Full report. - Social Research and Demonstration Corp

learn$ave Project: Final Reportof learners — those in need of settlement services asnewcomers to Canada, older workers with “obsolete”skills, and those with very low skills in need of secondaryschooleducation. As such, they may exclude adultlearners who do not fit into program-specific criteria.Social insurance-funded measuresOther supports and programs for training of individualsare funded through Canada’s EI program that collectsemployer and employee premiums as a payroll tax.While most of the funds go to income replacementthrough regular and special benefits under Part I of theEmployment Insurance Act, EI funds can also be usedunder Part II to support certain employment benefits andsupport measures (EBSMs). In 2007-08, the total amountpaid out for EBSMs was $2.1 billion (HRSDC, 2008).Nearly all of EBSM funds are transferred to provincial andterritorial governments through bilateral Labour MarketDevelopment Agreements for local delivery of activemeasures (referred to as Employment Benefits) witha small amount reserved for pan-Canadian initiatives,research and the National Employment Service. Whileunemployed workers who do not meet the eligibilitycriteria for income support benefits can still receive morelimited help with job searches and employment counselling(referred to as Employment Services), only currentand recent EI income benefits clients are eligible for anyskills training programs funded by EI.Skills Development programs operate largely like avoucher system. Eligible participants receive direct cashassistance to find and pay for eligible training that canimprove their employability. The assistance may includepaying for the cost of tuition and learning materials,apprenticeship training costs and income support.Clients might also receive individual or group counsellingto help them develop an employment plan, includingtraining. Self-Employment programs offer eligible clientsextended income support while they take part in smallbusiness development training and start-up programsoffered by local business development agencies. Outsideof these two measures, EI funds are also used to supportwage subsidies, job creation partnerships and targetedwage supplements to increase employment creation andparticipation for EI clients. These may lead to opportunitiesfor the kind of workplace-based learning discussedearlier in the section on policy to promote employersponsoredtraining.While Skills Development and Self-Employmenttraining make up nearly 90 per cent of all expenditures onemployment benefits, very few Canadians actually receivethese benefits, as Table A indicates. Because low-incomeand low-skilled workers are more likely to have poorerlabour market attachment, they are less likely to qualifyfor EI income benefits which require a minimum numberof hours of insurable employment. In turn, this meansthey are less likely to be able to access the training initiativessupported through EI premia even if they have paidinto the insurance program at some time. Also, becausethe primary aim of EI programming is to facilitate a returnto employment, much of the eligible training is gearedtowards relatively short-term skills training that mightlead quickly to a job. This is in contrast with, for example,measures to promote participation in PSE programs thattake longer but lead to a degree or diploma.Education tax creditsEducation tax credits provide some tax relief to students(or their families) for the cost of tuition and books, or forinterest paid on eligible student loans, and also exemptsome scholarship income from taxable income. They havebeen introduced at both the federal and provincial levels.At all levels of government, tax expenditures oneducation credits were about $2.1 billion in 2007-2008(Berger, Motte and Parkin, 2009), with about $1.5 billionat the federal level (Department of Finance, 2008). Whilethe credits are available to any full- or part-time student,most of this tax expenditure reflects transferred creditsfrom students to another taxpayer — most likely a parent.This suggests that most of the benefit of the credits isgoing to younger students, rather than adults returningto school to upgrade or enhance their education andlearning. Moreover, the majority of the benefits fromeducation tax credits is flowing to students from higherincomefamilies (Berger, Motte and Parkin, 2009). Thesehigher-income households will, first, be able to affordTable A Training under Employment Insurance (EI) Part II Benefits, 2007-08Number or % Expenditure ($ in millions)Self-Employment (SE) 2007-08 10,155 139.8Skills Development (SD) 2007-08 142,782 962.6Total training (SE + SD) 2007-08 152,937 1,102.4Proportion of workforce receiving EI benefits in average month in 2007 (%) 2.8Proportion of workforce receiving EI-funded training in 2007 (%) 0.09Source: Statistics Canada, Human Resources and Skills Development Canada (2008), and calculations by SRDC.Social Research and Demonstration Corporation Appendix A | 109