Ontario's Auditor-General Shelley Spence.Chris Young/The Canadian Press
Ontario’s Skills Development Fund, which has doled out more than $1.3-billion to employers and unions for training, is engulfed in scandal.
The program is a central part of Ontario’s work force strategy. Originally launched to help workers during the COVID-19 pandemic, it now has a broader aim to boost skills for workers and match the labour market with employer needs.
A recent Auditor-General report revealed that despite having a ranking system for applicants administered by bureaucrats in the Ministry of Labour, Immigration, Training and Skills Development, the Minister’s office often chose to give money to low-ranked firms.
Opposition leaders are screaming about political interference from Labour Minister David Piccini’s office, but the real problem is that the program exists at all. Programs like these, which allow the government to pick which companies and organizations get pay outs, are all too predictably taken advantage of.
The Auditor-General report earlier this month said that more than half the time, the Minister’s office chose to fund applicants ranked “poor,” “low” or “medium” by evaluators.
Ontario A-G says grant selection process for skills training program ‘not fair, transparent’
Meanwhile many high-ranked applications were passed over, despite analysis showing that these organizations were better at achieving the fund’s goals, such as hitting targets for the number of workers trained and having participants successfully find employment.
Many of the low and medium ranked applicants that got funding hired lobbyists to plead their cases on this matter. (Some of the high-ranked applicants also used lobbyists.) Often, the Minister’s office didn’t document any reason why it disregarded the evaluators’ scores.
In one case, a staff evaluator gave a low score of 47 per cent to an application for the program. The organization applying was just three years old, had no governing board, limited experience running job programs and presented an inflated budget. Yet the Minister’s office awarded it $4-million.
Mr. Piccini is refusing to recuse himself from selection decisions for the Skills Development Fund. He has remained defiant, saying, “We’re never going to apologize for making those investments in those workers.”
The Minister’s behaviour, and Mr. Ford’s unwillingness to rein him in, is a problem. Having political staff override bureaucrats’ decisions can create the appearance of conflicts of interest, and indeed, opposition leaders are saying the program is a slush fund to reward Progressive Conservative donors and friends. A Toronto Star analysis found that many of the fund recipients endorsed the Ford government in the February election.
The opposition parties are calling for Mr. Piccini to resign, but they’re missing the bigger point. These types of funds, where governments give themselves the power to select winners, are prone to these sorts of problems.
The temptation is high to give money to insiders or those who might help the party in power. Lobbyists seek to game the system for clients who might not qualify for money otherwise. The Ford government has expanded the Skills Development Fund to offer capital grants for construction and renovations, meaning the potential for conflicts has grown. The government should scrap the entire fund.
In general, government money for training should flow to educational institutions not private businesses. Corporations already have a financial incentive to train their workers, and doling out taxpayer funds to one company and not its competitors can be a can of worms.
The Ontario Public Service Employees Union, or OPSEU, has criticized the Skills Development Fund, saying it funnels money into the private sector that should be used for college and university programs. OPSEU says that colleges, which are shuttering programs as they grapple with severe financial pressures, offer better outcomes than private training, which is often compressed and unvetted and can limit the future mobility of workers.
Individual tax credits, such as the federal government’s Canada Training Credit, and the short-lived Ontario Jobs Training Tax Credit, offer another way to train workers. They are broadly available to individuals and don’t require favouring one firm over another.
If Mr. Ford wants to limit this scandal, he should scrap the Skills Development Fund and look for better ways to train Ontario workers.