‘A recipe for failure:’ Ford government moves to contract out employment services

The Ford government is moving forward with its plans to contract-out employment services in three areas of the province, despite calls from the official opposition that the program will be “a recipe for failure.”

The government made the announcement in a press release on Friday.

Two private companies and a public Ontario college have been awarded contracts to provide services to those seeking employment.

The government said the plan is to unite three previously separate programs: Employment Ontario, Ontario Works and the Ontario Disability Support Program.

The three contract-winners, called “Service System Managers” by the government, will receive payment based on a results-based system.

The government described the plan as being in the “prototype” stage but did say they do plan to roll out this type of service delivery throughout the province by 2022.

“Lessons learned from the prototype regions will be applied to the future roll out across the province (expected to start in 2022),” the release said.

Peel Region will be one of the first areas of the province to be serviced this way. The government said the contract for the region was awarded to WCG,  a Canadian subsidiary of The International APM Group Pty. Ltd. (APM).  APM is based out of Australia.

The second contract was awarded to FedCap, an American human-resources firm based out of New York City. The government said the firm will head up a consortium of three non-profit groups: the Canadian Council on Rehabilitation and Work (CCRW), Community Living Toronto (CLTO), Corbrook, and Operation Springboard.

“Fedcap Inc. will oversee day-to-day operations in the Hamilton-Niagara catchment area with an aim to build capacity within existing local delivery partners,” FedCap said in a news release.

The third “prototype area” is the Muskoka-Kawarthas region, which will be overseen by Fleming College.

“Fleming College is a trusted public asset delivering education, skills training, and employment service programs that respond to the needs of students, job seekers and employers,” said Fleming College President Maureen Adamson said in a news release. “We are very eager to work alongside our partners in the region and the provincial government to meet its goals and connect more adults with good quality jobs.”

Official opposition calls move “a recipe for failure.”

Catherine Fife, NDP MPP for Waterloo and critic for economic growth and job creation, said in a news release “using a for-profit company could turn Ontario’s social services budget into a cash cow for the Australian firm. ”

“Hiring a multinational firm owned by Australian and American companies to navigate local Ontario job markets is a recipe for failure,” she said.

The NDP said similar privatization plans in the United Kingdom and Australia haven’t worked out.

“In similar privatization experiments in Australia and the United Kingdom, results were bad because companies moved people into jobs to collect the fee — whether they were ready or not, and whether the job was right or not,” the NDP said.

In February 2019 the Guardian newspaper reported on an Australian Senate report that called the privatized “JobActive” system a $7.3 billion (Australian) “bureaucratic nightmare.”  The report also called for an overhaul of the program.

In Ford's new contracting out scheme, the Hamilton-Niagara employment services contract has been given to American firm Fedcap. The Peel region’s services will be contracted out to a for-profit subsidiary of Australian APM. @CFifeKW @LGretzky #onpoli https://t.co/FZBnfIflGZ

— Ontario NDP (@OntarioNDP) February 18, 2020