Atlantic ministers demand reversal of cut to LMTA funding under Budget 2024

'Not restoring this funding will inevitably limit the region's capacity to be responsive to current and emerging labour market opportunities and challenges'

Atlantic ministers demand reversal of cut to LMTA funding under Budget 2024

The ministers of provinces in Atlantic Canada are demanding that the federal government reverse the cuts it made to the Labour Market Transfer Agreements (LMTAs) under Budget 2024.

The cut amounts to $625 million, and this will be detrimental to both workers and employers, they said in a joint statement.

The budget cut hits workforce development programs that help people find and maintain jobs in sectors facing critical labour shortages such as construction, early learning child care and healthcare. These programs support persons with disabilities, Indigenous Peoples, women and newcomers, helping them to get the training and supports necessary to secure meaningful work, while also assisting employers to meet their labour demands, said the ministers.

“With this cut, LMTA funding will revert to pre-2017 levels at a time when inflationary costs continue to have profound impact on citizens. Provinces and territories were not notified of this cut prior to the release of the budget on April 16,” the said.

More than seven in 10 (71%) workers would like to update their skills more often, and 80% believe employers should invest more to provide upskilling and reskilling opportunities for workers, according to a previous TalentLMS report. 

How it will impact Atlantic provinces

The decision means a $62.3 million annual reduction in funding for skills training and employment initiatives in Atlantic Canada, said the ministers, adding that “the federal government has yet to clarify where the funding taken from LMTAs is being spent”.

The cut will have a negative impact the cut to this funding will have on the 120,000 individuals and 8,500 employers and organizations that have benefited annually from these programs throughout Atlantic Canada, they said.

“Not restoring this funding will inevitably limit the region’s capacity to be responsive to current and emerging labour market opportunities and challenges. Ministers are committed to working together to ensure Atlantic Canadians have the programs and services they need to prosper now and into the future.”

Under Budget 2024, the federal government claimed it invests nearly $3 billion annually in LMTAs and Workforce Development Agreements with provinces and territories.

For 2024-25, Ottawa is investing $722 million through the Workforce Development Agreements in, and approximately 30% of the investment supports persons with disabilities with training, skills development, and work experience.

The Atlantic ministers also raised concern with the federal government’s “misleading assertion that there are other funding sources to replace the cuts to LMTAs, such as claiming the introduction of capital gains revenues will allow provinces and territories to replace the $625 million in LMTA cuts”. 

“This statement is disingenuous, as the capital gains money will not be fully accessible until a year or longer. In the meantime, the future of essential LMTA programs and services that Canadians rely on remain in peril, with no resolution in sight,” they said.

The federal government expects the public service workforce population to decline by roughly 5,000 full-time equivalent positions over the next four years as part of Ottawa’s campaign to refocus spending.

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