federal involvement in pan-Canadian initiatives and unilaterally changed the federal-provincial transfer agreement rules.

We are now into devolution Phase three under the Trudeau Liberals. Hopefully my book Federalism in Action: the Devolution of Canada’s Public Employment Service 1995-2015 will shed light on what has transpired in the past in order to facilitate future policy learning. There is no shortage of work that needs to be done in this often neglected but essential area of public policy.

The Devolution of Canada’s Public Employment Service 1995-2015: Part 1