Evaluation of the Canada-New Brunswick Labour Market Development Agreement

Effectiveness and efficiency of EBSMs

• Overall, incremental impacts demonstrate that with some exceptions, participation in TSD, EAS and EWS improves labour market attachment and reduces dependence on government income support, compared to similar non-participants
• A subgroup analysis shows that, with few exceptions, TSD improves the labour market attachment and reduces the dependence on income support for most sub-groups of active and former participants
  • Male, youth and older worker participants who only received EAS improve their labour market attachment compared to similar non-participants
• A regional analysis of incremental impacts for TSD finds that participants increase their labour market attachment and reduce their dependence on government income supports both within the 2 municipalities of Fredericton and Moncton, and outside of these 2 municipalities
• With the exception of active claimant participation in EWS, the initial program investment costs are recovered over time

Chart i presents the incremental impacts on the incidence of employment for active and former claimants by EBSM. The estimates can be interpreted as change in the probability of being employed following participation. For example, participation in TSD increases the probability of being employed by 3.9 percentage points for active EI claimants relative to non-participants.

Chart ii presents the annual average change in employment earnings for active and former claimants over the post-participation period.

As shown in Chart iii, overall active and former claimants reduce their dependence on government income supports.

Table ii presents the number of years required for the social benefits to exceed program costs. Social benefits to participation exceed initial investment costs over a period ranging from the program start year to 6.1 years.

* Paid back within the program start year.

Self-Employment Benefit study

The Self-Employment Benefit program aims to assist participants in creating employment for themselves by providing them with a range of services.

Based on a survey, it is found that 2 to 4 years after program participation:

• participants increase their employment level by 8 percentage points from 61% in the year before participating to 69% at the time of survey; the increase is mainly due to an increase in the percentage of self-employed participants
• nearly 50% of survey respondents launched a self-employment business that was still in operation
• half of self-employment businesses are launched in other services^{Footnote 4}; professional, scientific and technical services; as well as in construction and retail trade
• 77% of respondents say that they are financially about the same or better off after the program
• 76% of respondents say that their household net worth is about the same or higher after the program

The survey examines the contribution of the program to the success of self-employment businesses. At least 84% of survey respondents who launched a self-employment business rate the following services and training as very or somewhat important to the business launch, operation and success:

• living allowance during participation
• assessment of entrepreneurial readiness
• one-on-one mentoring/advice or counselling supports
• assistance with business plan development
• discussion on risks and challenges of self-employment
• orientation session on self-employment
• training on budgeting, financial management, marketing, business operation and sales 

Regarding the reliance on government income support, participants reduce their use of EI and SA following program participation.

Adjustment Services and Labour Force Training (AS and LFT) study

AS and LFT aim to assist employers, communities and/or industries to address their labour force adjustments and human resource needs. Funded projects target current and/or forecasted skills and/or labour shortages. These projects also target specific unemployed populations (for example, Indigenous peoples, and persons with disabilities).

New Brunswick's Department of Post-Secondary Education, Training and Labour confirms that program officials carry out activities to support the formation and maintenance of partnerships. The department explains that partners' contributions are beneficial, but not required, for the achievement of expected project outcomes.

The majority of program officials stress the importance of partnerships for projects' success as they bring different perspectives and expertise, avoid duplication, allow for sharing project costs, and help in the implementation of large-scale projects.

Research and Innovation study

The Research and Innovation support measure aims to identify better ways of helping individuals prepare for, return to, or keep employment and to be productive in the labour force.

A document review reveals that Research and Innovation projects encompass a variety of activities including:

• development and/or testing of new approaches to improve employment outcomes for clients (for example, persons with disabilities)
• strengthening service delivery
• delivering career fairs

A questionnaire completed by provincial officials reveals factors contributing to successful testing and identification of innovative approaches, including:

• project holders having strong commitment from partners
• projects that have a clear plan with measurable outcomes

Training and Skills Development-Apprentices study

The objective of the program is to help apprentices become skilled tradespeople and to increase their labour market attachment. Program participants have generally chosen a career and are already attached to the labour market. The apprenticeship process involves on-the-job learning and technical training in a classroom setting.

The evaluation found that active EI claimants increased their average earnings from $17,966 5 years before program participation to $47,064 in the 5th year after the program start year.  Former EI claimants increased their average earnings from $16,827 before program participation to $51,238 in the 5th year after the program start year. After participating in the program, both active and former claimants also decreased their dependence on government income supports.

Sources of data and information

The analysis takes into account all the quantifiable costs and benefits directly related to EBSM delivery and participation that can be measured given the data available. The analysis is comprehensive in that it accounts for the vast majority of possible direct costs and benefits. However, the analysis does not account for all costs and benefits. For example, there are factors that can lead to an understatement of the benefits (for example, positive spillovers to other family members) and other factors that can lead to an overstatement of the benefits (for example, effects on skill prices or displacement).

This study relied on integrated data from the EI Part I and II Databank and Income Tax records from the Canada Revenue Agency. Information about earnings, use of EI, and use of social assistance was taken from the study of incremental impacts.^{Footnote 18} The program costs were calculated using information available in the EI Monitoring and Assessment Reports.

Relative to the previous cycle of evaluation, the methodology has been extended to incorporate one of the indirect health benefits associated with increased labour market attachment. In particular, the methodology includes an estimate of the change in public health care cost due to the decline in health care utilization resulting from program participation.

Data on average public healthcare costs by income quintiles are taken from the report Lifetime Distributional Effects of Publicly Financed Health Care in Canada (2013) by the Canadian Institute for Health Information.

Program costs are measured using information on LMDA expenditures and new interventions reported in the EI Monitoring and Assessment Reports. Other costs and benefits are assessed using integrated administrative data from the EI Part I and II databank and the Canada Revenue Agency.

Incremental impacts measured over the second year of participation and up to 5 post-program years are discounted by 3% to bring them to a common base with the program cost and benefits incurred in the program start year. This 3% rate accounts for the interest the government could have collected if the funds used to pay for the program had been invested. Incremental impacts are estimated using 2010 constant dollars and this accounts for inflation.

The costs and benefits accounted for in the calculations

Program cost: cost incurred by the government for delivering the program (that is, administration and direct program costs calculated from data reported in the EI Monitoring and Assessment Reports).

Marginal social cost of public funds: loss incurred by society when raising additional revenues such as taxes to fund government spending. The value is estimated at 20% of the program cost, sales taxes, income taxes, impacts on EI and impacts on SA paid or collected by the government.

Foregone earnings: estimated net impacts on participants' earnings during the participation period. During labour market program participation, some individuals have lower earnings than what they would have received if they had not participated.

Employment earnings: incremental impacts on participants' earnings during and after participation. In-program earnings represent the foregone earnings for participants.

Fringe benefits: the employer-paid health and life insurance as well as pension contributions. They are estimated at 15% of the incremental impacts on earnings.

Federal and provincial income taxes: incremental impacts on federal, provincial and territorial taxes paid by participants.

Sales taxes: the sales taxes paid by participants estimated as incremental impacts on earnings multiplied by the propensity to consume (97%), the proportion of household spending on taxable goods and services (52%) and the total average federal and provincial sales tax rate (11%).

Social assistance and Employment Insurance benefits collected: incremental impacts on SA and EI benefits use by participants following participation.

Canada Pension Plan and Quebec Pension Plan contribution and EI premiums: these contributions and premiums were identified from the Canada Revenue Agency data and then, the incremental impacts on Canada Pension Plan and Quebec Pension Plan contributions and EI premiums were estimated.

Public health care costs: estimated impact of participation in EBSMs on public health care costs shown as an average change per participant over the post-program period examined.

Incidence of employment

Chart 1 presents the incremental impacts on the incidence of employment for active and former claimants by type of program.^{Footnote 21} The estimates can be interpreted as a change in the probability of being employed following participation.

Active EI claimants in TSD increase their incidence of employment relative to similar non-participants.

Former EI claimants in TSD and EWS increase their incidence of employment relative to similar participants who receive only EAS services.

Employment earnings

Chart 2 presents the average annual increase in employment earnings for active and former EI claimants over the 4 years post-participation.

Active EI claimants in TSD and EAS increase their annual average employment earnings relative to similar non-participants.

Former EI claimants in TSD and EWS increase their annual average employment earnings relative to similar participants who receive only EAS services.

Use of EI benefits

As shown in Chart 3, active EI claimant participants in TSD and EAS reduce their annual average use of EI benefits in the post-program period compared to similar non-participants.

Former EI claimants in TSD and EWS increase their use of EI benefits in the post-program period relative to similar participants who received EAS only. From a cost-benefit perspective, the increase in the use of EI by former claimant participants in TSD and EWS is not necessarily a negative impact given the increased incidence of employment and earning. Following participation, former claimants are likely to requalify for EI benefits due to their stronger labour market attachment demonstrated by increases in employment and earnings.

Use of SA benefits

As shown in Chart 4, most active and former EI claimant participants decrease their use of SA benefits in the post-program period.

Active EI claimants in TSD and EWS decrease their use of SA benefits in the post-program period compared to similar non-participants. Active EI claimants in EAS services experience a small increase in the use of SA benefits compared to similar non-participants.

Former EI claimants in TSD and EWS decrease their use of SA benefits compared to similar participants in only EAS services.

Note: Impacts are estimated over 4 post-program years (or 5 years in the case of EAS).

Dependence on income support

As shown in Chart 5, overall active and former claimants in TSD, EWS and EAS reduce their dependence on government income supports.

Female participants

Main findings: Female active and former EI claimant participants in TSD improve their labour market attachment through increases in their incidence of employment and employment earnings. They also decrease their dependence on government income supports (that is, the combined use of EI and SA benefits). In the case of EWS, only female former EI claimant participants increase their labour market attachment, through increases in their incidence of employment and employment earnings (in the short-term), and decrease the use of SA benefits. Female active claimant participants in EAS decrease their reliance on government income support due to decreases in EI benefits.

Between 2010 and 2012, nearly 9,750 EI active and former claimant participants in LMDA programs and services were female, representing nearly 47% of participants.

The profile of female participants is presented in Table 4 by age, sociodemographic group, and marital status. Information about their educational attainment, occupation and industry is based on the latest job they held prior to applying for EI benefits. Information about sociodemographic groups is self-reported.

Note: Values may not equal 100% due to rounding or missing information.

Top 3 occupational groups for female participants

Active claimants:

• intermediate sales and service personnel = 20%
• clerical personnel = 18%
• other sales and service professionals = 13%

Former claimants:

• intermediate sales and service personnel = 24%
• clerical personnel = 18%
• other sales and service professionals = 16%

Top 3 industries for female participants^{Footnote 22}

Active claimants:

• retail trade; accommodation and food services; and health care and social assistance = 12% each
• manufacturing; and public administration = 11% each
• administrative and support, waste management and remediation services = 9%

Former claimants:

• retail trade; and accommodation and food services = 15% each
• health care and social assistance = 12%
• administrative and support, waste management and remediation services = 11%

Table 5 presents the detailed incremental impacts. For example, the results reveal that female active claimant participants in TSD have higher annual average earnings (+ $4,472) and incidence of employment (+ 4.4 percentage points). They also have a lower income support reliance rate (- 4.6 percentage points), due to decreases in EI (- $417 per year) and SA benefits (- $216 per year).

Female former claimant participants in EWS have a higher annual average incidence of employment rate (+ 3.9 percentage points). They also decrease their use of SA benefits (- $224 per year). These female participants also have an increase in employment earnings (+$1,942) in year 1 post-program participation.

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.
Note: Impacts are estimated over 4 post-program years (or 5 years in the case of EAS).
¹ The impact is not statistically significant. However, female former EI claimant participants in EWS have a statistically significant increase in their employment earnings of + $1,942 in year ¹ post-program participation.

Male participants

Main findings: Male active and former claimant participants in TSD, as well as former claimant participant in EWS and active claimant participants in EAS, improve their labour market attachment through increases in incidence of employment and employment earnings. These participants also decrease their dependence on government income supports (that is, the combined use of EI and SA benefits).

Between 2010 and 2012, nearly 11,150 EI active and former claimant participants in LMDA programs and services were male, representing about 53% of participants.

The profile of male participants is presented in Table 6 by age, sociodemographic group, and marital status. Information about their educational attainment, occupation and industry is based on the latest job they held prior to applying for EI benefits. Information about sociodemographic groups is self-reported.

Note: Values may not equal 100% due to rounding or missing information.

Top 3 occupational groups for male participants

Active claimants:

• other manual workers = 24%
• semi-skilled manual workers = 21%
• skilled crafts and trades = 15%

Former claimants:

• other manual workers = 25%
• semi-skilled manual workers = 20%
• skilled crafts and trades = 16%

Top 3 industries for male participants

Active claimants:

• construction = 18%
• manufacturing = 16%
• agriculture, forestry, fishing and hunting = 10%

Former claimants:

• construction = 19%
• manufacturing = 14%
• administrative and support, waste management and remediation services = 11%

Table 7 presents the detailed incremental impacts. For example, the results reveal that male active claimant participants in TSD have higher average annual earnings (+ $7,574) and incidence of employment (+ 4.2 percentage points). They also have a lower income support reliance rate (- 3.6 percentage points), due to their decreased use of EI (- $626 per year) and SA benefits (-$46 per year).

Male former claimant participants in EWS have higher annual average earnings (+ $4,546) and incidence of employment (+ 8.1 percentage points). They also have a lower income support reliance rate

(- 2.8 percentage points), due mainly to their decreased use of SA benefits (- $425 per year).

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.
Note: Impacts are estimated over 4 post-program years (or 5 years in the case of EAS).
¹ The impact is not statistically significant. However, male active claimant participants in EWS have a statistically significant increase in their incidence of employment of + 3.4 percentage points in year 1 post-program participation.

Youth participants

Main findings: Youth active and former claimants in TSD improve their labour market attachment through increases in their employment earnings and incidence of employment. They also decrease their dependence on government income support (that is, the combined use of EI and SA benefits). Youth former claimants in EWS increase their labour market attachment through increases in their employment earnings and reduce their dependence on government income supports in the medium term. Youth active EI claimants in EAS increase their labour market attachment through increases in their employment earnings in the medium term and reduce their dependence on government income supports.

Between 2010 and 2012, nearly 8,800 EI active and former claimant participants were 30 years of age or younger when they began their program, representing about 42% of participants.

The profile of youth participants is presented in Table 8 by gender, sociodemographic group, and marital status. Information about their educational attainment, occupation and industry are based on the latest job they held prior to applying for EI benefits. Information about sociodemographic groups is self-reported.

Note: Values may not equal 100% due to rounding or missing information.

Top 3 occupational groups for youth participants^{Footnote 23}

Active claimants:

• other manual workers = 20%
• intermediate sales and service personnel = 13%
• clerical personnel = 12%

Former claimants:

• other manual workers = 17%
• intermediate sales and service personnel = 16%
• other sales and service professionals; and clerical personnel = 14% each

Top 3 industries for youth participants^{Footnote 24}

Active claimants:

• manufacturing = 13%
• retail trade; construction; and public administration = 11% each
• administrative and support, waste management and remediation services = 10%

Former claimants:

• retail trade; and administrative and support, waste management and remediation services = 13% each
• accommodation and food services = 12%
• manufacturing; and construction = 10% each

Table 9 presents the detailed incremental impacts.

For example, the results reveal that youth active EI claimants in TSD have higher annual earnings (+$7,639 per year) and incidence of employment (+5.6 percentage points). They also depend less on government income supports (-4.3 percentage points), by decreasing their use of EI (-$599 per year) and SA (-$163 per year) benefits.

Youth former EI claimants in EWS increase their annual earnings (+$3,267 per year) and decrease their use of SA benefits (-$435 per year). These participants also decrease their reliance on government income supports (-3.3 percentage points) in year 3 post-program participation.

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.
Note: Impacts are estimated over 4 post-program years (or 5 years in the case of EAS).
¹ The impact is not statistically significant. However, former EI claimants in EWS have a statistically significant decrease in their reliance on government income supports of -3.3 percentage points in year 3 post-program participation.
² The impact is not statistically significant. However, youth active EI claimants in EAS have a statistically significant increase in their earnings of + $1,614 and $1,306, in years 3 and 4 post-program participation.

Older worker participants

Main findings: Older worker active claimant participants in TSD and EAS improve their labour market attachment through increases in their employment earnings and incidence of employment. However, older worker participants in TSD increase their dependence on government income supports (the combination of EI and SA benefits) following participation.

Between 2010 and 2012, nearly 2,000 EI active and former claimant participants were 55 years of age or older when they began their program, representing about 9,6% of participants.

The profile of older worker participants is presented in Table 10 by gender, sociodemographic group, and marital status. Information about their educational attainment, occupation and industry are based on the latest job they held prior to applying for EI benefits. Information about sociodemographic groups is self-reported.

Note: Values may not equal 100% due to rounding or missing information.

Top 3 occupational groups for older worker participants^{Footnote 25}

Active claimants:

• semi-skilled manual workers = 20%
• other manual workers = 14%
• skilled crafts and trade workers; intermediate sales and service personnel; and other sales and service personnel = 11% each

Former claimants:

• semi-skilled manual workers = 16%
• intermediate sales and service personnel; and other manual workers = 15% each
• other sales and service personnel = 12%

Top 3 industries for older worker participants^{Footnote 26}

Active claimants:

• manufacturing = 17%
• construction = 13%
• public administration; and agriculture, forestry, fishing and hunting = 9% each

Former claimants:

• manufacturing; construction; and retail trade = 12% each
• administrative and support, waste management and remediation services = 10%
• health care and social assistance; and public administration = 8% each

Table 11 presents the detailed incremental impacts.

The results reveal that older worker active claimant participants in TSD increase their average annual earnings (+ $4,561) and incidence of employment (+ 9.8 percentage points). However, they also have a higher average annual income support reliance rate (+ 4.1 percentage points), due to their increased use of EI (+ $812 per year) and SA benefits (+ 112 per year).

Older worker active claimant participants in EAS increase their average annual earnings (+ $3,431) and incidence of employment (+ 8.6 percentage points). They also decrease their use of EI benefits by $471 and $676, in the first and second years post-program participation.

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.
Note: Impacts are estimated over 4 post-program years (or 5 years in the case of EAS).
¹ The impact is not statistically significant. However, active EI claimants in EAS have a statistically significant decrease in their use of EI benefits of -$471 and - $676, in the years 1 and 2 post-program participation.

Indigenous participants

Main findings: Indigenous active claimant participants in TSD improve their labour market attachment through increases in employment earnings and decrease their use of EI in the short to medium term post-program participation.

Between 2010 and 2012, nearly 500 active and former EI claimant participants self-identified as being Indigenous Canadians, representing about 2.4% of participants.  

The profile of Indigenous participants is presented in Table 12 by gender, age and marital status. Information about educational attainment, occupation and industry are based on the latest job held prior to applying for EI benefits.

Note: Values may not equal 100% due to rounding or missing information.

Top 3 occupational groups for Indigenous participants

Active claimants:

• other manual workers = 18%
• skilled crafts and trades workers = 16%
• semi-skilled manual workers = 14%

Top 3 industries for Indigenous participants

Active claimants:

• public administration = 41%
• agriculture, forestry, fishing and hunting = 8%
• health care and social assistance = 7%

Table 13 presents the detailed incremental impacts. The results reveal that Indigenous active claimant participants in TSD increase their employment earnings (+ $2,626 and $3,095) in years 2 and 3 after program participation. They also decrease their use EI benefits (- $1,005) in year 2 post-program participation.

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.
Note: Impacts are estimated over 4 post-program years (or 5 years in the case of EAS).
¹ The impact is not statistically significant. However, active claimant participants in TSD have a statistically significant increase in their earnings of $2,626 and $3,095, in years 2 and 3 post-program participation.
² The impact is not statistically significant. However, active claimant participants in TSD have a statistically significant decrease in their use of EI benefits of $1,005 in year 2 post-program participation.

Training and Skills Development participants in Moncton and Fredericton

Between 2010 and 2012, approximatively 3,200 active and former claimant participants in TSD were located in Moncton and Fredericton, representing roughly 35% of participants in TSD.

Table 14 presents the detailed incremental impacts for participants in this region. The results reveal that active claimant participants in TSD in Moncton and Fredericton increase their annual average incidence of employment (+ 5.3 percentage points) and employment earnings (+ $8,494). They also reduce their dependence on government income supports (- 4.2 percentage points), due to decreases in EI (- $350 per year) and SA benefits (- $169 per year). 

Former claimant participants in TSD in Moncton and Fredericton increase their annual average incidence of employment (+ 6.1 percentage points) and employment earning (+$3,440 per year). They also reduce their dependence on government income supports (- 2.3 percentage points per year), due to decreases in SA benefits (- $186 per year).

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.

Training and Skills Development participants outside of Moncton and Fredericton

Between 2010 and 2012, approximately 5,900 active and former claimant participants in TSD were located outside of Moncton and Fredericton, representing roughly 65% of participants in TSD.

Table 15 presents the detailed incremental impacts for participants in this region. The results reveal that active claimant participants in TSD outside of Moncton and Fredericton increase their annual average incidence of employment (+ 3.2 percentage points) and employment earnings (+ $5,515). They also reduce their dependence on government income supports (- 3.9 percentage points), through decreases in EI (- $658 per year) and SA benefits (- $64 per year).

Former claimant participants in TSD outside of Moncton and Fredericton increase their annual average incidence of employment (+ 2.9 percentage points) and employment earnings (+$2,661). They also reduce their dependence on government income supports (- 2.3 percentage points), through decreases in SA benefits (- $424 per year).

Statistical significance level *** 1%; ** 5%; * 10%, other values are not statistically significant.

Training and Skills Development^{Footnote 28}

During the 2010 to 2012 period, TSD represents almost 79% of EBSM expenditures under the LMDAs in New Brunswick. This is the highest share of EBSM spending in the province. 

The average duration of a TSD Action Plan Equivalent is 56 weeks for active claimants and 60 weeks for former claimants. As shown in Table 16, over the 10-year post-program period, the social benefit for active claimants is $55,247 higher than the costs, yielding a social return of 553% on investment. This means that if the government spends $1 on TSD for active claimants, it generates a benefit of $6.53 for society. It takes 3.2 years for the benefits to recover the costs of programming. Overall, there are savings to health care costs of $569 per participant. The social benefit for former claimants is $17,337 higher than the costs, yielding a social return of 172% on investment. It takes 6.1 years for the benefits to recover the costs of programming. Overall, there are savings to health care costs of $234 per participant.

Workforce Expansion-Employer Wage Subsidies^{Footnote 29}

During the 2010 to 2012 period, EWS represents 4% of total EBSM expenditures in New Brunswick. The average duration of a EWS Action Plan Equivalent is 28 weeks for active claimants and 25 weeks for former claimants. As shown in Table 16, over the 5 year post-program period, the social benefit for former claimants is $23,501 higher than the costs, yielding a social return on investment of 498%. Savings to health care costs of $261 are found per participant 5 years after the program. The costs are recovered within the program start year.

Employment Assistance Services^{Footnote 30}

EAS includes a variety of services such as computer access for job search services, group sessions to prepare for an interview, career counselling, and action plan development. The administrative data, however, do not allow to identify what proportion of EAS interventions belong to each category or the intensity of services offered to participants.

While EAS are often provided with other EBSMs, this analysis examined only participants who received one or more EAS without participating in other EBSMs. EAS represents about 10% of total EBSM expenditures between 2010 and 2012. The average length of an EAS-only Action Plan Equivalent is 23 weeks.

As shown in Table 16, over the 5-year post-program period, the social benefit for active claimants in EAS is $44 lower than the costs, yielding a social return on investment of -5%. However, the initial investment in EAS is fully recovered 5.1 years after participation. Savings to the public health care costs of $27 are found per participant.

Overall, the goal of EAS is not to help participants acquire more skills, therefore, increasing participants' earnings after participation is not necessarily expected. Conducting a cost-benefit analysis for EAS is a challenge as it is not possible to attribute a dollar figure to the return to employment. However, including earnings in the cost-benefit calculation is still very relevant since it captures partially the positive impact of the quicker return to work. 

Program design and delivery

The Self-Employment Benefit program aims to assist participants in creating employment for themselves by providing them with a range of services including: 

• assistance with business plan development
• coaching and ongoing technical advice
• entrepreneurial training

New Brunswick has the flexibility to design and deliver the program to meet its labour market needs. In fall 2018, the program was delivered by the Community Business Development Corporations and not-for-profit third-party organisations.

Program officials reported that the amount allocated to the Self-Employment Benefit program is influenced by regional allocations and demand for the program.

The application process is structured and aims to ensure that participants are suited for self-employment, have a viable business plan and the financial resources to launch a business.

Participants' employment outcomes^{Footnote 32}

Self-Employment Benefit participants increased their employment level by 8 percentage points from 61% in the year before participating to 69% at the time of survey. That is, 2 to 4 years after program participation. The increase is mainly due to an increase in the percentage of self-employed participants.

Type of businesses created, survival rates and success factors

Nearly 50% of survey respondents launched a self-employment business that was still in operation in winter 2020 (2 to 4 years following program participation). Among the 119 respondents who started a business, 69% of them were still operating their business at 2 to 4 years post-program. Twenty-two percent (22%) of respondents were unable to maintain the operation of the business they started as part of the program.

The business survival rate is consistent with a 2018 Statistics Canada study that found that less than half of unincorporated self-employed individuals continued operations for more than 2 years.^{Footnote 33}

Half of self-employment businesses were launched in other services^{Footnote 34}; professional, scientific and technical services; as well as in construction and retail trade.

Regarding factors influencing the success or failure of self-employment businesses:

• participants who started a business and were still in operation at the time of survey attributed their business success to:
  • their dedication, hard work and positive attitude
  • the high demand for their services or products
  • the quality of service provided
• participants who did not launch a business attributed this to:
  • the lack of funding
  • the level of uncertainty and risk involved
  • the level of responsibility, pressure and stress

Earning outcomes and reliance on income support

Survey respondents were not comfortable answering questions that related to their earnings. This situation made it difficult to compare the pre- and post-earnings of Self-Employment Benefit participants.

Overall, there appears to be an increase in the number of participants reporting less than $10,000 in earnings annually. However, survey respondents who were able to maintain the operation of their business, were more likely than respondents whose business had closed, to report earning more or the same as before participating in the program.

As a complement to the earning questions, survey respondents assessed their financial well-being. When considering their entire financial situation:

• 77% of respondents said that they are financially about the same or better off after the program
• 76% of respondents said that their household net worth is about the same or higher after the program

In line with survey findings, 6 program managers state that immediate increases in earnings are not necessarily an expected outcome of the program. 

Regarding the reliance on government income support, participants reduced their use of EI and SA following program participation.

Satisfaction with services received and current employment

The majority of respondents who started a self-employment business report that they are equally or more satisfied with their job situation after program participation. Those who are able to maintain the operation of their business are 28 percentage points more likely to report being more satisfied, compared to those whose business closed (79% compared to 51%).

The survey examined the contribution of the program to the success of self-employment businesses. At least 84% of survey respondents who launched a self-employment business rate the following services and training as very or somewhat important to the business launch, operation and success:

• living allowance during participation
• assessment of entrepreneurial readiness
• one-on-one mentoring/advice or counselling supports
• assistance with business plan development
• discussion on risks and challenges of self-employment
• orientation session on self-employment
• training on budgeting, financial management, marketing, business operation and sales 

Challenges and lessons learned related to program design and delivery

Key informants identified the following challenges related to program design and delivery, including:

• lack of formal relationship and/or communication between program coordinators/service providers and Service Canada including:
  • privacy regulations impede service providers from verifying EI eligibility of applicants
  • inconsistent interpretation of program eligibility criteria between program consultants and service providers
• interpretation and implementation of EI legislation create challenges to program delivery, such as:
  • difficulties to thoroughly disseminate EI legislation changes to all affected and update program information
  • expanded EI eligibility has resulted in additional verifications
  • ambiguities in EI legislation (for example, distinction between a "lay off" and a "quit") lead to frustration for some clients

Best practices related to program design and delivery included:

• composition of selection committee to assess applicants:
  • include a diversity of perspectives to assess applicants; this can include departmental representatives, service providers, retired local business owners, chamber of commerce representatives, financing services representatives, and other members of the business community
• types of organisations as service providers to deliver Self-Employment Benefit:
  • service providers having a good understanding of, and connection to, the local labour market
  • using service providers that develop/maintain a strong network/knowledge of services
  • using service providers that provides financing or lending options
• training and supports:
  • training on topics such as marketing, social media and taxation
  • successful methods of providing training and supports include:
    • providing training on an as-needed basis
    • one-on-one training
    • "boot camp" on areas where participants might be experiencing difficulty/need extra help
• supporting access to financing:
  • preparing participants and their business plans for what is expected by financial institutions to improve chances of approval
  • teaching participants how to find and navigate financing options, including grants and contributions and let them choose what is right for them
• program delivery:
  • collaboration and communication between all those involved in program delivery is crucial for participant referrals
  • ensuring consistent implementation of the program guidelines and other resources such as business plan template

Key considerations for Self-Employment Benefit program and policy development

The following consideration emerge as part of the Self-Employment Benefit study.

The Self-Employment Benefit program can benefit from an updated objective specifying that it is dedicated to eligible participants who have a viable business idea, the financial or in-kind resources to launch a business, and the required level of dedication.

The data collection process should include only participants who have been deemed suitable for self-employment and accepted into the program. This will require excluding candidates who attended information sessions alone or those deemed not suited for self-employment. The latter participants can be reported under Employment Assistance Services.

Indicators of program success can include: increase in employment and/or self-employment levels; medium-term increase in earnings; business survival rate similar to the local economy and/or the sector; and acquisition of transferable skills.

New Brunswick may wish to consult with the service delivery network on the extent to which identified challenges are applicable to their unique context, and how best to address them along with integrating lessons learned that can benefit program delivery.

Program design and delivery

New Brunswick has designed 2 programs under the Labour Market Partnerships support measure, AS and LFT, which collectively aim to assist employers, communities and industries to address their labour force adjustments and human resource needs. They include a wide range of funded activities, such as:

• labour force adjustment
• labour market research and analysis to maintain a skilled workforce
• training to attain, increase, improve and/or maintain labour market attachment

With $17.3 million in 2019 to 2020, AS and LFT programs represent nearly 16% of total expenditure under the Canada-New Brunswick Labour Market Development Agreement.

Funded organisations

Funded organisations include:

• employers
• employee and employer associations
• communities and community groups
• industry associations

Targeted labour market issues

AS and LFT projects targeted skills and/or labour shortages. These projects also targeted unemployment and specific unemployed populations (for example, Indigenous peoples, and persons with disabilities).

Generally, funded projects target labour market issues associated with:

• lack of capacity for human resource planning resulting in attraction and retention challenges for employers
• employer expansion
• demographic changes
• business downsizing/closure/layoffs
• barriers to employment experienced by a target population
• lack of housing in communities

The majority of projects reviewed align with provincial program objectives and eligible activities.

Partnerships

New Brunswick's Department of Post-Secondary Education, Training and Labour confirm that program officials carry out activities to support the formation and maintenance of partnerships as part of the program design and delivery. The department states that partners' contributions are beneficial, but not required, for the achievement of expected project outcomes. The majority of program officials stress the importance of partnerships for projects' success as they bring different perspectives and expertise, avoid duplication, allow for sharing project costs, and help in the implementing of large-scale projects.

Through the document review of 23 projects and key informant interviews it is found that:

• partnerships were established to support the delivery of 5 AS projects
• LFT project holders are considered partners as they contribute in-kind and financially to the projects
• partnerships with other organisations are not required for the achievement of expected project outcomes; therefore, they were established as needed

Challenges and lessons learned

New Brunswick's Department of Post-Secondary Education, Training and Labour and key informants identified the following challenges:

• factors affecting the recruitment of project holders and setting up projects:
  • approval levels vary depending on project costs and may have an impact on the length of the assessment
• factors affecting program administration:
  • staff turnover
  • loss of historical knowledge due to retirement and purging of records every 7 years

Actions of program officials and project characteristics that are conducive to the success of the programs included:

• ensuring that project holders have the capacity to deliver the project
• providing clearly defined project timelines and outcomes
• providing clear communication and relationship building between program officials and project holders
• providing clear guidelines and ensuring good understanding of program parameters
• providing clearly defined reporting requirements

Key considerations for AS and LFT programs and policy development

The following considerations emerge from this study.

• Considering that the current performance indicators do not reflect the diversity of activities funded under AS and LFT, it is important for ESDC and New Brunswick to discuss current funded activities in order to make recommendations on how to best report on results
• It is essential to share lessons learned about successful AS and LFT projects. Particularly, for projects targeted to employers (such as workplace or employer-sponsored training), and those assisting communities and economic sectors dealing with labour market adjustment issues (contraction or expansion)

Program design and delivery

The objectives of Research and Innovation are to identify new and better tools and approaches to:

• help persons in the labour force
• ensure education and skills of the New Brunswick labour force meet current and emerging demands of the labour market
• develop innovative means to promote transition programs including the development of tools and procedures to be used in transitional programming
• reduce barriers to employment

Program officials report that the amount allocated to Research and Innovation is influenced by:

• labour market demand
• project capacity to introduce innovative tools

New Brunswick uses Research and Innovation funding annually.^{Footnote 37} In the 6 fiscal years between April 2014 and March 2020, funding ranged from less than 1% ($105,000) to 1% ($916,000) of the province's annual LMDA funding.

Funded organisations

Funded organisations include non-profit organisations.

Funded Research and Innovation activities

Research and Innovation projects encompassed a variety of activities including:

• development and/or testing of new approaches to improve employment outcomes
• strengthening service provision
• delivering career fairs

Innovation definition and criteria

In New Brunswick, innovative approaches are deemed to be either:

• tools or processes that have not been used in the jurisdiction or Canada in general
• existing tools or processes that are being used with a new client group

Performance measurement

Project holders are required to submit a final report at the end of the project. The final report should provide measures of all the project's short and/or long-term evaluation indicators identified in the project proposal, in order to demonstrate that the objective(s) have been met.

New Brunswick undertakes an early evaluation of the Research and Innovation program including individual projects.

Challenges and lessons learned

Project documents and program officials identified challenges related to testing and identification of innovative approaches including:

• project holder staff turnover due to poor terms of employment and job security
• transportation issues due to lack of access in rural areas

In relation to factors contributing to successful testing and identification of innovative approaches, program officials highlighted the importance of:

• having strong commitment from partners
• having a clear project implementation plan with measurable outcomes

Labour market outcomes

The labour market outcomes are based on individuals who began their participation during the 2010 to 2012 period. Statistics focus on 5 years before program participation and 5 years after the program start year.