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Third round of talks underway to convince provinces to accept Canada Jobs Grant

Employment Minister Jason Kenney speaks at a conference in Toronto on Thursday January 23, 2014. THE CANADIAN PRESS/Frank Gunn

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Employment Minister Jason Kenney speaks at a conference in Toronto on Thursday January 23, 2014. THE CANADIAN PRESS/Frank Gunn

TORONTO - The federal government has offered the provinces and territories a new Canada Jobs Grant package as part of a "sensitive" third round of negotiations over the controversial proposal, says Employment Minister Jason Kenney.

The original proposal, which came shortly after the last federal budget was introduced, was less than perfect, Kenney acknowledged Thursday as he described a new offer that offers additional "flexibilities" to the provinces.

"I'm not suggesting the initial model that we proposed was ideal; to the contrary," the minister said in a speech to the Toronto Region Board of Trade.

At the same time, however, he expressed frustration with the fact other levels of government have been balking at something that he considers to be a common sense plan.

"It's so blindingly sensible, I don't understand why it's not widely accepted."

The main idea behind the job grant scheme remains intact as the talks enter the latest phase, Kenney said: giving those who create jobs more say over how tax dollars are spent on training programs.

The Canada Jobs Grant model, first proposed by the Harper government in last year's federal budget, was supposed to be in place by April, but several provinces objected because it would have meant an overall cut to federal funding for job training.

Ontario Training Minister Brad Duguid said earlier this week that he remains opposed to the fact that Ottawa intends to finance its share of the program by reducing transfer payments to the provinces.

The original plan was to create a $15,000 grant that Canadians could use to receive training for a specific job opening. Each grant was to be shared equally three ways among the federal and provincial governments and a sponsoring business.

Kenney stressed that Canada is already short of skilled workers, and the pending retirement of thousands more across the country as the baby boomers retire will only make matters worse unless the right job training programs are in place.

"What we need is some intelligent flexibility, quickly, to avoid a problem from becoming a crisis," he said.

Ottawa had initially hoped to pay for its share of the grants by cutting $300 million annually from transfers to the provinces through the $500-million Labour Market Agreements (LMA). Another component would have required the provinces to find an additional $300 million to pay for the matching share of the grants. That requirement was waived in the last proposal delivered to the provinces in late December.

Ottawa's latest offer lowered the planned LMA cut from $300 million to $200 million, but then proposed separately cutting $100 million from the Labour Market Development Agreements fund, which is paid out of the employment insurance system.

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