Original Source: Daily Commercial News and Construction Record

RICHARD GILBERT - Staff Writer

The B.C. government’s September budget update includes millions of dollars in cuts to the Industry Training Authority, but the authority says measures are being taken to maintain apprenticeship training.

Finance Minister Colin Hansen released the update in response to rapidly declining revenues and a jump in the projected deficit, which is expected to reach to $2.8 billion this year.

The ITA’s new service plan forecasts that operational costs for program development will be $1.32 million in 2009-10, but this represents a 50 per cent reduction from the forecast in last February’s budget.

“The implication here is that they have cut the projected figure by half,” said Wayne Peppard, executive director of the British Columbia and Yukon Territory Building and Construction Trades Council.

“If now is the time for people to get into the trades, then cuts are not what we need right now.”

More importantly, the ITA’s service plan includes a $10 million cut in general funding from the Ministry of Advanced Education and Labour Market Development.

The budget forecasts $94.4 million in funding from the ministry for 2009-10.

In his budget update speech, Hansen said the months since the last provincial budget in February have been extremely challenging.

“In total, we are facing a loss of $2 billion in expected revenues in the current fiscal year,” he said.

Despite this, Hansen said the government is taking steps to protect vital services, including education.

However, Peppard expressed concern that deep cuts in spending will hamper efforts by the ITA to deliver apprenticeship programs.

“That’s a lot of money to cut out of the ITA,” he said.

“There will be serious impacts unless a complementary source of funding is found from other sources.”

Kevin Evans, CEO of the ITA, said the cost cuts will not result in a reduction in training delivery.

He said there will be 28,500 apprenticeship seats this year, the largest number ever.

“The delivery of services to employers and apprentices will remain intact,” he said.

“The reduction in program development would not impact training delivery in a material way this year. We have been as innovative and creative as possible to absorb these cuts, while maintaining service to our customers.”

According to Evans, the ITA must make cuts to administration, communications and marketing, as well as customer service.

He said program development cuts can also be done without reducing the quality of training because most programs have been reviewed and updated over the last few years.

Peppard doesn’t believe this is possible.

“We review a certain number of programs every year, so all programs can be updated every three to four years,” he said.

“The recession is a great opportunity to train people for when the economy turns around, not trying to catch up like we did last time. I would like to see as many people as possible trained as quickly as possible.”

Even with budget cuts, total projected provincial spending is expected to increase by $43.5 billion in 2011, compared to 2008.

The budget update contains additional revised deficit forecasts of $1.7 billion in 2010/11 and $945 million in 2011/12.

It wasn’t all doom and gloom.

The government plans to continue its implementation of a stimulus package that includes capital investments of $7.4 billion in 2009/10, $7.7 billion in 2010/11, and $6.5 billion in 2011/12.

Despite the stimulus spending, the Ministry of Finance expects the B.C. economy to contract by 2.9 per cent in 2009, which is a full two percentage points lower than the forecast in February.

According to Hansen, the biggest single measure the government is taking to stimulate the economy is the implementation of the Harmonized Sales Tax (HST).

The harmonization has met with the approval of some in the construction industry.

“In general we support the HST,” said Manley McLachlan, president of the B.C. Construction Association.

“Our concern is in the transition period. For example, there needs to be a discussion around contracts that are signed prior to July 1, 2010, but completed after this date. Consideration will also have to be given to inventories that are carried through into the new tax period.”