Canada – Northwest Territories Labour Market Development Agreement

Recitals

Between

The Government of Canada (herein referred to as "Canada"), as represented by the Secretary of State for Children and Youth on behalf of the Minister of Human Resources Development and the Canada Employment Insurance Commission

And

The Government of the Northwest Territories (herein referred to as "Northwest Territories"), as represented by the Minister of Education, Culture and Employment.

Recitals

Whereas Canada and the Northwest Territories give the highest priority to the integration of the unemployed into the workforce and are committed to providing high quality, effective and efficient labour market development programs and services to the people of the Northwest Territories;

Whereas Canada and the Northwest Territories agree on the importance of measuring, monitoring, assessing and evaluating the success of their labour market development programs and services in helping the unemployed of the Northwest Territories to prepare for, find and keep employment;

Whereas Canada and the Northwest Territories agree that predictability and transparency of funding is critical to the success of a long term labour market development agreement;

Whereas Canada and the Northwest Territories recognize that each government has certain responsibilities in the area of labour market development and seek to clarify roles and responsibilities in ways that improve the quality and accountability of government services to the public;

Whereas Canada and the Northwest Territories agree that they should reduce unnecessary overlap and duplication in their labour market development programs and services;

Whereas the Northwest Territories intend to provide a coherent and comprehensive array of labour market programs and services, including programs that are eligible for support from Canada under Part ll of the Employment Insurance Act;

Whereas recent experimentation in the cooperative delivery of federal and territorial labour force development programs and services has shown the benefits of establishing new labour market arrangements in the Northwest Territories;

Whereas both parties recognize the possibility of achieving significant economies and quality improvements through cooperation in the future development, management and funding of systems infrastructure that meets the objectives of Territorial and national labour market programs;

Whereas, in recognition of the above, Canada's Minister of Human Resources Development presented to all provinces and territories on May 30, 1996, a proposal on labour market development, a copy of which is attached as Annex 10 to this Agreement;

Whereas nothing in this Agreement shall prejudice the future political evolution of the Northwest Territories, the settlement of Aboriginal Land Claims in the Northwest Territories, or abrogate or derogate from existing Aboriginal and Treaty rights of the Aboriginal Peoples of Canada in the Northwest Territories;

Whereas following the division of the Northwest Territories, scheduled to take effect on April 1, 1999, Canada intends to extend its May 30, 1996 proposal on labour market development to the new Government of Nunavut;

Whereas the Northwest Territories desire to enter into an agreement with Canada with respect to the May 30, 1996 proposal on labour market development;

Whereas with respect to the Northwest Territories' desire to expand its role in the design and the delivery of labour market development programs that reflect unique cultural and economic characteristics of local and regional labour force needs in the Northwest Territories, Canada (acting through the Canada Employment Insurance Commission), and with the approval of Canada's Minister of Human Resources Development, is authorized under section 63 of the Employment Insurance Act to enter into an agreement with the Northwest Territories to provide for the payment of contributions towards:

• (a) the costs of benefits and measures provided by the Northwest Territories that are similar to employment benefits and support measures under Part ll of that Act and consistent with the purpose and guidelines of Part ll of that Act; and
• (b) the administration costs that the Northwest Territories incur in providing those benefits and measures;

Whereas the benefits and measures provided by the Northwest Territories described in Annex 1 entitled "Description of Territorial Benefits and Measures" are similar to employment benefits and support measures under Part ll of the Employment Insurance Act, and consistent with the purpose and guidelines of Part ll of that Act;

Whereas Canada’s Minister of Human Resources Development has approved the entering into of an agreement with the Northwest Territories to make contributions toward the costs of providing those benefits and measures and the associated administration costs;

Whereas with respect to the desire of the Northwest Territories to carry out on behalf of the Canada Employment Insurance Commission certain functions of the National Employment Service, the Commission may, under subsection 31 (3) of the Department of Human Resources Development Act, authorize any person or body to exercise functions of the Commission;

Whereas with respect to the other areas of cooperation between Canada and the Northwest Territories covered by this Agreement, Canada’s Minister of Human Resources Development is authorized to enter into this Agreement under section 20 of Canada's Department of Human Resources Development Act;

Whereas the Northwest Territories' Minister of Education, Culture and Employment is authorized to enter into this Agreement on behalf of Government of the Northwest Territories;

Whereas Canada and the Northwest Territories have agreed to the following principles governing the design, delivery and implementation of labour market development programs and services to assist the unemployed of the Northwest Territories that are to be provided by the Northwest Territories with support from Canada under this Agreement:

• (a) programs and services shall be designed to reduce dependency on income support by helping individuals obtain and keep employment;
• (b) cooperation and partnership with other governments, employers, community based organizations and other interested organizations in planning, implementation and evaluation are key to the success of the programs and services;
• (c) significant decisions about implementation of the programs and services should be made at the local level;
• (d) persons receiving assistance under the programs and services need to be committed to:
  • (i) achieving the goals of the assistance,
  • (ii) taking primary responsibility for identifying their employment needs and locating services necessary to allow them to meet these needs; and,
  • (iii) if appropriate, sharing the cost of the assistance;
• (e) programs and services should be implemented within the framework for evaluating their success in assisting persons to obtain and keep employment;
• (f) decisions on access to assistance under the programs and services should:
  • (i) consider client interests and labour market requirements (local, territorial and national);
  • (ii) clients should be involved in decisions with respect to appropriate interventions and in the management of their case plans; and
  • (iii) ensure that policies and procedures address fair treatment and redress;
• (g) innovative means should be used to ensure that clients have reasonable access to quality, effective and efficient programs and services;
• (h) equity principles with regard to women, Aboriginals, visible minorities and persons with disabilities will be respected in the design and delivery of the programs and services; and
• (i) clients have a right to receive assistance under the programs and services in the official language of their choice where there is significant demand.

Now, therefore, the parties hereto mutually agree as follows:

1.0 Interpretation

1.1 The terms "employment benefit" and "support measure" are special terms used in the Employment Insurance Act in reference to specific types of employment programs established by the Commission under sections 59 and 60(4), respectively, of the Employment Insurance Act. The terms "benefit" and "measure" are used in section 63 of the Act in reference to employment programs established by other governments and organizations in Canada towards the costs of which the Commission is authorized to make financial contributions provided they are similar to the Commission's employment benefits and support measures and are consistent with the purpose and guidelines of Part II of the Act. In this Agreement the term "program" is sometimes used instead of "benefit" and "measure".

1.2 In this Agreement, unless the context requires otherwise,

"active EI claimant" means an individual for whom a benefit period is established under the Employment Insurance Act;

"administration costs " means the costs of administration incurred by the Northwest Territories in providing their Territorial benefits and measures;

"Annual Results Annex" means the Annex referred to in section 16;

"Commission" means the Canada Employment Insurance Commission;

"costs of Territorial benefits and measures" means the costs of financial assistance or other payments provided by the Northwest Territories under their Territorial benefits and measures to persons and organizations that are eligible for assistance under those benefits and measures. For greater certainty, it is understood that:

• (a) insofar as the costs of Territorial benefits are concerned, they are limited to:
  • (i) the costs of financial assistance provided under the Territorial benefits directly to insured participants; and
  • (ii) the costs of financial assistance or other payments provided by the Northwest Territories under the Territorial benefits to persons or organizations as reimbursement for costs incurred by them, or as payment for services rendered by them, in relation to the provision of assistance to insured participants; and
• (b) insofar as the costs of Territorial measures are concerned, they are not limited only to costs incurred in relation to activities designed to provide assistance to insured participants since the activities eligible for support under Canada’s own support measures, to which the Territorial measures must be similar and consistent, are not so limited;
  
  "insured participant" means an unemployed person who, when requesting assistance under a Territorial benefit or measure:
  
  
  • (a) is an active EI claimant; or
  • (b) had a benefit period that ended within the previous 36 months; or
  • (c) had a benefit period established for him/her within the previous 60 months, and
    • (i) was paid parental or maternity benefits under the Employment Insurance Act or the former Unemployment Insurance Act,
    • (ii) subsequently withdrew from the labour force to care for one or more of their new-born children or one or more children placed with them for the purpose of adoption, and
    • (iii) is seeking to re-enter the labour force;

"Designated Officials" means the officials designated under section 21;

"division of the Northwest Territories" means the creation of a new territory and Government of Nunavut from the present Northwest Territories upon the coming into force and effect of those provisions of the Nunavut Act S.C. 1993 creating a new territory and the Government of Nunavut;

"ECE" means the Government of the Northwest Territories' Department of Education, Culture and Employment;

"fiscal year" means the period commencing on April 1 in one calendar year and ending on March 31 in the next calendar year;

"HRDC" means Canada's Department of Human Resources Development;

"Joint Evaluation Committee" means the committee established under section 8.4;

"NES clients" means persons and organizations to whom the National Employment Service provides its services, namely: workers, whether insured or not or whether they are claiming employment insurance benefits or not, employers, workers' organizations and interested public and private organizations providing employment assistance services to workers;

"Nunavut" means that territory created by the coming into force and effect of those provisions of the Nunavut Act S.C. 1993 creating a new territory and the Government of Nunavut;

"Territorial benefit" means a labour market development program designed to enable insured participants to obtain employment that is described in Annex 1, and in any amendments made thereto under section 24.2;

"Territorial measure" means a labour market development program to support:

• (a) organizations that provide employment assistance services to unemployed persons;
• (b) employers, employee or employer associations, community groups and communities in developing and implementing strategies for dealing with labour force adjustments and meeting human resource requirements; or
• (c) research and innovative projects to identify better ways of helping persons prepare for, return to or keep employment and be productive participants in the labour force;

that is described in Annex 1 and in any amendments made thereto under section 24.2;

"Territorial benefits and measures" may be referred to collectively as "Territorial programs";

"Transition Committee" means the committee established under section 20;

"Transition Period" means the period between the date of the signing of this Agreement and the later of:

• (a) the date referred to in section 3.1 of this Agreement on which the Northwest Territories begin implementation of the Territorial benefits and measures; or
• (b) the date on which the transfer of HRDC employees to the Northwest Territories referred to in section 12 of this Agreement is completed;

"western Northwest Territories" means that part of the present Northwest Territories, as described in the Northwest Territories Act R.S.C. 1985 that will not form part of Nunavut upon division of the Northwest Territories.

2.0 Purpose and scope of agreement

2.1 The purpose of this Agreement is to implement, within the scope of Part ll of the Employment Insurance Act, new Canada-Northwest Territories arrangements in the area of labour market development that will enable the Northwest Territories to assume an expanded role in the design and delivery of labour market development programs and services in the Northwest Territories.

2.2 Canada will retain responsibility for the delivery of insurance benefits under Part I of the Employment Insurance Act, and for the national aspects of labour market development such as responding to national emergencies, activities in support of interprovincial labour mobility, the promotion and support of national sectoral councils, funding for the Regional Bilateral Agreements with Aboriginal organizations, the operation of the national labour market information and national labour exchange systems, and innovative projects designed to test new approaches to improving the functioning of the labour market in Canada.

2.3 To avoid overlap and duplication, and promote cooperation in the conduct of their respective activities and initiatives in support of labour market research and innovative projects, Canada and the Northwest Territories further agree to keep each other regularly informed of their proposed activities and initiatives in this area.

3.0 Territorial benefits and measures

3.1 Beginning April 1,1998, or such later date as may be agreed upon by the parties, the Government of the Northwest Territories will provide in the Northwest Territories their Territorial benefits and measures.

3.2 The Northwest Territories agree to provide to Canada annually, three months before the beginning of each fiscal year, an Annual Plan which sets out:

• (a) the labour market issues which the Northwest Territories intend to address during the coming three fiscal years;
• (b) the array of Territorial benefits and measures to be offered during the coming fiscal year; and
• (c) the projected expenditures under each Territorial benefit and measure during the coming fiscal year.

3.3 Subject to section 3.4, the Northwest Territories may make ongoing modifications to the design of their Territorial benefits and measures to ensure responsiveness to client need, labour market conditions, and valuation findings. It is understood that any modifications to the design of the Territorial benefits and measures will be set out in amendments to Annex 1.

3.4 Where any question arises as to whether a change to a Territorial benefit or measure affects its consistency in relation to the guidelines and purpose of Part II of the Employment Insurance Act, or its similarity to the employment benefits and support measures established by the Commission, it shall be referred to the Designated Officials for a determination.

3.5 The Northwest Territories shall not require any minimum period of residency in the Northwest Territories on the part of an individual as a condition of access by that individual to assistance under a Territorial benefit or measure supported by Canada under this Agreement.

3.6 The Northwest Territories will give priority of access to assistance under their Territorial benefits and measures to active EI claimants.

3.7 To facilitate the coordination of the provision of assistance to active EI claimants by the Northwest Territories under their Territorial benefits, with the payment by Canada of insurance benefits to those claimants by virtue of section 25 of Part I of the Employment Insurance Act, the Commission, pursuant to subsection 31(3) of Canada's Department of Human Resources Development Act, hereby authorizes the Minister of Education, Culture and Employment to exercise, the Commission's power to designate authorities in the Northwest Territories who may, for the purposes of section 25 of Canada's Employment Insurance Act, refer active EI claimants to:

• (a) courses or programs of instruction or training which the claimant is attending at his or her own expense or under Territorial benefits; or
• (b) any other employment activity for which assistance has been provided for the claimant under Territorial benefits which are similar to the Commission's Job Creation Partnerships and Self-Employment Benefits.

3.8 The Northwest Territories shall give thirty days of advance notice to Canada of its intention to designate a referral authority for the purpose of section 25 of Canada’s Employment Insurance Act in order that Canada may make necessary administrative arrangements with the referral authority to ensure timely and proper payment of insurance benefits to the referred active EI claimants under section 25 of the Act.

3.9 Authorities designated by the Northwest Territories may include staff of ECE, other departments or agencies, corporations of the Government of the Northwest Territories, as well as third parties in the Northwest Territories.

4.0 Delegation of authority to Northwest Territories with respect to certain National Employment Services functions

4.1 ECE, in support of the Commission’s responsibility to maintain a national employment service, is hereby authorized to carry out on behalf of the Commission, the functions of the National Employment Service (NES) described in Annex 2 to this Agreement entitled "National Employment Service Functions".

4.2 In carrying out the functions referred to in section 4.1, Canada and the Northwest Territories agree to cooperate in establishing effective linkages to facilitate and coordinate the operation of their local and national labour exchange systems and the production and dissemination of local and national labour market information.

4.3 The Northwest Territories agree to give priority access to the screening and counselling functions of the National Employment Service to active EI claimants.

5.0 Service to clients

5.1 The parties agree that in the administration of the Territorial programs, and in carrying out certain functions of the National Employment Service, the Northwest Territories will be guided by the following principles of service to clients:

• (a) provide convenient access to federal and Territorial programs and services;
• (b) provide courteous, empathetic and timely service;
• (c) provide flexible and innovative approaches to labour market and community needs;
• (d) optimize individual potential and human dignity; and
• (e) achieve measurable results within a well-defined framework of accountability.

5.2 In areas of significant demand, the Northwest Territories agree to provide access to assistance under their Territorial programs, and in relation to the National Employment Service functions for which they are assuming responsibility, in both of Canada’s official languages. In determining the areas of the Northwest Territories where there is significant demand, the Northwest Territories agree to use as a guideline, the criteria for determining what constitutes "significant demand" for communications with, and services from, an office of a federal institution as set out in the Official Languages Regulations made pursuant to Canada's Official Languages Act. The Northwest Territories will consult with representatives of the Francophone community in the Northwest Territories on the availability of assistance in French under the Territorial programs, and with respect to the National Employment Service functions for which it is assuming responsibility.

5.3 In addition to the consultations with the Francophone community in the Northwest Territories as agreed between the parties in section 5.2, the Northwest Territories will also consult with representatives of the official Aboriginal languages as recognized in the Northwest Territories Official Languages Act when establishing the availability of assistance under the Territorial programs, and with respect to the National Employment Service functions for which they are assuming responsibility.

5.4 Canada and the Northwest Territories will ensure that Canada/Northwest Territories Service Centers are accessible to persons with disabilities.

5.5 Canada and the Northwest Territories agree to establish mechanisms for dealing with representations or enquiries made by Members of Parliament or Members of the Legislative Assembly of the Northwest Territories on behalf of constituents who have sought their assistance in resolving a problem or obtaining information in relation to the constituent’s dealings with a Canada/Northwest Territories Service Centre, to ensure that the reply to the inquiry or representations is directed to the appropriate party and that the confidentiality and privacy requirements of the Employment Insurance Act and the Northwest Territories' Access to Information and Protection of Privacy Act, are respected.

6.0 Delivery arrangements

6.1 The delivery of the Territorial programs and certain functions of the National Employment Service will be administered by the Northwest Territories at delivery sites identified to the public as Canada/Northwest Territories Service Centres.

6.2 In order to provide effective and efficient services, the parties agree that the various programs and services under their respective jurisdictions should, to the extent possible, be provided at common locations.

6.3 To give effect to the foregoing, the parties agree to establish co-located facilities or Alternative Service Delivery arrangements, as appropriate, at the locations listed in Annex 3 to this Agreement entitled "Delivery Arrangements".

6.4 The arrangements between the parties with respect to the operation of points of access/delivery are set out in Annex 3 of this Agreement.

6.5 Canada and Northwest Territories agree that the linking of electronic on-line systems which maintain client information data is an essential tool for effective and efficient case management for clients accessing Employment Insurance, Territorial income support, Territorial benefits and measures and the National Employment Service systems.

6.6 The use and application of information obtained through system linkages will be subject to the provisions set out in Annex 5 entitled "Information and Data Sharing Arrangements".

6.7 Where appropriate, pilot projects may be cost shared between Canada and the Northwest Territories to test the development and application of new on-line systems which demonstrate the potential to improve case management. Such projects would be directed by the Joint Evaluation Committee.

7.0 Expected results of territorial benefits and measures

7.1 Canada and the Northwest Territories agree to use the following criteria as the primary indicators for measuring the results of the Territorial benefits and measures:

• (a) the number of active EI claimants that access Territorial benefits and measures;
• (b) the number of insured participants, with an emphasis on active EI claimants, returned to employment; and
• (c) the amount of savings to the Employment lnsurance Account.

7.2 Canada and the Northwest Territories agree to jointly establish in advance of each fiscal year during the period of the Agreement, mutually agreed results targets for the coming fiscal year using the results indicators referred to in section 7.1.

7.3 Canada and the Northwest Territories agree that for fiscal year 1998/99, the results targets shall be those set out in Annex 4 to this Agreement entitled "Annual Results Targets for Fiscal Year 1998/99". The results targets for each subsequent fiscal year will be set out in the Annual Results Annex for that fiscal year.

7.4 Canada and the Northwest Territories agree to establish mechanisms to jointly set the annual results targets for each fiscal year following fiscal year 1998/99, and to jointly review and assess the achievement of the results in accordance with Annex 4. In setting targets for each of those fiscal years, the parties will take into consideration local, regional and territorial economic, cultural and labour market circumstances, the results achieved in previous years, the amount of funding available for the Territorial benefits and measures for the coming year, and improvements in the design and delivery of these benefits and measures.

7.5 The measurement of the primary indicators will be based on a methodology established by Canada and outlined in Annex 4, in order that Canada can establish the national results levels for reporting to Parliament.

8.0 Evaluation

8.1 Canada and the Northwest Territories recognize the importance of evaluating the results of the Territorial programs supported under this Agreement to clients, premium payers and tax payers. Accordingly, they agree that immediately after the commencement of the implementation of the Territorial benefits and measures, they will jointly develop an evaluation framework.

8.2 The evaluation framework will guide:

• (a) the development of evaluation processes adhering to recognized evaluation practices, for short, medium and long-term measurement of results;
• (b) the carrying out of such evaluation processes; and
• (c) the delineation of responsibilities of each party related to that framework.

The first formative phase will be conducted in the first year of implementation of the Territorial programs, followed by the second summative phase in the third year of implementation.

8.3 Subsequent evaluations will be conducted regularly, on a three to five year basis. Such evaluations will determine the impacts and effects of the Territorial programs, including:

• (a) their impacts and effects on sustainability of employment;
• (b) change in dependency on income transfers (Employment Insurance and income support);
• (c) impact on communities; and
• (d) change in tax revenues from earned income.

8.4 Canada and the Northwest Territories agree that Designated Officials will establish a joint Federal/Territorial evaluation committee, called the Joint Evaluation Committee, to support and oversee the evaluations of the Territorial programs. The Joint Evaluation Committee will prepare and sign off the evaluation framework, carry out evaluations according to the plan laid out in the framework document, approve third party evaluation contracts, and evaluation reports.

8.5 Canada and the Northwest Territories agree that the Joint Evaluation Committee will approve the design and operation of research and innovations projects initiated in the Northwest Territories.

8.6 Where the parties conduct evaluations of an independent nature, Canada and the Northwest Territories agree to share information on their plans and their results, including the evaluations of the benefits, measures and other programs implemented by Aboriginal organizations in the Northwest Territories under the Regional Bilateral Agreements entered into between Canada and those organizations.

9.0 Information and data sharing

9.1 For the purposes of implementing this Agreement, Canada and the Northwest Territories agree to exchange information in accordance with the arrangements specified in Annex 5 to this Agreement entitled "Information and Data Sharing Arrangements".

10.0 Monitoring and assessment

10.1 Section 3 of the Employment Insurance Act requires the Commission to monitor and assess the effectiveness of the benefits and assistance provided under the Act, including assistance provided under the arrangements put in place in the context of this Agreement, and to submit a report on its assessment to the Minister of Human Resources Development at least annually from 1998 to 2001 and it must subsequently be laid before Parliament. Beginning in 1998/99, Canada will use the information provided to it by the Northwest Territories under section 9.

11.0 Employment insurance program integrity

11.1 As Canada may be providing insurance benefits under Part l of the Employment Insurance Act to active EI claimants while they are participating in Territorial programs, Canada and the Northwest Territories agree to cooperate with each other in developing measures for detecting and controlling abuse, and in determining how and by whom these measures should be carried out.

12.0 Human resources

12.1 The Northwest Territories agree to make an irrevocable offer of indeterminate employment to the employees of Canada affected by the Northwest Territories' decision to:

• (a) expand their role in the design and delivery of labour market programs through the implementation of the Territorial benefits and measures; and
• (b) assume responsibility for certain functions of the National Employment Service.

The particulars of the offer of employment are set out in the Employee Transfer Agreement between Canada and the Northwest Territories attached as Annex 6 to this Agreement.

13.0 Financial arrangements

13.1 Canada and the Northwest Territories agree that, subject to the financial limitation set out in section 78 of the Employment Insurance Act, the financial arrangements between them shall be as set out in the provisions below.

Contribution towards costs of territorial benefits and measures

13.2 Subject to section 13.4, and to sections 13.19 to 13.23, in each of fiscal years 1998/99 to 2001/2002, Canada (through the Commission) agrees to make a maximum contribution to the Northwest Territories towards the costs of Territorial benefits and measures incurred in those years of an amount determined in accordance with the allocation methodology described in the letter of June 26, 1996 from Canada's Deputy Minister of Human Resources Development to the Government of the Northwest Territories’ Deputy Minister of Education, Culture and Employment and attached as Annex 7 to this Agreement.

13.3 The currently projected maximum amount of Canada's contribution towards the costs of Territorial benefits and measures for fiscal year 1998/99 is $4,418,000.

13.4 With respect to fiscal years 1999/00 to 2001/02, the parties recognize that the division of the Northwest Territories into the western Northwest Territories and Nunavut is scheduled to take effect on April 1, 1999 and that this will require changes to the funding arrangements described above. When division occurs, the parties agree that the maximum amount of Canada's annual contribution to the Northwest Territories towards the costs of their Territorial benefits and measures will be determined in accordance with sections 13.19 to 13.23. In this regard, Canada and the Northwest Territories agree that for those years the amount of the maximum annual contribution towards the costs of their Territorial benefits and measures, as would be determined in accordance with the methodology referred to in section 13.2, will be shared between the western Northwest Territories and Nunavut in the manner to be determined in accordance with sections 13.19 to 13.23. The currently projected maximum aggregate amounts of Canada's funding allocations to be shared between the western Northwest Territories and Nunavut in each of those years, are as follows:

• fiscal year 1999/00: $4,893,000
• fiscal year 2000/01: $4,893,000
• fiscal year 2001/02: $4,893,000

13.5 The Northwest Territories recognize that given the nature of the allocation methodology referred to in section 13.2, the actual amount of the maximum contribution payable in each fiscal year cannot be ascertained until shortly after January of the immediately preceding fiscal year. Furthermore, the maximum contribution payable could change should the allocation methodology change as a result of a consensus between provinces/territories and Canada. To assist the Northwest Territories in their planning and the preparation of their Annual Plan, HRDC undertakes to provide it in December of each year, with a preliminary estimate of Canada's maximum contribution for the coming year.

13.6 Notwithstanding the results of the allocation methodology referred to in section 13.2, and the review of funding levels in section 13.10, Canada agrees that the maximum amount of funding to be made available for sharing between the western Northwest Territories and Nunavut in each of fiscal years 2000/01 and 2001/02, will not be less than the projected maximum amount of the combined allocation for the western Northwest Territories and Nunavut for fiscal year 1999/00 as set out in section 13.4.

13.7 For greater certainty, it is understood that the above mentioned funding allocations relate only to allocations for expenditures in the western Northwest Territories and Nunavut under Part II of the Employment Insurance Act and do not include insurance benefits payable by the Commission to active EI claimants under Part I of the Act (by virtue of section 25) while participating in training and other employment activities under Territorial benefits.

13.8 In order to maintain continuity of client service until the Territorial benefits and measures are ready to be implemented, the Northwest Territories agree that Canada should continue to make program decisions until that time. During the period from the time of the signing of this Agreement until the time the Northwest Territories begin implementation of their Territorial benefits and measures, Canada agrees to provide the Transition Committee with details of the amounts of the financial commitments it has continued to make under its employment benefits and support measures by program and location. Commitments approved by Canada through carryover of outstanding agreements from 1997/98 to fiscal year 1998/99, will reduce the amounts of maximum annual contributions payable to the Northwest Territories. Carryover will be reported by Canada to the Northwest Territories, and will be used to reduce the maximum amount of the contributions payable by Canada in fiscal year 1998/99.

13.9 For each fiscal year after the fiscal year 2001/02 during the period of the Agreement, Canada's contribution towards the costs of the Territorial benefits and measures will be mutually reviewed annually between the parties. The agreed amount of Canada's contribution towards the costs of the Territorial benefits and measures for each such fiscal year will then be specified in the Annual Results Annex for that fiscal year. In conducting the annual reviews, Canada undertakes to provide the Northwest Territories with projected three year allocations on a rolling basis as a forecast based on current trends, but which are subject to change.

13.10 Canada agrees to review, within 24 months after the signing of this Agreement, the overall level of funding to be available for expenditures under Part II of the Act with a view to determining whether the amount of funding should be increased. Canada will base its review in part on the results obtained under the labour market development agreements entered into with the Northwest Territories and other provinces and territories as a result of the May 30,1996 proposal on labour market development.

13.11 Canada also agrees to establish an intergovernmental process aimed at reviewing the current methodology for the allocation of Employment Insurance funds in support of expenditures under Part II of the Act and at proposing options which put emphasis on matters such as achievement of results and generation of savings to the Employment Insurance Account.

Contribution towards administration costs

13.12 In addition to the contribution towards the costs of the Territorial benefits and measures, Canada (through the Commission) agrees to make a maximum contribution to the Northwest Territories in each fiscal year during the period of the Agreement towards the administration costs incurred by the Northwest Territories in that fiscal year.

13.13 Subject to sections 13.14 to 13.18 and sections 13.19 to 13.23, the maximum amount of the annual contribution shall be an amount determined in accordance with the methodology as outlined in the letter of September 25,1996, from Canada's Deputy Minister of Human Resources Development to the Government of the Northwest Territories’ Deputy Minister of Education, Culture and Employment, and the calculations made in the Table attached to that letter, as amended by a revised Table issued by Canada dated May 5,1997, all attached as Annex 8 to this Agreement. The actual amount of the maximum contribution for administration costs will be dependent upon the employee transfer arrangements set out in the Employee Transfer Agreement referred to in section 12 of this Agreement.

13.14 The maximum amount of the contribution towards the administration costs of the Northwest Territories will be increased depending upon the actual financial resources available to Canada after the termination of various property leases which will occur as a result of reduced accommodation requirements for Canada flowing from the transfer of HRDC employees to the Northwest Territories under the Employee Transfer Agreement referred to in section 12. Designated Officials will be responsible for determining and recommending to the parties the amount of any such increase.

13.15 The maximum amount of the contribution for administration costs may also be increased if, after an offer of employment has been made to a Transferring Employee but prior to the date of the employee's transfer,

• (a) the employee's annual salary is increased as a result of:
  • (i) the signature of a new collective agreement;
  • (ii) the signature of an agreement with respect to a pay equity adjustment; or
  • (iii) the rendering of a final decision in respect of the pay equity complaint brought by the Public Service Alliance of Canada against Canada's Treasury Board that is currently before a Canadian Human Rights tribunal; and
• (b) under the terms of the Employee Transfer Agreement, the Northwest Territories is required to increase the salary set out in the offer to make it at least equal to the employee's annual salary after a salary increase resulting from a circumstance referred to in paragraph (a).

The amount of the increase in the maximum annual contribution shall be an amount equal to the total amount of any salary increases referred to in paragraph (b) that are payable to Transferring Employees.

13.16 If, during the first three fiscal years of this Agreement, the Treasury Board of Canada makes available to HRDC additional sums for former federal employees transferred to the Northwest Territories under the Employee Transfer Agreement referred to in section 12, Canada agrees to increase, for those years, the maximum contribution payable to Northwest Territories for administration costs by an amount equal to those sums.

13.17 If, during the first three years following the transfer of an employee, the application of the Northwest Territories' program of mandatory leave without pay results in deductions from the annual salary of the Transferring Employee, the amount of the maximum annual contribution towards administration costs in those years shall be decreased by the aggregate amount of those deductions.

13.18 The maximum amount of Canada's annual contribution to the Northwest Territories for administration costs in each of the first three fiscal years in which Transferring Employees currently occupying federal Crown housing continue living in that housing at a subsidized rate of rent, shall be decreased by the amount of the annual amount paid by HRDC to Public Works and Government Services Canada to subsidize that arrangement, provided, however, that the amount of the decrease shall not exceed $65,000, being the amount of the current payment by HRDC to Public Works and Government Services Canada to subsidize that arrangement.

Nunavut and the western Northwest Territories

13.19 The division of the Northwest Territories is to occur on or about April 1, 1999 in accordance with the Nunavut Act. The parties agree that this will necessitate the review, renegotiation and amendment of some of the terms of this Agreement, including the terms of section 13 relating to the amounts of Canada's annual contributions to the Northwest Territories towards the costs of providing the Territorial benefits and measures and the related administration costs. This review will begin as soon as possible after the signing of this Agreement.

13.20 Without limiting the generality of section 13.19, Canada and the Northwest Territories recognize and agree that the division of the Northwest Territories:

• (a) will necessitate Canada extending its May 30, 1996 proposal on Labour Market Development to Nunavut;
• (b) will likely necessitate, and result in, Canada entering into a separate labour market development agreement with the Interim Commissioner of Nunavut pursuant to the Nunavut Act or, after April 1, 1999, the Government of Nunavut; and
• (c) will, in any event, require Canada to allocate and provide funding under Part II of the Employment Insurance Act to support labour market programs and services in Nunavut. This will, in turn, require Canada to share between the western Northwest Territories and Nunavut, the maximum amounts of its annual contributions under this Agreement towards the costs of the Northwest Territories' Territorial benefits and measures and their administration costs, in order to make funding available for labour market programs and services in Nunavut.

13.21 With regard to the sharing referred to in paragraph 13.20(c),

• (a) the Northwest Territories agree that following the division of the Northwest Territories, the amount of Canada's maximum annual contributions towards the costs of their Territorial benefits and measures in fiscal years 1999/2000 to 2001/02 and towards their administration costs in all years, will be amounts based on a sharing between the western Northwest Territories and Nunavut of:
  • (i) the amount of Canada's maximum annual contribution towards the costs of the Territorial benefits and measures in fiscal years 1999/00 to 2001/02, as otherwise determined under section 13.2; and
  • (ii) the amount of Canada's maximum annual contribution towards the Northwest Territories administration costs, as otherwise determined under sections 13.12 to 13.18; and
• (b) the sharing will be calculated:
  • (i) by Canada in a manner consistent with the national allocation methodology established by Canada, described in the letter of June 26, 1996 from Canada's Deputy Minister of Human Resources Development to the Government of the Northwest Territories’ Deputy Minister of Education, Culture and Employment and attached as Annex 7 to this Agreement; or
  • (ii) in such other manner as may be mutually agreed upon by the parties to this Agreement.

13.22 The Interim Commissioner of the Government of Nunavut will be included in any discussions, communications, meetings or negotiations relative to any matters which will have a direct impact upon the Nunavut Territory.

13.23 Provided that the Government of Canada enters into a labour market agreement with the Interim Commissioner, or after April 1,1999 with the Government of Nunavut , as a result of the implementation of that agreement, Canada agrees to release the Government of the Northwest Territories from all liability assumed by the Interim Commissioner or the Government of Nunavut. In all other respects, the Government of the Northwest Territories will continue to be bound by all the terms of this Agreement.

14.0 Payment procedures

14.1 Beginning April 1,1998 or on such later date as may be agreed upon by the parties on which the Northwest Territories begin implementation of their Territorial benefits and measures, Canada will make advance payments of its annual contribution towards the costs of the Territorial benefits and measures. The advances will be made on a monthly basis and will be based upon a forecast of monthly cash flow requirements furnished by the Northwest Territories. The Northwest Territories agree to update the forecast on a quarterly basis.

14.2 Subject to section 14.3 and section 13.0, payment of Canada's annual contribution towards the administration costs incurred by the Northwest Territories will be made in twelve equal monthly installments based upon an agreed estimate of the administration costs to be incurred by the Northwest Territories during the fiscal year. Prior to the division of the Northwest Territories the estimated maximum annual contribution towards administration costs is determined to be $1,790,000.

14.3 No payment on account of Canada's contribution toward the Northwest Territories' administration costs will be made until the transfer of employees under the Employee Transfer Agreement referred to in section 12 occurs. Payment will then be made in equal monthly installments beginning in the month in which the transfer is completed.

15.0 Transfer of assets

15.1 Canada and the Northwest Territories will establish an inventory of assets that will be transferred to the Northwest Territories and specified in Annex 9 to this Agreement entitled "Inventory of Assets". The assets to be transferred to the Northwest Territories will be related to the extent of labour market development responsibilities assumed by the Northwest Territories and the number of Canada’s employees being transferred to the Northwest Territories.

15.2 The timetable for the transfer of the assets will be established by the Transition Committee referred to in section 20.

15.3 It is agreed that the assets transferred to the Northwest Territories will be equitably shared between the western Northwest Territories and Nunavut upon the implementation of a labour market development agreement with Nunavut.

16.0 Annual results annex

16.1 Prior to the beginning of the second and each subsequent fiscal year during the period of this Agreement, Canada and the Northwest Territories agree to set out in an Annual Results Annex to this Agreement the following:

• (a) the agreed annual targets for the coming fiscal year for the results-based criteria or indicators referred to in section 7;
• (b) the rolling three year projection referred to in section 13.9 of Canada's annual allocations for contributions toward the costs of the Territorial benefits and measures; and
• (c) the actual amount of Canada's maximum contribution toward the costs of the Territorial benefits and measures in the coming year, as determined pursuant to section 13.

16.2 The Designated Officials are authorized to sign the Annual Results Annex.

17.0 Financial accountability

17.1 For fiscal year 1998/99 and for each fiscal year thereafter during the period of this Agreement, the Northwest Territories shall submit to Canada a report containing:

• (a) an audited financial statement prepared in accordance with generally accepted accounting principles and practices and in a form prescribed by Canada, and certified by the Auditor General of Canada, setting out the amount of costs that the Northwest Territories have actually incurred in that fiscal year in respect of each Territorial benefit and measure. The audit shall be conducted based upon audit criteria including the degree of materiality established in a letter of engagement agreed to by both parties and a summary shall be published within the public accounts/annual main estimates of the Government of the Northwest Territories; and
• (b) a statement from the Auditor General of Canada certifying that all payments received from Canada in the fiscal year on account of Canada's contribution to their administration costs were paid in respect of administration costs actually incurred in that fiscal year.

17.2 The report shall be submitted no later than three months after the end of the fiscal year to which it relates.

18.0 Overpayment / lapsing funds

18.1 In the event that payments made to the Northwest Territories under this Agreement exceed the amounts to which the Northwest Territories is entitled, the amount of such excess is a debt owing to Canada and shall be repaid to Canada forthwith.

18.2 Any unutilized funds in a given fiscal year will lapse.

19.0 Public information

19.1 The Northwest Territories agree to give public recognition of Canada's role in providing financial assistance under this Agreement to support the Territorial benefits and measures.

19.2 Canada and the Northwest Territories agree to jointly prepare public information material and jointly organize and participate in any public announcement relating to the signing of this Agreement and of any Annexes provided for in this Agreement that are to be signed in the future.

19.3 The Northwest Territories agree to the prominent display of the Canadian flag and other forms of federal identification. The contribution of the federal government to employment programming funded in whole or in part by Part ll of the Employment Insurance Act, will be recognized by means of information intended for the public published by the Northwest Territories including:

• (a) pamphlets, brochures or applications for assistance for the use of Employment Insurance clients in connection with a Territorial benefit or measure;
• (b) reports of departments and agencies of the Northwest Territories;
• (c) evaluation reports; and
• (d) letterhead, signage and advertising.

19.4 The Northwest Territories agree that offices of the Northwest Territories where Territorial benefits and measures or services to NES clients are delivered will have appropriate signage indicating that the programs and services provided at the offices are funded in whole or in part by the Government of Canada;

19.5 The Northwest Territories agree that where automated information kiosks supplied by Canada providing labour market information to the public are installed on premises operated by the Northwest Territories, the premises will have appropriate signage identifying that the kiosks are supplied by Canada.

19.6 The Northwest Territories agree to ensure that cheques or deposit statements for Employment Insurance clients receiving assistance under their Territorial benefits either directly from the Northwest Territories or through an organization receiving funding from the Northwest Territories, will include the Government of Canada logo.

19.7 The parties agree to consult with each other regarding, and give each other reasonable advance notice of, any major public relations initiatives to inform Canadians of activities being undertaken in the context of this Agreement.

20.0 Transition committee

20.1 During the Transition Period, Canada and the Northwest Territories agree to form a Transition Committee. The Transition Committee will perform a review of delivery arrangements within the context of Annex 3 and establish an implementation plan for the Agreement which includes the transfer of financial, human, and material resources/assets.

20.2 The Transition Committee will be composed of an equal number of representatives of both parties and co-chaired by Canada and the Northwest Territories. The Transition Committee shall meet on an "as required basis" at the request of either party.

21.0 Designated officials

21.1 The Regional Executive Head, Alberta/Northwest Territories Region of Human Resources Development Canada, is the Designated Official of Canada for the purposes of this Agreement, and the Deputy Minister of Education, Culture and Employment for the Northwest Territories, is the Designated Official of the Northwest Territories for the purposes of this Agreement.

21.2 Designated Officials, or their delegates, shall meet as required to complete the Annual Results Annex, determine the authorities required by third party delivery agents, review the annual evaluation plan and its results, and resolve issues that emerge from the Agreement.

22.0 Period of agreement

22.1 This Agreement shall be effective from the day of signing and, subject to section 23, will remain in force for an indefinite period.

23.0 Termination

23.1 This Agreement cannot be unilaterally terminated during the first three fiscal years beginning fiscal year 1998/99. Canada and the Northwest Territories agree to complete a review of the Agreement within those first three fiscal years to assess if mutually desired results are being achieved and to determine if they should continue their labour market development arrangements under this Agreement. After completion of that review, either party can terminate the Agreement at any time by giving one fiscal year’s written notice of intention to terminate to the other party.

23.2 In the event of termination of this Agreement, Canada and the Northwest Territories agree that they will work together to ensure that services to clients will not be unduly affected or interrupted by the termination.

23.3 In the event that either party wishes to terminate this Agreement by providing less than the required notice in writing:

• (a) any and all costs attributable to the termination shall be shared in a reasonable manner between the two parties; and
• (b) both parties shall take reasonable steps to reduce the costs attributable to the termination.

23.4 In the event that either party wishes to terminate this Agreement by:

• (a) providing less than the required notice, any and all costs of the non-terminating party reasonably attributable to the early termination shall be the responsibility of the terminating party; and
• (b) the non-terminating party shall take reasonable steps to reduce the costs attributable to the early termination.

23.5 Canada affirms its continuing responsibility for insured participants should this Agreement be terminated.

24.0 Amendment

24.1 This Agreement may be amended at any time by mutual consent of the parties. To be valid, any amendment shall be in writing and signed, in the case of Canada, by Canada’s Minister of Human Resources Development and the Commission, in the case of the Northwest Territories, by the Minister of Education, Culture and Employment.

24.2 Notwithstanding section 24.1, an amendment to any Annex to this Agreement, may be made with the written agreement of the Designated Officials of the parties.

25.0 Equality of treatment

25.1 During the period of this Agreement, if a province or territory other than the Northwest Territories negotiates a labour market development agreement with Canada based on Canada's May 30, 1996 proposal, and any provision of that agreement is more favourable to that province or territory than what was negotiated with the Northwest Territories, Canada agrees to amend the Agreement upon request by the Northwest Territories, in order to afford similar treatment to the Northwest Territories.

26.0 General

26.1 No Member of the House of Commons, or Member of the Legislative Assembly of the Northwest Territories shall be admitted to any share or part of this Agreement or to any benefit arising therefrom.

26.2 Transfers from Canada under this Agreement will not be considered "Eligible Revenues" under the Formula Financing Agreement between Canada and the Northwest Territories.

26.3 This Agreement, including Annexes 1 to 10, comprise the entire Agreement entered into by the parties with respect to the subject matter hereof.

This Agreement has been signed on behalf of Canada this 27^th day of February 1998, by:

the Minister of Human Resources Development

This Agreement has been signed on behalf of the Northwest Territories by the Minister of Education, Culture and Employment, this 27^th day of February 1998.

Annex 1 - Description of territorial benefits and measures

1.0 Purpose

1.1 The purpose of this Annex is to describe the design of the Territorial benefits and measures that will be provided by the Northwest Territories under the Canada - Northwest Territories Labour Market Development Agreement.

2.0 Challenges

2.1 In the implementation of the Territorial benefits and measures, some of the challenges to be addressed by ECE are:

• (a) aligning the Territorial benefits and measures with the Northern Employment Strategy of the Northwest Territories;
• (b) developing a coherent and cost-effective set of Territorial benefits and measures that are focused on the primary results indicators;
• (c) ensuring the fair treatment of clients by respecting equity principles with regard to women, Aboriginals, visible minorities and persons with disabilities;
• (d) supporting the network of Canada - Northwest Territories Service Centres as they expand client access to the Territorial benefits and measures;
• (e) maintaining itinerant service to smaller centres, and using other community and regional delivery agents in order to further expand client access to the Territorial benefits and measures; and
• (f) ensuring that client action plans and case management systems are in place throughout the entire delivery network so that the required financial and client data is accurate and available on a timely basis.

3.0 Territorial benefits

3.1 All of the Territorial benefits share the following design features:

• (a) Expected results
  • are the primary results indicators as defined in Annex 4
• (b) Eligible clients
  • are insured participants, with access priority to active EI claimants
• (c) Delivery mode
  • insured participants will access the Territorial benefits through the ECE staff in the Canada - Northwest Territories Service Centres who will use client action planning and case management processes. These processes will ensure that the client is referred to appropriate Territorial benefits. In the future, to supplement this delivery capacity, third party delivery agents may be contracted using the Employment Assistance Services Territorial measure.

3.2 Training on the Job (TOJ) is an existing Northwest Territories program which uses a wage subsidy to encourage employers to create incremental employment. Its use will be expanded by incorporating a stream that broadens the client focus to include insured participants.

• (a) Description
  • (i) wage subsidy paid to employers who hire insured participants
  • (ii) pays a negotiated wage subsidy of up to $7.50/hour for up to 52 weeks to private, public or non-profit employers who can: demonstrate how essential skills will be learned on the job; and provide a guarantee of ongoing employment after the wage subsidy
  • (iii) the other expenses that may be cost-shared with the employer are:
    • tuition and materials for short term courses;
    • tools, equipment, and specialized clothing; and
    • specialized equipment for persons with disabilities
  • (iv) all Employment Insurance Part I benefits are discontinued
  • (v) the wages constitute insurable earnings as the client becomes paid employee of the employer
• (b) Target
  • (i) insured participants who possess basic job readiness skills and abilities, but who require some skills enhancement and work experience. Among insured participants, access priority will be given to active EI claimants, in particular those who have expended less than 25% of their Employment Insurance Part I entitlement; and
  • (ii) other clients as selected by ECE as part of the existing Territorial program. Part II funding may not be used to support these clients.

3.3 Building and Learning Strategy is an existing job creation partnership model in the Northwest Territories which provides and documents temporary work experience, and skill development opportunities, that will improve the subsequent employment prospects of the participants. The program is being expanded to include insured participants.

• (a) Description
  • (i) the program provides training opportunities on Government of the Northwest Territories capital construction projects through classroom instruction and on the job training
  • (ii) maximum participant duration is 52 weeks
  • (iii) the program client base will be expanded to include insured participants under Employment Insurance Part II
  • (iv) Part II funds are limited to insured participant income support and training activities, and will not be used for capital expenditures
  • (v)the income support received by insured participants is non-insurable and may be a combination of
    • their Part I benefit, on top of which they may be paid a needs based Part II funded income supplement paid by the project sponsor; or
    • a needs based income support funded from Part II and paid by the project sponsor if there is no Part I entitlement or it is exhausted during participation on the project
  • (vi) this work experience model may be implemented in partnership with other sectors that provide the capital costs and appropriate work experience. Similarly, the model may also be implemented in conjunction with Community Capital Works Programs. In this case, community infrastructure capital projects become the setting for the work experience and skills development for the participants.
• (b) Target
  • (i) insured participants, whose subsequent employment prospects will be increased after their participation on the project. Among insured participants, access priority will be given to active EI claimants who have expended less than 25% of their Part I benefit entitlement; and
  • (ii) other clients as selected by ECE as part of the existing Territorial program. Part II funding may not be used to support these clients.

3.4 Business Development Fund Program is an existing Northwest Territories self-employment program which will be modified to incorporate an income support component for insured participants.

• (a) Description
  • (i) the existing program gives clients access to coaching, business planning development support, technical advice and training up to $5000 for start up capital, licensing, tools and equipment market development and promotion support
  • (ii) insured participants will be able to benefit from the support of the existing program, while receiving income support by either
    • continuing to receive their Part I benefits, or
    • obtaining needs based income support from Part II to a combined maximum duration of 52 weeks
• (b) Target
  • (i) insured participants, and, in particular, active EI claimants who have expended less than 25% of their Part I benefit entitlement
• (c) Delivery Mode
  • (i) case management and career action plan development will be delivered by ECE staff, who will also determine and pay appropriate Part II income support to insured participants.
  • (ii) Business Development Fund services will be delivered by the Northwest Territories Department of Resources, Wildlife and Economic Development. Third party delivery agents may also be contracted through Part II funds to provide coaching, business planning development support, technical advise and training. Part II funds may not be used to support start up capital, licensing, tools and equipment, or market development and promotion support.
  • (iii) participants may also be assisted in accessing the existing Community Grants To Small Business, or the Community Futures Programs. Part II funds may not be used by these programs.

3.5 A Training Loan and Grant benefit will be designed by ECE. It will build on existing Northwest Territories skills training programs by adding a loans feature. It will incorporate income support for insured participants for short term academic upgrading, and for the basic to advanced skills necessary for employment. Prior to the implementation of this benefit under this Agreement, Designated Officials will jointly approve the amendment of this Annex to incorporate its design features.

4.0 Territorial measures

4.1 All unemployed persons may access the Territorial measures rather than just insured participants. Active EI claimants would be able to retain their Employment Insurance Part I benefit entitlement, as appropriate. No Part II income support may be afforded to any client.

4.2 Employment assistance services

ECE currently supplements its delivery of employment assistance services by contracting with third parties. Through the use of Part II funds, the utilization of this third party contracting model may be expanded to further serve the unemployed.

• (a) Description
  • (i) there are four categories of service:
    • individual
    • group
    • self-directed, and
    • special events
  • (ii) the employment assistance services could include:
    • assessment and counselling
    • testing
    • career action planning
    • provision of career, labour market, and program information
    • group workshops
    • access to computer and print resources
    • life skills counselling, and
    • direct referral to program placement

4.3 Labour market partnerships

ECE currently contracts with third parties to enable employee or employer associations, employers or community organizations to undertake activities that address human resource development challenges and opportunities. These activities would subsequently improve the delivery of the Territorial benefits and measures. Through the use of Employment Insurance Part II funds, the utilization of this model may be expanded.

• (a) Description
  • (i) the range of activities includes:
    • research
    • consultations
    • development of labour market information, and
    • developing human resource adjustment strategies
  • (ii) the partnership model encourages cost-sharing of the approved activities.

4.4 Research and innovations

ECE has not designed a measure similar to Research and Innovations which can support pilot projects within an evaluation framework. Prior to the implementation of this measure under this Agreement, Designated Officials will jointly approve the amendment of this Annex to incorporate its design features.

5.0 Notional territorial benefits and measures part II allocations and participants

5.1 Based on the 1998/99 Part II allocation for the Territorial benefits and measures, and the agreed to results targets set out in Annex 4, Designated Officials will amend this Annex prior to April1,1998 to set out the following planning estimates:

• (a) the estimated number of insured participants in each Territorial benefit, and
• (b) the estimated Part II budget for each Territorial benefit, and the Territorial measures.

6.0 Amendments

6.1 Under this Agreement, no expenditures by the Government of the Northwest Territories can be reimbursed for either the Territorial Training Loans and Grants benefit, or the Territorial Research and Innovations measure, until this Annex is amended by the Designated Officials.

6.2 Other amendments to this Annex will be made by Designated Officials as set out in section 3.3 of this Agreement.

Annex 2 - National Employment Service functions

This Annex sets out the functions of the National Employment Service to be performed by the Northwest Territories on behalf of the Commission.

1.0 Service needs determination

1.1 The Northwest Territories will provide Service Needs Determination services. This includes the identification of an individual’s need for employment services and referral to temporary income support and to programs and services as appropriate.

2.0 Employment counselling

2.1 The Northwest Territories will provide employment counselling and case management. Together these include in-depth interviews and consultations which result in the identification of barriers to continuing employment, the development of remedial plans of action and client follow up.

3.0 Labour exchange services

3.1 The Northwest Territories will provide Labour Exchange Services that gather and disseminate job vacancy information with a view to:

• (a) assisting workers to obtain employment; and
• (b) assisting employers to obtain workers.

3.2 The Northwest Territories will undertake these responsibilities in a fashion methodologically consistent with the operation of the National Labour Exchange System whereby:

• (a) job order taking and the dissemination of job order information are done in both of Canada’s official languages;
• (b) quality of service standards are applied;
• (c) linkages are maintained through the National Labour Exchange so that Canadians have full access to Northwest Territories work opportunities, and Northwest Territories employers have full access to Canadians seeking work;
• (d) there is no discrimination within the meaning of the Canadian Human Rights Act, or because of political affiliation;
• (e) in designated Canada/Northwest Territories Service Centres, kiosks and the HRDC intranet are maintained with up-to-date information;
• (f) the International Labour Organization convention on labour exchange is applied; and
• (g) Canada's contributions are recognized.

4.0 Labour Market Information

4.1 Canada and the Northwest Territories agree to the joint preparation of a strategy that sets out how each party will collaborate in the gathering, production and dissemination of local and territorial labour market information. The strategy will be designed to:

• (a) assist workers to prepare for, obtain, and retain employment;
• (b) assist employers to obtain, upgrade and retain workers;
• (c) inform the public of the delivery of Territorial benefits and measures; and
• (d) inform the public of Canada's continuing delivery of Part I Employment Insurance Income Benefits, Labour programming including fair wages and Employment Equity, and the authorization of foreign workers.

4.2 The joint strategy will be done in a fashion consistent with National Labour Market Information System and the systems and linkages available in the Northwest Territories (NLMIS) whereby:

• (a) labour market information is available in both of Canada’s official languages (as per section 5.2 of the Agreement);
• (b) linkages are maintained through the national Labour Market Information System and CanWorkNet so that Canadians have access to Northwest Territories labour market information from elsewhere in Canada;
• (c) kiosks and the HRDC intranet continue to receive up to date information;
• (d) where and when available, NLMIS methodological consistency and operational standards are applied to ensure data quality;
• (e) partnerships are encouraged; and
• (f) the contribution of both parties and other partners are recognized.

4.3 Labour market information encompasses national, territorial and local components, and is structured to include the following elements:

• (a) occupational profiles and forecasts;
• (b) community profiles;
• (c) human resource profiles;
• (d) industrial/sectoral profiles;
• (e) wage and salary data and conditions of employment;
• (f) vacancy and employment opportunities;
• (g) occupational demand high opportunity lists;
• (h) potential employer lists;
• (i) major project updates;
• (j) learner information about training providers;
• (k) work search tools; and
• (l) newsletters.

4.4 Canada and the Northwest Territories will clarify their respective roles and responsibilities, how partnerships can be encouraged, and ensure complementarity such that there is no unnecessary overlap and duplication.

Annex 3 - Delivery arrangements

1.0 General description

1.1 The Northwest Territories will operate a network of Canada/Northwest Territories Service Centres which will provide access to Territorial labour market programming and Human Resources Development Canada’s continuing programs and services.

1.2 Canada/Northwest Territories Service Centres will provide access to the functions of the National Employment Service (described in Annex 2), as well as the Territorial benefits and measures.

2.0 Alternate delivery arrangements

2.1 In communities where both Canada and the Northwest Territories maintain infrastructure and staff, access to territorial and federal labour market programs and services will be provided through a common "front-end".

2.2 Programs and services will include: reception, screening, needs determination and information functions delivered by federal and territorial staff operating under common job descriptions. Coordination of the common front-end will be provided by the Northwest Territories.

2.3 The above arrangements will be made separate from, but complementary to the Canada/Northwest Territories Labour Market Development Agreement. The points of service will be known as "Canada/ Northwest Territories Service Centres". The following locations are considered subject to this provision:

• (i) Yellowknife
• (ii) Fort Simpson
• (iii) Inuvik
• (iv) Iqaluit
• (v) Rankin Inlet
• (vi) Hay River

2.4 In communities where the Northwest Territories maintain physical infrastructure and staff, and where Canada finds it ineffective to do so or Canada does not maintain physical infrastructure or staff, the parties may enter into an arrangement whereby the Northwest Territories would provide access to federal and territorial labour market programming and HRDC’s continuing programs and services, through a single point of service known as a "Canada/Northwest Territories Service Centre".

2.5 Arrangements for the provision of access to HRDC’s continuing programs, and/or the collocation of HRDC staff involved in the delivery of their continuing programs and services, will be described in an agreement separate from and complementary to the Canada/Northwest Territories Labour Market Development Agreement. Communities subject to this provision include:

• (i) Norman Wells
• (ii) Igloolik
• (iii) Cambridge Bay
• (iv) Fort Smith

2.6 In communities where neither Canada nor the Northwest Territories maintain physical infrastructure or staff, the parties agree, to the extent possible, to contract with the same community-based service delivery agent for the provision of their respective programs and services.

Annex 4 - Annual results targets for fiscal year 1998/99

1.0 Purpose

1.1 The Employment Insurance Act and the proposal to provinces and territories regarding labour market arrangements are explicit on required results and the need for results verification in terms of monitoring, assessment, and evaluation. Through this Annex, Canada and the Northwest Territories set out these mutually agreed to results targets.

2.0 Results measurement

2.1 Expected primary results indicators

The focus here is a rapid return to work for active EI claimants leading to short term savings to the EI Account.

2.1.1 Priority EI claimant access

At least 65% of clients who participate in the Northwest Territories benefits and measures will be active EI claimants.

2.1.2 Insured participants returned to work

At least 409 insured participants returned to employment or self-employment, after being referred to Northwest Territories programs and services. While the count includes those returning to work during their benefit entitlement period, and those returning to work after their benefit entitlement period, priority will be given to active claimants.

Clients are considered as employed if:

• (a) they have drawn 25% or less of their EI entitlement for 12 consecutive weeks (applies to active EI claimants who return to employment 12 weeks or more before the end of their benefit period); or,
• (b) they draw 25% or less of their EI entitlement in all their remaining weeks of benefits (applies to active EI claimants who return to employment less than 12 weeks before the end of their benefit period); or,
• (c) they are recorded as employed at the completion of their intervention(s) (clients who return to employment less than 12 weeks before the end of their benefit period); or,
• (d) they are employed when contacted 12 weeks after the completion of their intervention(s)(clients who return to employment after the end of their benefit period or who were not active EI claimants).

2.1.3 Savings to the Employment Insurance account

At least $ 3.59 million in short term savings, being the difference between the individual's entitlement to regular benefits and the actual pay out of regular Part I benefits to that individual (unpaid benefit entitlement). The formula established for the savings target level was based on average entitlement, duration, and benefit rate for Northwest Territories in 1996. Given that the Agreement sets out Employment Insurance savings targets not before measured, other factors and trends may be assessed for the development of the territorial Employment Insurance target. These could include:

• (a) territorial Employment Insurance penetration/access rates compared to national rates and the rates in regions of similar unemployment levels;
• (b) territorial Employment Insurance discontinuation and disentitlement rates (weeks paid versus entitlement) compared to national rates and the rates in regions of similar unemployment levels; or
• (c) the potential impact of the construction phase of non-renewable resources development (mining initiatives) on increased claims in the NWT (the current analysis of Employment Insurance indicates 35% of benefits paid to unemployed in the trades, trades helper and heavy equipment occupations).

3.0 Measures to track costs

3.1 The focus is on tracking current unit costs as an early indication of cost effectiveness. The established targets will utilize a benchmark procedure supported by historical data from HRDC.

3.2 Unit costs of insured participants, employed or self-employed (Part l and Part ll), by type of intervention, and, by client type (active EI claimant or not).

3.3 The definitions and methodology to measure the primary indicator results, and the measures to track costs, will be established by Canada. It is recognized however that in the first year, the primary indicator results targets are "soft". Emphasis will be on establishing the systems and client information exchange linkages such that data integrity is achieved, results measured, and the information required for Canada's annual report to Parliament is available on a timely basis. Reporting by the Northwest Territories will be at least quarterly; Annex 5 identifies the agreed to information and data sharing requirements. The Northwest Territories primary results targets and the results achieved will be public information.

4.0 Medium and longer term qualitative evaluation measures

4.1 The focus here is on determining whether the primary indicator results are sustained, along with broader medium and longer term impacts. These include:

• (a) sustained employment or self-employment as a result of the Northwest Territories benefits and measures;
• (b) reduction in dependency on Employment Insurance and government assistance;
• (c) savings to territorial income support programs and the Employment Insurance Account;
• (d) increased tax revenues from earned income; and
• (e) others as may be agreed to by the Joint Evaluation Committee.

4.2 During 1998/99 Canada and the Northwest Territories also agree to work cooperatively to establish a methodology for setting local results targets that are consistent with the achievement of the Northwest Territories results totals. These local results targets may be made public if both parties agree.

4.3 The Joint Evaluation Committee, as agreed to in section 8 of the Canada/Northwest Territories Labour Market Development Agreement, will jointly establish the evaluation framework that links the short term Primary Indicator Results and Cost Tracking Measures, within the broader set of medium and longer term evaluation Qualitative Measures.

5.0 1999/00 Annual results annex

5.1 Canada and the Northwest Territories agree to initiate discussions to establish the 1999/00 Annual Results Annex no later than January, 1999.

Annex 5 - Information and data sharing arrangements

1.0 Purpose

1.1 The purpose of this Annex to the Canada-Northwest Territories Labour Market Development Agreement is to provide for the exchange of information between the parties for the effective implementation of the Agreement, given that:

• (a) The Northwest Territories need timely and reliable information from Canada on active EI claimants and other insured participants for the purpose of establishing their eligibility for assistance under the Northwest Territories' Territorial benefits and measures, and for meeting the targets established in Annex 4; and
• (b) Canada also needs timely and reliable information from the Northwest Territories on active EI claimants and other insured participants who are receiving assistance under benefits and measures provided by the Northwest Territories for purposes of verifying their eligibility for, or entitlement to, insurance benefits under Part I of the Employment Insurance Act and for the monitoring, assessment and evaluation of the effectiveness of the assistance which the Commission is required to do under section 3 of the Act, and, for evaluating the results of Territorial benefits and measures supported under the Agreement, as required under section 57 of the Act.

2.0 Authority to disclose information

2.1 With respect to the information needed by the Northwest Territories from Canada to establish the eligibility of active EI claimants and other insured participants for the purpose of establishing their eligibility for assistance under the Territorial benefits and measures, Canada's Minister of Human Resources Development has considered it advisable under section 127 of the Employment Insurance Act and 8(2)(j) of the Privacy Act to make the information described in this Annex available to the Northwest Territories for that purpose and, accordingly, Canada confirms that it is authorized under these sections to provide such information to the Northwest Territories.

2.2 Similarly, the Northwest Territories confirm that it is authorized to disclose to Canada the information described in this Annex.

3.0 Information to be exchanged

3.1 Canada will provide the Northwest Territories the following information to determine the eligibility of the individual for assistance under the Northwest Territories benefits and measures, determining and assessing employment needs, determining the appropriate type of assistance to be provided and determining the amount of financial assistance that may be required, and carrying out the delegated functions of the National Employment Service.

• name
• social insurance number
• address
• date of birth
• benefit period commencement
• date of renewal application
• claim type
• claim status
• weekly benefit rate
• number of insured weeks
• claim terminated
• entitlement weeks
• number of weeks paid; and
• other personal information as mutually agreed upon between the parties that is needed to determine client eligibility, level of service or benefit, or for the design and evaluation of the programs and services provided under the territorial benefits and measures.

3.2 The Northwest Territories will provide Canada with the following information from the file of each participant in the Northwest Territories benefits to ensure that the participant who is an active EI claimant continues to receive the Employment Insurance benefits to which they are entitled:

• name
• social insurance number
• address
• date of birth
• name of program in which individual is involved
• start and end dates of program
• withdrawal from or termination date of program; and
• other information to be determined and mutually agreed to.

3.3 The Northwest Territories will provide to Canada upon request, on a per-client basis, information for use by Canada in monitoring, assessing and evaluating the effectiveness of the assistance provided under the Agreement, in order to meet Canada's legislative requirement under section 3 of the Employment Insurance Act and for evaluating the results of the Territorial benefits and measures supported under the Agreement, as required under section 57 of the Act:

• name
• social insurance number
• address
• date of birth
• gender (where available as self-identified information)
• family type
• marital status
• number of dependents
• official language preferred
• disability status (where available as self-identified information)
• visible minority (where available as self-identified information)
• Aboriginal group (where available as self-identified information)
• assessment regarding employability
• name of program in which individual is involved
• length of program
• language of service
• language of intervention received
• cost of program
• educational attainment
• type of employment obtained
• date of return to work
• length of employment
• earnings
• change in dependency upon government support; and
• other personal information as mutually agreed upon between the parties that is needed for the purposes outlined in this clause.

This information will be updated by the Northwest Territories at least quarterly.

4.0 Mechanism

4.1 Information covered by this Annex should be provided by each party in a mutually agreed format and manner. In this regard, Canada and Northwest Territories agree to review various options to facilitate the sharing of information between them including:

• (a) access by the Northwest Territories to systems administered by HRDC;
• (b) development of connectivity protocols allowing the systems of both parties to communicate with each other; and
• (c) sharing of common software and functionality.

4.2 The parties agree that whatever option is chosen, access to information covered by this Annex will be:

• (a) limited to only those employees, agents or contractors who require access for the purposes listed in sections 3; and
• (b) only used for the purposes listed in sections 3.

4.3 Canada and the Northwest Territories recognize the importance of reliable and timely information and agree to pursue their work towards shared or interconnected information systems.

5.0 Costs

5.1 Costs incurred by a party in the context of this Annex will be the responsibility of that party.

6.0 Confidentiality and Use

6.1 Each party undertakes to fully maintain, respect and protect the confidentiality of the information received under this Annex, and not to disclose any information under its custody or control as a result of this Agreement, to anyone for any purpose other than specifically mentioned in section 3 without the written consent of the person to whom the information relates other than:

• (a) for those purposes outlined in section 3;
• (b) for a consistent purpose as defined in sections 47 to 49 of the Access to Information and Protection of Privacy Act of the Northwest Territories or as defined in section 7(a) of the federal Privacy Act, and in accordance with the Northwest Territories’ and Canada’s guidelines and policies; and
• (c) or a purpose authorized or required by law, including those disclosures authorized under sections 47 to 49 of the Access to Information and Protection of Privacy Act of the Northwest Territories or section 127 of the Employment Insurance Actor section 8 of the Privacy Act.

6.2 Except as stated in 6.1, this clause provides a written undertaking by both parties to the Agreement that there will be no subsequent disclosure of the information in a format that could reasonably be expected to identify the individual to whom it relates.

7.0 Information management

7.1 The information exchanged under this Annex shall be collected, administered, maintained, destroyed or disposed of in accordance with:

• (a) in the case of Canada, the Privacy Act, the Government of Canada Security Policy and supporting operating directives and guidelines, covering the administrative, technical and physical safeguarding of the personal information; or,
• (b) in the case of the Northwest Territories, the Access to Information and Protection of Privacy Act.

7.2 The information management arrangements in clause 7.1 above will ensure the confidentiality and integrity of personal information covered under this Annex and will safeguard the personal information against accidental or unauthorized access, disclosure, use, modification and deletion.

7.3 Each party will notify the other party of an unauthorized disclosure or use and will furnish the other party with full details of the unauthorized disclosure or use.

7.4 In the event of an occurrence described in section 7.3 above, the party responsible for the security of the information will take all reasonable steps to prevent a recurrence of the event.

8.0 Accuracy

8.1 Each party will use its best efforts to ensure the completeness and accuracy of the information provided to the other under this Annex. However, it is understood and agreed that they cannot guarantee its accuracy and will, therefore, not be held responsible for any damage resulting from the transmission or use of any informatio that is inaccurate or incomplete.

8.2 Each party agrees to review any requests from individuals for correction or notation of their personal information which may be under the custody or control of that party, in accordance with section 45 of the Access to Information and Protection of Privacy Act of the Northwest Territories or section 12(2) of the Privacy Act.

8.3 Both parties agree to make best efforts to keep each other informed of corrections or notations that come to their attention or knowledge.

9.0 Roles of federal and territorial commissioners

9.1 If an issue arises as to whether the provisions of the Privacy Act or the Freedom of Information Act apply to certain personal information covered in this Annex, the matter will be referred to the Offices of the Privacy Commissioner (Canada) and the Commissioner for the Access to Information and Protection of Privacy Act (Northwest Territories).

10.0 Ensuring data protection

10.1 The parties agree that they are each responsible for the actions of their own employees, agents and contractors with respect to the collection, disclosure, use, retention, and disposal of personal information in their custody or under their control, whether or not the person is or was acting within the scope of his or her employment, agency or contract.

10.2 Provided that a disclosure or failure to disclose personal information is done in good faith and reasonable care has been taken to comply with applicable federal or territorial legislation, the parties shall not assume liability whatsoever with respect to the misuse of any personal information provided to each other under this Annex.

10.3 The parties will, separately or jointly, on a periodic basis, conduct an audit:

• (a) of the practices and procedures employed in the information management process under this Annex to ensure compliance with applicable federal or territorial legislation; and
• (b) for the detection and control of any improper use or disclosure of shared or exchanged personal information.

11.0 Employment insurance integrity

11.1 The parties agree to develop audit and verification procedures for detecting and controlling abuse under Territorial benefits and measures.

11.2 Any personal information exchanged for the purposes of audit and verification in clause 11.1 shall be the subject of a separate agreement between the parties.

12.0 General

12.1 This Annex can be modified with the written consent of Designated Officials of each party.

Annex 6 - Letter of June 26, 1996 from Canada's Deputy Minister of Human Resources Development

Mr. Eric Colbourne

A/Deputy Minister of Education, culture and Employment

Lahmridge Tower, 3rd Floor

P.O. Box 1320

Yellowknife, Northwest Territories

X1A 2L9

Dear Mr. Colbourne:

As a follow-up to Minister Young's May 30, 1996 labour market proposal to all provinces and territories, I am writing to provide further information on the current and projected amount of funding which could be made available in your province under new labour market arrangements.

Enclosed is an illustrative summary of the funding available in your province for active labour market measures relating to Part II of the Employment Insurance (El) legislation, as well as information on the funding available for all provinces and territories. The attached material also indicates for each province and territory the maximum amounts that could be provincially managed under new arrangements. This information applies to El-related funding only. As indicated in earlier talks with you, CRF-funded programs will be discussed at a later date.

We are also providing you an explanation of how the funds are allocated among provinces and territories. The federal proposal released May 30, 1996 stated that the allocation of funding will be equitable, transparent and based on a standardized set of objective labour market variables. While the Reinvestment of Reform Savings and Transitional Jobs Fund are allocated based on new formulae designed to support adjustment to the new El system, the allocation of Employment Insurance funds (formerly Developmental Uses) will continue to be based on the existing formula that has been in place over the past several years. In recognition that some provinces may prefer a different. allocation methodology for distribution of the $1.15 B in El funds, the Government of Canada would be pleased to consider any alternative allocation methodology that provinces and territories may want to design jointly.

In our upcoming discussions with you, some elements will be key. As mentioned in the labour market proposal, one priority is the development of-a jointly acceptable, results-based framework supporting the provision of active labour market measures. This will help ensure client access, jobs and savings.

Another key element will be the future employment of Human Resources Development (HRDC) staff. If a provincial or territorial government accepts greater responsibility for employment measures, we want to ensure that HRDC staff associated with these functions will have the opportunity to transfer. We will be guided in this respect by Human Resources Development Canada's human resources principles (copy attached) which are based on the Government of Canada's Alternative Service Delivery Initiatives as described in our Workforce Adjustment Directive.

I hope this information is useful and will help support a full consideration of Mr. Young's proposal. We look forward to working with you to put in place new labour market arrangements.

Yours sincerely, Jean-Jacques Noreau Att.

Projected distribution of EI-related funding * under new Labour Market Arrangements 1995-96 to 1999-00 ($000s)

NWT	1995-96	1996-97	1997-98	1998-99	1999-00
Maximum funds for provincially managed programs **
UIDU / Part II (Base)	2,328	2,198	2,357	2,538	2,700
Re-investment	0	548	1,190	1,880	2,193
Total - max. funds for provincially managed programs	2,328	2,746	3,547	4,418	4,893
Income support under active measures
Part I (benefit entitlements)	880	800	880	880	880
Pan-Canadian responsibilities
Ongoing	2,816	2,969	2,969	2,969	2,969
Transitional	0	450	1,104	781	0
Total - Pan-Canadian responsibilities	2,816	3,419	4,073	3,750	2,969
Grand total	6,024	7,045	8,500	9,048	8,742

* Additional funds for administrative purposes for provinces that take up programs and aspects of the National Employment Service will be discussed separately.

** Maximum funds under new Labour Market Arrangements where provinces / territories fully take up May 30 labour market proposal.

HRDC guiding human resources principles

The following set of HRDC human resource principles will be used when negotiating and managing the movement of employees to another jurisdiction.

• Human resource decisions will continue to be governed by fairness and transparency accompanied by open, clear and timely communications with employees and unions.
  
• If a provincial or territorial government accepts greater responsibility for the employment measures, we intend to negotiate to ensure that HRDC staff associated with the transferring functions has the opportunity to transfer as well.
  
• HRDC will have responsibility for determining the resources involved and will collaborate with the province and other jurisdictions in the identification and selection of individuals.
  
• Every attempt will be made to ensure that HRDC staff who are moved to a new establishment do so with salary, benefits and pension packages that are generally comparable to those which they receive as HRDC employees.
  
• The conditions of transfer of staff from HRDC to provincial or other jurisdiction will be based on Alternative Service Delivery Initiatives as described in the Workforce Adjustment Directive.
  
• Provisions will be made for joint dispute resolution/redress mechanisms to deal with the interpretation of issues pertaining to the re-allocation of responsibilities and resources.
  
• The potential HR impact of decisions relating to employee allocation to the new establishment will be considered in relation to the broader context of the many HRDC initiatives and departmental needs.
  

Both partners re-affirm the need to continue to provide quality services to our clients during any change or transition process.

Projected distribution of EI-related fundings* under new labour market arrangements 1995-96 to 1999-00 ($000s)

	Nfld	NS	NB	PEI	Que	Ont	Man	Sask	Alta	NWT	BC	Yuk	Subtotal	National	Total
1995-96 (presented for comparative purposes only) Maximum funds for provincially managed programs **
UIDU (Base)	49,458	47,100	49,028	12,016	355,655	388,740	45,518	31,291	86,695	2,328	144,726	1,851	1,214,406	0	1,214,406
Re-investment	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total - max. prov. mgd. progr.	49,458	47,100	49,028	12,016	355,655	388,740	45,518	31,291	86,695	2,328	144,726	1,851	1,214,406	0	1,214,406
Income support under active measures
Part I (benefit entitlements)	26,059	22,009	23,402	5,244	143,449	152,196	18,734	13,588	36,821	880	56,771	847	500,000	0	500,000
Pan-Canadian responsibilities
Ongoing	2,270	2,776	12,744	565	20,624	18,194	5,210	5,553	7,782	2,816	9,954	356	88,844	96,750	185,594
Transitional	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total - pan-cdn resp.	2,270	2,776	12,744	565	20,624	18,194	5,210	5,553	7,782	2,816	9,954	356	88,844	96,750	185,594
Grand total	77,787	71,885	85,174	17,825	519,728	559,130	69,462	50,432	131,298	6,024	211,451	3,054	1,803,250	96,750	1,900,000
1996-97 Maximum funds for provincially managed programs**
UIDU / Part II (base)	51,676	48,606	47,189	12,687	344,343	373,033	42,785	29,290	81,857	2,198	136,851	1,750	1,172,265	0	1,172,265
Re-investment	15,988	6,639	9,213	2,192	54,266	40,271	2,238	2,157	7,858	548	33,191	439	175,000	0	175,000
Total - max. prov. mgd. progr.	67,664	55,245	56,402	14,879	398,609	413,304	45,023	31,447	89,715	2,746	170,042	2,189	1,347,265	0	1,347,265
Income support under active measures
Part I (benefit entitlements)	26,059	22,009	23,402	5,244	143,449	152,196	18,734	13,588	36,821	880	56,771	847	500,000	0	500,000
Pan-Canadian responsibilities
Ongoing	16,076	8,617	13,656	949	28,626	22,678	5,922	6,040	10,997	2,969	10,754	451	127,735	100,000	227,735
Transitional	9,198	5,520	4,928	1,848	18,256	5,408	1,328	1,257	792	450	3,614	401	53,000	7,000	60,000
Total - pan-cdn resp.	25,274	14,137	18,584	2,797	46,882	28,086	7,250	7,297	11,789	3,419	14,368	852	180,735	107,000	287,735
Grand total	118,997	91,391	98,388	22,920	588,940	593,586	71,007	52,332	138,325	7,045	241,181	3,888	2,028,000	107,000	2,135,000
1997-98 Maximum funds for provincially managed programs**
UIDU (base)	51,121	48,190	46,425	13,026	339,464	363,118	41,454	28,846	80,454	2,357	133,848	1,697	1,150,000	0	1,150,000
Re-investment	34,716	14,415	20,005	4,761	117,834	87,446	4,861	4,684	17,063	1,190	72,072	953	380,000	0	380,000
Total - max. prov. mgd. progr.	85,837	62,605	66,430	17,787	457,298	450,564	46,315	33,530	97,517	3,547	205,920	2,650	1,530,000	0	1,530,000
Income support under active measures
Part I (benefit entitlements)	26,059	22,009	23,402	5,244	143,449	152,196	18,734	13,588	36,821	880	56,771	847	500,000	0	500,000
Pan-Canadian responsibilities
Ongoing	16,076	8,617	9,410	949	28,626	22,678	5,922	6,040	10,997	2,969	10,754	451	123,489	126,511	250,000
Transitional	22,560	13,539	12,088	4,532	44,783	13,264	3,256	3,084	1,942	1,104	8,864	984	130,000	10,000	140,000
Total - pan-cdn resp.	38,636	22,156	21,498	5,481	73,409	35,942	9,178	9,124	12,939	4,073	19,618	1,435	253,489	136,511	390,000
Grand total	150,532	106,770	111,330	28,512	674,156	638,702	74,227	56,242	147,277	8,500	282,309	4,932	2,283,489	136,511	2,420,000

* Additional funds for administrative purposes for provinces that take up programs and aspects of the National Employment Service will be discussed separately.

** Maximum funds under new Labour Market Arrangements where provinces / territories fully take up May 30 labour market proposal.

Projected distribution of EI-related fundings* under new labour market arrangements 1995-96 to 1999-00 ($000s)

	Nfld	NS	NB	PEI	Que	Ont	Man	Sask	Alta	NWT	BC	Yuk	Subtotal	National	Total
1998-99 Maximum funds for provincially managed programs**
Part II (Base)	51,504	48,646	46,544	13,548	340,959	360,571	40,987	28,948	80,591	2,538	133,484	1,680	1,150,000	0	1,150,000
Re-investment	54,815	22,761	31,587	7,517	186,053	138,073	7,675	7,396	26,941	1,880	113,797	1,505	600,000	0	600,000
Total - max. prov. mgd. progr.	106,319	71,407	78,131	21,065	527,012	498,644	48,662	36,344	107,532	4,418	247,281	3,185	1,750,000	0	1,750,000
Income support under active measures
Part I (benefit entitlements)	26,059	22,009	23,402	5,244	143,449	152,196	18,734	13,588	36,821	880	56,771	847	500,000	0	500,000
Pan-canadian responsibilities
Ongoing	16,076	8,617	3,080	949	28,626	22,678	5,922	6,040	10,997	2,969	10,754	451	117,159	132,841	250,000
Transitional	15,966	9,581	8,555	3,208	31,692	9,387	2,304	2,182	1,375	781	6,273	696	92,000	8,000	100,000
Total - pan-cdn resp.	32,042	18,198	11,635	4,157	60,318	32,065	8,226	8,222	12,372	3,750	17,027	1,147	209,159	140,841	350,000
Grand total	164,420	111,614	113,168	30,466	730,779	682,905	75,622	58,154	156,725	9,048	321,079	5,179	2,459,159	140,841	2,600,000
1999-00 Maximum funds for provincially managed programs**
UIDU (Base)	51,849	49,057	46,651	14,018	342,304	358,278	40,567	29,039	80,714	2,700	133,157	1,666	1,150,000	0	1,150,000
Re-investment	63,950	26,555	36,852	8,770	217,062	161,085	8,954	8,629	31,431	2,193	132,763	1,756	700,000	0	700,000
Total - max. prov. mgd. progr.	115,799	75,612	83,503	22,788	559,366	519,363	49,521	37,668	112,145	4,893	265,920	3,422	1,850,000	0	1,850,000
Income support under active measures
Part I (Benefit Entitlements)	26,059	22,009	23,402	5,244	143,449	152,196	18,734	13,588	36,821	880	56,771	847	500,000	0	500,000
Pan-Canadian responsibilities
Ongoing	2,340	2,839	2,488	588	22,042	18,345	5,561	5,679	8,074	2,969	10,392	451	81,768	168,232	250,000
Transitional	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Total - pan-cdn resp.	2,340	2,839	2,488	588	22,042	18,345	5,561	5,679	8,074	2,969	10,392	451	81,768	168,232	250,000
Grand total	144,198	100,460	109,393	28,620	724,857	689,904	73,816	56,935	157,040	8,742	333,083	4,720	2,431,768	168,232	2,600,000

* Additional funds for administrative purposes for provinces that take up programs and aspects of the National Employment Service will be discussed separately.

** Maximum funds under new Labour Market Arrangements where provinces / territories fully take up may 30 labour market proposal.

Explanatory note

Resource allocation formulae

Funding available for new labour market arrangements

Human Resources Development Canada uses resource allocation formulae to determine allocations in a fair and objective manner. This note explains how three formulae work: for EI Funds; for Reinvestment of Reform Savings; and for the Transitional Jobs Fund.

EI funds ($1.9 B annually)

The $1.9 B EI funds include $500 M income support associated with active measures; $250 M in pan-Canadian activities; and $1.15 B available for provincially/territorially managed active labour market measures. (The $1.9 B total was previously known as Unemployment Insurance Developmental Uses funds).

$500 M per year nationally is estimated for income support (i.e. insurance benefit payments) for individuals with an active EI claim who participate in active employment measures. The allocation of these funds reflects the provincial/territorial share of the budget indicated in the 1996 UIDU Expenditure Plan. For illustrative purposes, the same distribution is assumed for all years. Actual expenditure patterns will be monitored. This EI income support will be administered by the Government of Canada. However, under new arrangements, provinces may assume responsibility for selection of EI claimants participating in active measures supported by these entitlements.

$250 M annually in EI funds will be dedicated to pan-Canadian activities including commitments such as successor programming to Pathways (for Aboriginal Peoples); response to national crises (e.g. The Atlantic Groundfish Strategy); national sectoral partnership initiatives; and research and innovation. The pan-Canadian fund will be maintained under federal responsibility. Federal-provincial discussions will be held on the pan-Canadian activities at a later date.

The remaining $1.15 B in EI funding will be made available to provinces taking up greater labour market responsibilities under new results-based contractual arrangements.

The current Developmental Uses formula that has been in place for the last several years will be maintained. The current formula has 17 variables, individually weighted, which are updated on an annual basis. The variables are:

• average UI claim load
• long-term unemployment (more than 14 weeks)
• Initial and Renewal claims for unemployment benefits
• unemployed multiplied by the unemployment rate
• education less than nine years
• the employment rate
• work sharing participants
• work sharing expenditures
• projected employment for manufacturing; trade, construction (3 variables)
• projected GDP for manufacturing, trade, construction (3 variables)
• GDP for manufacturing, trade, construction (previous year: 3 variables)

In order to prevent abrupt inter-provincial shifts in resources, the optimal provincial allocations are phased in at a 10% rate annually. That is, each year the change in resources will be 10% of the variance between the optimal allocation suggested by the formula and the current allocation.

In recognition that provinces and territories may have ideas on a different resource allocation methodology with a view to improving the accuracy and fairness of allocations, the Government of Canada would be pleased to consider any alternative formula that provinces and territories may want to design jointly.

Reinvestment of reform savings ($800 M annually at maturity)

Reinvestment of Reform Savings will occur in all provinces and territories. This funding will be available to provinces and territories taking up greater labour market responsibilities. The major objective is to ensure reinvestment of a portion of the EI Reform Savings into “active” re-employment measures so as to enable individuals, employers and communities to adjust to the new EI system (particularly those most affected by the reform); and to a lesser degree recognize the need to reduce the level of cross-subsidization between regions. These funds will be allocated in a manner ensuring that the net impact of the EI reform in 2001-2002 is relatively similar across provinces and that the net impact in provinces that are net contributors is at least one percentage below the level of the net impact in provinces which are net beneficiaries. The allocation of the reinvestment of Reform Savings for years before 2001-2002 will be on the same percentage basis as for 2001/02.

Changes from the previous notional allocations of the reinvestment of Reform Savings are explained by amendments to the EI Bill which reduced the impact of EI reform between 3-4 percentage points in Atlantic Canada versus 1-2 percentage points in other provinces. In order to even out the impact across all provinces, the provincial allocations for the reinvestment of Reform Savings had to be adjusted.

The attached table displays how the reinvestment of Reform Savings formula works.

Transitional jobs fund ($300 M over 3 years)

The annual allocations for the Transitional Jobs Fund will be $60 M; $140 M; $100 M over the three year period starting 1996-97; funding is through the Consolidated Revenue Fund. The objective is to ease the impact of the EI reform in high-unemployment regions across the country. Consequently, the allocation formula mainly focuses on EI regions with high levels of unemployment (above 12% unemployment rate) and also takes into account the impact of EI reform in each province (including the recent amendments made to the EI Bill). Seventy five percent of funds will be allocated based on the number of EI claimants in EI regions with unemployment rates above 12% multiplied by the unemployment rate in these regions. Twenty five percent of funds will be allocated based on estimated reductions in insurance benefits per province (at maturity). A $25 M national reserve over the three years will be set aside, $15 M of which will be dedicated to initiatives for Urban Aboriginal Peoples (three national Aboriginal groups will work with HRDC to advise on the allocation of these funds). Administration of the Transitional Jobs Fund is under federal responsibility.

Changes from the previous notional allocation is explained by amendments to the EI Bill; the establishment of a $25 M national reserve; and greater precision in allocation (no more broad rounding).

Recommended allocation of reinvestment for 2001/02 showing impacts of reform before/after reinvestment and benefit to contribution (B/C) ratios

Reform impacts in 2001-02
Province	UI benefits (without reform) $ million	Reduction before reinvestment $ million	Reduction before reinvestment percent	Illustrative re-investment $ million	Net impact of reform $ million	Net impact of reform percent	Benefit contribution ratio after reform (ranking from largest net contributor to largest net beneficiary)
Newfoundland	725	112	-15	73	39	-5(5.4)	2.73 (9)
PEI	170	19	-10	10	9	-5(5.3)	2.77 (10)
Nova Scotia	750	70	-8	30	40	-5(5.3)	1.52 (7)
New Brunswick	630	76	-11	42	34	-5(5.4)	1.59 (8)
Québec	5,495	536	-10	248	288	-5(5.2)	1.32 (6)
Ontario	5,270	380	-7	184	196	-4(3.7)	0.76 (1)
Manitoba	520	31	-6	10	21	-4(4.0)	0.85 (4)
Saskatchewan	385	26	-7	10	16	-4(4.2)	0.81 (2)
Alberta	1,395	93	-7	36	57	-4(4.1)	0.83 (3)
B.C.	2,040	241	-11	152	89	-4(4.4)	0.93 (5)
NWT *	35	5	-14	3	2	-6(5.9)	-
Yukon *	35	4	-11	2	2	-6(5.7)	-
Total	17,450	1,593	-9	800	793	-4(4.5)	1.0

* NWT and Yukon estimates of impact are only accurate to a certain level given the small size of the claimant population and the lack of labour force data on the hours of work in these areas.

• Column three shows the Impact of the reform at maturity (i.e. 2001-02) on insurance benefits.
• As the objective of the reinvestment of a portion of the reform savings is to help individuals and regions most affected by the reform to adjust, the allocation of the $800 M is designed to achieve a fairly even net impact across provinces. However, in recognition that some provinces are net contributors to the program, funds are reinvested in a way to ensure at least a one percentage point lower impact in such provinces, generally ranked in order of the scale of their net contributions over the business cycle (see last column).
• Therefore, as the second last column shows, the net impact in provinces that are net beneficiaries round to 5% (the slightly higher impact in the territories is due to rounding and the degree of accuracy of estimates) and to 4% in provinces that are net contributors.

Annex 7 - Letter of September 25, 1996 from Canada's Deputy Minister of Human Resources Development with amended table

Mr. Eric Colbourne

A/Deputy Minister of Education, culture and Employment

Lahmridge Tower, 3rd Floor

P.O. Box 1320

Yellowknife, Northwest Territories

X1A 2L9

Dear Mr. Colbourne:

I am writing to you about the Government of Canada proposal for new arrangements on labour market programs. As you know, Minister Young wants to make rapid progress towards new labour market arrangements with all provinces and territories and recently wrote his provincial and territorial colleagues to underline his commitment. For your information, I have attached Minister Young’s letter to Minister Dent.

You will remember that on June 26 my predecessor provided provincial and territorial Deputy Ministers with information on program funding for the May 30 proposal. I would now like to give you information on the administrative resources available to provinces and territories who take on the employment benefits and measures provided for in the May 30 proposal.

In determining the available resources, we have been guided by the principle that all administrative resources that HRDC would have to deliver the programs in Northwest Territories over the duration of the agreement will be made available to you. Adhering to this principle allows us to provide “reasonable administrative costs for program delivery to EI clients”, as stated in the May 30 proposal. To ensure that the Government of Northwest Territories has an adequate planning horizon, the administrative resources will remain stable for the duration of the agreement.

As you will note in the attached explanatory note and table, we have projected that 24 FTEs (Full Time Equivalents) and $1,758,000 administrative resources per year would be available once a final agreement is reached and if the Government of Northwest Territories on all responsibilities offered in the May 30 proposal. The Government of Canada will, in addition, provide funds for accommodation.

There are undoubtedly matters concerning administrative resources that you or your officials will want to discuss. Mr. Russ Brown, Regional Executive Head for Northwest Territories and Alberta, and the chief negotiator for the Government of Canada in Northwest Territories, is available to address any questions you may have and provide additional information you require. The Government of Canada will be guided by a spirit of openness and transparency in discussions about administrative resources.

On a closely related matter, there are many human resource issues related to the transfer of HRDC employees and the details will be a matter of careful examination in our negotiations with provinces and territories. This is a critically important issue. An acceptable resolution is essential to the success of the negotiations. In this matter HRDC will be guided by the federal Alternative Delivery Framework of the Workforce Adjustment Directive. The level of administrative resources transferred will be directly linked to the transfer of affected federal employees (i.e., the employees associated with the FTEs in the attached table). Given the experience and expertise of HRDC employees in delivering active employment programs, I do not expect this to be an issue. Again, I would ask that you or your officials speak to Mr. Russ Brown on the human resource issues

I have attached a table showing a projection of FTEs and administrative resources available for all provinces and territories, for your information. The principle on which FTEs and administrative resources are determined is the same across the country: each province and territory would have available the resources HRDC has to deliver the programs in the province or territory, over the duration of the agreement.

I am pleased to know that our officials have presented a draft framework agreement September 12 and that the detailed discussions will begin September 27. I think we should aim at an agreement as soon as possible, which could allow the Government of Northwest Territories to begin delivery of programs in the 1997-98 fiscal year, if this is consistent with your province’s priorities.

I want to close by reiterating Minister Young’s commitment to rapid progress and adding that HRDC’s officials will do everything possible to support the negotiations.

Mel Cappe



Deputy Minister

Human Resources Development



encl.

Administrative resources

In addition to FTEs (full-time equivalents), funds for administrative resources and accommodation, portable assets, such as furniture and personal computers associated with the transferred FTEs will be made available to provinces.

Factors affecting the projection of FTEs and administrative resources available to provinces include:

• Within the framework of the National Employment Service, the Government of Canada will retain the responsibility and the resources required to manage pan-Canadian activities such as the free and timely flow of information on employment opportunities across the country; support for inter-provincial worker mobility; and national sectoral development. The Government of Canada has offered to provinces NES functions and resources that are required to support the delivery of active labour market measures to EI clients.
  
• All currently budgeted HRDC administrative resources, including those available to provinces and territories for the delivery of responsibilities laid out in the May 30 proposal, are fixed at the 1997-98 level. There will be no increases due to such factors as inflation.
  
• The FTE and dollar figures reflect a take-up of all responsibilities offered in the May 30 proposal. In the event that your province assumes partial responsibilities, FTEs and administrative resources will be adjusted accordingly.
  
• Given the need for both Governments to demonstrate that labour market agreements promote efficient programming and reduce any overlap and duplication, no incremental funds, e.g., start-up funds related to new agreements, are available for provinces.
  
• Compensation for accommodation will be based on projected, actual costs for a given site. Funds for accommodation will only be transferred to a provincial government after a current lease commitment has expired.
  

Projection of EI-related administrative resources under new labour market arrangements 1997-98 onwards

	Nfld	NS	NB	PEI	Que	Ont	Man	Sask	Alta	NWT	BC	Yuk	Total
Full-time equivalents	177	196	170	49	1,084	1,007	118	114	204	24	470	7	3,620
Operating funds ($000s)	7,080	8,195	7,240	2,115	46,269	44,612	4,759	4,681	7,712	1,534	17,292	329	151,818
Employee benefits ($000s)	1,115	1,254	1,142	338	7,286	6,721	735	717	7,202	224	2,819	52	23,605
Total funds available	8,195	9,449	8,382	2,453	53,555	51,333	5,494	5,398	8,914	1,758	20,111	381	175,423
Accommodation ($000s)(see note 4 below)	643	969	743	214	4,406	6,071	562	708	759	155	2,248	64	17,542

Notes:

1. A Full-Time Equivalent (FTE) is the unit of measurement for personnel resources and refers to the employment of one person for one year or the equivalent thereof. FTEs consist of regular time personnel, continuing and non-continuing, full-time, part-time, seasonal, term and/or casual employees. As per the May 30th proposal from Minister Young, the above FTE numbers include resources in support of EI Part II delivery and National Employment Services. In addition, FTEs also include a share of local and regional corporate management, and associated national headquarters support.
2. Operating funds include salary and non-salary resources in support of FTEs. The value of portable assets (i.e. furniture and personal computers) is excluded from these figures. Associated portable assets would be transferred with each FTE.
3. Employee Benefits include the federal government’s costs of supporting: the Public Service Superannuation Plan; CPP/QPP employer payments; EI employer payments; death benefits; health and dental insurance. The total cost of Employee Benefits represents 17% of salary costs.
4. Accommodation funds reflect an estimated average cost per FTE based on HRDC lease costs per province/territory in accordance with the downsizing plan. The actual funds to be made available to a province/territory are linked to the phase-put of existing lease agreements and will be made available at that time.

---

The Honourable Charles Dent, M. LA.

Minister of Education, Culture and Employment

P.O. Box 1320

Yellowknife , Northwest Territories

X1A 2L9

Dear Mr. Dent:

I am writing to you, and all my provincial and territorial colleagues, to bring you up to date on progress achieved since the tabling of the Government of Canada's proposal for new arrangements on labour market and to stress the priority I give to signing an agreement with each province and territory which will meet the objectives of both levels of government. I understand that, over the summer months, our officials have reviewed various issues and exchanged information and I believe we are now well positioned to move negotiations forward.

We have covered several important steps over the last months. As you know, the Employment Insurance Act of Canada was passed on July 1, establishing the legislative foundation for the new arrangements between our governments. We have also reached agreement with each of the provinces and territories on arrangements and funding allocations for labour market training for 1996-1997 and, in some cases, for subsequent years as well. These agreements reflect the needs and circumstances of each jurisdiction and, in some cases, are closely linked to negotiation of a broader labour market agreement.

Recognizing the importance of this issue for all the provinces, last June, my Deputy Minister sent his provincial and territorial counterparts detailed information on the funding available to each province under the new arrangements. We have signed a Letter of Understanding that will serve as a guide for negotiations with Alberta ; in other provinces and territories, we have agreed on a negotiating structure and are in discussions with most of the provinces for establishing joint work plans.

I am firmly convinced that the proposal I sent to you on May 30 provides a solid basis for a new labour market arrangement with your province. My goal is to proceed as quickly as possible with bilateral negotiations, while of course respecting the special circumstances of each province. To this end, I have asked my Department to give high priority to this file and ensure appropriate resources are dedicated, both at the national and regional levels, to detailed negotiations.

I am pleased to note your commitment to arriving at new labour market arrangements, as mentioned in your letter of August 21, 1996, and I agree that it would be useful for us to meet. The creation of negotiation teams and the development of workplans and timetables will now allow us to intensify our discussions. I am confident that our representatives will be able to complete the negotiations quickly so that a labour market agreement can be in place for the 1997-1998 fiscal year. My Deputy Minister will be sending additional information on this subject to his provincial and territorial counterparts in the very near future.

I wish to assure you of my personal commitment to reach an early agreement that will benefit the unemployed workers of your province. In view of the priority I am placing on this issue, I have asked my Parliamentary Secretary Robert Nault to assist by working with you and your ministerial staff to expedite negotiations toward final agreements. You can count on his full availability and co-operation.

Sincerely,

Douglas Young

Annex 8 - Inventory of assets (to be prepared)

To be prepared

Annex 9 - May 30, 1996 Proposal to provinces and territories

Getting Canadians back to work: A proposal to provinces and territories for a new partnership in the labour market

On behalf of the Government of Canada, the Honourable Douglas Young, Minister of Human Resources Development, is proposing a new partnership with provincial and territorial governments in labour market activities based on the new Employment Insurance legislation. This partnership respects provincial responsibility for labour market training and recognizes that both levels of governments must find new ways to work together to help unemployed Canadians find and keep jobs. Governments have a shared obligation to provide transitional assistance to Canadians who face temporary periods of unemployment.

The proposal provides for new formal labour market agreements between the Government of Canada and each provincial and territorial government, which will reflect diverse and changing circumstances across the country.

Under new arrangements, those provinces or territories who wish to do so will be able to assume responsibility for active employment measures, supported by Employment Insurance funds administered by the Government of Canada.

These new arrangements will help get unemployed Canadians back to work, encourage innovation and best practices and strengthen federal and provincial/territorial partnerships. Canadians will receive improved service through expanded use of single window service.

The Honourable Douglas Young Minister of Human Resources Development

I. A new partnership

All levels of government and the private sector have significant roles to play in employment and labour market development. They have particular responsibilities and strengths in the labour market field which they can apply to help Canadians find employment opportunities. New federal/provincial/territorial arrangements can strengthen the Canadian labour market locally, provincially and nationally.

This proposal provides for a new federal/provincial/territorial partnership in labour markets activities. In addition to their current labour market responsibilities, provincial and territorial governments can use the proposal to:

• deliver active employment measures funded through the Employment Insurance (El) Account (approximately $2 billion at maturity);
• use El funds to tailor active measures to meet local and provincial labour market priorities;
• provide individuals with labour market services currently delivered by the Government of Canada such as screening and employment counselling;
• match local labour market demand and supply through labour market placement; and
• help individuals develop career action plans to address their employment needs and guide them to successful employment opportunities.

Based on the proposal, the Government of Canada would:

• remain responsible to the Parliament of Canada and to premium-payers for the El Account and delivering insurance benefits (approximately $12.3 billion in 1996-97), including $500 million per year to individuals who have an active El claim and participate in active employment measures ^{Footnote 1} ;
• provide a national system of labour market information and exchange to support interprovincial mobility of labour;
• foster interprovincial sectoral development and develop strategies to respond to such events as national economic crises;
• administer a one-time Transitional Job Fund ($300 Million funded from the Consolidated Revenue Fund over three years); and
• deliver ongoing commitments and pan-Canadian activities funded through the El Account ($250 million per year).

The Government of Canada will phase-out its funding in such areas as the direct purchase of training, apprenticeship training, cooperative education, workplace-based training, and project-based training, based on mutually acceptable federal-provincial arrangements. Full federal withdrawal will be as rapid as a province or territory wishes over a maximum of three years. There will be no federal activity in these program areas after 1999.

II. The basis for new partnership

Bill C-12, proposed legislation for a new Canadian employment insurance system, is a balanced and integrated framework designed to promote jobs and growth. Part I of the legislation maintains and improves the national system of temporary income support for EI claimants while they look for a job. Part II provides for a range of active employment measures so that people can get back to work as quickly and efficiently as possible.

Part II also expands client access to these active measures. EI clients include individuals who are eligible to receive insurance benefits (EI claimants) and individuals who were eligible to receive insurance benefits at any time in the past three years, or any parent re-entering the labour force who were eligible for parental or maternity benefits during the past five years.

The legislation provides for a flexible set of active employment measures geared to helping EI clients find jobs. These measures will be tailored to the needs of individuals and local labour market realities. New measures could include:

• wage subsidies,
• temporary earnings supplements,
• self-employment assistance,
• job creation partnerships and,
• subject to provincial agreement, skills loans and grants.

The legislation commits the Government of Canada to work in concert with the government of each province and territory to design, implement and evaluate the active measures. Provinces and territories can receive EI funds to deliver directly the active measures; or provinces or territories can receive EI funds to provide their own similar employment measures if they are consistent with the guidelines in Part II of the new employment insurance legislation.

If provinces or territories do not want to assume responsibility for active employment measures, the Government of Canada is prepared to work with them on the joint design, delivery and evaluation of active measures. In some provinces or territories, Canada's Human Resource Centres could continue to deliver active measures.

III. A new approach to getting Canadians back to work

Part II sets out seven legislative guidelines for new federal-provincial agreements. These guidelines represent a new way of getting unemployed Canadians back to work. Active measures must:

• be results-based (i.e., help individuals obtain or keep employment);
• reduce individuals' dependency on government assistance;
• promote cooperation and partnership with other labour market partners, such as other governments, employers and community-based organizations;
• feature local decision-making;
• eliminate unnecessary overlap and duplication;
• encourage individuals to take personal responsibility for getting back to work;
• ensure service to the public in either official language, where there is significant demand.

The new legislation requires that any active measures delivered to EI clients by the Government of Canada or by a province or a territory will be reviewed periodically to ensure they are effective and efficient. The level of service for EI claimants will remain the same or be improved.

The Government of Canada is also prepared to enter into new partnership arrangements with provinces and territories on several functions of the National Employment System (NES). The NES provides the direct link between the "passive" and "active" parts of the national labour market system and has four core functions:

• labour market information: providing information on and analysis of the national labour market;
• labour exchange: matching workers with available jobs and employers with available workers across the country;
• screening: identifying individuals' service needs and making a preliminary referral to appropriate services; and
• employment counseling: evaluating the labour market needs of the unemployed; developing an action plan; referring/selecting participants for specific active measures.

Provinces and territories assuming responsibility for delivering active measures can also decide to deliver the NES screening, employment counseling and local labour market placement services. Provinces or territories will be able to determine the level and type of assistance clients require from active measures, provide individuals with in-depth assistance, help them develop career action plans and match local labour market demand and supply through labour market placement.

Part II of the new employment insurance legislation will also create three new support measures for the NES: employment assistance services to the unemployed (e.g., developing client-centred action plans for individuals who have limited job experience); labour market partnerships (e.g., providing financial assistance to community-based labour market partners involved in dealing with local labour market challenges); and research and innovative projects (e.g., examining ways to improve the effectiveness and efficiency of active measures).

The Government of Canada will work with provinces, territories and labour market partners on the three support measures in order to ensure financial resources are directed at those EI clients who need the most assistance in getting jobs. New arrangements could provide for direct provincial or territorial delivery of employment assistance services and local labour market partnerships.

The Government of Canada will retain overall management of labour exchange and national labour market information due to their pan-Canadian nature, and will welcome input from provinces and territories in maintaining and improving these services.

IV. Principles and parameters of agreements

What counts is results: getting unemployed Canadians back to work; maximizing savings to the EI Account; and reducing dependency on income support programs generally. Therefore the following principles and parameters should apply to the delivery and design of all active measures, whether by a provincial or territorial government or by the Government of Canada, and form the basis for mutually-agreeable accountability frameworks.

Results-based accountability

The accountability framework will be used to ensure the effectiveness and efficiency of both the active measures and the NES functions; it will apply to whatever level of government delivers these activities. Results will be made public so that Canadians can assess the effectiveness and efficiency of the active measures. Results could be evaluated by a third party mechanism.

If a province or territory decides to assume responsibility for the delivery of active measures and certain NES functions, the Government of Canada will work with provincial and territorial governments to develop mutually agreeable accountability frameworks, which will include mechanisms for assessing and evaluating the anticipated results of these arrangements. These mechanisms could involve labour market partners using either formal structures or advisory groups. Labour market partners can play a central role in ensuring EI clients receive the support required to find and keep jobs.

For planning purposes, results will be based on: priority access for EI claimants, jobs secured for EI clients, with emphasis on EI claimants (persons currently eligible for insurance benefits), and savings to the EI Account through reduced dependency on employment insurance benefits. Results will be informed by changing economic and labour market circumstances.

Duration of agreements

Initially, the Government of Canada will commit itself to three-year agreements which cannot be terminated unilaterally. Beyond the initial three-year period, the Government of Canada is prepared to discuss with each province and territory the appropriate duration of new agreements. For example, agreements could remain in place as long as the mutually-agreed results are being achieved. New formal agreements with provinces and territories may be implemented directly following approval of the legislation, anticipated by July 1, 1996.

Funding

Total EI funding for new agreements will be approximately $1.95 billion, including current EI expenditures of $1.15 billion and $800 million in reinvestment (at maturity) result from EI reform.

Starting in 1997-98, a new simplified formula will be used to allocate EI funds, which will be equitable, transparent and based on a standardized set of objective labour market variables. It will be updated annually to reflect changing labour market conditions. For 1996-97, EI funds will be allocated using the current formula. The $800 million in reinvestment will be allocated among provinces and territories based on the impact of recent reforms to the EI Account (as set out in the new Employment Insurance legislation). Where a province or territory delivers active measures, the Government of Canada will also fund reasonable administrative expenses for program delivery to EI clients.

Service levels and associated funding levels will be contingent, in part, on EI savings and budget decisions. A mutually agreeable process will be established to review annual funding levels. The EI funds provided by the Government of Canada can be spent only for the purposes identified in the agreement, namely, assistance to EI clients. Canadians will be informed of the source of the financial contributions.

Strengthening service to clients

New arrangements will improve client service, create more and better employment opportunities for Canadians and eliminate overlap and duplication. All EI clients will have reasonable and equitable access to active measures and NES functions (i.e., no residency requirements and the requirements of equity groups are to be given special consideration). Service to EI claimants will either be maintained at current levels or strengthened. Improved service to clients will be accelerated through collaborative work on; linking information systems to facilitate client case management; using single client files; expanding client monitoring systems; and sharing of best practices and evaluations.

The Government of Canada currently provides labour market assistance to EI claimants and other Canadians through the network of Canada Human Resource Centres across the country; provinces and territories operate separate facilities for social assistance recipients and often offer additional labour market services through other points of service. Offering all labour market assistance to individuals from one location in a local labour market will maximize an individual's chances to get into the job market. Consequently under the new arrangements, the expanded use of co-location/single window service will be pursued on a priority basis. If a provincial or territorial government accepts greater responsibility for active measures, appropriate employment arrangements will be established for Human Resource Development Canada employees required to provide continuity of service to clients. Provinces and territories will need to work with the Government of Canada on the transfer of employees within its recently established human resources framework for alternative service delivery policy.

During the transition period to new agreements, the Government of Canada will maintain uninterrupted client service, while working in concert with provinces and territories.

V. Government of Canada proposal

The Government of Canada believes that this proposal can be the basis for new bilateral labour market agreements, which will address provinces and territorial labour market priorities and improve active employment measures for Canadians. All provinces and territories are invited to give consideration to the proposal as early as possible.