Chapter 4: Conclusions

Official title: Evaluation of the Labour Market Development Agreements

LMDA investments represent the largest annual investment in active labour market programs in Canada. Given their positive incremental impacts on improving the labour market attachment of participants in general, these investments are meeting the needs of unemployed Canadians and are contributing to achieving ESDC strategic outcome of having A skilled, adaptable and inclusive labour force and an efficient labour market. This strategic outcome is aligned with the Whole-of-government Framework outcome area of providing Income security and employment for Canadians.

Overall, incremental impacts demonstrate that programs and services are improving the labour market attachment of participants, including youth and older workers. As well, social benefits of participation exceeded the cost of investments for most interventions over time. Finally, providing Employment Assistance Services earlier during an EI claim (first four weeks) produced larger impacts on earnings and employment and facilitated earlier return to work. This demonstrates the importance of targeting early participation of EI active claimants.

Key informants interviews with service providers and program managers as well as the documents reviewed and the questionnaires filled by provincial/territorial representative also generated few lessons about program design and delivery:

Skills Development

  • Key informants confirmed that most P/Ts take steps to direct Skills Development funding towards training for occupations in demand in the labour market. In particular, as part of the application process, prospective participants have to justify their choice of training program by demonstrating that labour market demand exists. Five provinces/territories may not approve applications for training leading to employment in low demand occupations.
  • According to key informants, the main challenges related to Skills Development include:
    • Lack of capacity to case manage and monitor individuals facing multiple barriers to employment.
    • Access to the program is limited due to the EI eligibility criteria.
    • Participant’s ability to access and complete training is often limited by a lack of essential skills, learning disabilities, literacy issues and other factors such as living in remote locations and lack of transportation.
    • Unemployed individuals lack awareness about the program and early engagement of EI claimants is difficult since Service Canada does not refer recent EI claimants to provincial/territorial offices.

Skills Development for Apprentices

  • Existing Canadian literature showed that there is a fairly high non-completion rate among apprentices (40-50%)Footnote 11. Furthermore, subject matter literature revealed that despite the growth in apprenticeship registrations in Canada, there has not been a corresponding increase in completion ratesFootnote 12. While available data do not provide reliable information on completion and non-completion rates of Skills Development – Apprentices participants, key informants involved in apprenticeship delivery confirmed the stagnation in completion rates.
  • According to key informants, apprenticeship drop-out is due to factors such as low level of essential skills, financial difficulties (for example, not being able to live on EI benefits while on training) and delays in getting EI benefits (for example, EI eligibility is not confirmed until training is almost complete).

Targeted Wage Subsidies

  • Key informants confirmed that participation in Targeted Wage Subsidies can be driven by either unemployed individuals or employers looking to fill a new position. Key informants also confirmed that in most P/Ts covered by the evaluation, the subsidized employers are generally hiring those they would not have otherwise hired without the help of the program.
  • While evaluation results have demonstrated the effectiveness of Targeted Wage Subsidies, its use has been falling in recent years. According to the EI Monitoring and Assessment Reports, the proportion of new Targeted Wage Subsidies interventions decreased from 3% to 1% of total new interventions between 2002/03 and 2014/15. Reasons identified by key informants to explain this decline include:
    • The frequent and time consuming reporting requirements for the employers.
    • Lack of awareness about the program among employers.
    • Employers having a negative perception of the quality of the candidates.
    • Difficulty in matching employers’ needs to the skills of available candidates.

Employment Assistance Services

  • According to key informants, challenges with the design and delivery of Employment Assistance Services include:
    • Lack of awareness about Employment Assistance Services among potential participants.
    • Current budget allocation is not enough to support the delivery of Employment Assistance Services and has led some service providers to eliminate services.
    • Service providers cannot provide all the services needed for participants facing multiple barriers to employment. They have to refer these individuals to other organizations.
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