Flaherty sets priorities for budget

OTTAWA — Finance Minister Jim Flaherty is signalling he’ll make skills training, modernizing the country’s crumbling infrastructure and helping the manufacturing sector the key priorities in Thursday’s budget.

OTTAWA — Finance Minister Jim Flaherty is signalling he’ll make skills training, modernizing the country’s crumbling infrastructure and helping the manufacturing sector the key priorities in Thursday’s budget.

In a letter to his caucus colleagues, the finance minister cautions that the Canadian economy remains fragile and faces strong competition from emerging nations. The three priorities, he says, will help grow the economy and create jobs.

Government ministers have long identified the miss-match between the jobs that are in much demand and the skills being churned out by universities, colleges and training programs as a critical problem with the current labour market.

“There are too many jobs that go unfilled in Canada because employers can’t find workers with the right skills,” he writes in the letter. “Training in Canada is not sufficiently aligned to the skills employers need.

“In Canada’s Economic Action Plan 2013 (the budget) we will take steps to address this important issue.”

By some estimates, there are about 260,000 job vacancies in Canada, some of which are not being filled because those looking for work lack the skills or credentials, or won’t move to where the jobs are. While the percentage of firms reporting labour shortages dropped in the most recent Bank of Canada survey issued in January, the level remains elevated, particularly in the West.

Recently, Flaherty discounted reports he was about to take back some $2.5 billion Ottawa transfers to provinces for skills training and do the job itself, but suggested he will impose conditions on the provinces.

“There’s no question that the delivery of those kinds of services generally are better placed with the provinces and territories,” he said.

“What we are looking at though is outcomes. We got to do a better job of connecting the skills people have, the education people have, with the jobs that are available in Canada.”

The letter gives no details about his approach, but Flaherty has made clear that he wants to increase the participation in the labour market of the young, seniors, aboriginal Canadians and the disabled.

Flaherty is also committing to “do more” on infrastructure. With stimulus construction projects now complete, and the $8.8-billion Building Canada Fund about to expire, the minister is expected to announce an extension of the program in the budget.

And he is expected to renew the accelerated capital cost allowance, first introduced in 2007, that allows manufacturing firms a quicker writeoff for investments in machinery and equipment, thereby lowering their tax bill.

While most sectors of the economy have fully recovered from the recession, manufacturing is one industry that still is in catch-up mode. Statistics Canada reported Tuesday the factory sector suffered its second consecutive monthly decline in January — 0.4 per cent in terms of output volumes — and remains below levels of a year ago.

Flaherty says in the letter that “there is more we can and will do,” although he gives no specifics.

Answering a question in the House of Commons, the minister said Canadians won’t have to wait long to find out what he has in mind.

The budget will be read by the minister from Parliament at 4 p.m. ET on Thursday.

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